Asia Centre

The dialogue will include the following themes:

-          New Directions in Chinese Foreign Policy – Responsibilities, Regional Crises, Peace-Keeping

-          the EU-U.S.-China Triangle

-          the EU-Russia-China Triangle

-          Proliferation from a Regional Perspective: Northeast Asia and Iran

China’s Politics under Hu Jintao

Mathieu Duchâtel, François Godement

Abstract

This special issue focuses on Hu Jintao’s first mandate in power, between the Sixteenth and the Seventeenth Party Congress (2002-2007). It considers two intertwined issues: power viewed through the lens of party politics, and actual policy changes that may have emanated from a mandate initially loaded with expectations. Besides the domestic dimensions of elite politics and ideological change, two central aspects of Chinese politics, the key question tackled in this issue is the ability of a new general secretary to transform past policies, especially in the realms of foreign affairs and national security since they are by tradition – and constitutionally – the responsibility of China’s paramount leader.

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The Chinese Communist Party: Recruiting and Controlling the New Elites

Cheng Li

Abstract

This article explores two interrelated aspects of the new dynamics within the CCP leadership – the new elite groups and the new ground rules in Chinese politics. The first shows profound changes in the recruitment of the elite and the second aims to reveal the changing mechanisms of political control and the checks and balances of the Chinese political system. The article argues that the future of the CCP largely depends on two seemingly contradictory needs: how broad-based will the Party’s recruitment of its new elites be on the one hand and how effective will the top leadership be in controlling this increasingly diverse political institution on the other. The emerging fifth generation of leaders is likely to find the challenge of producing elite harmony and unity within the Party more difficult than their predecessors. Yet, the diverse demographic and political backgrounds of China’s new leaders can also be considered a positive development that may contribute to the Chinese-style inner-Party democracy.

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Remaking the CCP’s Ideology: Determinants, Progress, and Limits under Hu Jintao

Heike Holbig

Abstract

Two decades after the predicted “end of ideology”, we are observing a re-emphasis on party ideology under Hu Jintao. The paper looks into the reasons for and the factors shaping the re-formulation of the Chinese Communist Party’s (CCP) ideology since 2002 and assesses the progress and limits of this process. Based on the analysis of recent elite debates, it is argued that the remaking of ideology has been the consequence of perceived challenges to the legitimacy of CCP rule. Contrary to many Western commentators, who see China’s successful economic performance as the most important if not the only source of regime legitimacy, Chinese party theorists and scholars have come to regard Deng Xiaoping’s formula of performance-based legitimacy as increasingly precarious. In order to tackle the perceived “performance dilemma” of party rule, the adaptation and innovation of party ideology is regarded as a crucial measure to relegitimize CCP rule.    

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China’s Foreign- and Security-policy Decision-making Processes under Hu Jintao

Jean-Pierre Cabestan

Abstract

Since 1979, foreign- and security-policy-making and implementation processes have gradually and substantially changed. New modes of operation that have consolidated under Hu Jintao, actually took shape under Jiang Zemin in the 1990s, and some, under Deng Xiaoping. While the military’s role has diminished, that of diplomats, experts, and bureaucracies dealing with trade, international economic relations, energy, propaganda and education has increased. Decision making in this area has remained highly centralized and concentrated in the supreme leading bodies of the Chinese Communist Party (CCP). However, China’s globalization and decentralization, as well as the increasing complexity of its international interests, have intensified the need to better coordinate the activities of the various CCP and state organs involved in foreign and security policy; hence, the growing importance of the CCP leading small groups (foreign affairs, national security, Taiwan, etc.). But the rigidity of the current institutional pattern has so far foiled repeated attempts to establish a National Security Council. 

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Managing Stability in the Taiwan Strait: Non-Military Policy towards Taiwan under Hu Jintao

Wu-ueh Chang, Chien-min Chao

Abstract

China’s Taiwan policy has been one of coupling intimidation (the “stick” approach) with coercion (the “carrot” approach), a policy mix which, in the near term, is not likely to change, as is evidenced by the passage of the “Anti-Secession Law” in March, 2005. However, under Hu Jintao, the focus has been on pragmatism. The warm atmosphere that presently reigns in the Taiwan Strait area is unprecedented. Further talks are expected before the two cross-Strait leaders are slated to step down, simultaneously, in 2012. An era of reconciliation and negotiations has dawned. For the first time there is consensus regarding norms of interaction between the two sides. Cross-Strait relations have stabilized after years of tumult. More open, stable and predictable cross-Strait relations are in the interests of both sides. Difficulties surely lie ahead, but they will be dealt with in a different manner than what has been witnessed in the past. 

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The overarching theme is the Chinese state's capacity to address the growing sense of energy insecurity-defined as "strategic threats" posed by supply disruptions, efficiency and sustainability in energy usage, price volatility, and environmental degradation (p. 16). The authors encourage us to think beyond the conventional emphasis on supply-side policies and procurement, to investigate the political choices emerging from the key regulators' strategic interactions with stakeholders and to incorporate the macroeconomic, social and foreign policy, and fiscal and legal dimensions of energy security. They highlight the unresolved issues of corporate governance and economic efficiency in the aftermath of the restructuring of the national oil and petrochemical corporations (NOCs) and privatization of coal sectors in the late 1990s.

Chapter 1 by Michal Meidan, Philips Andrews-Speed and Ma Xin proposes an analytical framework for energy policy-making, listing and briefly characterizing the central state regulators and a variety of stakeholders. Not surprisingly, the main relationship affecting policy output is that between ministries and state-owned firms such as the national oil corporations. The chapter could benefit from greater clarity about the interests of the regulators, in particular by differentiating clearly between economic and technical concerns on the one hand and fiscal imperatives on the other. This neglect of the fiscal aspects of energy policies is a problem throughout the book.

Meidan, Andrews-Speed and Ma are absolutely right that the cherished "fragmented authoritarianism" model of bureaucratic politics does not account adequately for the emerging regulatory landscape on energy policies. Simply stated, there are more autonomous interests and energy-related issues to consider today than there were in the late 1980s. The issue linkages implied in this more inclusive analytical framework are laid out for three policy bundles encapsulating different statist priorities-energy supply, the relationship between energy supply and efficiency, and the relationship between energy efficiency and environmental protection (pp. 58-61). I would have liked to see a critical assessment of the key predictions of the fragmented authoritarian model; however, this chapter serves as a reference point for future theory-building.

Erica Downs' work on the relative autonomy of NOCs is highly respected; in Chapter 2 she turns to the supply side of policies and regulation. Her account adopts the language of the fragmented authoritarian model, but her findings push the model's boundaries. I would have liked to see more precision about the current functions of the National Development and Reform Commission (NDRC), and an assessment of the relative rule-making activism and enforcement presence of the agencies across issue areas would be informative. Downs underscores the continuing usefulness for elite promotion of work experience in the oil sector - does this pattern suggest factionalism with an "oil clique" as its base? Do regulators consider job prospects in the NOCs when they design or enforce policies? These questions relate to an important debate on the emergence of the regulatory state in China.

In Chapter 3 Brian Ricketts of the International Energy Agency analyzes the international and domestic market characteristics of coal production and trade. While coal pricing and coalmine ownership have been significantly more privatized than in the oil and petrochemical sectors, Ricketts rightly points out that coal trade remains under the oligopolistic control of state-owned trading companies. In addition, serious shortcomings in health, safety and environmental regulation and in transport infrastructure have discouraged investors. A greater focus is needed on the responses of local governments to Beijing's attempts to consolidate the market, favor large-scale mines and increase regulatory enforcement; the concluding chapter mentions the need to consider the local state (p. 226).

Chapter 4 by Shi Dan, a leading expert on China's energy, hints at the redistributive conflicts behind domestic-international price gaps and Beijing's adherence to administrative controls over price adjustments. This chapter captures succinctly the essence of the structural problems facing the oil industry since the last market consolidation and asset restructuring of NOCs in 1998. As China moves toward price convergence with global prices while keeping the NDRC firmly in control of price-setting, it exposes itself to contentious redistributive politics in times of price fluctuations. The oligopolistic market structure has also impeded the emergence of private competitors and the adoption of technology and production methods to improve efficiency in subsidiaries. Her suggestion that the government allocate funds for strategic petroleum reserves is particularly apt in the current context of depressed oil prices, but her additional suggestions for market-determination of oil prices and encouragement of private capital in exploration would be difficult to implement. If, as Downs has argued, the NOCs have leveraged their autonomous political influence, then such changes would be possible only if they can provide private gains for the NOCs.

Chapter 5 by Wei Bin on the power industry reflects the official perspective on the key reform measures in the past decade and the future reform agenda. Chapter 6 by Yang Lan, Mao Xianqiang, Liu Zhaoyang and Xing Youkai applies a general equilibrium model (using the base year 2000) to simulate the effects of an energy tax on macroeconomic indices, energy consumption, saving and demand, and the environment. The model's assumptions are certainly open to dispute. The prediction, not surprisingly, is that the higher the level of the energy tax, the greater the negative impacts on the national economy, but also the more likely that industries and households will adjust their energy usage and technology toward cleaner fuel. The authors argue that the energy tax should be supplemented by short-term side-payments to disadvantaged users and additional incentives to promote green technology. This has not been done with the recent implementation of the national fuel tax.

Chapters 7 to 9 adopt a legalistic perspective on China's energy policy in a broader geopolitical context. In Chapter 7, Wang Mingyuan identifies an interesting paradox in the legal foundation for China's implementation of "clean development mechanisms" (COM): the core domestic laws on CDM rest on China's commitments as a contracting party to the Kyoto Protocol. Furthermore, the 2004 Management Measures invite bureaucratic entanglements involving many major and supporting agencies. The chapter's faint condemnation of private interests unfortunately precludes a more thoughtful discussion of incentivizing firms and encouraging private-public partnerships in CDMs.

Chapter 8 by Yu Hongyuan provides an overview of China's involvement in international regimes concerning climate change. The central theme is China's willingness to recognize the negative impacts of its rapid growth and to come to terms with other countries' demands. I would have liked to see a discussion of whether China's position on climate change is either complicated or facilitated by participation in general multilateral institutions such as ASEM and APEC. Yu rightly points out that domestic empirical understanding of the actual impact of climate change remains woefully inadequate, hindering informed and accountable pol icy-making.

The final chapter, by Tadakatsu Sano-a former vice-minister of the Japanese Ministry of Economy, Trade and Industry (METI)-with Mikiko Fujiwara, offers lessons from the Japanese experience in managing energy insecurity. This comparison has many limitations and may overstate China's potential problems, since for China the development of domestic resources is a viable option. Sa no does not consider the Japanese government's mixed record of environmental protection, or innovative Japanese carmakers' critical contribution to meeting consumer demand for fuel efficiency. The chapter's relevance to China would also have been enhanced by further analysis of Japan's bureaucratic reorganization, along the lines of Steven Vogel's work on reregulation.