By Ian Bremmer
NEW YORK, Nov 28 (Reuters) - 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 predictions.
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.