Change of Guard in Beijing

China is today the world’s second largest economy and “the world’s factory” for the global commodity chains steered by the transnational corporations of the Triad – North America, western Europe and Japan – and one of the most important sources of their profits. If and when its economy runs out of steam what will be the repercussions for the Triad itself? Will Beijing abide by the China 2030 report jointly prepared by the World Bank and China’s State Council and aggressively go for another round of privatisation of state-owned enterprises (SOEs)? With the launch of the Obama administration’s “pivot to east Asia” regional strategy, will Beijing give up its foreign policy doctrine of a “peaceful rise”?

To get even a clue as to what is going on in the corridors of power in China one has to go beyond what actually happened at the week-long 18th National Congress of the Chinese Communist Party (CCP) that was held in Beijing last month. In this, the months preceding the Congress are all important. The most important event, in our view, was the April suspension of Bo Xilai from the Politburo and the Central Committee, as also his junking of the “Chongqing Model”, which had the potential to emerge as an alternative to the current “Guangdong Model” that “lets some people get rich first”. There was nothing radical in the Chongqing Model, just that Bo took Deng Xiaoping’s rhetoric about the danger of “reform” taking the “evil path” of capitalism (and engendering class polarisation and bringing to the fore vested interests difficult to dislodge) seriously. The Chongqing Model, Bo’s creation, tried to bring about a degree of complementarity between SOEs and domestic private firms and trans­national corporations. In the political realm, it took the official rhetoric of “common prosperity” to heart and tried to practise Mao’s mass line leadership principle in its “Striking Back” campaign against corruption and in its “Singing Red” propaganda in the realm of culture. It is interesting that as a result, both Bo and the Chongqing Model came under attack, not only in the Chinese media but also in its western counterpart. Bo had to go, for both the main factions in the CCP, led by Hu Jintao and by Jiang Zemin did not want him elected to the powerful Politburo Standing Committee (PBSC), the “collective leadership” of the Party.