Xi is panicking over the economy.
How can we be sure? He’s telling CCP apparatchiks that they won’t be blamed for their mistakes so long as they are doing everything they can to goose the economy.
“The vast number of party members and cadres must have the courage to take responsibility and dare to innovate,” said a readout from the meeting, which was chaired by Xi.
The readout also mentioned the term “three exempts” – exempting well-meaning officials who make mistakes due to lack of experience; exempting officials who make mistakes in experiments, especially those in new domains without clear restrictions; and exempting officials who inadvertently err when promoting development.
“The fact that this ‘responsibility and punishment waiver’ is reaffirmed at today’s Politburo meeting, at which Beijing issued the most urgent call-out to fire up economic growth, is significant,” said a political scientist with Peking University who declined to be named as they were not authorised to speak to non-state media.
This is notable considering the number of “anti-corruption” purges Xi has conducted over the years. Xi is asking the rank-and-file of the CCP to trust him that he won’t come after them later when their efforts fail to bear the promised fruit.
I’m sure every member of the CCP is going to believe Xi when he says this—surely they would not take the politically safe route of even greater timidity and avoiding any sort of spotlight!
But the cry for policy “innovation” is itself remarkable in a system that has been marked by top-down thinking even before Xi assumed control, and has only become more centralized during his tenure. Asking mid-level bureaucrats to “innovate” means the top-level people have run out of ideas. By definition any time someone asks someone else to innovate there is a lack of ideas on one side of the equation.
The readout of the Beijing Politburo’s emergency session means Xi sees something in the data before him that is not sitting at all well with him. Perhaps he’s finally done the requisite math and realized that China is undergoing population collapse—not “decline” but COLLAPSE. Perhaps he has finally seen that the average Chinese worker simply does not earn enough to offer a meaningful boost to national consumption expenditures. Perhaps there is yet another huge bankruptcy looming in the real estate sector, a sector which needs all the confidence-building measures it can receive.
Whatever Xi has seen in whatever information is actually flowing to him, he is worried. Leaders in any realm of endeavor do not make impassioned calls for policy innovation except when they have no idea what to do.
We can presume from this readout that, however bad the publicly available data on China’s economy looks, the reality on the ground is a few orders of magnitude worse.
China is about to experience some very interesting times!