021_Global12_InSight_2013

Global 13

Global Insight2013 is the prime driver of the world economy. The ability of Wash- ington and Beijing to steer their way through this will be a sig- nificant test of diplomacy on both sides as the USA shifts policy model now faces multiple challenges with major implications for Credit: US Secretary of Defense/Erin A. Kirk-Cuomo CC BY 2.0-The outlook is a good deal more complex than may be suggestedThe impact of those broad challenges on foreign policy is a mat to acknowledge the changing global balance towards Asia amid forecasts that the Chinese economy will surpass its own in size in the second half of this decade. by those who see China’s rise as inexorable, and the reasons lie in domestic affairs. Though the achievements since the launch of economic reform at the end of the 1970s are evident, the growth a society that is evolving very fast. Political reform is not on the cards but, in a state where the monopoly Party holds all the reins of control, any change has political overtones. ter for conjecture given the lack of pointers from the leadership. The result could be a concentration on domestic matters with little attention paid to relations abroad. That seems unlikely, however, given Beijing’s more asser- tive stance in recent years and the way it sees a real and present As China’s new president, Xi Jinping also serves as the head of the Politburo threat from other regional powers backed by the USA, especially There had been speculation that the Politburo’s top body, the over conflicting claims to maritime sovereignty. More likely is a Standing Committee, might include two figures committed to eco- combination of increased nationalism and an effort to overawe nomic and social change when it was formed at the five-yearly smaller East Asian states while confronting the old foe, Japan. Party Congress held in November. One of these, Wang Yang, had The moment of decision will come when such confrontation af- laid out an agenda for change during his five years in charge of fects economic relationships that both Asian countries need – and the country’s richest province, Guangdong; the other, Li Yuanchao, draws in the USA. had a reformist record when running Jiangsu province in eastern China before moving to Beijing to head the Party’s powerful Or- The question is whether the Politburo can ganisation Department. improve living standards and rebalance too disruptive by a leadership that wants to stress unity after theIn the event, both men fell by the wayside. Wang was seen as the economy without chipping away at dramatic fall from grace of the rising star of Chinese politics, Bo Xilai. Li made enemies through his promotion policies at the Or- Communist rule in a regime that remains ganisation Department. Former leaders, including Jiang Zemin in a political straitjacket and where retirement to help mould the new seven-man Standing Commit-who headed the Party from 1989 to 2002, emerged from supposed the Party’s continued supremacy is the tee in which five Party stalwarts with experience of running big provinces or cities joined Xi and Li at the summit. The backstairs bottom line for the leadership politicking was intense. All the signs are that the new Standing Committee will follow However, the first priority for Xi Jinping, the new Party Secre- cautious, incremental policies at home while drawing on the politi- tary who ranks first in the Communist Politburo, is domestic. Xi has cal dividends of a strong national stance in foreign affairs. Change made his way to the top by working well with the various interest will come, but on a piecemeal, localised basis. However in a re- groups that make up the country’s political apparatus, including the gime as interlocking as that in China, there are inescapable politi- big state-owned enterprises, the bureaucracy and the army. In his cal and social implications in such steps as reducing the power of first remarks after being promoted to the top job at the Party’s five- privileged state companies, strengthening land-ownership rights, yearly Congress in mid-November, he acknowledged the desire of liberalising the financial system, increasing the rights of migrant the inhabitants of the world’s most populous nation for better lives, workers, and implementing realistic pricing of water and energy as following up with the launch of a campaign against corruption. His well as getting to grips with environmental degradation. colleague at the top of the Politburo, Li Keqiang, who will become With the economy likely to show mild short-term recovery af- prime minister at the annual meeting of the legislature in March, ter growth fell in 2011, and given the way that reform would cut has spoken of the need for economic reform and shares the desire growth and boost inflation in the short run, the temptation to stick of the outgoing leader, Hu Jintao, to move towards a “harmonious with the status quo are considerable. Yet that could spell longer- society” of reduced wealth disparities and less social tension. term dangers in a lack of necessary development away from the So the leadership knows it has to improve living standards fur- post-1980s model. China may seem unstoppable and confident in ther – 13 percent of Chinese live on less than $1.5 a day – and its future but, like other nations, it has major choices to make and rebalance the economy away from its dependence on exports and a tricky task in adapting to a shifting world crowding in on it. fixed asset investments. The question is whether they can achieve this without chipping away at Communist rule in a regime that re- Jonathan Fenby is author ofTiger Head,Snake Tails; China Today, How It Got mains in a political straitjacket and where the Party’s continued Thereand Where It Is Headingand is China Director of the research service supremacy is the bottom line for the leadership. That means avoid- Trusted Sources. He blogs on China at www.trustedsources.co.uk/blog/china ing risks to the system. globalfirst quarter 2013 www.global-briefing.org l21


Global 13
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