Xi Jinping haunted by Deng Xiaoping's ghost at Third Plenum

The Third Plenum, a key event in China’s political calendar, is underway (July 15-18), marking a significant moment for President Xi Jinping. Xi is definitely looking to consolidate his position in the Chinese Communist Party (CPC) when he is facing pressures from a sluggish domestic economy and growing international flak over his aggressive expansionist policies.  

The CPC takes major decisions at several plenums — seven in all. The first plenum decides the party’s national leadership, the second provincial leadership, the third economic policies and so on.

Traditionally held every five years, this assembly is crucial for setting economic policy directions. It was supposed to be held in 2023 but was delayed. As the event unfolds at the Third Plenum, Xi finds himself under the looming shadow of Deng Xiaoping, the architect of China’s modern economic reform and opening-up era.

Typically, CPC events are meticulously planned, with outcomes often decided well in advance. However, the delay of the Third Plenum suggests intense political manoeuvring behind the scenes. Under Xi Jinping, who wields considerable autocratic power, such delays are rare and indicate significant internal discord.

The ghost of China’s reformer

In the run-up to the Plenum, state propaganda has been vigorously promoting Xi’s personality cult, drawing parallels between Xi and Deng Xiaoping. A state-produced documentary, “Leading a New Journey,” has been prominently featured at the assembly, highlighting Xi’s supposed visit to Anhui province in 1978 to study the “household contract responsibility system”.  

The reported Anhui study was a key moment in China’s march to market economy under Deng. Facing the growing impression that Xi is reversing Deng’s reformist ideas, the current narrative is intended to cast the Chinese president as the heir to the progressive communist stalwart’s legacy of economic reform.

Some China watchers also doubt the authenticity of the story that Xi visited Anhui province for the claimed story. They say that the story of Xi’s visit is largely a fabrication, much like Deng’s use of the Anhui system to legitimise his own reforms. Despite this, the state media is working overtime to reassure the public that Xi is committed to continuing Deng’s reforms, even as fears grow that Xi is steering China back towards a more centralised, Maoist economic model.

Has Xi abandoned Deng’s legacy?

Since taking office in 2013, Xi has increasingly played down Deng’s achievements. For example, Deng valued improved relations with the West as he planned opening up China’s economy. He was convinced China could not grow in isolation and with an adversarial relation with the West. However, China-West relations have significantly deteriorated under Xi’s leadership.  

While Xi claims to uphold Deng’s legacy, his actions often suggest otherwise. Critics argue that Xi’s policies are a departure from Deng’s market-oriented reforms, signalling a return to a top-down, state-controlled approach.

The economic reality

China’s current economic challenges starkly contrast with the era of robust growth initiated by Deng. Despite state efforts to promote “new quality productive forces” and technological advancements, ordinary Chinese citizens face economic hardships, including plummeting housing prices, rising living costs, and high unemployment rates.  

Official statistics report an overall unemployment rate of 5%, but the reality is likely much higher, especially among the youth. Economic uncertainty has been exacerbated by the lingering effects of the Covid-19 pandemic.  

Echoes from history

This is not the first time that Xi is fighting the shadow of Deng Xiaoping. In 2018 when the last Third Plenum was held, Xi faced similar dilemmas when his policies were seen to be failing to address China’s economic challenges. The property market, like today, showed signs of trouble as major developers struggled to maintain sales, despite aggressive promotions.

China was reporting a slowdown in economic growth. One of the quarters recorded the slowest pace of growth since the global financial crisis of 2008. Xi’s administration responded with stimulus measures — these moves led to a ballooning national debt, raising concerns about long-term financial stability. It was soon hit by the Covid-19 outbreak in the later part of 2019.

To consolidate his power and address economic issues, Xi has often invoked Mao-ist tactics. His anti-corruption campaign and moves against prominent billionaires like Alibaba’s Jack Ma have been viewed as a broader effort to to be seen by the public as someone who is trying to close the gap between rich and poor.  

A peep into the future

The Third Plenum is expected to focus on technologically focused growth. The Chinese economy continues to be in bad shape, with comparisons being made between Xi’s policy of geopolitical advantage and Deng’s reforms that brought economic prosperity to the Chinese people.  

The geopolitical heft that China under Xi has got practically means nothing to the ordinary Chinese people, who are struggling to cope up with the rising cost of living, housing prices, unemployment and delayed wages.  

Foreign Policy quoted a recent study as saying that the Chinese public increasingly believes the economy is rigged against them under Xi. The Third Plenum’s policy announcements are unlikely to assuage these concerns.

This comes against the backdrop of reports that Xi has set 2035 as the target year for fixing income inequalities in China. Some view this as a target up to which Xi wants to rule China. He would be 82 by then. Deng Xiaoping was 83 when he demitted office.