Xi's model of Chinese modernisation shaking up China and the world

The 20th Party Congress of the Chinese Communist Party (CCP) ended on 22 October. In President Xi Jinping's congress work report, "Chinese modernisation" was a key theme.

Namely, Xi identified the rejuvenation of the Chinese nation through Chinese modernisation as the core mission. He also termed the next five years as a crucial period for China to embark on its journey to become a modern socialist country in all aspects. Xi also said that Chinese modernisation offered humanity a new choice for achieving modernisation.

Xi's remarks have been the subject of much global debate in the past week. Some analysts opined that the CCP's proposal of Chinese modernisation means that China is determined to take an entirely different path from the West, and this could spell greater competition between both camps.

Following the opening of the congress on 16 October, many academic organisations and think tanks in Taiwan organised seminars to analyse its proceedings.

At a forum held at Taiwan's Legislative Yuan on 18 October, Anthony Saich, director of the Rajawali Foundation Institute for Asia and Daewoo Professor of International Affairs at the Harvard Kennedy School, pointed out that as the biggest beneficiary of globalisation, China is no longer satisfied with being a rule-taker; instead, it is trying to play a more dominant role and become a rule-maker when it comes to international rules.

He added that the congress signalled a continuation rather than a transformation of the CCP's policies. The Chinese government has also made clear that China will continue to proactively shape the global order through taking up leadership positions in international organisations, especially in sectors that the US has backed away from, such as aviation, telecommunications and agriculture, so as to formulate regulatory standards for global public goods.

Saich predicted that China will reduce its reliance on the West in areas such as the economy, finance and technology as soon as possible. It will do so through measures such as internationalising its currency, establishing an international energy trading exchange and setting up cross-border inter-bank payment systems.

On 17 October, at a seminar organised by the National Chengchi University Institute of International Relations, Professor Huang Chiung-Chiu of the university's Graduate Institute of East Asian Studies spoke about China's proactive efforts in promoting the "Chinese-style of governance" amongst developing countries. In future, it may make use of such relationships to redefine the meaning of the term "region" in geopolitics so as to reshape the international order.

On the other hand, it was also mentioned in the congress work report that in the next five years, China must be "mindful of potential dangers, be prepared to deal with worst-case scenarios, and be ready to withstand high winds, choppy waters, and even dangerous storms". Therefore, the country should uphold and strengthen the CCP's overall leadership and carry on with its fighting spirit and not be "swayed by fallacies, deterred by intimidation, or cowed by pressure".

Distinguished Professor Wang Hsin-Hsien of the National Chengchi University Graduate Institute of East Asian Studies pointed out that based on the narrative of the work report, China is at the starting point of its journey of great rejuvenation and becoming a modern socialist powerhouse. This coupled with the unprecedented turbulent times at hand means that a strong government and leader are required to lead China on this journey. "The powerful government is the CCP and the strong leader is Xi," said Professor Wang. His analysis has been validated by the proceedings of the congress this past week.

In November 2021, the CCP adopted its third historical resolution to "establish Comrade Xi Jinping's core position on the Party Central Committee and in the Party as a whole, and defined the guiding role of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era", also referred to as the "Two Establishes".

Based on reporting by China Central Television on 17 October, when members of the CCP Politburo Standing Committee (PSC) participated in small group discussions on the work report, besides Xi, the other 24 members also emphasised the Two Establishes when they spoke.

Additionally, at one of the congress press conferences, the deputy director of the CCP Central Committee Policy Research Office, Tian Peiyan, described Xi as "an outstanding figure in this great era and a widely-revered leader of the people", and the Two Establishes as a major political outcome achieved by the CCP in this new era.

According to Chair Professor Chung Yen-Lin of the National Chengchi University Graduate Institute of East Asian Studies and an expert in the history and ideology of the CCP, the underlying message of the work report is that "in order for China to continue its monumental rejuvenation journey, it cannot do without Xi and his thought leadership". He also felt that even though the title of "the people's leader" is not as lofty as Chairman Mao's title of "the great leader", it is still only second to that of Mao's and sufficient political capital for Xi to take a third term in office.

Professor Chang Teng-chi, head of the political science department of National Taiwan University, pointed out that in the congress work report, the phrases "reform" and "opening up" appeared about 50% less often than in the 19th Party Congress work report. Instead, they were replaced by words like "enhance", "govern", "improve" and "innovate".

In Professor Chang's view, to the CCP, the usage of words like "reform" in the past was a sign of a lack of confidence and inadequacies in many areas, hence the need to learn from others. The usage of terms like "enhance", "innovate" and "improve" now indicates that the party is confident of bringing about reforms and showcasing the "Chinese model". It also means that the 20th Party Congress heralds the shifting of the limelight from Deng Xiaoping's model to Xi's model.

Undeniably, the CCP has plenty on its plate after the congress. It has to resolve domestic problems such as the perilous economic downturn and a lingering pandemic, and external issues such as rising global uncertainty and rising tensions in the competition between great powers.

It is noteworthy that in a rare move, China postponed the release of key economic indicators and figures such as its GDP for the third quarter of 2022 which was scheduled to be announced on 18 October while the congress was underway. (NB: China reported on 24 October that China's third-quarter GDP grew by 3.9% from a year ago, outstripping the 3.4% pace forecast in a Reuters poll and faster than the 0.4% growth in the second quarter.)

Even though the Chinese economy faces increasingly severe downward pressure, the work report stressed the need to push ahead with high-quality development, to be resolute in developing the public sector and guide the development of the non-public sector, and to focus on the real economy in the pursuit of economic growth.

Liu Meng-Chun, director of the First Research Division at the Chung-Hua Institution for Economic Research in Taiwan shared his analysis that this emphasis on high-quality development from the Chinese government means that in future, official discussions on the Chinese economy will start focusing on improvements in quality rather than quantity.

He also felt that at least in the next five years, China's overall economic strategy will focus on the real economy, especially on the country's primary and secondary industries, while being more reserved when it comes to the country's tertiary industries underpinning the service economy.

However, Liu also pointed out that the work report failed to specifically address the many problems the Chinese economy faces. For example, how to integrate the public and non-public sectors, how to boost the digital economy without creating monopolies, and how to prevent poverty rates from rebounding. At the same time, issues like urban poverty and family poverty were sidestepped, and there was no further discussion on the push for common prosperity.

Therefore, Liu feels that in time to come, the Chinese government will face the four economic challenges of high risk from financial debts, a lack of clarity in its means for promoting economic growth, a reduction in its demographic dividend caused by an ageing population, and more government intervention in private enterprises. These will result in long-term fiscal pressures on China and will be a thorny problem the Chinese government has to resolve.

For over two years, a major factor that always comes up when the rest of the world discusses China's economic issues is its strict Covid-19 measures, with its lockdowns triggering pushbacks from its citizens.

In an interview with the New York Times in early October this year, Professor Yang Dali from the University of Chicago's political science department warned that more than a few places in China have exhausted their resources when it comes to fighting the pandemic. With fewer incentives available, some local governments are running out of funds.

However, in the congress work report, there was no indication that China would loosen its Covid-19 controls. Instead, the CCP reiterated a strict adherence to the "dynamic zero-Covid" strategy and promised to enhance the country's public healthcare system, and improve government capabilities and capacity in dealing with future occurrences of such nature.

With regards to this, Distinguished Professor Wang Hsin-Hsien from the National Chengchi University Graduate Institute of East Asian Studies opined that the pandemic has had a profound impact on China. In particular, it has made middle-class Chinese distrust the central government. Nonetheless, zero-Covid has been a political endeavour all along and at the CCP Politburo meeting held on 28 July this year, Xi emphasised the need to view the relationship between fighting the pandemic and socio-economic development through the lens of politics and account for the political cost.

Professor Wang predicts that China will not loosen its Covid-19 measures right after the congress, instead it may only change its Covid-19 policies after its new team of administrative leaders is installed at the 2023 Two Sessions annual parliamentary meetings. But Professor Wang also cautioned that this is also dependent on how the Covid-19 situation evolves and on the availability of effective homegrown vaccines, so it could be a long and arduous journey.

Other than domestic issues, geopolitical hazards like Sino-US rivalry and the Ukraine war are the external challenges that the CCP has to confront.

Associate Professor Tang Hsin-wei from the political science department of the National Taiwan University said that the foreign policy position of the CCP following the congress would be to create external conditions that are favourable for China's development. Looking at the current situation, the US has more or less fortified its leadership amongst developed countries while China has prevented developing countries from siding fully with the US, for now.

Professor Tang predicts that China may seek to slow down the deterioration in its bilateral ties with the US in order to gain more time to develop. China will also look to avoid the collapse of the regime in Russia or the emergence of a Russian government that is pro-US. As for Europe and Japan, even though it is very unlikely that China could achieve political and military cooperation with them, it can strengthen economic ties with these countries.

Professor Huang Chiung-Chiu from the National Chengchi University Graduate Institute of East Asian Studies highlighted that in the sections of the congress work report on foreign relations, the CCP reiterated that it stands firmly against all forms of hegemonism and power politics, the Cold War mentality, interference in other countries' internal affairs, and double standards. This was clearly aimed at the US. She also felt that as long as other countries remained neutral instead of siding with the US to oppose it, Beijing would consider this a win.

Distinguished Professor Wang Hsin-Hsien from the National Chengchi University Graduate Institute of East Asian Studies added that Sino-US bilateral ties affect China's national security, domestic politics, military affairs, science and technology talents, its rule by law and even its cross-strait relations with Taiwan. So, even though the US was not mentioned directly in the congress work report, China's plans and actions in the areas listed above are primed against the American threat. This also implies that at least for the next five years, the CCP's work would be framed within the dual major themes of rejuvenation and strategic competition with the US.

However, as pointed out by Associate Professor Chen Shih-min of the political science department of the National Taiwan University, the congress work report mentioned for the first time the need for China to "establish a strong system of strategic deterrence". This could mean that China wants to enhance its nuclear capabilities.

Professor Chen further said that the Ukraine war showed that the threat of nuclear weapon usage (by Russia) deterred the US from intervening directly. China would take this into consideration in its evaluation of war in the Taiwan Strait. Said Professor Chen, "If China (like Russia and the United States of today) possesses around 5000 nuclear warheads when it invades Taiwan, would that stop the United States from going to Taiwan's aid? I feel this is a prospect that the Chinese government would seriously consider."

It is also worth noting that in an interview with CBS News at the beginning of October, CIA director William Burns, mentioned that Xi has given orders for the People's Liberation Army (PLA) to be ready to take Taiwan by force before 2027.

Based on reporting by Bloomberg, US Secretary of State Antony Blinken said at a Stanford University forum held on 17 October (while the congress was underway) that China has decided to bring forward its plans to attack Taiwan and achieve reunification, but Blinken did not provide an estimate of when this could occur.

On the issue of China attacking Taiwan, Professor Chen believes that even if the PLA were to achieve its centennial goals by 2027, it would only possess "combat capabilities at the outset". If the US military intervenes, China may not be confident in taking Taiwan. "It would be a grave matter if China invades but fails to take Taiwan," said Professor Chen.

Anthony Saich, director of the Rajawali Foundation Institute for Asia at the Harvard Kennedy School, also felt that having witnessed the intensity of sanctions imposed by the West on Russia following the Ukraine war, China may not have the appetite to take Taiwan by force in the short term, especially since Russia, its staunch backing against the US, is in disarray. So, there is no need for China to be hasty even though reunification by force is still on its agenda.

As for indicators of China's policies towards Taiwan from the congress, Associate Professor Chang Wu-Ueh, director of the Tamkang University Centre for Cross-Strait Relations, observed that even though fewer than 600 characters in the work report were ascribed to Taiwan, the fewest since the 16th Party Congress work report, its forcefulness is unparalleled.

Professor Chang feels that in the next five years, it would be very difficult for China to achieve peaceful reunification with Taiwan. On the other hand, barring an infraction of China's "red lines" with regards to Taiwan, China will also not seek reunification by force. What can be foreseen though is that China will push ahead with the reunification process so that it goes beyond slogans to become concrete steps like building up its military capabilities to prevent Taiwan from declaring independence and deter foreign forces from intervening. At the same time, China would also pressure Taiwan to return to negotiations and use its home advantage to unilaterally foster more amicable ties with Taiwan.

He also mentioned that based on precedent, Xi is expected to deliver an important speech after a new parliament is in place following the 2023 Two Sessions. After that, China's approach and stance towards Taiwan will become clearer.

Honorary Professor Chao Chun-Shan of Tamkang University Graduate Institute of China Studies was a cross-strait policy adviser to the Ma Ying-jeou administration. At a forum organised by the Ma Ying-jeou Foundation on 19 October, he said that both the US and Taiwan will be holding presidential elections in 2024. During this period, China will adopt a wait-and-see approach and cross-strait war will not break out.

But Professor Chao also predicts that China will make moves against Taiwan between 2024 and 2027 because by then, Xi would have to deal with the issue of a possible fourth term in office.

For Lianhe Zaobao's special reports on the 20th Party Congress, click here.

This article was first published in Lianhe Zaobao as "两个确立"导航下 中国式现代化不与西方同路".

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