Macroscope
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To succeed under Xi Jinping’s brand of socialism, the onus is on performance for the people

PUBLISHED : Wednesday, 21 March, 2018, 10:34am
UPDATED : Wednesday, 21 March, 2018, 10:25pm

Less than 100 years ago, my grandfather was an ardent socialist in the valleys of South Wales. My father was recruited at the age of four. He would be hoisted up to the stage at a large gathering and told to shout “Socialism is the salvation of the working masses.”

The masses, usually male Welsh miners, roared their approval.

The old joke comes to mind that “if you are not a socialist under 20 you have no heart, if you are a socialist over 20 you have no head”. My father became a professor of politics; neutral, or maybe with a little residual Left bias – at least to me.

It is pretty hard to grow up in Hong Kong and not become a raging capitalist, but I still know a socialist when I see one.

China’s President Xi Jinping is a socialist to his fingertips. He understands “the people”. His closing speech at the National People’s Congress (NPC) showed that he clearly believes that the power in the hands of the Chinese Communist Party comes from the people.

The party’s right is to govern, and serve. To gain credibility, the people’s interests - as he sees it - must come first.

This was why his first real action was to clean up the party, because corruption abuses that trust. He knows that he is the man to raise his people out of poverty, to care for the sick and elderly, and to clean up the environment.

This NPC has lifted the veil from the man who from now on will lead China. As a politician, forming a cabinet of your friends is politics lesson number 101. But filling it with competent individuals is quite another. His close advisers not only have impeccable party credentials, but are also hand-picked, highly educated technocrats.

Premier Li Keqiang has a law degree and a PhD in economics from Peking University. His doctoral dissertation was awarded China’s highest prize in economics.

Finance and foreign affairs have been especially reinforced by Xi’s most trusted advisers, such as economics adviser, Vice-Premier Liu He, who has a masters from Harvard and is likely to lead trade talks with the U.S.

Yi Gang, the new central bank boss, has a PhD in economics from the University of Illinois and had academic tenure in America.

Xi has special confidence in vice-president for foreign affairs and former anti-corruption tsar Wang Qishan, who was brought out of retirement when the rules changed.

Socialist rhetoric places a huge burden on the shoulders of the leadership. A command and control economy must have bright people at the top as 1.4 billion people are looking at them to get it right. They have to make decisions that the markets make in the West - that Invisible Hand that guides resource allocation.

Capitalism and democracy create winners and losers, and in times of stress, the system provides flexibility for rapid recovery. “Socialism with Chinese characteristics” has no room for failure. The people are fickle and like to complain and blame the government. Xi’s message will be that you must be good to reach the top, but to stay there you will have to perform.

My grandfather’s brand of early socialism was global – he believed naively in a community of the people of the world. That generation greatly admired the USSR, until the bestiality of Joseph Stalin’s pogroms became obvious.

Previous communist or socialist nirvanas have often been led by poorly educated partisans who have slipped too easily into the comforts and entitlements of high office, then been unable to deliver, whereupon they have used the state machine to quell dissent.

Xi does not have the luxury of being idealistic. His technocratic, socialist and nationalist approach is designed to unite the people. He exudes the desire to Make China Strong Again – respected and strong culturally and militarily, with China taking its place in the world order. He has to bring wealth and pride to the people of China.

Strong experienced leadership comes at a price. The top leaders are now at the peak of their powers, but by the end of Xi’s original term, he will be 70.

Another five-year term will see some colleagues touching 80. Will their technocratic skills be dulled or cowed in that time?

Will they and the party still be relevant to a much younger people? The world does not stand still. This team does not have much time to succeed before Father Time requires another changing of the guard – the rate of reform in China is about to accelerate.

Richard Harris is a veteran investment manager, banker, writer and broadcaster and financial expert witness. www.portshelter.com

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