In the summer of 2004 and now almost two years after the 16thCommunist Party Congress of November, 2002 affirmed a succession of leadership in China with a new team drawn from the younger fourth generation of Chinese Communist Party (CCP) leaders, economic progress is rapid but political uncertainty continues. Uncertainty about who is in charge, what policies and directions prevail, and where the country is going in its foreign policy continue to create anxiety about the future. Several realities and recent events reaffirm the remarkable economic progress China has made while also demonstrating the persistence of a political process that appears incapable of transitioning in a smooth and predictable fashion. Let us consider some of the evidence and recent happenings that account for this.
China’s economy continues to advance at breakneck speed particularly in the development of its manufacturing base and the extraordinary growth of its exports. While the exact size of China’s economy remains a topic of debate among various economists owing to how it is measured (whether in dollar terms based on its gross domestic product or in purchasing power parity terms as is more common in studies of developing economies wherein purchasing power based on comparable products is evaluated), by any accounting system, China’s economy is now one of the world’s largest and certainly one of the most rapidly growing. Problems remain in the banking and fiscal systems, yet policy makers are addressing these issues. Real progress has been made in recent years to clean up the inadequacies and to create a modern economic system required to participate fully and effectively in the WTO and other world organizations that require accurate accounting and statistical systems and records.
On the political front the signs are not so clear. First, the leadership succession that is supposed to be part of the reformed system has not completed its transition. This has become increasingly evident in the signals emanating from the past party general secretary and president, Jiang Zemin, who now officially only occupies the top military position as Chairman of the Central Military Commission. As Joseph Kahn of the New York Times wrote on July 16, 2004, Mr. Jiang is reported to have told National Security Advisor Condoleezza Rice in a meeting two weeks ago that he was “handing over more and more power” to Mr. Hu. This is a clear signal that Mr. Jiang is still in power and calling the shots.