Wednesday June 26, 2019

CHINA’S 19TH PARTY CONGRESS: OUTCOMES AND ANALYSIS

Johns Hopkins SAIS, Rome Auditorium, Washington, DC
October 26, 2017

Oct26Panel-4

On October 26th, the U.S.-China Policy Foundation hosted a panel discussion on China’s 19th Party Congress, which took place last week. The panel addressed a wide audience including students, scholars, and media outlets. Our panel of experts presented their analyses of the foreign policy implications present in the events of the 19th Party Congress, including the impact on U.S.-China relations, the challenges of Chinese economic reform, and President Xi Jinping’s foreign policy vision.

Former U.S. Ambassador to China J. Stapleton Roy presented his thoughts on the significance China’s new leadership may have on U.S.-China relations. Through a close reading of Xi’s work report, Roy found an answer to how relevant a Western model of governance will be for China’s development. He pointed out that the use of the term “with Chinese characteristics” (中国特色), traditionally used to refer to Chinese-style socialism, is now applied to almost anything, including military, rule of law, and social institutions. This indicates that China has little interest in adhering to Western models, and instead is creating its own model with the Party in control that other developing countries can follow. In the short term, China hopes to step into a leadership role on the global stage from which the U.S. is currently withdrawing. With China’s top U.S. specialist, Yang Jiechi, now the first member of the Politburo with a foreign ministry background, the new leadership is likely to be ambitious in the foreign policy realm and will emphasize Chinese Party control. In longer-term consequences, China plans to complete the modernization of its military, which may pose a challenge to the U.S. However, Ambassador Roy was sure to clarify that Xi’s speech focused on a stable international order and peacekeeping. It is clear that China will be pushing for a uniquely Chinese model of development and leadership to challenge the U.S. on the global stage.

Dr. Yukon Huang, a senior fellow at the Carnegie Endowment, discussed economic reform contradictions in China. He posits that U.S.-China relations are difficult primarily because American understanding of China is poor. He explained that while America is the world’s leading economic power, and China and the rest of the world acknowledge it, most Americans believe that China leads the global economy. This misperception indicates insecurity and tension, especially as American unfavorability ratings of China have increased in recent years. After examining the linkage of U.S. and China’s trade balances (which he argues are not in fact linked at all), he raised the question of China’s debt problem. Dr. Huang showed that China’s debt-to-GDP ratio most resembles that of Singapore; he calls it not a debt crisis, but a “financial deepening.” Local government fiscal pressures are driving the debt problem along with excessive land development and ghost towns. The issue is not a banking problem but a budget problem. Unless this is solved, the hemorrhaging of the financial system will continue. China’s mixed economy defies the norms of conventional economic wisdom, as unlike most countries China has only become more corrupt as it has become richer. Xi has not yet faced the question of direction and may have to decide whether to alter China’s growth model in the near future.

Dr. Robert Sutter, professor at George Washington University, continued from the discussion Ambassador Roy touched upon to discuss the implications for Xi’s vision of foreign policy on a broader, global scale. Not only does Xi Jinping’s vision serve to consolidate China’s position in international relations, but it also further legitimizes Xi’s new government domestically. He states that China is more constrained internationally than China itself would have the rest of the world believe. The constraints he outlined include a variety of domestic preoccupations (legitimacy problems, corruption, economic development); strong interdependence on foreign markets and investment; China’s insecure position in Asia; and a gap in China’s international power. Dr. Sutter argues that there is a clash between the image of China’s strength and the reality within China, and that how China will react to restraints and resistance is still uncertain.

Dr. David Lampton, the Director of China Studies at Johns Hopkins SAIS, moderated the panel. In his summary at the end of the three panelists’ discussions, he pointed out Xi’s striking emphasis on Party control, the anchoring of his speech on sovereignty, and the lack of clarity or institutionalization of succession within the Party. After prompting the panelists to discuss their expectations for President Trump’s upcoming visit to Asia, he opened the floor for questions from the audience and further thought-provoking analysis.