Xi Jinping — journey to power
Xi Jinping is arguably the most powerful man in the world. But what do we really know about the President of China? And should we be concerned about the direction in which he is taking his country?
Jane Sydenham, Investment Director, Rathbones
In the once-desolate village of Liangjiahe, North-West China, hundreds of tourists a day queue to visit a series of caves where, back in 1969, a naïve and privileged young 15-year-old from Beijing was banished.
The teenager spent seven years in the village, labouring alongside the local peasants who ground a living from the soft hillside dirt.
“He slept here. He didn’t know how to cook. He didn’t know how to adapt to life in the countryside,” says an elderly villager, Gong Zhengfu. He shows visitors the bed of brick and clay on which the boy fell exhausted each night. “At first we had to arrange for people to cook for him,” he says.
“We taught him how to plough the land and carry manure,” adds another villager, Shi Yuxin. “When he left the village, he cried.”
That boy was Xi Jinping. This experience shaped his life, and it is shaping the lives of millions more today.
A life of privilege
Xi Jinping (pronounced “shee jin ping”) was born in Beijing in 1953, the son of Xi Zhongxun, a Chinese communist revolutionary who had helped Mao Zedong rise to power and held a senior role in government as Head of Propaganda.
As the son of a revolutionary hero, Xi Jinping enjoyed a privileged upbringing among the families of the party elite. But it was not to last.
Mao’s megalomaniac tendencies began to emerge in the 1960s. The failure of the Great Leap Forward brought famine to the country and the deaths of as many as 55 million people. As the senior party leadership became fractured and in-fighting broke out, Xi’s father was purged and demoted — sent to work in a remote tractor factory.
Worse followed. With the start of the Cultural Revolution in 1966, his case was once more examined and the historic accusations against him expanded. He was jailed and forced to undertake “thought reform” through hard labour.
The Cultural Revolution lasted 10 years. It was a period of political and social chaos designed to mobilise China’s masses behind Mao, helping to reimpose his control over the Communist Party.
Mao’s enemies were crushed, schools and universities were closed, and gangs of teenagers wearing red armbands — Red Guard groups — roamed the streets, destroying property, tearing down signs and persecuting those wearing “bourgeois clothes”.
They ransacked the Xi family home. His older sister, Xi Heping, committed suicide in the wake of the trauma.
Though Mao's intentions to root out opposition and strengthen his waning leadership were partially successful, the levels of violence and disorder soon became too extreme even for him. He declared it “very necessary for the educated youth to go to the countryside and undergo re-education by the poor peasants”. In the years that followed as many as 17 million youths were sent to live like farmers.
Without his disgraced father’s protection, Xi was one of them. It was a difficult time. After a few months, torn from his parents and siblings, he fled back to Beijing. He was arrested and sent to work on a camp to dig ditches before returning to the village.
Death of Mao
Mao died in 1976. His successors sought to restore order and rebuild the economy. From 1978 Deng Xiaoping quietly began opening up the country and encouraging enterprise — he designated special economic zones (SEZs) in strategically placed areas to re-open to international trade and exploit China’s abundance of cheap labour.
“Under Deng’s more liberal regime, Xi flourished and began his own skyward trajectory.”
In 1989 troops fired at pro-democracy protesters in Tiananmen Square, leaving thousands dead and wounded. The massacre demonstrated the limits of Deng's willingness to shift too far from the model of centralised control. He has, however, been credited with igniting China’s rise to economic power in the 21st century.
Under Deng’s more liberal regime, Xi flourished and began his own skyward trajectory. After a spell in the People’s Liberation Army and a failed first marriage, he began working in local government.
In 1985 Xi moved to the vast coastal area of Fujian Province, directly opposite the island of Taiwan, and took up a township-level governmental role in one of Deng’s SEZs, Xiamen. Here he experienced first-hand the benefits of reform — and the problematic side-effect of corruption.
It was here, too, that he met and married his second wife, Peng Liyuan, one of the most famous singers of traditional Chinese songs.
Anyone predicting at this point that Xi would one day become China’s President might have had their sanity questioned.
He was elevated to provincial-level leadership as a Deputy Governor in 1996, enabling him to stand for one of the alternate 150 posts of the national Central Committee of the Party the following year. This is where serious power really begins to lie in China. Famously, Xi missed out by one position. He secured a slot only when a 151st position was made available for him by political allies, including old friends of his father.
In 2000 Xi became Governor of Fujian province. Two years later he was moved to Zhejiang, a coastal province to the north, as Party Secretary — a much more powerful position. There he supported local enterprises, including the internet start-up Alibaba, created by former English teacher Jack Ma, a native of the province.
In 2007 Xi briefly served as Party Secretary of Shanghai, and in October 2007 he was appointed to the nine-man Politburo Standing Committee. He took charge of the 2008 Summer Olympics and was elected Vice President.
When his nearest rival for the ultimate crown of “paramount leader”, Bo Xilai, fell from grace — convicted of bribery and embezzlement charges — Xi’s position as successor was secured. On 15 November 2012 he was elected to the post of General Secretary of the Communist Party, making him informally the paramount leader. He was elected President in March 2013.
For much of the past decade Xi has seemed to encourage free enterprise, enabling the rise of giant companies like Tencent, Alibaba and JD.com and the success of billionaire Chinese business owners, who are every bit as charismatic — and almost as rich — as American counterparts such as Jeff Bezos and Elon Musk.
This has led many in the West to see Xi’s reforms as a shift towards Western values and beliefs.
We assume his experience makes him a natural successor to Deng, in the liberal tradition. We assume, too, that he must resent the man responsible for the suffering visited on his family in the ’60s and ’70s. It is a mistake people have only recently begun to realise.
In China, Xi has always spoken positively of Mao and his experience in Liangjiahe. Mao’s various reforms may have accounted for millions of deaths, but Xi describes these as years of learning. He paints the picture of the Party that has emerged as an effective governing force that is helping restore China to its central role in the world. Rather than regarding them as divided, he sees himself as reconciling the pre- and post-1978 eras.
He has said: “There are people who think that reform and opening up are the same as adopting Western universalist values, Western political systems, and if these things don’t happen then it’s not reform. This is mistaken and distorts what we are doing. Of course, we want to raise the banner of reform, but our reform is one that will continuously have Chinese characteristics.”
“We want to raise the banner of reform, but our reform is one that will continuously have Chinese characteristics.”
And communist ones. A Chinese phrase says: “There can only be one tiger on the mountain.” Since coming to power Xi has ruthlessly built his power base, ensuring he is that tiger. A rigorous anti-corruption campaign won him the support of China’s poor while helping concentrate power to himself. He has taken up many of the most important positions within the Party himself or has filled the seats with close followers. He has also removed the constitutional restriction on him serving more than two terms, which would have seen him step down in 2023. His power is now as great as Mao’s once was. He may rule till he dies — or is overthrown.
Defender of the faith
Professor Steve Tsang, a political scientist and historian at the School of Oriental and African Studies in London, says: “Xi is a Leninist and Marxist able to rely completely on the Communist Party to exercise control in practically every area of Chinese life. So, he is not just a dictator but a dictator using the world’s most efficient instrument of control to exercise power and make changes as he sees fit.”
He is also a visionary. Tsang says Xi is on a mission to rejuvenate China and restore the country to a mythical status he believes it had in the 18th century, when people would pay homage to the Chinese Emperor, the Son of Heaven, before its humiliation at the hands of the British Empire. He sees himself as one of China’s greatest leaders.
T. E. Lawrence warned: “All men dream; but not equally. Those who dream by night in the dusty recesses of their minds wake up in the day to find that it was vanity, but the dreamers of the day are dangerous men, for they may act their dreams with open eyes to make it possible.” Does that make Xi dangerous?
Incursions into Taiwan’s air defence zone in the South China Sea, along with recent proclamations by Xi that he will “reunify” Taiwan with China, certainly make people concerned. In a speech in September this year, Xi described Taiwan’s independence as “the most serious hidden danger to national rejuvenation”, adding: “The historic task of the complete reunification of the motherland must be fulfilled — and definitely will be fulfilled.”
Tsang says: “Xi Jinping believes that his Leninist party system is the best system in the world. And he wants to make sure that system is always protected and safe. A world that promotes democracy and seeks to make other countries more democratic is a world that is not safe for Leninist China.”
Tsang believes this makes conflict between China and the US almost inevitable — eventually. One mountain; one tiger.
A more immediate concern may be China’s current economic stability. In recent months Xi appears to have launched his own Mao-style reforms, with a crackdown on businesses that fail to toe the Communist Party line.
In November 2020, he unexpectedly intervened to prevent the public offering of Ma’s payments and lending business, Ant Group. Attacks on other tech groups and other industries have followed. Targets include private tutoring — an industry that is worth $100 billion but which Beijing has decreed can now operate only without profit — and the video-games industry. Children are now limited to just one hour online on only Fridays, Saturdays and Sundays.
Jing Hu, a Rathbones Senior Asset Allocation Analyst, says: “My understanding is that certain big internet companies grew too fast in a lax regulatory environment. It meant consumers rights, like data privacy, were not protected, and fair market competition was not practised either. Those firms were gaining too much political influence. Jack Ma was known for criticising government policies in public. As it turned out, it crossed the line in Xi’s view. The economic and political reasons combined might have contributed to the initiation of the regulatory campaign that has shaken the market this year.”
“A factor behind the cancelled IPO of Ant Group, a microloans company, was the party’s intention to put the domestic capital markets in order. At a widely speculated 60 times leverage, Ant’s IPO would have set an example and escalated the already paramount concerns over China’s financial stability issue.”
Similarly, giant property developer Evergrande has fallen victim to Beijing’s crackdown on spiralling real estate debt amid a multi-year housing bubble.
These moves have seen trillions of dollars wiped off the value of Chinese tech and education shares this year, as well as hundreds of property developers facing bankruptcy.
Russell Napier is curator of the Library of Mistakes in Edinburgh, which is dedicated to recording the financial folly of humankind. He is also the author of a history of the Asian Financial Crisis — he was a young analyst in Asia when it broke in the late ’90s. He has serious concerns about the way Xi has allowed debt levels to rise, and he worries that the President’s tactics for reducing them are driven by an ulterior motive.
Napier says: “Since his ascent to power Xi has taken steps to increase the control that he and the Chinese Communist Party have over many facets of life in China. Exploding debt bombs across the Chinese private sector would let the Chinese state intervene to take control of distressed companies. Xi’s decision to permit much more debt distress than investors believed possible may be another mechanism by which he seeks to return China to something less akin to a market economy and more akin to a command economy.”
It is a dangerous game. Many worry that, with all these measures coming at once, Beijing could trigger a rapid cooling of the Chinese economy. This is not helped by a zero-tolerance policy to COVID-19 that has created a stop-start recovery in consumer confidence — or by local officials aiming for centrally imposed targets on CO2 emissions simply turning the power off.
Jing Hu says: “You have to give Beijing the benefit of the doubt that it can improve people's lives in a way that is aligned with the Party interest without causing systemic risk to the economy. Our baseline case is that it can continue to manage this process and create a soft landing, as it has done in the past. But the risk is definitely high.”
In the aftermath of the Tiananmen Square Massacre, Deng made a pragmatic retreat from his liberal path for some years. It had gone too far for the Communist Party. Is that what Xi is doing now — readjusting the levers of economic power to bring things back into line? Or is it possible that his actions this year presage the start of something more enduring and serious, like one of Mao’s disastrous ideological campaigns? Xi says the Party has learnt the lessons of the past. Let’s hope he has.
The Chinese premier has come a long way since his exile to a cave in Liangjiahe. No-one could have predicted that a teary-eyed teenager would one day become the world’s most powerful man. Few can predict today what he will do next with that power.