BLUMENTHAL: China’s steps backward began under Hu Jintao

BY DAN BLUMENTHAL

China’s stunningly reckless response to the coronavirus pandemic has hastened the need for an examination of America’s problematic policy of engagement with China and a determination of what went wrong. The conventional answer has been that Xi Jinping changed everything when he became the country’s leader in 2013. But this implies that the United States’ engagement policy with China was sound before his rule. Not so. While Beijing exhibited some troubling behavior in the 1990s, it was Hu Jintao, Xi’s predecessor, who presided over changes the Chinese Communist Party’s (CCP) internal system and foreign policy the following decade. Understanding changes in China’s grand strategy requires a close examination of China’s internal politics, now and in the future.

By the time Hu became general secretary of the CCP in 2002, Deng Xiaoping and his anointed successor Jiang Zemin had radically reformed and opened up the Chinese economy. Beijing joined the World Trade Organization in 2001 with a huge U.S. assist. With economic reforms came modest legal and political reforms, such as allowing lawyers to redress citizen grievances before local and sometimes central authorities and creating a more consensus-driven elite political system. Deng and Jiang had created a so-called developmental autocracy akin to South Korea and Taiwan before they democratized in the 1980s. During this reform period, engaging China in the hopes that both its political system and national interests would converge with those of the United States seemed reasonable.

But China’s spectacular economic growth and Beijing’s consequent optimism about its future obscured major political changes. By 2002, the CCP’s conservative neo-Marxists, who had been shunted aside by Deng and Jiang, struck back with a vengeance. Hu struggled against his predecessor Jiang’s political moves to remain powerful and influential. Weakened by this factional fighting, Hu buckled under intense pressure from ideological opponents of “reform and opening” and rolled back key economic and legal reforms. He switched from a pro-entrepreneur economic posture to a policy that created national champions. Hundreds of industries deemed “strategic” were consolidated and secured mass subsidies from the state. Beijing once again protected failing Chinese state-owned enterprises. Private entrepreneurs in China suddenly had a difficult time accessing capital.

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Dan Blumenthal is the Director of Asian Studies and resident fellow at the American Enterprise Institute.