What the CCP Wants You to Watch for in 2015

The “two sessions” – the annual meetings of the National People’s Congress and the Chinese People’s Political Consultative Conference – more or less took over Beijing (and China’s newspapers) for the first two weeks of March. Though Western pundits often decry the NPC as a “rubber-stamp legislature” and the CPPCC as a group of toothless advisors, the “two sessions” should not be so easily dismissed. The meetings, and the media coverage surrounding them, give the clearest possible picture of the Chinese Communist Party’s goals – what it expects of itself and how it wants to be judged.

This year, in a rare occurrence, the Party nearly lost control of that narrative. The weekend before the “two sessions” opened, a new environmental documentary appeared online. Produced and narrated by Chai Jing, a popular former news anchor with state-run CCTV, Under the Dome focused on China’s air pollution woes. The film immediately caught fire, gaining over 200 million views in less than a week. Yet despite initially allowing free discussion of the film, and even promoting it in state-run media, China’s leaders seemed to quickly grow concerned about the film. Online discussion was squelched, stories were pulled, and the film itself was taken down site by site.

That doesn’t mean that environmental protection wasn’t on the agenda for the National People’s Congress – very much the opposite. In his closing press conference, Premier Li Keqiang fielded a question on the environment, saying, “The Chinese government is determined to tackle smog and environmental pollution as a whole. But the progress we have made still falls far short of the expectation of the people… We’re determined to carry forward our efforts until we achieve our goal.” President Xi Jinping, as well as new Environmental Minister Chen Jining, both promised that China would step up the enforcement of its environmental laws, but there was no concrete plan for doing this (by increasing the powers of the Ministry of Environmental Protection, for example).

So yes, environmental protection was on the docket, but the Party did not want it to become the main focus – this is perhaps why discussion of Under the Dome was banned just as the NPC officially opened. Instead, the CCP wanted to steer public discussion to other areas – namely, the twin hallmarks of the Xi regime to date: economic reforms and anti-corruption.

‘Medium-High Growth’

In particular, CCP leaders were eager to reiterate that their reform and anti-corruption plans will not sink China’s economy. While Li stressed the importance of accepting a “new normal” of economic growth in his work report before the NPC, he also made it clear that the CCP does not expect (and likely will not allow) annual GDP growth to slip much below 7 percent for the foreseeable future. By framing the slowdown as a transition to “medium-high growth” rather than a continued slide, Beijing hopes to quell fears at home and abroad that China is in for a hard landing. In his closing press conference, Li even made a point of saying that the China’s leaders “still have more tools in our toolbox” when it comes to boosting a sluggish economy.

On anti-corruption, top leaders continued to flaunt the gains made so far – including a list of 14 generals tabbed as being under investigation in an announcement made just before the “two sessions” opened. More targeted officials were announced just as the NPC closed – including two NPC delegates who, according to Caixin, were detained immediately after the session closed. Those actions bookended verbal promises to continue the fight against corruption, including a push to increase the legal penalties for embezzlement and bribery by updating China’s Criminal Law.

Interestingly, Chinese media felt the need to defend the anti-corruption probe against increasingly frequent charges that it is weighing down China’s economy. There’s no denying that certain sectors, including luxury goods, automobile sales, and top-end restaurants, have been hard-hit by the anti-corruption crackdown. What’s more, many analysts (including Christopher Johnson of the Center for Strategic and International Studies) believe that local government officials have effectively stopped approving many new business deals for fear of drawing unwelcome attention to themselves. Cumulatively, that gridlock could put a brake on China’s growth at the time when it can least afford it.

Xinhua went to bat against these arguments in an op-ed released during the NPC. “Anti-corruption will not affect economic development. On the contrary, it will make the growth healthier,” the commentary quoted Xi as saying. The piece also argued strenuously against an economy reliant on corruption – “Prosperity against the backdrop of a ‘corruption economy’ – where rampant corruption lies in both government and business sectors – is not only artificial, it is poisonous,” Xinhua argued. The Party leadership is committed to anti-corruption, but apparently is facing stiff enough headwinds that it must take to the media to argue its case.

The twin focus on economic reforms and anti-corruption is nothing new – the same themes have been prominent since November 2012, when Xi officially came to power as the top CCP leader. However, 2015 is seen as a critical year for actually making headway, particularly on economic reforms. The Party’s emphasis, then, is illuminating – it creates political pressure for local officials to fall in line, but also puts pressure on the central government itself to make good on its promises. In essence, the CCP has doubled-down on its reform plan by continuing to highlight these goals in such a high-profile way. It has also promised not to allow reforms or anti-corruption to sharply slow economic growth – a promise that may prove difficult to keep.

What does this mean for the rest of 2015? There are a number of key issues to keep an eye on as the edicts issued at the NPC begin to be implemented. First, watch for continued progress (or lack thereof) in the opening of China’s service sector, particularly the financial services. Expanding China’s service industries is a crucial step in rebalancing its economy away from an over-reliance on exports and opening the service sector to more foreign investment is the surest way of jump-starting the process. This may be unveiled as a U.S. “win” as part of the on-going Bilateral Investment Treaty (BIT) negotiations, but don’t be fooled – it’s just as important for leaders in Beijing.

Also keep an eye on how far top leaders can go in reforming China’s state-owned enterprises, another key reform on the docket for 2015. SOEs represent powerful political interests groups; pushing through reforms will be a crucial test of Xi and Li’s ability to work their will on China’s economy. As part of their efforts, expect more SOE executives to fall to the anti-corruption campaign.

Outside of the SOE sector, observers will be looking to see who falls to the anti-corruption campaign, particularly in the military and within China’s top leadership. There are a number of rumors flying around about who might be next to fall – from the more likely (Guo Boxiong, a former vice chairman of China’s Central Military Commission whose son has already fallen) to the potentially shocking (Li Yuanchao, China’s current vice president, who is tied by rumor to a number of lower-ranking figures who have fallen).

Xi’s anti-corruption efforts have already been surprisingly widespread, but political analysts note there are still “gaps” – no one who came to power along with Xi has been targeted, for example, nor have any members of the “princeling” or “Red nobility” group, the sons and daughters of powerful Party members. If Xi is serious about taking the campaign to the fullest, he may attempt to address these “gaps” – possibly as early as this year.