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Xi Jinping is not Mao reborn China's economic decline has been vastly exaggerated

Mao in a Sixties poster (Universal History Archive/Universal Images Group via Getty Images)

Mao in a Sixties poster (Universal History Archive/Universal Images Group via Getty Images)


December 13, 2023   5 mins

Ever since he eliminated China’s two-term limit in 2018, Xi Jinping’s rule has produced a proliferation of articles and studies that compare his rule with Mao’s. The comparison is true only at a very superficial level, relating to the cult of personality that surrounds Xi and the increased inclusion of his name in the official documents of the Communist Party of China (CPC). Thus, in its 2021 resolution “on the Major Achievements and Historical Experience of the Party over the Past Century”, Xi is mentioned 25 times, Mao 18 times, Deng Xiaoping six times, and previous presidents Jiang Zemin and Hu Jintao just once.

These similarities may be useful to gauge the internal party power of Xi, but they tell us nothing about his economic policies or ideology. While Mao’s ideology during the Cultural Revolution was directly anti-Confucian, Xi’s is pro-Confucian. While Mao’s great economic turns — “the Great Leap Forward” and the Cultural Revolution — were motivated by ideology and disregarded stability, Xi’s policies are motivated by the opposite desire: to produce a more stable society.

This reflects evolution over the past 40 years. Following Deng’s sharp pro-market turn that placed economic growth centre stage, first after Mao’s death in 1976, and then even more decisively after the Tiananmen crackdown, China grew tremendously (at an average annual rate of more than 6% per capita between 1992 and 2012), while inequality increased (measured by the Gini index, from 36 to 47 points over the same period). The new China made many people rich, reduced poverty, changed the structure of the elite by having it much more private-sector oriented, and made the country “moderately prosperous”.

This trend was overseen by Jiang Zemin, the General Secretary of the Party from 1989 to 2002, and then by Hu Jintao, who held the two highest offices (head of the Party and head of the state) during the following 10 years. The embourgeoisement of the Chinese elite had to be given an ideological veneer — and Jiang Zemin provided this in 2000, when he introduced the policy of the “Three Represents” which allowed rich entrepreneurs to be more easily accepted in the nation’s governing bodies. Thus, somewhat paradoxically, the Chinese People’s Congress became the richest legislative body in the world, exceeding even the US Congress in the number of dollar millionaires in its ranks.

Both in personnel and ideology, then, a party whose claim to legitimacy was largely rooted in equalising chances and outcomes for most Chinese was gradually becoming the party of the rich. Based on micro data from household surveys, one paper I worked on with Li Yang and Filip Novokmet found that the top 5% of Chinese society had dramatically changed: in 1988, less than one quarter of the elite was linked with the private sector; by 2013, the year after Xi’s ascent to power, that share was close to 60%. We also found an increasing split between the social composition of the party overall and the party’s own elite: while the Party in 2013 still had a majority membership of the “old” (state-related) social groups, the top 5% was increasingly dominated by the “new” social groups (private-sector entrepreneurs and professionals).

The rich not only became more important, but were more visible too. Conspicuous consumption and disregard of public modesty — recall the story of the black Ferrari crashed in Beijing by a son of one of Hu Jintao’s top allies in 2012 — added to the perception of the Party as condoning many of the worst displays of nouveau-riche arrogance. And it seemed very possible, whether for better or worse, that the CPC might continue to evolve into an outwardly pro-rich party, defending the interests of a monied oligarchy, stimulating capitalist development, and holding power similar to the ruling South Korean party during the period of General Park’s rule. The term “communist” in the name of the Chinese party should not make us think such an evolution is impossible: North Korea’s communist party runs a monarchy.

But Xi seemed to have had a different view on the matter. At around the time he assumed his highest powers in 2012, there were two possibilities for the CPC: become a pro-capitalist party both in deed and ideology, or repress the most glaring displays of capitalist power within the party and outside and send the message that the ultimate arbiter is the State and the Party, not the new moguls and oligarchs. In addition, it could discourage ostentatious displays of wealth, punish the most corrupt, and shift the gears of the state towards ensuring less inequality, especially by reducing the urban-rural gap and the division between Eastern and Western provinces.

If we look at Xi’s “Common Prosperity” programme in a realistic way, and not fantasise that it represents some vague return to Maoism, it makes perfect sense: it is the overdue readjustment of excessively pro-capitalist policies, which, while perhaps good for growth, threatened to produce social anomie. And, in taming the liberalisation of his predecessors, what Xi proposes to do is not so different from what social democratic parties of Western Europe realised after the Second World War. Letting capitalism run amok, they thought, would produce another Great Depression, and such developments would only provide grist to the mill of the increasingly powerful Communist parties and trade unions linked with them. By contrast, their social-democratic policies were remarkably successful, so much so that a version of the period’s French sobriquet of the Trentes Glorieuses is applied across much of Western Europe. Inequality went down, growth picked up, and a “normal” middle class composed of hard-working and well-educated workers and employees was created.

We do not know if Xi’s policies will be equally successful. Western European countries were democracies; China is not. West European policies did not depend on one man, or a narrow consensus; they were the product of a much wider intellectual movement that dated back to the pre-war period. Xi’s policies could therefore fall prey to the desire of his eventual successor to differentiate themselves from him — especially if they, similarly to Jiang Zemin, put greater emphasis on economic growth and do not shy away from supporting capitalists. Outside of government, China’s citizens may be, as some parts of the middle class seem already, tired of the repetitive insistence on an ideology that seems an awkward mĂ©lange of Marx and Confucius.

Yet while China’s future may not be as firmly seated as Xi wishes it to be, the main ideas behind his “turn to the Left” can be easily articulated: expand the role of the state and the Party, reduce the power of capitalists, and keep growth going while making sure it does not become socially destabilising. We do not need recourse to some fanciful Maoism to explain it. Rather, to borrow the metaphor of Chen Yun, one of the early Chinese Communist leaders, it is time to slightly narrow the cage within which the private sector operates. After all, if such a “readjustment” is successful, it will set China on a track for reasonable growth (of 4-5% per year) over the medium term. This will maintain some inequality, particularly when it comes to geography, and China’s capitalists will still get rich — but they will not be in political control.

Recent reports of China’s economic decline are thus much exaggerated. They reflect the unconscious absorption by Western and Chinese analysts of a Dengist emphasis on growth alone: uniquely in the case of China, growth rates below 7-8% per annum are seen as precursors of economic demise. Yet while Deng’s approach made sense in a post-Mao China traumatised by voluntarist economic policies, it cannot be, nor should it be, maintained forever. As in every country, economic growth and social stability have to be balanced. China will not grow at 10% per annum; nor will it cease to grow. It will not rule the world, nor become irrelevant. Instead, it will maintain an intermediate position — an outcome that should be welcomed by both China and the West.


Branko Milanović is a Serbian-American economist. His most recent book is Visions of Inequality: From the French Revolution to the End of the Cold War

BrankoMilan

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Billy Bob
Billy Bob
7 months ago

No mention of the massive real estate bubble? No mention of the rapid ageing of society, or the very high youth unemployment which stopped being reported when it hit 20%?

Liam F
Liam F
7 months ago
Reply to  Billy Bob

Sure. But those problems are not unique to China.

Shrunken Genepool
Shrunken Genepool
7 months ago
Reply to  Liam F

But the legitimation crisis that will ensue is rather unique – given the geographical scale of the country ( although the EU is in for a rough ride for similar reason)

R.I. Loquitur
R.I. Loquitur
7 months ago
Reply to  Liam F

But the scale of the problems in China, particularly the real estate bubble and aging populace, is unmatched.

JR Stoker
JR Stoker
7 months ago
Reply to  R.I. Loquitur

Germany and the UK have the same problem

Tom K
Tom K
7 months ago
Reply to  JR Stoker

No, Germany and the UK have a rather different set of problems. And nothing as severe as China’s.

Andrew Boughton
Andrew Boughton
7 months ago
Reply to  R.I. Loquitur

Unlike the GFC?

Billy Bob
Billy Bob
7 months ago
Reply to  Liam F

They’re not unique to China but the scale of the problem there is much worse. China hasn’t managed to become rich before it becomes old

Danny D
Danny D
7 months ago
Reply to  Liam F

But they are on a unique scale in China. 30% of their economy depends on real estate development, a multiple of most other countries. This is a level that in other economies has often preceeded a massive crash. And the only thing justifying the CCPs restrictions on freedom for the Chinese population has been economic growth.

Alex Carnegie
Alex Carnegie
7 months ago
Reply to  Billy Bob

Nor of the knock on effect on local governments in China since much of their revenue comes from real estate developments.

Andrew Boughton
Andrew Boughton
7 months ago
Reply to  Billy Bob

The real estate crisis is merely China’s fist capitalist business cycle. See Andrew Boughton with Michael West, ‘ Wanted: A New Economic Theory’ or ‘Three Cheers for the Ideals of Guided Capitalism’, in the Sydney Morning Herald and Melbourne Age. Written when China was busy lecturing tge US on fiscal responsibility in the GFC.

Andrew Boughton
Andrew Boughton
7 months ago

I find these negative votes hilarious. What, are you a gang of kids in the playground? Answer the observation.

Andrew Boughton
Andrew Boughton
7 months ago
Reply to  Billy Bob

Deleted.

Last edited 7 months ago by Andrew Boughton
Prashant Kotak
Prashant Kotak
7 months ago

No mention of China’s disastrous demographics? Not even in passing?
This article has all the hallmarks of the reportage of a court insider, a bit like some guy pronouncing on politics and intrigues from within the The Hall of Mirrors, with no mention of, um, Cake.

Last edited 6 months ago by Prashant Kotak
Andrew Boughton
Andrew Boughton
7 months ago
Reply to  Prashant Kotak

Ah, the old demographic thing, fondest hope of every neocon. “I hope my neighbour’s cow dies.”

Steve Jolly
Steve Jolly
7 months ago

Another interpretation is that Xi brought private industry under the thumb of the government because he could not abide anyone having a base of power outside the purview of government, and thus himself. He established that private industry must serve the interests of the state as much as the citizens and the bureaucracy. He didn’t abolish capitalism or even limit it to any great degree, only demand that the oligarchs bow to him and help him further his geopolitical, social, and military objectives.
The author is quite correct. Xi is not Mao, nor is he a communist. He’s a nationalist whose primary obsession appears to be China taking its rightful place among the great powers of the world and achieving regional hegemony comparable to China’s other great imperial eras. Everything, from the people to the military to the business community, must serve towards the glorification and ascendance of China. China must take its rightful place among the world’s great civilizations and achieve the dominance that is their historic birthright. No, Xi is most assuredly not like Mao at all. He bears far more resemblance to another dictator of that era who promised his country glory and global preeminence only to lead it to war and ruin. People forget that Nazi was a shortened form of national socialism and people praised Hitler for some of the same things they now praise Xi.

Last edited 7 months ago by Steve Jolly
J Bryant
J Bryant
7 months ago

Excellent article that provides a realistic assessment of Xi and his social-economic goals, imo.

Tom Graham
Tom Graham
7 months ago
Reply to  J Bryant

A bit of a straw man, it seems to me.

For sure Xi’s economic policies are not Maoist – he isn’t about to starve half his people to death in an insane attempt to have peasant farms turned into steel foundries.
But he still has the cult of personality and centralisation of power according to the whims of one man, which is not conducive to long term stability.

Iris C
Iris C
7 months ago
Reply to  Tom Graham

Idealistically, “the whims of one man” should not lead to long-term stability” but recent history has shown that the entrepreneurial communist states (China and Russia) fair better than democracies where there is a need (every four or five years) to curry favour with voters to get elected.
I wish that was not so but fear it is!

Andrew Fisher
Andrew Fisher
6 months ago
Reply to  Iris C

Russia? Eh? Russia is not a Communist state of any flavour.

Sayantani Gupta
Sayantani Gupta
7 months ago

I guess the author is trying to be balanced. However in trying to analyse Xi’s philosophy being rooted in Confucian precepts, he forgets the other strand of ancient philosophy that accounts for present day Chinese ambitions. It’s called the ” Middle Kingdom Complex” which sees the globe as a Chinese Empire.
The crucial aspect the author overlooks is the complete opacity in Chinese economic data. Does he realise that even the GDP growth figures maybe inflated, beyond the normal levels of usual window- dressing which almost every economy engaged in?
The second last paragraph is particularly contradictory. If a ” Governed State” led by a Party clique loyal to Xi is leading the process, how is this “capitalism” ? Then Stalinist Sovietism was also capitalism was it not?
He perhaps forgets the old Chinese adage” Look strong when you are weak”. From war- mongering in its latest round of water- cannoning the Philippines ships to threats to Japan to a general tone of wolf- warrior diplomacy, this may well be due to the need to distract from a strained economy.
I do hope these are errors of omission rather than commision on the author’s part.

Last edited 7 months ago by Sayantani Gupta
Andrew Boughton
Andrew Boughton
7 months ago

Errors of commission? You sound ideological in a very big way. As for yiur thesis, the “Middle Kingdom Complex” did see China as the centre of the world. Only they only ever sent one fleet on a voyage of discovery, and none on voyages of conquest, unlike the European powers or their true Asian reactionary state, Japan. So, a worldwide empire in theory only, torn to pieces by the Western states and their Asian analogue. Pretty weak stuff.

Sayantani Gupta
Sayantani Gupta
7 months ago

On the contrary, I am more inclined towards Alistair Ian Johnston’s ” Strategic Culture” paradigms on Chinese foreign policy. If you are familiar with that line of thought, you would realise that CCP under Xi sees the present context as very much fertile ground for world domination. In fact one can take a ” longue duree” approach in consonance and trace Chinese policy since Deng to the same motivation. Especially with regard to Asia.

Andrew Boughton
Andrew Boughton
7 months ago

It’s fine. My view of political people is that they are all on a false mission, an illegitimte one. The real world is never enough. Uninvited by humanity, they set themselves the mission of turning life into a grand operatic fable. When these fables inevitably clash with reality, they use force to insist.

Andrew Fisher
Andrew Fisher
6 months ago

The idea that the Chinese have rarely embarked on wars of conquest is poor history. Xinxiang, Tibet, Inner Mongolia, enormous areas, none of them ethnically Chinese (at least to start with) were all conquered by the Qing dynasty in the 18th century.

They have also been rather more successful in holding on to their conquest than the Europeans.

Martin M
Martin M
7 months ago

“Expand the role of the State and the Party” and “Keep Growth Going” strike me as being mutually exclusive to some extent. Plus, although there is much “capitalism” in China nowadays, I am unconvinced that the CCP truly understands capitalism.

Andrew Boughton
Andrew Boughton
7 months ago
Reply to  Martin M

“I am unconvinced that the CCP understands capitalism.” Do you believe our career politicians understand or care much for business more so? Not in my experience.

Arthur G
Arthur G
7 months ago

How do you write this article and not mention the massively oppressive, techno-surveillance state that Xi has built? Social credit scores anyone?

P Branagan
P Branagan
7 months ago
Reply to  Arthur G

The UK is a failing depressive techno-surveillance state that Westminster has built.

And never ever forget the totalitarian thuggery in 2020, 2021 and 2022 (championed by the MSM, academia and the medics) that showed the hypocrisy of claiming the UK is a liberal democratic state.
At least Xi isn’t a hypocrite – he doesn’t make claim to being other than he is.

Arthur G
Arthur G
7 months ago
Reply to  P Branagan

The point is, Xi doesn’t care about anything except total control.

Tom K
Tom K
7 months ago
Reply to  P Branagan

You know nothing about China. The scale is entirely different.

Andrew Fisher
Andrew Fisher
6 months ago
Reply to  P Branagan

Yes, but all those excessive amounts of control were in a totally misguided attempt to control the spread of a virus, and have been abandoned everywhere in Europe now. “Thuggery” is completely over the top. Are you aware of any case where the police beat people up?

In fact the main reason they were adopted in my view was that the Chinese did so.

There is a still an enormous difference between the degree of freedom living in the UK and that in China.

Tom K
Tom K
7 months ago

A nothing burger of a commentary, completely lacking in economic analysis. No word on the debt overhang which dwarfs by an order of magnitude that previously faced by Japan, nothing on the malinvestment in unproductive infrastructure including real estate, some of which is coming apart at the seams already, not a word on the decoupling/derisking by the West in response to the supply chain shock caused by covid lockdowns, nothing on Xi’s ruinous Wolf Warrior foreign policy and aggression against Taiwan and in the South China Sea that has put rocker boosters under that decoupling, nothing on China’s collapsing demographics. Quite pathetic really.

Last edited 7 months ago by Tom K
Andrew Fisher
Andrew Fisher
6 months ago
Reply to  Tom K

It seemed a pretty good article to me. It saddens me to say so, but it appears the West’s problems are very much more fundamental than China’s.

William Brand
William Brand
7 months ago

Chairman xi has killed China’s golden goose. He also has terrorized China’s customers who buy all that China makes. America is frantically trying to cut supply lines away from China since the USA fears war with China is imminent. Xi is making moves that indicate that he plans a nuclear Pearl Harbor against the USA. With America in ashes, how will China sell anything.

Andrew Fisher
Andrew Fisher
6 months ago
Reply to  William Brand

This is completely hysterical. Of course the Chinese don’t want war with the US, or vice versa. Which doesn’t preclude one arising, perhaps over Taiwan.

Josef O
Josef O
7 months ago

Maybe, we do not know. Time will tell, in ten years time we shall be wiser.

Chauncey Gardiner
Chauncey Gardiner
7 months ago

“If we look at Xi’s “Common Prosperity” programme in a realistic way, and not fantasize that it represents some vague return to Maoism, it makes perfect sense: it is the overdue readjustment of excessively pro-capitalist policies, which, while perhaps good for growth, threatened to produce social anomie.”
This is the main proposition…. Hmm… I will think about it. Counter-factuals are all about alternatives, many of which amount to nothing more than “magical thinking.”

Dumetrius
Dumetrius
7 months ago

But China is not doing very well at the moment.

On my last visit, people sleeping on the street.

I know that’s common in London, but certainly it was not in Chinese cities.

Andrew Boughton
Andrew Boughton
7 months ago

What a brilliant analysis. So nice to see facts in place of Cold War reflex.

Christopher Chantrill
Christopher Chantrill
6 months ago

“As in every country, economic growth and social stability have to be balanced.”
Yes, but “who whom?” to coin a phrase. Who will do the balancing? The politicians, the administrators, the intellectuals, the capitalists, the consumers?
Do tell.

Brian Doyle
Brian Doyle
7 months ago

Xi Jinping is a fastidious studier of Zen Buddhism and Confucianism in particular

So I strongly recommend that in order to
Comprehend Xi please go and partake of
The Analects Chapter 12
This Chapter deals with the Importance of good governance
Where Confucius says ‘ The Character of the ruler is like the wind and that of the people is like the grass ‘

Which basically says, requires a leader aspires towards moral perfection and puts the interests of the people first

So few in the West understand Chinese thinking which is firmly anchored in the ancient wisdom of Buddhism, Zen and Confucianism

Once you even begin to comprehend such a myriad of doors open up in your mind
If not attempt,s in dealing with China will be akin Trying to wrap a fire in Paper

james goater
james goater
7 months ago
Reply to  Brian Doyle

“Chairman” Xi is a devoted disciple of Lenin and all that he stood for. Best understand that.

Brian Doyle
Brian Doyle
7 months ago
Reply to  james goater

Complete and Utter nonsense
You will rarely be told this
You patently know little of China and its history,far less how they function
In a rapidly changing evolving World
Today

China during WW 2 Fought against
36% of the Total Japanese Imperial forces
How do you think matters would have evolved if such forces were added to Japanese fighting USA and The UK

Charles Stanhope
Charles Stanhope
7 months ago
Reply to  Brian Doyle

Thank you. That rather succinctly explains China’s lamentable history over the last two millennia. It probably also goes for Japan, until 1853 at least.

Brian Doyle
Brian Doyle
7 months ago

You completely misunderstand how Colonialism altered and held back the development of the East
By the way care to inform us all with a update on Little England,s progress
With regards HS 2
If so and not too embarrassing for you then I shall gladly update you on China’s HS railways
I do believe in colonial days it was not unusual to refer to the Chinese as
‘ Coolies ‘
But me thinks and certainly with regards HS railways Tis Little Englander’s that may be referred to as ‘ Coolies ‘ after all you penned such nomenclature did you not

JR Stoker
JR Stoker
7 months ago
Reply to  Brian Doyle

You’re drivelling

Brian Doyle
Brian Doyle
7 months ago
Reply to  JR Stoker

You are havering

starkbreath
starkbreath
6 months ago
Reply to  Brian Doyle

Do the ‘interests of the people’ include running a massive surveillance state, welding the doors of their apartments shut during the world’s most severe and long lasting COVID lockdown and forcing them into ideological servitude through a social credit system? You sound like Muslims who claim no one can begin to understand their holy book unless they read it in Arabic.

Martin Davis
Martin Davis
7 months ago

Pearls before swine, as regards this particular commentariat, Branco.

Shrunken Genepool
Shrunken Genepool
7 months ago

I can tell you how to get there, but I wouldn’t start from here

Andrea Vickers
Andrea Vickers
7 months ago

And no mention of the abject cruelty to dogs and cats for their meat, and stealing pets from their distressed owners’ arms? If this is Xi’s attempt at a ‘stable society’ I’ll be boycotting Chinese goods forever. Barbarians.