Cassandras have failed every time they sought to predict end of the Chinese dream-run. They have sought to focus on the nation’s high internal indebtedness; they have talked about how the export-led economy would have crash landing soon; and China’s emphasis on State-owned Exterprises (SOE) for fueling the economy as deleterious to the growth of private sector. The final grouse was clearly an appeal to the Chinese authorities for relaxing measures of controlling multinational corporations.

President Xi Jinping took care to brush-off the approach by denying any change in the style of administering the economy that he is slowly but surely ushering. In his consolidation of political and administrative power, Xi has shown steadfastness as evident in his speech delivered live on television addressing the people. The day was 18 December. He reassured the people that the basic path Deng Xiaoping had laid out in 1978 would not be abandoned. He mentioned the main slogan in his 90 minute speech 40 times. He spoke about Deng as the architect of the reform path, but he talked about Mao much more. His Maoist mien thus reaffirmed, Xi had stated, “Inside and outside the Party, there were fierce calls for correction of the errors of the ‘Cultural Revolution,’ so that the Party and the nation could make a spirited new start from the midst of calamity.” Xi was a ‘sent away’ youth, banished from Zhongnanhai headquarters and his illustrious father purged.

China earlier had been agog how little Xi considers raising Deng’s name. In fact, some Western writers had made a strange proposition sometime in mid-2018 that he had been promoting his father, at best a second rung leader, Xi Zhongxun more. The ‘second-most’ important painting of the Chinese leadership at the National Museum of Art in Beijing, an AFP correspondent had noted, showed how Xi’s father was drawn as the leader – standing at a chart - explaining the ‘reform’ path to Deng. The diminutive man as Deng was, could be seen sitting on a couch listening to him with apparent rapt attention.

But on the Tuesday of 18 December, at an occasion when Xi’s signals in the speech were most important, he delivered. However, he left his wide audience of neo-classical votaries and their clients in various Western capitals – specially Washington DC – dumbfounded.

He first drew out the tight control of the Communist Party of China (CPC) and then restated its supreme role in steering the nation. Interestingly, Xi had presaged the speech with a visit that initially evoked images of the famous ‘Southern tour’ of Deng’s in the wake of Tienanmen Square ‘upsurge,’ now rather quaintly called the ‘4 June’ incident. On that tour Deng had calmed the nerves of the Western manufacturers and investors, and had told them that the country would not veer away from the path of ‘reform and opening up.’ But ‘political reform’, a shorthand for ‘liberal democracy’ – the most important demand of the agitating students at Tienanmen Square – would remain in the backburner. Western capitalists quickly forgot the human rights concerns their own governing regimes had been raising with a sense of ‘outrage.’

Unlike Deng, Xi knows that the context and circumstance of a benign West looking to do business with the most populous nation and having cheap labour, no longer exists. The Party’s control thus needed to be restated in clearer terms. “The practice of reform and opening has taught us that the leadership of the Chinese Communist Party is the most basic character of socialism with Chinese characteristics…” He thus said, as if as a red flag to the seemingly interfering Western powers, that the Government, the military, the people, the schools, East, West, South and North, the Party leads in all.

The fact that there is a cause for concern from apparently interventionist policies of the West – may not be militarised threats but more subtle and economic ones through the trade route – was flagged by Xi. “No one is in a position to dictate to the Chinese people what should or should not be done," Xi said in Mandarin Chinese during the speech, according to an official translation of the speech.

The key takeaway of the speech is the issue of restarting economic sovereignty of a nation that even as the USA is seeking. Xi has affirmed his globalist identity in terms of the world economy last year while attending the World Economic Forum annual jamboree in Davos. That clearly was a forum for private capital to be present seeking a dipstick survey of the moods of global political leadership. Xi catered to their desire of capital to go where profit can be maximised.

But he is shrewd in his understanding the world where capital seeks to be sovereign in its own right by being transferrable at will. He knows that China has the capabilities to stanch that outflow at will till now since the nation has not yet embraced full capital account convertibility.

Hence the speech needs to be read as a rendering from a position of strength. This an object lesson for India to learn.

(The paper is the author’s individual scholastic articulation. The author certifies that the article/paper is original in content, unpublished and it has not been submitted for publication/web upload elsewhere, and that the facts and figures quoted are duly referenced, as needed, and are believed to be correct). (The paper does not necessarily represent the organisational stance... More >>