A significant political change has occurred in the People's Republic of China: the peaceful transfer of power from one generation to the next. For months, China watchers speculated about whether the 76-year-old Jiang Zemin would, in fact, resign as Party secretary. But during the week-long 16th Party Congress in mid-November, Jiang did just that when he stepped aside after 13 years in that post, allowing Hu Jintao to assume the role of general secretary of the Party.
Jiang, however, has retained his post as chairman of the Central Military Commission (CMC), enabling him to continue to wield significant influence. Jiang further tried to secure his political reach by placing six of his closest allies on the nine-member Standing Committee, the highest decision-making body in the country. Of those six allies on the incoming Standing Committee, Zeng Qinghong had served as Jiang's top aide. Hu, the only remaining leader from the previous Standing Committee, is expected to also succeed Jiang as China's president when the legislature meets in March 2003.

Wilson Center Fellow Cheng Li told Centerpoint that the leadership selection of this Congress seemed like a traditional game in which the ruler decided the rules and manipulated the outcomes. "It is too early, however, to announce the real winners and losers of Jiang's game," Li said. "Jiang's attempt to cling to power and his seeming ‘political triumphs' might in fact have revealed his own weaknesses and insecurities."

Li argued that Jiang has lost a great opportunity to "keep abreast of the times"— the phrase that Jiang frequently used in his report to the Congress. "Jiang also has lost his credibility, especially in the eyes of those who thought he would make this generational transition of power real and complete."

Ironically, said Li, Jiang's failure to contribute to China's institutional development helps to enhance Hu's popularity. Though Hu is surrounded by Jiang's protégés on the standing committee, these protégés also are vulnerable due to the political favoritism by which they obtained their seats. The next two or three years will be a test of Hu's political strategy, wisdom, and capability. "But in a far more important sense," Li said, "it is a test of whether China can make a major step toward a genuinely more institutionalized power transition, resulting in power-sharing."

No major policy shifts are expected, at least in the next several years, as Hu and his new government work to consolidate their power. But the new leadership must devise strategies to invigorate China's 1.3 billion citizens. "China must enfranchise civil society to empower the lower levels of the system," Wilson Center Fellow David Shambaugh told Centerpoint. "[Otherwise], it will exacerbate social tensions and the Communist Party will be on a slippery slope to extinction." Shambaugh added that economic growth also has caused socio-economic disparities and political tensions.

The Party is attempting to reinvigorate itself by targeting "advanced" sectors of society. "The Communist Party has been recruiting capitalists," said Li, "because the Party is fighting for survival." But, as Shambaugh pointed out, in order to survive, the Party must have a rallying vision for the nation's future. Despite national economic growth, China confronts a widening income gap and high unemployment. Commented Shambaugh, "Significant segments of society are increasingly stratified, angry, and unemployed." He suggests that the new leadership will give greater attention to those sectors still untouched by the reforms.

Rural Discontent
Among the most pressing challenges facing the new leadership is China's vast rural population, numbering 700 million, whose incomes have been stagnant for a decade. Despite two decades of modernization, rural China—which accounts for 70 percent of the country's total population—has been left behind, plagued by economic backwardness and political instability.

A November 12 ASIA PROGRAM seminar, Crisis in the Hinterland, explored whether rural discontent poses a serious threat to China's national stability. Panelist Jean Oi of Stanford University argued that most peasant protests have been isolated and mainly directed at corrupt village cadres, not at the regime itself. Such corruption has intensified over the past several years as township governments have imposed a range of taxes and fees on villagers. Despite the central government's 1998 Organic Law of Villagers Committees that guarantees the right of all villages to hold competitive elections, it remains to be seen how much autonomy these elected village officials really will have to run their villages without interference from the newly strengthened townships.

Xiaobo Lu of Columbia University said that rapid industrialization in rural areas of coastal provinces has dramatically improved the lives of farmers, while township and village enterprises grew more slowly in the central provinces and still slower in the western belt. Farmers suffer the heaviest tax burdens in the grain-producing provinces in central China, he said, where protests are more frequent than in the other rural areas. Peasant rebellion against township officials has ranged from non-violent acts such as tax evasion, demonstrations, sit-ins, and road blockades to violent actions, specifically the beating and killing of local cadres. But rural protests have not turned into nationwide social movements. With an ongoing reform in the rural taxation system, Lu said the Chinese regime may be able to maintain stability in the countryside.

Yawei Liu of the Carter Center discussed several factors that have helped to diffuse China's rural crisis. For example, the central government—aware of the destabilizing situation—has adopted several measures to increase peasants' income and reduce their tax burdens. And, separated from the industrial workers and urban elite, the restless Chinese peasants lack visionary leaders to carry out a cross-regional rebellion. Village elections have provided an outlet for villagers to vent their frustrations and protest social injustice. But, said Liu, only real peasant self-government can guarantee that a more serious rural revolt does not erupt.

The best remedy for the rural crisis, suggested Melanie Manion of the University of Wisconsin, is to expand political participation and rural elections to the country level. As all speakers attested, economic solutions alone cannot alleviate the widespread rural discontent. China's new leadership will have no choice but to address these strains and will need to give priority to industrializing rural townships and developing China's western regions. It is unclear, however, whether the new leadership will seriously crack down on abusive cadres in China's countryside.

As the new leadership begins its reign, it will confront numerous challenges to securing the legitimacy of the Communist Party. Outgoing General Secretary Jiang, by putting his allies in powerful posts in the new leadership and retaining his post as head of the CMC, has ensured a continuation of his agenda. China lies at a critical juncture in the relationship between the state and society. Time will tell if the new leadership has the vision and will to seriously address the problems of corruption and social disparities.

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