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On the Eve of Political Transition in China, Assessing Hurdles and Global Role

November 8, 2012 at 12:00 AM EDT
As Chinese President Hu Jintao passes off leadership to a successor, China faces a slight economic slowdown after a decade of explosive economic growth, a growing middle class with shifting expectations and recent charges of political corruption. Margaret Warner gets analysis from David Lampton of Johns Hopkins University.

MARGARET WARNER: What will this leadership change mean for China and the world?

For insight into that, we turn to David Lampton, director of the China Studies Program at JohnsHopkinsUniversity’s School of Advanced International Studies.

Welcome back to the program.

DAVID LAMPTON, Johns Hopkins University: Good to be with you.

MARGARET WARNER: So, how sweeping a change is this going to be??

DAVID LAMPTON: Well, I think the first thing to recognize is we are not electing a person that has the kind of executive power that even a president of the United States has.

We’re electing a chairman of the board. And Bill Clinton, when he sits around, or Barack Obama, at his Cabinet table, he’s got people around him that he chose.

The people that Xi Jinping is going to be surrounded with were selected by a committee process. And they don’t owe their entire future to him. And they represent different portions of China, either geographically or in institutional terms.

So what we’re electing is a committee that will after it’s elected decide key policy issues.

So this Congress doesn’t represent the election of a strong leader or a resolution of all of the policy issues facing the country.

MARGARET WARNER: And is it fair to say we won’t really know the direction on those policy issues until this committee, as you call it, the Standing Committee, I think, of the politburo, what, seven members, is announced next week? That will tell us more?

DAVID LAMPTON: Well, we will know the leadership lineup at the top presumably next Monday or so.

MARGARET WARNER: So, why is this — why does this matter to the United States and to the world?

DAVID LAMPTON: Well, China faces enormous problems.

You don’t want to be a Chinese leader. They have got a rapidly aging society. They have to rebalance their economy away from exports. They have to win the confidence and legitimacy of their people that is somewhat shaky. They have to reassure their neighbors now who are worried about their growing power, military and economic.

And if China is going to deal with this , they are going to have to effectively create a stronger leadership that inspires confidence. And the story of post-Deng has been weaker leaders, more fragmented society, more fragmented bureaucracy, and empowered groups of people. And so we have a weaker group dealing with a stronger and more divided society.

MARGARET WARNER: And, as you said, they have a slowing economy. And that’s very important to the world, is it not, that they find some way to reignite the pace of growth?

It looks enviable to us. I think it was 7.4 percent in the last quarter, but, for China, that’s a slowdown.


But if you look at Hu Jintao over his 10 years, it’s been 10-plus percent average rate of growth. If you read the financial pages of our papers, we are worried about the slowdown in China’s economy. So on the one hand, we want them readjust in a way that will slow them down. But, on the other hand, they buy fewer exports if they do slow down.

MARGARET WARNER: So what choices does the new leadership face? I mean, what — are there sort of two paths here? We keep hearing about economic reform. What’s the bottom-line choice?

DAVID LAMPTON: Well, I think the bottom-line choice is that they are going to have to increase their kind of consumption of health care, of education, and the kinds of things that people want to buy in their domestic society.

And they have to rely less on heavy investment, heavy exports to the rest of the world, because the major export markets of the world are having their economic difficulty.

MARGARET WARNER: So, are there ideological factions over this question of how they can spur more growth? Do some favor sort of a more socialist model and others a more market-oriented model?

DAVID LAMPTON: Well, I think there is — there are many divisions, but that’s one of them.

There are those who have both a personal interest or an organizational interest in a state enterprise, more centralized, pillar industry kind of focus. And then there are other leaders of provinces, and the private sector is a very rapidly growing part of China, that want to have a more open and market-driven kind of economy. And, frankly, if China wants to continue high rates of growth, it’s going to have to move towards that market view.

MARGARET WARNER: So, what’s known about incoming President Xi Jinping, because we do know he’s going to be the incoming president, as opposed to President Hu on that question?

DAVID LAMPTON: Well, on that question…

MARGARET WARNER: How liberal a market-oriented economy to try to build?

DAVID LAMPTON: Well, we will have to see, but there are a lot of indicators here.

First of all, Xi’s father was Deng Xiaoping’s trusted ally setting up the first special economic zone that was the first initial stage of the open and reform policy. So Xi grew up in a household that was responsible for opening to the world.

His whole political career since for the most part has been being a provincial official or party secretary in China’s most cosmopolitan, trade-oriented bureaucracy — provinces. And, therefore, everything we know about him has been cultivating relations with Taiwan, with Hong Kong, building the trade relations of Shanghai and other coastal provinces where he’s served.

MARGARET WARNER: Finally, on the issue of corruption, there’s been this huge scandal of course involving Bo Xilai and his wife and the murder of a British businessman.

We heard outgoing President Hu warn about how that could actually bring down the party. How serious is the public anger over it? Do you think anything will be done?

DAVID LAMPTON: Well, I think it is a serious problem.

And when in a public report that Hu Jintao gave today, he says fatal weak link for the party, I think he’s not kidding. On the other hand, that’s been said before, and, nonetheless, we have had 10 percent growth and China continually growing its national power.

It’s certainly something that everybody is upset about. But there was a recent Pew poll that talked about what are Chinese unhappy and happy with.

And the irony in is, they’re happy with their personal life, they’re happy with housing for the most part. They can now — their children can go abroad if they want or they have more educational opportunity, career mobility.

So people in the domains of their life that they’re most concerned about seem to be very happy. But when they reflect on sort of what you might call public civic issues, of which corruption would be one, they’re entirely unhappy.

So I think the irony is that China is building this middle class very happy with its material circumstance, but we’re just beginning to see they’re turning towards the public square and asking, what are our rights as citizens? Do we need our property protected? How do we get more transparency?

MARGARET WARNER: Well, a lot for the new leadership to consider.

David Lampton, thank you.

DAVID LAMPTON: Good to be with you.

JEFFREY BROWN: And there’s more online. We asked three experts how the power transfer in China and President Obama’s reelection could affect U.S.-China relations. You will find that on the Rundown.