Let’s explore the concept of Chinese “princelings”. First, what are they? “Princelings” are descendants of influential members and leaders of the CCP. They are assured opportunity in the party simply by way of lineage. Hu Jintao, the president of China prior to Xi, was not a “princeling”; rather, he was a “tuanpai”, who, quoting the Council on Foreign Relations,

“…came from more humble backgrounds and rose to power through the Communist Youth League.”

Xi Jinping IS a “princeling”; as noted in a recent CNN piece,

“[Xi Jinping] is one of China’s “princelings,” the sons and daughters of former revolutionary leaders who have risen into high positions within the party. His father was Xi Zhongxun, a revolutionary fighter and former Chinese vice premier, who also pioneered China’s early experiments with capitalism, helping to establish Shenzhen’s Special Economic Zone.”

It’s possible that Xi Jinping was never comfortable being a “princeling”. There is evidence of this going back to his days as a youth during the Cultural Revolution. In the spirit of Mao Zedong, Xi Jinping aspires to be seen as “of the people”, and not “of artistocracy”. Having been seen as the enemy of the people during the Cultural Revolution left a scar visible in his actions. He has made it his goal to prove himself, and disprove his predecessors, since his first day in office. Upon becoming president, Xi implemented an anti-corruption campaign against party members who had previously ruled under Hu Jintao, and others. Again from Council on Foreign Relations,

“Some of the most high-profile [corruption] cases include Hu’s former aide, Ling Jihua, and his brothers; former Chongqing party chief Bo Xilai; Xu Caihou and Guo Boxiong, former vice chairman of China’s top military body; and Zhou Yongkang, a retired Politburo Standing Committee member and former chief of the CCP’s law and politics commission. Between Xi’s power elevation and the end of 2016, more than 850 individuals were expelled or arrested for corruption, including nearly one hundred “tigers,” or high-level officials. In addition, eighteen members of the party’s Central Committee have been detained by corruption investigators.”

Going after members of the the previous regime signaled an attempt to delegitimize Hu Jintao. It was a message primarily to the Chinese poor and working class that China now had a leader, unlike before, who was on their side. Xi has not only gone after the old leaders in this anti-corruption campaign, but any leader viewed as a potential successor to him. In July of 2017, Xi went after one of those potential successors, a powerful party secretary from the city of Chongqing. CNN reports,

“…some have pointed out that the campaign’s high-ranking targets were rarely Xi’s supporters. ‘This anti-corruption campaign is very selective,’ Chinese leadership analyst Bo Zhiyue told CNN. ‘Some people say if you look at the names of people who have been brought down, you don’t see a lot of names of (Xi’s) princeling allies.’ In July, Chongqing’s powerful party secretary and Politburo member Sun Zhengcai was placed under investigation by the Central Commission for Discipline Inspection. He had been considered a potential successor to Xi.”

There is clear evidence of an on-going power-grab by Xi. Investigating a potential successor is also an attempt to delegitimize, and it coincides with Xi’s successful removal of presidential term limits in March of 2018. Just like Americans, the Chinese love to see politicians in handcuffs, and Xi has obliged. But Xi has a way of balancing a give with a take. While liberals praised his anti-corruption campaign, he has simultaneously gone after them; Document No. 9 symbolized the beginning of a crackdown on western ideals in China. Many prominent activists have seen their demise since it was published. Both the anti-corruption and anti-western campaigns serve one purpose: the continued proliferation of Party force and control. As the New York Times states, when it confirmed the existence of Document No. 9,

“Mr. Xi’s hard line has disappointed Chinese liberals, some of whom once hailed his rise to power as an opportunity to push for political change after a long period of stagnation. Instead, Mr. Xi has signaled a shift to a more conservative, traditional leftist stance with his “rectification” campaign to ensure discipline and conspicuous attempts to defend the legacy of Mao Zedong.”

There’s that word again, discipline. It is used often in Xi’s speeches, and party communiques. It is meant to reinforce the idea that all Chinese people must obey the lane they are assigned. Discipline runs contrary to “constitutionalism”, the idea that all people, including governments, are subject to check and balance. Constitutionalism says,

“…state and party power should be subject to a supreme law that prevents abuses and protects citizens’ rights.”

Maoism, the form of Communism practiced by the CCP, is paternalistic in nature; it’s philosophy is that the party knows what’s best for the people, and therefore the people do not require protection from it. Xi’s anti-corruption campaign was intended to be proof of this, to show that he would be a good father to the Chinese people. But by aggressively pursuing prominent rights activists and throwing them in jail along with the corrupt leftists, Xi is throwing the good away with the bad.

Capitalist Enclaves

To find out how Xi plans on merging socialism and capitalism going forward, we can look at the influence his father had on China’s economic boom of the 1980’s. Xi Zhongxun believed there was a place for capitalism in China. According to CNN, he…

“…pioneered China’s early experiments with capitalism, helping to establish Shenzhen’s Special Economic Zone.”

Special Economic Zones are important in China. They are capitalist enclaves in an otherwise socialist country. The CCP’s laws on taxes and foreign direct investment (FDI) do not apply in SEZs. Incentives, lower taxes, and less government involvement, all translate to a more free-market environment for foreign and domestic investors to come together. Specifically, according to Wikipedia, the following are economic policy of SEZ:

1. Special tax incentives for foreign investments in the SEZs.
2. Greater independence on international trade activities.
3. Economic characteristics are represented as “4 principles”:
   1. Construction primarily relies on attracting and utilizing foreign capital
   2. Primary economic forms are Sino-foreign joint ventures and partnerships as well as wholly foreign-owned enterprises
   3. Products are primarily export-oriented
   4. Economic activities are primarily driven by market forces

Number 4 on that list is most important, because it is all encompassing; it is the very definition of capitalism. One of the first SEZs to be enacted is in Shenzhen. As the below photo from an article dated April 19, 2017 by US Global Investors, the difference between Shenzhen in the early 1980’s (at SEZ inception) and today is stunning:

DIGRESSION…

An important side note: many of the most monumental decisions made in China since 1949 (the beginning of Communist rule) have been made in what is called, the 3rd Plenum of the Party Congress. The economic reforms that created Special Economic Zones happened at the 3rd plenum of the 11th Party Congress in December 1978. Business Insider gives us good insight into exactly what the 3rd Plenum. First, what is a plenum? According to Bill Bishop at Business Insider,

“A Plenum is a meeting of the Communist Party’s Central Committee. This Central Committee has 205 full and 167 alternate members, chosen at the First Plenum… Each Party Congress lasts for 5 years, and with the exception of the first year there is usually one Plenum held per year.”

That last point is important. In the first year of a congress, there are three plenums. No real economic or political blueprint can be set in the 1st Plenum, as it is packed with selection of the Central Committee. The 2nd Plenum, quoting Bill Bishop,

“…tends to be personnel- and Party construction-focused…”

The 3rd Plenum is therefore the,

“…first plenary session at which the new leadership has basically consolidated power and can introduce a broader economic and political blueprint.”

There is historical precedence for reform being announced at 3rd Plenums. In December 1978, at the 3rd Plenum of the 11 Party Congress, China announced the end of the Cultural Revolution and the arrest of the Gang of Four. The end of the Cultural Revolution was a gigantic event in Chinese history, because it began China’s evolution post Mao Zedong, the founding father of the PRC (People’s Republic of China). The Cultural Revolution, which was sparked by Mao, was a violent period in China. It sparked class warfare, which Mao used to,

“…reassert control by setting radical youths against the Communist Party hierarchy…Young people battled Mao’s perceived enemies, and one another, as Red Guards, before being sent to the countryside in the later stages of the Cultural Revolution. Intellectuals, people deemed “class enemies”, and those with ties to the West or the former Nationalist government, were persecuted. Many officials were purged. Some, like the future leader Deng Xiaoping, were eventually rehabilitated.”