Xi’s Ode to Jiang: A Study in Authoritarian Consolidation

The recent centenary celebration of former Chinese President Jiang Zemin’s birth saw current leader Xi Jinping reaffirm his predecessor’s commitment to balancing economic growth with Communist Party rule. This tribute from one leader to another appears routine, but it reveals Xi’s strategic consolidation of power.

Xi’s speech at the Great Hall of the People in Beijing was notable not only for its timing but also for its content. By praising Jiang as an “outstanding leader” who maintained stability during China’s tumultuous late 1980s and early 1990s, Xi is rewriting history to suit his own agenda.

Jiang Zemin took power shortly after the Tiananmen Square crackdown of 1989, a pivotal moment in Chinese politics marked by the brutal suppression of democratic protests and the emergence of an increasingly authoritarian regime. China’s economic reforms accelerated during this period, but they came hand-in-hand with a tightening grip on dissent.

Xi Jinping’s praise for Jiang reinforces the notion that Communist Party rule is indivisible from economic growth. This echoes Xi’s own vision for a strong, centralized state driving development – a recipe for authoritarianism evident in China’s recent moves.

The role of Xi’s eulogy for Jiang in 2022 should be seen as part of this narrative. By portraying Jiang as having protected the party and sustained China’s development despite Western pressure, Xi was laying groundwork for his own consolidation of power. This is now being taken to its logical conclusion with Xi’s speech on August 17.

Jiang Zemin’s Theory of Three Represents allowed private entrepreneurs to join the Communist Party as China transitioned towards a market-based economy. On the surface, this seems like a progressive measure, but it was also a masterstroke in co-opting private capital and ensuring party control over economic development.

The implications for investors are significant. As Xi continues to prioritize party-led growth over genuine reforms, foreign investment will likely be subject to increasingly stringent controls. China’s economic liberalization is being reversed, with the state regaining a tight grip on strategic sectors.

The timing of these events is noteworthy. Coming in the aftermath of former Premier Zhu Rongji’s passing and the 20th Party Congress, Xi Jinping is seeking to shore up his own position within the party. This centenary celebration was as much about reinforcing his leadership as it was about paying tribute to a predecessor.

Looking ahead, we can expect Xi Jinping’s speech to be seen as part of a broader pattern of authoritarian consolidation in China. As investors, this should serve as a cautionary tale about the risks of investing in an increasingly closed-off economy with no clear path for genuine reforms. The party-led growth model being touted by Xi and his allies may yield short-term gains but will ultimately prove unsustainable.

For foreign investors, the warning signs are clear: a return to authoritarianism may be attractive in the short term, but it has historically proven disastrous for economic growth.