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China Prepares for Transition to New Government

September 28, 2012 at 12:00 AM EST
With the fall of Bo Xilai, an outspoken voice of opposition and reform, the Chinese government revised its selection for new leadership in China's Communist Party. Margaret Warner talks to George Washington University's David Shambaugh for more on what the decision to oust Bo means for China and its ruling party.
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MARGARET WARNER: So, what does the decision to oust Bo Xilai mean for China and its ruling party?

For that, we turn to David Shambaugh, director of the China Policy Program at professor of political science and international affairs at George Washington University.

Professor Shambaugh, welcome back to the program.

So, expelling Bo Xilai, lodging criminal charges, put this in some context for us, first of all. How big a step is this?

DAVID SHAMBAUGH, George Washington University: Well, Margaret, it’s been a sort of thundercloud hanging over the Chinese political system and the country for the last six months.

The whole system has been in suspended animation waiting for this last shoe to drop. As your package just indicated, the conviction of his wife and then his former police chief where the antecedents to today’s announcement.

It is a big — it is a major scandal. It is probably the largest scandal since a man named Zhao Ziyang was removed from office on the eve of the Tiananmen crisis in 1989.

And, as your package has indicated, Bo was a contender for the highest body, the Standing Committee of the Politburo, but he obviously stepped on a lot of toes and made a lot of enemies.

MARGARET WARNER: Well, why did it take — I mean, as you said, this has been grinding on for months. Why did it take so long? What was the infighting really about?

DAVID SHAMBAUGH: Well, we don’t entirely know. The Chinese political system is known for its opacity, not its transparency.

But, clearly, in addition to the complicity in the murder of the British national, Heywood, his style when he was the leader of Chongqing irritated the central leaders.

He wasn’t a consensual party man. He was kind of more an American-style politician, out glad-handing a lot, trying to build a populist base amongst the poor and the deprived in Chongqing, and really openly campaigning for promotion, as well as bugging — apparently, his security services were said to bug the president of the country, Hu Jintao.

He just did a number of things. And now we know that there were financial irregularities, rather considerable, and huge corruption and bribe-taking.

MARGARET WARNER: Did he represent any kind of significant ideological wing in the party? In other words, is there some sort of neo-Maoist leftist cadre, or was this just power politics?

DAVID SHAMBAUGH: No, very definitely, there is a Neo-leftist Maoist cadre. They have been there really for 30 years throughout the reform period.

They have not been happy with either the external opening to the world or many of the “grab what you can” — “grab while you can grab it” kind of policies domestically. They see China as having really gone down the wrong path of…

MARGARET WARNER: You mean embracing the markets, even though it’s party controlled. DAVID SHAMBAUGH: Embracing markets, that’s right, and creating vast social inequities.

China has now the world’s highest, I think, Gini co-efficient, which is a measure of social inequity. So, this is a country of huge haves and have-nots.

And the leftists, if you will, who are actually a rather vocal bloc within the party and in society, the netizens, actually echo this as well, have been…

MARGARET WARNER: Yes, the social media.

DAVID SHAMBAUGH: That’s right.

MARGARET WARNER: The social media types who — there was one headline today that said, micro-bloggers gloat.

(LAUGHTER)

DAVID SHAMBAUGH: Right. Right.  

MARGARET WARNER: So, meanwhile, it was so serious what to do about him that it delayed setting the date for the party congress.

Was there a power struggle? In the end, the same leadership everyone expected is coming in. Why were the two so linked? And does this say anything about the triumph of one faction over another?

DAVID SHAMBAUGH: There’s a lot of speculation in the West about factions in the Chinese political system. I frankly don’t think they are that solid. I think this is a much more fluid, kind of coalitional political system.

Bo was a member of what group known as the ‘princelings,’ the kind of children of the first-generation revolutionary elite. But they don’t really hold together as a faction, per se.

So, I think a lot of the infighting that has been going on is really about who is going to get what position in the political bureau and the standing committee.

And that’s not settled yet. That was not — you know, we won’t know that until the 8th of November, when they all come out and meet the world in their red ties and blue suits.

MARGARET WARNER: And how serious is this economic slowdown? You heard Judy’s segment, the start of it, you know, about slow U.S. growth. I mean, 7.5 percent would just be nirvana for us.

DAVID SHAMBAUGH: Right.

MARGARET WARNER: And do you share the view that in fact paralysis over what to do about Bo and the leadership change has really significantly hobbled the leadership’s ability to deal quickly with the economic issues?

DAVID SHAMBAUGH: Yes, I do.

The Bo case has frozen up the entire system, not just on economic decision-making, but political reform, social reform, and even some foreign policy issues.

And we’re not going to see until probably well after the Congress that kind of sclerosis lifting.

It’s going to take awhile. It’s going to take Xi Jinping and the new leadership some time to get their feet, as it were. But it’s really hobbled the decision-making structure. We have had a vacuum at the top of this system. You have weak leadership, lack of vision, inability to move to tackle the economy.

It’s not just slowing growth rate and exports broad. It’s growing non-performing loans and bank indebtedness, social inequities, a whole series of issues that plague the economy going forward.

MARGARET WARNER: Final quick question, there are plenty of other party leaders who live beyond the obvious means of a government official. Is that at all risky for them to file these kind of charges against Bo?

DAVID SHAMBAUGH: Absolutely.

He is not unique, shall we say. He is unique in that he was involved in a homicide or in the cover-up of a homicide, and his own political style was slightly unique.

But in terms of corruption, he is more representative, I would say, of the entire system. The system is riddled with this. And, you know, there is no — there is a little irony that the princelings are the ones who are receiving most of this corruption.

MARGARET WARNER: Well, Professor David Shambaugh, thank you.

DAVID SHAMBAUGH: You’re welcome.