Masterclass: Making Sense of Xi Jinping’s China

Why the crucial Communist Party congress starting October 16 could mark a major inflexion point in the country's political and economic journey

Founding Fuel

Amidst purges of senior officials and rumours of a military coup, the Communist Party of China is all set for the 20th party congress this month, where President Xi Jinping is expected to get endorsed for an unprecedented third term.

What is Xi Jinping’s China really like? And why should China’s internal political intrigue matter to outsiders, especially India?

This specially curated Masterclass explored 7 broad themes:

  1. What does Xi Jinping want to accomplish at the 20th Chinese Communist Party congress?
  2. What signs should we be looking for in the party congress regarding support for Xi and the direction the Chinese economy is headed?
  3. What can we expect from China on the international stage?
  4. China’s view of the world
  5. What should India be watching out for after the party congress?
  6. Military and geopolitics—is there alignment between Xi and the rest of the party? And does India matter in the US-China equation?
  7. The internal contradictions in China

The panellists included

  • Former foreign secretary and former ambassador to China, Vijay Gokhale
  • A leading authority on Chinese elite politics in the world, Professor Bo Zhiyue
  • Sinologist and associate professor at Shiv Nadar University, Jabin T Jacob
  • Sinologist and professor at IIM Indore, G Venkat Raman
  • Anchored by Pramit Pal Chaudhuriwho is visiting fellow, Ananta Aspen Centre, and India head, Eurasia Group

We also invited four esteemed members from our community to reflect on the masterclass by posing them one question: What did you learn from the Masterclass conversation that was new and different?

We’re sharing their 2-minute audiograms here, followed by a 10-minute summary of the Masterclass.

“The subtle ideological opposition to Xi Jinping’s thoughts was a revelation… And that we must invest resources to studying China and the rest of the world—like China has done to study India.”

~ Sundeep Waslekar

The narrative in the US on China is often binary. Will China invade Taiwan, support Russia, surpass US GDP?... This needs to be understood against the reality that the world’s geopolitical center of gravity is moving from the Atlantic to the Indian Ocean”

~ David Judson

“China is not quite the monolithic structure outsiders think. There are differences of opinion on economic policy and foreign policy—more importantly on military policy as an element of China’s foreign policy”

~ Vivek Kelkar

“Why would Xi want to retain charge? It is a lack of confidence in the party itself and scepticism about the ability of the sixth generation to handle the complex socio-economic situation”

~ Varshita Agarwal

A 10-minute summary of the Masterclass

1. What does Xi Jinping want to accomplish at the party congress?

There are 5 important areas, says Vijay Gokhale:

  • Augment his personalistic leadership through personnel changes.
  • He’s trying to enshrine himself as Marxism’s interpreter-in-chief in the 21st century.
  • He is trying to sanctify his actions with the force of law. That will make it difficult for anyone to question it.
  • He will intensify the process of detaching China in core sectors from foreign dependance.
  • Make China a national security state; hardening of domestic supply chains.

The success of all of this depends on internal party politics and the economy—which is showing worrisome signs. And the extent to which the party state inhibits innovation and creative ideas.

A context to the 20th CCP congress, by Prof Bo Zhiyue

  • The leadership changes at the congress will have implications for state leaders in the meeting that will happen in March 2023.
  • Xi has 4 titles: general secretary of the CCP, chairman of the Central Military Commission of the party, President of the People’s Republic of China, and chairman of the Central Military Commission of PRC. He holds 2 military positions that could be held by two people.
  • We tend to assume that the leadership has been decided already. Because it is not up to the party Central Committee or the party congress per se to decide that—they are in theory rubber stamps. But that has not been decided yet.
  • If you observe China closely, there are signs of power ups and downs. If you read Premier Li Keqiang’s talk at the 73rd anniversary of the founding of the PRC, you will get a sense that no one has been decided for the top job.
  • So Xi’s intent will be to amend the CCP constitution
    • To establish himself as the core of the Central Committee and the entire party, and establish his thought as a guide for the party and the whole country.
    • To create a new position as the party chairman. Because Xi faces two major hurdles—age limit (the top leadership has followed a rule of 68 as the retirement age; Xi is 69), and term limit (2 consecutive terms). Xi has served 2 terms as general secretary of the party, and now wants to start a new term as chairman. 
  • There are signs of dissent: 
    • On September 21, the top military leadership had a major conference—without Xi, who’s been chairman of the Central Military Commission for 10 years.
    • On September 23, the People’s Liberation Daily published an article reviewing the past 10 years of military achievements. And it omits many reference markers of Xi that he has developed over the 10 years. One of them is Xi Jinping Thought—on strengthening the military, which was written into the CCP Constitution. 

2. What signs should we be looking for in the party congress regarding support for Xi and the direction the economy is headed?

Vijay Gokhale:

  • The change to chairman of the party is only a change in nomenclature, and may not indicate dilution of power. On Xi’s absence, sometimes leaders find it convenient to absent themselves when there’s still a decision to be finalised. We’ve seen this with Mao during the Tiananmen incident.
  • On the economy, we have to go back to the period before Xi. The reforms led to the economy growing to $7-8 trillion by 2012, but also led to large challenges for the party. The private sector weakened the party’s control on the economy; corruption began to manifest itself; economic disparity grew—especially between the east coast and the rest of China. 
  • So when Xi came into office, the priority changed. Instead of growing the GDP, reduce the socio-economic disparities.
    • In the initial years there was a shift in Xi’s policy focus from export-led industrialisation to technology and innovation, and increasing domestic consumption. ‘Dual circulation’ (growing exports and expanded domestic demand) and common prosperity were the keywords.
    • But the government’s oversight on the private sector is stifling innovation.
    • There’s a sense that FDI may no longer be viable. Because China’s predictable regulatory framework is rapidly changing.
    • The anti-corruption campaign is spreading fear among domestic and foreign investors.
    • Then there’s slowing economic growth; rising youth unemployment; high savings rate which is not ideal in a recessionary phase; capital flight; the housing market crisis.

G Venkat Raman:

  • The hesitation to pass on the mandate to the sixth generation of leaders is actually a lack of confidence in the party itself on how the sixth generation will handle the contradictions from the economic modernisation.
  • When Hu Jintao took over, the party felt two of its important constituencies, the working class and the peasantry, had not benefited from the economic modernisation. And hence the “harmonious society” approach. 
  • Under Xi, the economic modernisation drive actually went a few notches up (Alibaba, Tencent, “national champions”). China’s socio-economic stratification became more complex. And there’s doubt whether the next generation of leaders can handle this.
  • Xi wants to bring about institutional mechanisms within the party to have a smooth transition to the sixth generation. Xi is known to be pragmatic and has a conservative approach, close to what the party stands for—hence the hesitation to pass on the mantle. 
  • At the 20th party congress, we need to look out for Xi’s work report; it will give an indication of the type of people who will be in the top-most decision making bodies.
  • There’s a debate in the party on whether Xi is trying to leave a legacy by trying to make China a tech superpower. 
  • The youth league faction has been pro-people and they are saying China needs technology for the China Dream. So how tech is harnessed and what modern China should look like is a major point of contention.

Jabin Jacob:

  • Remember that this is a party state. Regime survival is at the centre of it all.
  • In the last decade, while Xi is out to promote his personal leadership, he also has a broad support base—that enables him to conduct anti-corruption drives, etc.
  • There is increasing fusion of the party and the state. This has implications for China’s economy and foreign policy.
    • State institutions are collapsing into party institutions. 
    • Xi is marrying communism to a strong sense of self in China and hyper nationalism.
  • For the international community, the Chinese view of the world is zero-sum. If liberal democracies thrive outside China’s borders, that’s seen as a threat to the communist party at home.   
  • China wants to decouple from the rest of the world (Made in China 2025) because it sees a threat from the outside world.

3. What can we expect from China on the international stage?

Bo Zhiyue:

A historical background to the current economic policy.

  • In the past 40+ years China has had three waves—three openings—to allow the outside world in.
    • The first opening, through 4 SEZs in the 70s—economic growth was 9%
    • The second wave starting 1992 (after Tiananmen in 1989)—average growth in the decade was 10.2%
    • The third opening, starting with China’s entry into the WTO in 2001—the decade saw hyper growth of 10.6%.
    • The 4th decade, under Xi
  • Xi’s first term didn’t see many new economic policies. His focus was on anti-corruption to establish his own authority over the party and the military, and on military reform.
  • In his second term, he started introducing his own economic policies—to address social equality and environmental concerns. He was trying to establish rule of law over the private sector, clean up the environment, and correct social imbalance. When you have “common prosperity” you try to squeeze rich people and entrepreneurs out of their positions.
  • In December 2021, at a major economic conference, Xi’s causes were rejected one by one by the top leadership. Because that policy is not sustainable for China’s current situation. Premier Li Kiqiang’s policy became mainstream since December 2021.
  • There is a tug of war between Xi and Li Kiqiang over the economy. You can hear different voices in China—one is for economic change and opening; another is trying to keep that voice down by trying to use different terms, like “people economy” versus “market economy”. 
  • Majority of Chinese people and Chinese cliques are beneficiaries of the reforms and opening. 100%, maybe 95%, of people send their children to the US or the UK; 0% send their children to Russia. Because China has become part of the global village and they recognise the value of the Western countries and want their children to have a better future than theirs. They stay in China to make money so their children can enjoy their life in the US.
  • But Xi is promoting something else. He started a new academy, called Chinese Academy of History, in 2019. It has a high rank. In recent days, scholars have written a number of papers to provide options for Xi’s move backwards
    • One is to go back to Mao’s era of class struggles—they are trying to dismiss the criticism of the class struggle theme (that there are no classes in China). 
    • Another is to go back to the Ming-Qing period when China was isolated—they argue that this was a proactive policy to prevent invasions from Western imperialists.
    • That China should correctly understand Stalin and go back to Stalinism.   
  • Why is Xi taking a turn over the private sector? If you look at it from politics, if people are richer, they will want more voice. They will want to participate in politics and select their own agent or be elected themselves. This is a direct challenge to the party’s and Xi’s authority. 

4. China’s view of the world

Vijay Gokhale: 

  • The US represents an existential threat to the party and the state, especially in the last 3-4 years.
    • You will continue to see a decoupling of the Chinese economy in critical sectors—though it’s not possible or desirable for a $18 trillion economy to completely decouple.
    • Some supply chain disruption is likely to occur. 
    • The rest of the world might be forced into uncomfortable choices where key technologies are concerned—India will have to be prepared to align with either the US or the Chinese tech regime.
    • On the military and foreign policy side, there will be no let-up in their combative approach. 
    • We should expect a strong push to align the rest of the world against the West.
    • The battle for hearts and minds has begun, and this impacts India diplomatically and strategically.
    • Peripheral and proximate states—including India—will become more vulnerable to Chinese pressure, for Chinese homeland security. India falls within the “near abroad” for China. 
    • India will be a battleground of sorts if there’s a China-US conflict.
    • India too is an expanding economy with expanding diplomatic and national security capability and influence. There is increasing overlap of India’s strategic periphery with China’s. Especially as China moves into the Indian Ocean. This means an enhanced diplomatic and defence cost for India. 

5. What should India be watching out for after the party congress?

G Venkat Raman:

  • Party diplomacy, and not state diplomacy, has become critical.
  • CCP has engaged the political parties in Southeast Asian countries at the highest level—BRI and other kinds of engagement with China.
  • There’s some confusion on how we will deal with China: Is India going to deal with the Chinese state, the Chinese party, or the party state?
  • Can we afford to completely isolate China given the interconnectedness in the world? Can we continue to import and be dependent on APIs from China and have a tough stance on bilateral trade and commerce? We may say we will be selective in engaging with China economically—but then if we get more expensive options from the rest of the world, they will subcontract it to China.
  • As Xi becomes more powerful, to what extent will the party call the shots and how will the political elite exploit the party’s weaknesses to mobilise the Chinese people on nationalistic lines? For example, whenever there is trouble on any front, the Chinese leadership tries to mobilise anti-Japanese protests.
  • How will India become a part of this “near abroad” narrative and become a source of political mobilisation by the party elite? And how do we then deal with it?

Jabin Jacob:

  • China has been pretty active in India’s neighbourhood—by integrating India’s neighbours more closely with China’s economy. And under Xi, China has tried to politically integrate as well. 
  • In the past we worried about China-Pakistan relations. Today we have to worry about China’s presence in Sri Lanka, Myanmar and Nepal.
  • China has the resources to convert economic influence into political influence; but there have been structural problems in the way India engages with its neighbourhood. China is talking about building rail lines to Kathmandu; we’ve been talking about that for decades, with the terrain easier on our side, but China is taking the lead. 
  • It’s easier for China to view things in black and white as a confrontation with the US—so those who are not with China are with the US. That makes it difficult for India to deal with China.
  • On the military side, the boundary dispute will continue—China needs to show the kettle on the boil to make the Chinese people believe that the party is absolutely necessary for China’s survival and growth.
  • There’s going to be a temptation in India to go the Chinese way, to follow the Chinese model of growth—that will reduce India to being a minor player in the battle between the US and China.

6. Military and geopolitics—is there alignment between Xi and the rest of the party? And does India matter in the US-China equation?

Bo Zhiyue:

  • We are a little too absolute about China’s regime. Different leaders have different policies. 
  • Under Xi, China has played the wrong game, choosing the wrong enemy.
    • China’s strength is in its economy. It is the largest foreign trader in the world. The military game is the wrong game to play. 
    • Historically, Russia is China’s biggest enemy. In the past 160 years Russia has annexed large tracts of China’s territory. Between 1.5 million square km and up to 4.5 million square km, by different accounts.

Vijay Gokhale:    

  • If we accept the narrative that China looks at the US as an existential threat, then I foresee this competition growing in this decade as China attempts to reduce its deficiencies to take on the US.
    • Technological deficiencies
    • China is determined to break the US dollar’s hegemony.  
  • India is critical to China’s gameplan. 
    • For the first time in 250 years you have three significant powers on the Eurasian mainland again—Russia, China and India. Two of them are certainly rising and the third, while declining, will take a long while to decline.
    • The Indian Ocean region returns to the geo-economic relevance it had before the 18th Century.
    • In both the Eurasian mainland and in the Indo-Pacific, India is the fulcrum state.
    • So China’s focus will be to ensure neutrality, if not friendship. 
  • In pursuit of that friendship, India might expect persuasive tactics and low-level coercion. Because China believes that India does not have the capacity for geopolitical backlash.
  • However, if you examine the manner in which India has acted on the LAC after 2020 and its role in Vienna in ensuring that China’s resolution against AUKUS has not succeeded in the International Atomic Energy Agency’s general assembly, India is capable of a geopolitical backlash.

G Venkat Raman:

  • After Russia’s invasion of Ukraine, there seems to be differences in the party on how China deals with peoples.
    • One section feels Xi has not been right in openly supporting Russia.
    • A section of leadership feels that China’s “wolf warrior” diplomacy and confrontation with the US has slowed China’s rise.
  • India matters to China. There are two dominant development models in the world. India and China are civilizational states, with a long history. China has adopted an authoritarian approach, and has a homogeneous society. India is heterogeneous, a democracy, and has achieved many milestones. Its development model is also very persuasive. This is also a certain competition—India is slow, but steady. China’s growth has speed, but no one knows if it will stall.
  • So it is up to India to negotiate from a position of strength. 

Jabin Jacob: 

  • The Chinese have studied Indian politics and society very closely—the resources they devote to this is orders of magnitude greater than the resources India devotes to studying China.
  • India also matters to the rest of the world. Who else has the experience of dealing with China as India does? Right now Indian troops are confronting Chinese troops. If the rest of the world believes China will be a military threat, who else can they learn from on how to deal with China?
  • India also needs to pay attention to other parts of the globe—to Africa, Latin America—and not just focus on immediate and pressing problems.

7. The internal contradictions in China

Vijay Gokhale:

  • Factional politics has always been a part of the party’s politics in China. While Xi seems to be unchallenged, there are subterranean currents that run against him.
  • Our presumption that an authoritarian leader will rule in perpetuity is incorrect.

G Venkat Raman:

  • The times necessitated that private tech players be promoted by the state.
  • Once China reached a certain level, 
    • The leadership will not allow the private companies to have more data than the party state.
    • Cannot have individuals who can challenge the general secretary of the party.
    • There is social inequality, and the youth are preferring to opt out of the rat race—that raises problems of legitimacy for the party itself.
    • The online platforms are not considered hi-tech as such. So it is trying to cut to size the tech giants, but is promoting smaller players that suit its strategic direction.

Still curious?

  • Read a context setting essay by G Venkat Raman 
  • An excerpt on the boundary question from Vijay Gokhale's book 'After Tiananmen: The Rise of China'
  • A reading and watching list, recommended by the panellists
  • Our specially curated Notion page that has more links to additional resources for a wide-angle perspective on China 

Was this article useful? Sign up for our daily newsletter below


Login to comment

About the author

Founding Fuel

Founding Fuel aims to create the new playbook of entrepreneurship. Think of us as a hub for entrepreneurs- the go-to place for ideas, insights, practices and wisdom essential to build the enterprise of tomorrow. It is co-founded by veteran journalists Indrajit Gupta and Charles Assisi, along with CS Swaminathan, the former president of Pearson's online learning venture.

Also by me

You might also like