CCP Control Over Economy, Military Reaches New Heights: Experts

By Michael Washburn
Michael Washburn
Michael Washburn
Michael Washburn is a New York-based reporter who covers U.S. and China-related topics. He has a background in legal and financial journalism, and also writes about arts and culture. Additionally, he is the host of the weekly podcast Reading the Globe. His books include “The Uprooted and Other Stories,” “When We're Grownups,” and “Stranger, Stranger.”
February 3, 2022 Updated: February 7, 2022

The expected appointment of Xi Jinping to a third term as head of the Chinese Communist Party (CCP) at the 20th Party Congress this fall is likely to lead to ever tighter and more autocratic control over Beijing’s fiscal, military, and national security policies, said experts at a virtual hearing of a U.S. congressional advisory body on Jan. 27.

Panelists at a hearing of the U.S.-China Economic and Security Review Commission addressed a broad range of topics whose common denominator was the enhanced centralized control that is likely to occur following the twice-in-a-decade Party Congress, and the potentially dramatic consequences for China and the world.

One of the defining characteristics of Xi Jinping’s reign as CCP general secretary has been a tendency to strengthen the Party aggressively and make it more prominent within the apparatus of government, said Nis Grünberg, a lead analyst and the Berlin-based Mercator Institute for China Studies. Xi’s purpose has not been to dismantle the state apparatus but rather to shift the balance of power to the point where Party officials, and Xi himself above all, control all decision making.

“Xi is pretty clear that he wants embedded Party officials to advance objectives better within their respective organizations and for all strategic policy-making to be under his personal leadership. He has instituted this system to an unprecedented degree,” Grünberg said.

Grünberg dissected the fallacy that state-owned enterprises (SOEs) are to some degree independent of the regime. Under Xi’s reign, the heads of SOEs receive strong encouragement to support policy objectives proactively. To ensure that this happens, Party officials vet candidates for the leadership of SOEs. They fill the 50 most important SOE leadership roles, in areas such as oil, manufacturing, and technology, through direct appointments, Grünberg said. Hence, SOE heads are in reality both government officials and business executives.

Increasingly over the last two years, whatever autonomy SOEs might once have had has waned as SOEs have come under pressure to invest in certain technologies and promote social stability as defined by Party officials. And these pressures carry over even into the private sector.

“As Alibaba can testify, leading private organizations are now expected to develop strategies that serve political objectives,” Grünberg said.

Under CCP law, any organization employing more than three people has to establish a CCP cell, and under the CCP’s constitution, non-state companies are required to follow Party guidelines.

“The goal is to have representatives at the table. Not to kill private enterprise, but to align it closely with Party ideology,” Grünberg added.

The panelists left no doubt that the tentative pro-market reforms and moderate social liberalization undertaken under then-CCP leader Deng Xiaoping in the 1980s are now a thing of the past as centralized control tightens, and the appointment of Xi to a third term will only accelerate this trend.

“China’s economic future depends on whether Xi will course-correct and adopt a more moderate approach, or double down,” said Yuen Yuen Ang, a professor at the University of Michigan.

The current regime is a true dictatorship with few if any parallels in the world today, said Victor Shih, a professor at the University of California San Diego.

“Xi gets most of the important decisions. They don’t all get implemented, but they matter, and they sway policy,” Shih said.

Foreign Policy and National Security

The expansion and consolidation of Xi’s autocratic control are no less evident in the realms of military policy and national security, according to panelists.

“Xi has emphasized on different occasions that foreign policy is a reflection of the nation’s will, and therefore must be controlled by the central committee of the Communist Party,” said Yun Sen, director of the China program at the Stimson Center, a Washington-based think tank.

One means to this end has been Xi’s restructuring of the decision-making process at the CCP Congress in 2018, which involved the formation of a new Central Foreign Affairs Commission.

“Party control is as strong as it has ever been over the Chinese military. But rather than coming from any basis of charismatic authority, I would argue that Party control is stronger than ever because of coercion,” said James Mulvenson, director of the Center for Research Intelligence and Analysis, a think tank.

The recent history of internal Chinese politics offered clues to what has been in the works, Mulvenson argued. One clue came across at a military meeting known as the Gu Tian conference in 2014, which Mulvenson described as a reprise of an event in 1929 where Mao Zedong assumed full control over the CCP’s Red Army, which up to that time had been an assortment of mercenaries and warlords, and imposed direct top-down oversight of all the ranks. In the 2014 conference, Xi reorganized the People’s Liberation Army (PLA) into five theater commands, relying heavily on his anti-corruption campaign to exert pressure.

“It resulted in hundreds of thousands of people losing their jobs. All of that was facilitated by the anti-corruption campaign, and that continues to be the most powerful level that Xi Jinping has,” Mulvenson said.

The cumulative effect of Xi’s reforms has been to establish a level of direct top-down oversight with few parallels in history.

“At the top level, China’s system for decision-making has been revamped. An entire system has been created in the CCP hierarchy down to the county level,” said Joel Wuthnow, a senior research fellow at the Center for the Study of Chinese Military Affairs at the Institute for National Strategic Studies, a Pentagon-run think tank.

“The PLA is ultimately run by a set of Party organizations. There is a Party committee at the head of it,” concurred Roderick Lee, research director at the U.S. Air Force China Aerospace Studies Institute.

Michael Washburn
Michael Washburn is a New York-based reporter who covers U.S. and China-related topics. He has a background in legal and financial journalism, and also writes about arts and culture. Additionally, he is the host of the weekly podcast Reading the Globe. His books include “The Uprooted and Other Stories,” “When We're Grownups,” and “Stranger, Stranger.”