Foreign Affairs

A look at Xi Jinping’s ‘Third Revolution’

As Xi Jinping’s power grows in China and abroad, what American scholar Dr Elizabeth Economy has termed his 'Third Revolution' continues to take shape. Sam Sachdeva spoke to Economy about Xi’s vision, the US response, and the obstacles in his way.

Xi Jinping's trip to Osaka this week for the G20 leaders' summit is notable for a number of reasons.

It is the Chinese President's first trip to Japan since he took office in 2013, a chance for another closely scrutinised meeting with US President Donald Trump, and an opportunity for recent protests in Hong Kong to be raised by China's critics.

But the visit also feeds into what Dr Elizabeth Economy, director for Asia studies at the US Council on Foreign Relations, describes as Xi's "Third Revolution" in China.

Where Mao Zedong installed communism in the 1940s, and Deng Xiaoping brought “reform and opening-up” of the Chinese economy, Economy sees Xi’s own revolution as moving China towards centre stage in the international order.

But that step towards the limelight abroad has been coupled with greater repression and authoritarianism at home, including greater surveillance and a "wall of restrictions" separating China from the rest of the world, from internet censorship to the exclusion of foreign NGOs.

"When he looked around at the next generation of potential leaders, I don’t think he saw anyone that he felt comfortable would be able to move forward and realise his own vision.”

While the removal of term limits sets the stage for Xi to become China’s “president for life”, Economy does not believe that is his goal.

“I don’t think that’s in his head ... he wants to be leader until his vision is realised or well under way. When he looked around at the next generation of potential leaders, I don’t think he saw anyone that he felt comfortable would be able to move forward and realise his own vision.”

That vision, she says, revolves around a robust Communist Party at the forefront of the political system, an innovative Chinese economy capable of competing with the world’s elite, and a 2049 territorial reunification with the South China Sea, Hong Kong and Taiwan “firmly part of mainland China”.

Then there is China’s role in global governance: the country wants not just to make the rules of the game but to build the playgrounds on which they are played, as Xi himself said in 2014.

The country’s “political capacity building” in parts of Africa, Southeast Asia and Latin America are helping to export the China model overseas to countries who are disenchanted with the status quo.

A for vision, C for execution

China’s growing assertiveness raises the question of what exactly the United States is doing to respond.

Perhaps surprisingly, when asked to offer a letter grade for the Trump administration’s approach to China, Economy offers up an A for “rethinking the relationship” - largely due to its willingness to adjust to the new course being charted by Beijing.

“If you want to understand why US foreign policy has changed, it’s because China has changed ... all of the understanding of the direction in which China was moving has changed.”

She believes the American bureaucracy and foreign policy machinery is “fully cognisant” of the risks posed by export of the China model, noting that Congress has passed a number of new laws designed to build capacity in countries who may be tempted to look to Beijing for help.

Where Economy gives Trump and his team a C, however, is in following through on their new vision, due in part to the President’s willingness to neglect multilateral alliances and traditional diplomacy.

“We shouldn’t promote relationships with North Korea, China and Russia and criticise our allies at the same time.”

She also believes the US should rebuild its cooperation with China instead of letting the relationship fray beyond repair, choosing “a few signature issues” - such as public health in Africa, or tackling climate change - which can signal a willingness to work together.

Dr Elizabeth Economy gives the US good marks for rethinking the relationship with China, but poor grades for its execution. Photo: Victoria University of Wellington.

But what of smaller countries like New Zealand who fear the fate of grass trampled beneath the feet of fighting elephants, as Singapore Prime Minister Lee Hsien Loong put it at this year’s Shangri-La Dialogue?

Economy is careful to note that every country must choose its own path, but suggests those paths should lead in the same direction.

“If countries like Singapore, New Zealand, most of the Asia-Pacific, if they look to the values that have made them a strong and vibrant polity, they will find partnership with the US quite natural.”

What doesn’t help, she says, is “trying to bully those countries into submission” as the US has done over the use of Chinese telecommunications company Huawei.

As for foreign interference, a hot topic in New Zealand given the work of Kiwi academic Anne-Marie Brady, Economy says it is “incumbent on every government to stand up and protect its democracies”, while she also calls on New Zealand to protect Brady “100 percent”.

She does offer caution against overreach, pointing to the US crackdown on Chinese researchers and academics in response to concerns about Confucius Institutes.

'Significant pockets of discontent'

While some look at Xi and see an all-powerful figure, Economy warns against conflating the institutional power he has consolidated with political legitimacy.

There are still “significant pockets of discontent” within China, she says, with retired party elders calling on him to rein in what they see as overreach when it comes to the Belt and Road Initiative, his anti-corruption campaign, and the relationship to the US.

Liberal intellectuals and entrepreneurs are concerned by the degree to which Xi has constrained their freedom of movement, with access to the “virtual political space” for dialogue and discussion having been severely curtailed in recent years.

Movements that can cross provincial borders and demographics, such as a push for environmental action, are particularly potent.

But what may be keeping him most awake at night is the risk of a continuing and growing economic slowdown.

“It’s only a matter of time before China is no longer an illiberal country and it will become, if not a true market economy, it will develop more of those attributes.”

Over the last few years, Xi has tried “almost every sort of trick in the book” with little success, but he is unwilling to let go of the levers of control and bear the pain of meaningful market reforms - perhaps one of the reasons why China has withdrawn its claim at the World Trade Organisation to be a market economy.

Economy has described Xi’s efforts to grow China’s role on the world stage, while stifling the connections between his country and the outside world, as one of the country’s “great paradoxes”.

But how long can that paradox be sustained?

“That’s my least favourite question - when does it all come falling down?” she says, laughing.

While she says it may make her a “dinosaur”, Economy still believes in modernisation theory when it comes to China - that as its economy develops and the middle class grows, pressure will grow for meaningful political reform.

“It’s only a matter of time before China is no longer an illiberal country challenging a liberal international order but will become, if not a true market democracy, it will develop more of those attributes.”

Dr Elizabeth Economy was in New Zealand to deliver the 10th anniversary address for the New Zealand Contemporary China Research Centre at Victoria University of Wellington - a sponsor and supporter of Newsroom.

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