Chinese political transition: split in the Princeling camp?

Author: David Kelly, UTS

On 21 January 2011, Xu Jilin, an intellectual historian at Shanghai’s East China Normal University, gave a seminar paper entitled ‘Does China Need A Leviathan?’ in Beijing to the Boyuan Foundation.

The Foundation, a pro-reform study group, has been under heavy attack from China’s fervent nationalist left who rile at its unambiguous defence of ‘universal values.’

The delivery of Professor Xu’s paper and the list of attendees afford a glimpse into the high-stakes game of politics at the national level.

There are signs of an ideological split in the Princeling camp, and a major bone of contention is the nature of the ‘China model’, a topic Xu addressed in his paper. The vitriolic attacks from leftist websites that appeared subsequently represent a ‘push back’ by the state sector and its vested interests who feel threatened by the radical reformist model of the Boyuan circle. Given the impending transition in 2012 to a new political leadership led by ‘Princeling’, Xi Jinping, any signs of a split in the Princeling camp deserve careful attention.

The Boyuan Foundation, registered in Hong Kong but active in Beijing, is a network of the administrative and policy elite. Many are ‘Princelings’ – offspring of high officials from the early days of the CPC’s rise to political supremacy. The Boyuan group typically supplemented its credentials with international training, often in the economic, financial and management fields. In many cases they drive private sector organisations.

The Boyuan Foundation holds that China’s economic success was heavily dependent on earlier rounds of reform and supports programs that encourage ‘inclusive growth’. It is opposed to continued dominance by the state owned sector and frowns on the hyper-nationalist China model that reduces China’s success to an interventionist, authoritarian state.

A specialist on contemporary intellectual affairs, Xu is increasingly well known in academic circles as a public intellectual who addresses current issues beyond his specialty.

In his paper to the Boyuan Foundation, he presents ‘statism’ as a dominant trend in intellectual and policy circles in recent years. Xu sees statism as a more serious phenomenon than nationalism:

Since the turn of this century, there has been a strong, decade-long trend of statism — distinct from nationalism — in China’s intellectual world: it claims that state is central; enhancing its prosperity and capacity is the core objective of modernity. The state, which represents the fundamental interests of the people, has the highest sovereignty: supreme, indivisible and non-transferable. Statist thought in contemporary China has two different contexts and sources. One is a collective swing to the right on the part of the radical left; the other is emergence of doctrines associated with Carl Schmitt. From different intellectual and political backgrounds, they ultimately converge on the deviant path of state worship.

The notion of a ‘collective swing to the right of the radical left’ needs explan­ation. From the early 1990s the New Left spoke as representative of the dispossessed working class who were suffering from market reforms, especially the downsizing of state enterprises. Intellectuals such as Wang Hui and Cui Zhiyuan spoke of preserving the direct, popular democracy of the heyday of Maoism in the Cultural Revolution. By ‘swing to the right’ Xu has in mind the New Left’s reconciliation with the regime in the wake of China’s unprecedented rise as an economic and political power in the last decade. Added to that, the influence of Carl Schmitt, a political and constitutional theorist closely associated with the Nazi regime, strengthens the impression of a rightward drift.

Another public intellectual questioning the China Model is Boyuan Foundation’s Council Chairman, Qin Xiao, who holds ‘princeling’ status by virtue of his sister’s marriage to a son of Chen Yi, one the ‘immortal’ Grand Marshalls of the Mao era. Like several other Boyuan members, he holds a doctorate in economics from Cambridge University. A former CEO of CITIC, and later Board Chairman of the China Merchants Group, he declared on his retirement from the latter post in mid 2010 that he intended to become a ‘public intellectual’. Making good on this pledge, he shortly after defended universal values at a graduation ceremony at Tsinghua University, and, again controversially, dismissed the China Model as ‘unacceptable’. Many economists in China express reservations about the China Model, but this coming from someone with leadership experience in major state financial institutions was somewhat more challenging.

Qin Xiao has in recent months been pilloried on the website Wuyou zhi xiang [Utopia], a haven of the New Left. Accused of financial crimes, particularly relating to a market listing of the Ping’an insurance corporation, the real bone of contention appears to be his public defence of universal values. These attacks appeared to step up with the approach of the National People’s Congress and Chinese Peoples Political Consultative Conference. A group of New Left professors wrote to the NPC indicting Qin Xiao and the Utopia website speculated that he has taken refuge in Hong Kong.

But Qin did not abandon the fray. He dismissed the claims of corruption in well-publicised interviews. As if to defy his attackers, he became more vocal than ever on reform-related issues, with reports appearing in the Chinese media bearing titles like, ‘Defects of GDP stimulus China model; ‘Control inflation by more use of interest rate rises’, ‘Qin Xiao: services will become scarce capital in future’; ‘Qin Xiao advocates government withdraw from and divide up state-owned assets’ (8 March); capping these off, so to speak, was one just before the Congresses in Caijing [Finance] entitled ‘Reform must be persevered with.’ Together these arguments mounted a powerful case against continuation, let alone intensification, of guojin mintui [the state intervention in the market at the expense of the private sector].

The emergence of a Princeling Party leader carries certain expectations, the principle one being that as a holder of considerable political capital, Xi Jinping will be able to institute policy changes where Hu Jintao faltered. Hence winning the ear of Xi is a priority for all policy interest groups.

Qin Xiao and the Boyuan Foundation’s interest in Xu Jilin’s address on statism also comes into perspective. It is vital in their view to restore the incentives to further rounds of reform which have ebbed seriously and begun to reverse in recent years with state revanchism in the market place. The rightward swing in thinking is alarming to them also because it seems to call for China to march entirely to its own tune in the international arena. The Boyuan group do not agree that China is well-placed to do this.

The achievement of these goals is placed at risk by the mood of hubris that has been palpable in the wake of the global financial crisis. Part of the Princeling camp finds advantage in versions of the China Model that dampen enthusiasm for reform. Others anticipate criticism of their role and seek pre-emptive moves to ameliorate their standing the eyes of the nation. The weakening consensus in the Princeling camp make it unlikely that the rise in the temperature of discussion about the China Model will abate soon.

David Kelly is a Professor of China Studies at the China Research Centre, University of Technology, Sydney.