1 Analyzing the Hunan local govt’s campaign to ‘emancipate the mind’
Feb. 18
The Hunan provincial Party Committee issued a notice announcing a province-wide campaign to “emancipate the mind through extensive discussions” (關於在全省開展解放思想大討論活動). The campaign chiefly focuses on work units at the county level and above and is connected with the “Xi Jinping Thought” thematic education. The campaign will commence in early February 2024 and is expected to conclude in late March 2024.
The notice included the following noteworthy points:
- The campaign seeks to facilitate the implementation of “Xi Jinping Thought,” “further unlock [the province’s] restraints” of achieving the “Three Advances and Four News” (三高四新) strategy, and improve the competence and quality of Party members and cadres in the province. (Three Advances: Advanced manufacturing base of national importance, advanced technological innovation with core competitiveness, and advanced reform and opening up in the mainland; Four News: New approaches, new endeavors, new responsibilities, and a new chapter for Hunan).
- The campaign will progress along six aspects, including “advancing along the direction guided by Party Central and Xi Jinping” and “safeguarding the bottom line of secure development.”
- The campaign requires Party members and cadres to address “some main issues” through in-depth study and discussions. Some of these issues include:
- Lack of confidence in development, weak sense of mission, insufficient sense of responsibility.
- Unwillingness to endure the anxiety of transformation pains.
- Being solely focused on “finding ways” and “achieving results” through data manipulation.
- Disregarding risks through indiscriminate borrowing, blindly following trends in projects, and conducting overly ambitious expansion.
- Prioritizing pleasing the leadership over satisfying the masses.
- Adopting an ostrich-like mentality of deliberately avoiding and concealing conflicts and issues.
- Adopting a “lying flat” attitude of preferring not to take action in order to avoid trouble.
- Issues of local protectionism.
- Some state-owned enterprises lack sufficient focus on their main business, exhibit strong administrative (bureaucratic) characteristics, and have imperfect modern enterprise systems.
- Low rate of commercializing technological achievements.
- Weak level of openness to the outside world, low degree of economic openness, and few institutional achievements in openness.
- Difficulties in corporate financing, expensive financing, and costly logistics.
- Illegal charges by local authorities, failure of government commitments, and arrears of payments to private enterprises.
- Some government agencies and public institutions have excessively large non-staff personnel and surplus personnel, which present a heavy financial burden on public funds.
- The mindset of prioritizing one aspect while neglecting another, and the concept of one-sided development.
Official mainland media republished news of the Hunan provincial government campaign on Chinese social media like Weibo and WeChat, but comments on those posts were closed.
Feb. 19
The local authorities of Binzhou City in Shandong Province held a mobilization conference on how to “emancipate the mind through extensive discussions.” At the meeting, Binzhou Party secretary Song Yongxiang said laid out so-called “10 emancipations,” or establishing a mindset of opening up, enhancing the pattern of opening up, constructing channels for opening up, strengthening carriers of opening up, expanding entities of opening up, opening up the economy for prosperity, formulating opening up policies, optimizing the environment for opening up, expanding opening up propaganda, and nurturing cadres on an opening up model.
Historical context and past precedent
Deng Xiaoping first called for “emancipating the mind” and “seeking truth from facts” in 1978. From the late 1970s to the 1980s, Deng’s “emancipate the mind” call was partly a refutation of the “Two Whatevers” of Hua Guofeng and Mao Zedong’s class struggle doctrine as Deng strove for supremacy in factional struggle. Deng was also looking to advance his “reform and opening up” policy and needed to “emancipate the mind” of Party cadres and the masses towards accepting the CCP’s quasi-market operations. When Deng again called for “emancipating the mind” during his “Southern Tour” in the 1990s, he was looking to preserve his political legacy and prevent Jiang Zemin and other Party “leftists” from abandoning “reform and opening up.”
Xi Jinping occasionally called for “emancipating the mind” during his various inspection tours in China. In April 2018, then Jiangsu Party Secretary Lou Qinjian launched an “emancipating the mind through extensive discussions” campaign, but it fizzled out after some time.
Our take
1. The Hunan provincial Party Committee campaign to “emancipate the mind through extensive discussions” is aligned with Beijing’s broader thrust to strengthen the indoctrination of Party members and cadres with “Xi Jinping Thought” and is not a sign that the CCP is becoming more reform-minded.
The Hunan campaign could either be an initiative directed by the central government (see point two) or a ploy by local officials to win favor with Beijing. If it is the latter, then local officials could have come to believe that securing achievements and results during an economic downturn is best pursued through high-profile political campaigns and less through practical attempts to spur economic growth.
Meanwhile, the “main issues” of Party members and cadres identified in the campaign notice indirectly underscore what we have analyzed on numerous occasions. That is, the CCP regime has serious systemic deficiencies and Xi Jinping cannot resolve the problems in the officialdom through sheer power consolidation and forcing cadres to follow his will. In fact, the more authoritarian Xi becomes, the more officials will be concerned with making mistakes, which leads to them “lying flat” or “acting recklessly” instead of being more hardworking and innovating to advance regime development.
2. The Xi leadership could be directly involved in the Hunan provincial Party Committee’s campaign to “emancipate the mind.”
For one, Hunan Party secretary Shen Xiaoming is a Xi ally whom Beijing had earlier tasked to advance several regime development efforts. Shen served as director of the Shanghai Free Trade Zone (a Xi leadership pet project that struggled to take off due to interference from the Jiang faction) from April 2015 to September 2016. After a brief stint as deputy minister of education, Shen was dispatched to Hainan (the Xi leadership was promoting Hainan as a “free-trade port” at the time) to serve as governor and then Party Secretary from April 2017 to March 2021. Given Shen’s history of overseeing some of Beijing’s important development agendas during Xi’s tenure, it cannot be ruled out that he is now being tapped to spearhead the Xi leadership’s latest effort at advancing “reform” and increasing governing efficiency.
The Hunan provincial Party Committee’s campaign to “emancipate the mind” could also be a new loyalty test of sorts as Xi searches for obedience and discipline in the officialdom amid trying times for the regime. An earlier example of a loyalty test was Li Hongzhong publicly expressing support for the “Xi core” in early 2016 when he was Tianjin Party secretary. Subsequently, several provincial Party secretaries joined Li in promoting the “Xi core,” and Xi would officially establish himself as the Party “core” at the Sixth Plenum of the 18th Central Committee. Li, a former Jiang faction member, would be “rewarded” for showing loyalty to Xi with his appointment as a vice chairman of the National People’s Congress at the 20th Party Congress.
3. Other possibilities for why the Hunan provincial Party Committee is pushing the “emancipate the mind” campaign now include Xi Jinping laying the groundwork to shift some of the blame for the economic downturn onto local officials (by identifying “some main issues” that they have) and Xi looking to accrue even more personal “quan wei” to enhance his paramount position and dictatorship.
The reaction of the public and officials to the campaign, as seen from social media posts and overseas Chinese language media reports, indicates that the Hunan “emancipate the mind” campaign is being viewed as Xi’s attempt at a “Cultural Revolution 2.0” rather than an effort at loosening ideological rigidity and promoting reform. We believe that the campaign will ultimately be counterproductive and short-lived, and will only serve to increase the officialdom and Chinese people’s resentment towards Xi and the CCP.
4. The Binzhou City meeting on “emancipating the mind through extensive discussions” focuses on economic matters (“opening up”) and differs in essence from the campaign pushed by the Hunan provincial authorities. This suggests that the Binzhou authorities are likely engaging in formalism (see second entry in the newsletter) as they perceive “emancipating the mind” to be the latest in “political correctness” in the CCP regime.
2 Scholar warns of governing crisis as Xi talks up the economy
Xi blusters about China’s economy
Feb. 8
Speaking at a Spring Festival meeting, Xi Jinping praised the “achievements” of his leadership team after their “hard work and struggle” over the past year, and claimed that “looking at the world, the economic situation is still better here” in China (風景這邊獨好).
Xi added that there should be further comprehensive deepening of reform in 2024 with a focus on resolving deep-seated institutional obstacles and structural contradictions.
***
The phrase “the situation is still better here” (風景這邊獨好) came from a poem titled, “Qing Ping Le: Huichang” (清平樂: 會昌) written by Mao Zedong in 1934.
Mao wrote the poem at a time when he was beset with many troubles, including the CCP being encircled by the Kuomintang forces and Mao being blamed within the Party for the CCP’s failures. However, Mao later staged a comeback after the “Long March” at the Zunyi Conference in 1935 where he became a Politburo Standing Committee member and took over military command.
Grassroots woes in China
Feb. 16
Lv Dewen (呂德文), a prominent sociology professor specializing in rural governance at Wuhan University, published an article on WeChat titled, “A Grassroots Investigation into the Other Side of the Economy” (經濟的另一面的草根調查) following a recent field trip to rural areas in China. In the piece, Lv pointed out four difficulties faced by grassroots industries and government operations:
1. The impact of China’s economic downturn is comprehensive.
- Factories in industrial parks generally have insufficient production and decreased profit margins.
- Migrant workers have no problem finding jobs but cannot negotiate their wages and other benefits. If the workers express dissatisfaction with their pay, they will be immediately dismissed by the factories.
- With regard to project contracting, general contractors tend to squeeze profits to extremely low levels but guarantee the wages of migrant workers.
2. Most township governments are operating with great difficulties
- Township authorities have either reduced or were not able to pay out performance bonuses to their cadres. Some village authorities were unable to pay salaries, resulting in resignations and cadres preparing resignations.
- All township leaders say that further development is impossible and that they are trying their best to keep things going.
- Funding for village-level organizations cannot be guaranteed in most places.
- Implicit debts of village-level organizations are increasing in most places.
3. Formalism and social stagnation in China
- Grassroots governments want to be accountable to upper levels of government but not to the local communities. “Village-level organizations prioritize meeting superior directives over serving the community, and even when they do serve the community, it is often merely to put on a show for higher officials,” Lv wrote.
- Lv also wrote, “In various sectors, there is a trend towards superficiality rather than substance, leading to societal stagnation, which constitutes the most significant crisis of our time.”
- Government public services are mostly outsourced to third parties. Government departments do not do their jobs and instead delegate tasks to grassroots and third party entities. Most townships lack funds to outsource services and end up heavily exploiting village cadres.
- Guidance from the banking regulatory departments is being interpreted as orders and used to pressure the grassroots authorities into obedience without consideration for business and profit. Many enterprises are undergoing financialization and platformization, as well as prioritizing short-term profit realization and the interests of major shareholders over industrial development. Enterprises that are truly engaging in industrial work have to deal with extremely low profits and strenuous work.
- Academic innovation has become more about hitting quantifiable benchmarks, masking existing policies. Specific measures for cultivating innovation talent in universities are only good for encouraging low-level repetition. Research institutions and personnel focus solely on completing project indicators without considering actual research.
- Many media outlets fail to report the news accurately. Grassroots communities fear journalists, and journalists have limited access to the actual situation.
- State-owned enterprises are plagued by formalism. Grassroots employees struggle to work effectively, technical personnel lack prospects, and senior executives focus on marketing and report writing.
4. Higher authorities engage in formalism and harass village cadres
- The transfer payments provided by higher authorities can only cover the salaries of village-level cadres.
- Higher authorities use rewards or deductions in transfer payments to pressure village cadres into completing tasks assigned by them. Meanwhile, village-level organizations have become “dumping grounds” and “disaster relief stations” for government work.
- In most cases, village cadres lack the ability to complete tasks assigned by higher authorities. These cadres then seek to resolve the problem by throwing money at it and worsening the state of village-level finances.
- The higher authorities prioritize formalism over substance in assigning tasks to village cadres, and village cadres end up complicating matters unnecessarily through formalism.
In concluding, Lv observed that grassroots have established a “working mechanism” for “being accountable to higher authorities, governing through political movements, and achieving high standards,” and village cadres spend all their time and energy into maintaining this “mechanism.” Lv added that a key issue is that the grassroots authorities in the central and western regions have inadequate finances and resources to pay village cadres and keep up governing standards, and “unstable” grassroots governance would lead to “turmoil.”
Lv Dewen’s article was subsequently scrubbed from the internet, but not before it was widely shared and reposted.
Big picture
The economies of several countries are in technical recession, including Japan and some European nations. Meanwhile, the U.S. is still struggling with inflation and regional lenders are under pressure from high Federal Reserve interest rates.
Our take
1. Lv Dewen’s article about the state of lower-level government in the PRC today affirms much of what we have earlier written about the poor state of the Chinese economy, as well as the serious deficiencies of the CCP authoritarian dictatorship.
Lv’s criticism of “formalism” in government and academia is in line with what we have constantly observed about the negative impact of Party culture and bureaucratism on the CCP authorities’ governing efficiency. As long as lower level officials and governments spend more time doing performative work to keep their superiors happy, Beijing will never be able to boost governing efficiency or meaningful address problems regardless of how much power Xi Jinping centralizes in his person and the Party. Also, grassroots cadres’ prioritization of pleasing their superiors over actually serving their communities will lead to greater social destabilization and an erosion of the CCP’s political legitimacy over time.
Lv’s observation about grassroots governments lacking finances also adheres to our spotlighting of local government financial shortages and the general dire state of the Chinese economy. Global economic downturn, decoupling from China, and Western sanctions against the PRC will further tighten the CCP authorities’ financial situation and present operational difficulties for local governments.
The accumulation of economic and social risks at the grassroots level in China will eventually heighten risks for the higher authorities and evolve into political risks for the Xi leadership.
2. There are several possible reasons for the huge disparity between Xi Jinping’s optimistic assessment of China’s economic situation expressed at the Spring Festival meeting and the actual situation at the grassroots.
In one scenario, Xi is fully aware of what is going on but has opted to “spin tragedy into victory” to upkeep the CCP’s “great, glorious, correct” image. If so, then Xi’s assessment of the Chinese economy is intended to be propaganda and Beijing is planning to keep the social situation under control through high-intensity political campaigns and ideological indoctrination.
In another scenario, Xi could be aware to some extent of China’s current economic predicament but lacks the full picture due to bad information, selective reporting, and flattery by officials. Therefore, Xi genuinely believes in part that the economic situation is indeed “still better here” in China as compared to the rest of the world, and the CCP can weather the storm as long as it maintains stability at home. Xi could also believe that if he sticks to his current policies with some adjustments like during the “zero-COVID” period, the PRC will do better than other countries and be in a better position to achieve its global domination plans in the long run.
In a third scenario, Xi is almost completely shielded from negative information by those around him, and he fully believes that the Chinese economy is doing okay and is really “still better” than other countries. However, we assess this scenario to be very unlikely because official media reports indicate that Beijing is deeply concerned about the economic situation even if it does not appear to be moving quickly or strongly enough to resolve it.
3. Businesses, investors, and governments should pay attention to Lv Dewen’s assessment and be skeptical of bets on an imminent recovery of the Chinese economy. As long as Xi Jinping continues to cling to the Party and its ideology to preserve political power, the serious deficiencies of the CCP authoritarian dictatorship will strongly inhibit Beijing’s economic rescue efforts, worsen various risks, and result in the emergence of greater crises.
