Study "Xi Jinping - the new era"

« XI JINPING -
THE NEW ERA »
The power emerging
from the 18th Congress

BACKGROUND AND PERSONALITIES OF THE FIFTH GENERATION OF LEADERS,
IMPACT ON FUTURE POLICY

December 2012

Study carried out by China Trade Winds Ltd. for the exclusive use of xxx China Page 1

INTRODUCTION
上有政策,下有对策 - shàng yǒu zhèngcè, xiàyǒu duìcè,
“On the surface there is the strategy of power,
at a deeper level there is the strategy of opposition.”

This saying has just been perfectly illustrated by the succession war played out between Hu Jintao,
the outgoing leader, and Jiang Zemin, his predecessor.

In fact for over a year now, with their respective factions – the “Youth League” and the “Shanghai
Club” – each leader has worked to ensure his influence would live on after November 2012 – when the
fourth generation of leaders would step down.

The overall aim of these manoeuvers was to nominate the members of the Central Committee, the
Politburo and the Standing Committee, the highest decision-making bodies, elected by a show of
hands at the XVIII Congress (Shíbādà - 十八大 ), held from November 8th to 14th 2012.

The results are finally in after numerous changes to the lists making the rounds until mid-October.
There has been upheaval – huge and unprecedented – due to two chance incidents (possibly also
helped by various secret bodies) that took place in the space of five weeks:

- At dawn on February 7th 2012, Wang Lijun, Chongqing Party Secretary Bo Xilai’s right-hand man,
donned a wig and left the city disguised as a woman, driving his car with false number plates. He
was heading to the American Consulate in Chengdu, 325 kilometres away, where he would find
short-lived refuge. This was the first twist in a series of events that would end with the Secretary's fall
from grace, a man who until then had been one of the main pretenders to power. Bo Xilai was one
of Jiang Zemin’s chief lieutenants – however the latter’s protection was not enough to prevent his
downfall.

- In the small hours of the morning of March 18th 2012, Ling Gu, a spoiled child of the red aristocracy,
died after crashing his Ferarri against a concrete pillar on the capital’s fourth ring road; in the Ferrari
with him were two virtually undressed female students. For his father, Ling Jihua, Hu Jintao’s
right-hand man, the accident would signal the end of his rise.

These two incidents would derail the two factions’ succession strategies. They were supposed to remain
in the wings, now suddenly they were centre stage. Heroes would be dismissed, sullied, and the Party
would see itself weakened as never before over the last few decades, damaged in terms of its image
and legitimacy.

However, as soon as the respective factions’ succession strategies were dismantled, the two groups
set about finding new alliances and new areas of agreement. The impetus for this – still ongoing – was
to avoid a catastrophe: the implosion of the Party. Under pressure, the two factions would pull together
to find common ground for a new team.


This study is written in three parts. To echo the saying that opens the study, the first two parts
concentrate on the surface level and outline the “strategy of power”, whereas the last part digs down
to reveal the “strategy of opposition”.

The first part aims to present a short overview of Hu Jintao’s era, his successes and failures, and an
interpretation of his tenure – neither heroic nor daring, but producing some genuine results, even in
terms of reform.

The second part scrutinises the backgrounds of the 25 new leaders, first those of the Standing
Committee, then the Politburo members. These detailed profiles highlight their specific career paths,
affiliations, leanings and routes to power.

The final section draws up a list of the policies that can be expected from this team today,
evaluated in terms of what they have said or planned for and in light of the pressing issues of the day.

In this way we hope to tackle some of the questions on the horizon and share our insights with our
readers, be they international companies, diplomats and politicians or political science research
centres.

By March 2013, we will be delivering an update to this study, focusing on the composition of the
ministries.

We are always available for exchanges and answers to your questions: editor@leventdelachine.com.

We are happy to organise conferences on this subject to suit your needs.


N°6 : WANG QISHAN (王岐山)
THE “FIREMAN” PROMOTED TO POLICE CHIEF
Aged 64 and at the pinnacle of his career, Wang Qishan is an apparatchik from the privileged
“princeling” world and an economist with a rare talent acknowledged domestically and
internationally.

Born in 1948 in Qingdao, Shandong, to intellectual
parents (his father eventually became a professor at
Tsinghua), Wang Qishan, like every youngster during the
Cultural Revolution, was sent at 21 to a rural commune in
Yan'an, Mao's former headquarters in Shaanxi. What could
have been a miserable experience turned out to be a stroke
of luck: there he met and married the daughter of the leader
Yao Yilin. He was able to rapidly resume history studies in Xi'an
and work in museums. Under his father-in-law's wing, he went
to Beijing after Mao’s passing away. A cunning young blade,
after four years at CASS (Chinese Academy of Social
Sciences) he directed an institute and at 34 joined the rural
research bureau of the Central Committee. He was
admitted to the Party a year later.

Aged 40, he cut his teeth in banking. He quickly came to the attention of Zhu Rongji, governor of
the People's Bank of China (the Central Bank), who made him his No.2 (1993-1994). During his stint as
vice Premier (1991-1998), Zhu promoted him to head of China Construction Bank (1994) and then sent
him to Guangdong as vice-governor (1997) to clean the mess of GITIC, the financial arm of the
Guangdong government that found itself in difficulties after making some risky moves (which involved
most of the Western banks present in China) and had USD 7 billion of debt. Wang tackled the situation
with brio, overseeing the first bankruptcy of a Chinese provincial bank while keeping the bust to a
minimum for everyone – Beijing and foreign creditors. Henceforth he would be known as the “fireman of
the Chinese economy”.

During the same period, he struck up a close friendship
with Jiang Mianheng, the businessman and son of Jiang Zemin,
which enabled him to add his third and most powerful patron.
All these godfathers gave him wings. In 2002, aged 54, he was
Party Secretary of Hainan Island. In 2003 he took over the
capital's city hall at the height of the SARS epidemic, replacing
a passive mayor. Restoring links with the World Health
Organisation,

Wang Qishan dealt with the crisis and restored the Party's image, at the same time consolidating his
image as the man for a crisis, able to face the situation and make quick decisions based on good
instinct. In 2006-2008 he managed most of the construction for the Olympic Games.


As a reformer – at least as far as finance was concerned – and looking at reforming credit and
taxation, his place on the Standing Committee was a foregone conclusion. Although he himself was a
powerful banker, he campaigned to end the State banks' monopoly and to make more services
available for foreigners. In a recent speech on strategies for getting out of the crisis, Wang displayed an
enthusiasm that was new to the CPC after 20 years of blind faith in liberalism: he believed in the need
for “two hands”, Adam Smith's invisible hand of the market and the government hand to correct any
excesses.

A highly intelligent man, he was one of the first socialist leaders to be able to speak fluent English.
Blessed with a rare sense of humour, he also seduced figures in the outside world such as Henry Paulson,
the former US Treasury Secretary, who hoped he might become an important dialogue partner. For its
part, the Chinese business community wanted new measures to boost investment abroad.

At the 18th Congress, Wang Qishan was finally given the Central Commission for Discipline
Inspection after initial thoughts that he would be made President of Parliament or even Premier. This
pragmatic and brilliant economist would have been an excellent candidate for resetting and further
opening the economy, deregulating the currency (a task that will fall to Ma Kai). This apparent failure
has intrigued the entire international community, given Wang's flamboyant charisma. But the
anti-corruption battle is a priority for the regime, which has been sorely tested by the Bo Xilai affair.
Putting such a valuable man in this role could give fresh – if somewhat late – impetus to this fight – the
apparent priority of Xi Jinping’s government.


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Study "Xi Jinping - the new era"

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Study "Xi Jinping - the new era"