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18th Party Congress

The Chinese Communist Party's 18th Congress, held in Beijing November 8-14, 2012, marked a key power transition in China. A new generation of leaders, headed by Xi Jinping and Li Keqiang, took over from the previous leadership headed by Hu Jintao. The Communist Party's Politburo Standing Committee was reduced in number from nine to seven. Unlike his predecessor Jiang Zemin, Hu Jintao handed over both the Party General Secretary and Chairman of the Central Military Commission positions to Xi.  

CommentInsight & Opinion

China will reshape East Asian politics

Lau Nai-keung explains the factors working in Beijing's favour

PUBLISHED : Friday, 28 September, 2012, 12:00am
UPDATED : Friday, 05 October, 2012, 10:21am

When former chief executive Tung Chee-hwa came out to discuss the health of China's leader-in-waiting Xi Jinping, it served as a reminder that the 18th national congress of the Communist Party is drawing near.

Yet for months now on the evening news, though we get several minutes' coverage every day on the US election, this important home event receives little attention on television, either in Chinese or English. This is the Hong Kong-style cosmopolitanism we inherited from the colonial era, which is still going strong 15 years after the handover.

To a lot of people, China is now in a mess both internally and externally, and having a lot of difficulty getting out of it. Some even harbour hopes that it may not, and that its three-decade-long success will soon come to an end, perhaps accompanied by chaos and disaster. Such observations and speculation do not stand up to examination.

Now that the US is facing renewed troubles in the Middle East as a result of an anti-Muslim movie, its Asia strategy is heading towards the dustbin. As a result, the provocative Japanese Prime Minister Yoshihiko Noda will sooner or later have to beat a humble retreat from his aggressive position on the Diaoyu Islands.

The next few years will mark a new era in regional politics in East Asia. China will gradually gain effective control of the disputed islands and Japan will have to fade from the scene, whether it likes it or not.

The South China Sea will no longer be an issue, after China recovers the sovereignty of various rocks and islands one by one, either through peaceful means or by force. But with a tradition of a somewhat benign paternal attitude, China will refrain from bullying its neighbours despite the American absence. Instead, it will continue to push for peace and co-development in the region, if only to distinguish itself from Western hegemony.

With pressure from the US and Japan mitigated and no sustainable threats on the horizon, China's incoming leaders can afford to concentrate their efforts on tackling internal issues. There are several factors working in their favour.

To start with, the ruling Communist Party does not have to go through elections to remain in power, and therefore does not have to dish out various overstretched promises to please the people. These are luxuries not accorded to democratically elected politicians on a perpetual campaign.

For example, it can rally the resources of the entire country to converge on tackling real issues, and not performing cosmetic patch-ups. A lot of problems that are seemingly insurmountable in the West have been successfully resolved this way. For example, the medical insurance scheme covering almost all rural areas of the country was implemented within a very short time frame.

China can afford to plan for the long term because the party is always in power. This is evident in the decades of restraints on military expenditure to concentrate on infrastructure investment to spur economic growth.

On top of all this, China enjoys the most enviable position of still maintaining an extraordinarily high growth rate and low public debt. Don't take the loud grumblings about an economic slowdown at face value; a "low" 8 per cent growth is high by any other standard.

As for public debt, according to the International Monetary Fund, China's stood at 25.8 per cent of gross domestic product last year, which is lower even than Hong Kong's 33.9 per cent. Compare this with America's level of 102.9 per cent.

Yet, despite all this, development in China is experiencing a serious bottleneck and there are great challenges facing the new leadership and threatening stability.

It has to formulate a revolutionary strategy to achieve a breakthrough, and any new policy measures will inevitably include Hong Kong, as the country's most important international gateway. The winds of change can be felt in many quarters, and the new situation will become more apparent late next month.

Lau Nai-keung is a member of the Basic Law Committee of the NPC Standing Committee, and also a member of the Commission on Strategic Development

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clc2
Lau Nai-Keung is, perhaps, much more informative than he intends to be.

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