By Ian Bremmer
NEW YORK Nov 28 As China obsessives know, it is
tough to read tea leaves when the water is as opaque as that
surrounding China's Politburo. In the wake of the Chinese
leadership transition, we're left to sift through the news in
search of answers. There is plenty we do not know about the
process or what its outcome will bring, but when it comes to
underlying themes we can understand, it is possible to make some
Start with solidarity. In the most telling example of
Chinese political unity, the Politburo, the elite political body
that makes all of China's major decisions, went from nine people
to seven to consolidate control of the political process. The
Communist Party is now more unified than before and is less
likely to tolerate dissent from within. The stability of the
Communist Party is paramount. All else will fall in line.
Note what happens to those who don't. If the Bo Xilai incident
demonstrated anything, it's that, in China, nails that stick up
will be hammered down. There is no room for leaders who stray
from the party platform.
Need more evidence that power is being consolidated? Hu
Jintao recently surrendered his military position sooner than
expected so Xi Jinping, the incoming president, could have more
control. Li Keqiang, Xi's incoming deputy, got the nod to run
the economy rather than Wang Qishan - the most senior and noted
market reformer of the lot. Three of five of the remaining
standing committee members seem to be protégés of former
President Jiang Zemin, a sign that the leadership is looking to
past success as much as to the future. Again, it's about
consolidation-the easiest way to prevent another Bo is to limit
the number of possible Bos.
This new regime will govern a China that is increasingly two
different countries. On the coast, the country is developed,
with the amenities of a post-industrialized society. In the
countryside, China is still a developing country, with hundreds
of millions of people living in poverty. In 2010, according to
Bloomberg Businessweek, there was a nearly threefold difference
in per capita incomes between coastal China and inland China.
Likewise, China now has more income inequality than the United
States, making China 27th in the world overall.
Those Chinas want different things from their leaders.
People making $20,000 a year in prosperous cities don't need 8
percent growth. They need product safety, government
accountability, transparency, clean air and water - good
government, in other words, without all the lies and the secret
wealth. People in the interior, on the other hand, need growth
and goods. Government transparency means less to those who live
hand to mouth.
This is what the 21st century economy has wrought, but China
clings to its 20th century political system. Ten years - the
expected stint of the current Politburo members (though there
will be room for halftime adjustments) - is a long time to live
with so fundamental a contradiction. Pressures will mount from
within and without for China to modernize its political approach
to match the economic reforms it must undertake. But those
hoping for political reform are sure to be disappointed, no
matter how much they pine for them on Weibo or in the halls of
the United Nations. The leadership change, remember, was all
about solidarity, both for the Communist Party and with the
party's past efforts. Citizens on both ends of the spectrum may
grumble, but the Chinese leadership will continue its slow and
cautious approach - and its focus, first and foremost, will be
on consolidating power and eliminating threats to the party's
hold on power. On the Politburo's list of priorities, political
innovations will run a distant second.
As China grows, so will its rivals' angst. We're already
seeing Japan begin to reinvest in defense, both domestically and
abroad, to counter a rising China. Meanwhile, the United States,
which already views China as a sometime "adversary" and is
shifting more of its military resources toward Asia, will have
more disagreements with China on economic and human-rights
questions as Beijing looks to minimize distractions along its
path to becoming the world's largest economy in the next five
years. The power dynamic has changed. China needs foreign
investment less than it used to and no longer need defer at the
first sign of conflict.
It does, however, need even more commodities. China imports
55 percent of its oil and is increasing its imports of liquefied
natural gas by one-third this year. That appetite will grow
under this regime, and China will have to find a way to buy
everything it needs without making too many new enemies.
So here's the real question: If China resists internal change,
how will it adapt to the evolving world outside its borders?
There, the forecast remains cloudy.
( Ian Bremmer is the president of Eurasia Group, the leading
global political risk research and consulting firm. Bremmer
created Wall Street's first global political risk index, and has
authored several books, including the national bestseller, The
End of the Free Market: Who Wins the War Between States and
Corporations?, which details the new global phenomenon of state
capitalism and its geopolitical implications. He has a PhD in
political science from Stanford University (1994), and was the
youngest-ever national fellow at the Hoover Institution. )