One of Xi Jinping’s accomplishments as China’s leader has been to narrow the gap between political rhetoric and policy reality. During the tenure of his predecessor Hu Jintao, this gap was so wide as to be a standing joke: various government promises of reform were repeatedly followed by little or no action. Important economic-policy decisions seemed to be driven less by declared priorities and more by expediency and interest-group bargaining. Perhaps in reaction, Xi has focused on making China’s governing apparatus more disciplined, more effective and less corrupt. He has recast the administrative structure to ensure that there is more coherence between his own top-level pronouncements and the actions of lower-level officials.

To take just one, highly consequential, example: after Xi declared a “battle” against financial risk in 2017, the annual growth of banking-system assets slowed sharply to 7-10% in his second term from the 15-17% of his first term. The shift was a dramatic contrast to the repeated failure of the Hu administration to rein in the credit boom they had unleashed in the response to the 2008 global financial crisis. In the initial stages of Xi’s financial-risk campaign, there was a lot of skepticism that Chinese regulators would ever meaningfully control the growth of debt. Now, the crackdown on debt has gone so far that it has triggered major financial problems at property developers, with huge knock-on effects on the real economy. If anything, the problem is that regulators have been too zealous in implementing Xi’s top-level priorities, and haven’t done enough bargaining with affected interest groups.

The size of the gap between rhetoric and implementation is therefore an important indicator of Xi’s power, one that he himself is focused on (he has given many speeches criticizing officials for passivity or inaction). In the runup to October’s Party Congress, which is all but certain to cement a third term for Xi as Party chief and all-round supremo, there has been a lot of fantasizing about scenarios in which his power would be more limited. These range from him being deposed in a coup to having to share power with supposed “reformers.” None of these are particularly realistic: despite plenty of grumbling, there’s no evidence of any organized or effective internal political opposition. The Party Congress is most likely to feature high-level rhetorical affirmation of Xi’s signature goals, and a new leadership lineup that is dominated, though perhaps not completely, by Xi loyalists.

But, as Jude Blanchette suggests in a typically thoughtful recent piece, it will be worth watching for any sign that the gap between rhetoric and reality is widening back to a historically more normal size:

Prognosticating on China’s future has always been an invitation to be proven wrong. But the most sensible starting position is that Xi is not going anywhere, and for all the apparent setbacks China is now facing—many of which can be directly tied to actions taken by Beijing in recent years—the discrepancy between public frustration and an organized leadership challenge remains significant.

This opens up a third path for Xi somewhere between unchallenged dominance (which he may well lose if problems continue to mount) and full-on leadership change (which he is unlikely to have to confront): Xi as a bruised autocrat with China as a diminished global power. In this scenario, Xi is able to retain his grip on power, but without the elan and appeal that seemed to follow him over the 18th and 19th Party Congresses. His major policy pronouncements would receive a polite reception, and then be ignored summarily or (purposefully) misconstrued. Policy paralysis and policy dislocation would typify the rollout and implementation, or lack thereof, of new government regulatory efforts.

The excerpt is from CPC Futures, a useful, and free, recent volume from the East Asian Institute in Singapore that compiles several pieces explaining political and economic trends under Xi.

Currently, the best candidate for a Xi policy pronouncement that fails to get translated into reality is the slogan “common prosperity,” which summarizes a general desire to narrow income and wealth inequality. Xi rolled out the slogan with much fanfare in 2021, writing it into the five-year plan and devoting a high-level meeting in August to its discussion. At the time, the term was associated with the crackdowns on internet platforms and real-estate developers, the sectors responsible for creating most of China’s billionaires. But by early 2022, the slogan seemed to be a lower priority in official propaganda, with Premier Li Keqiang mentioning it only once in his annual government work report in March (see my previous post What happened to common prosperity?).

A quick search in Baidu Index, the Chinese equivalent of Google Trends, quantitatively confirms these impressions. The screenshot below is an index of how often the term “common prosperity” appears in news reports: there’s a huge spike around Xi’s meeting in August 2021, which then rather quickly falls back to previous levels.

It’s understandable that such a longer-term aspirational goal would be less urgent at the moment, given the serious shorter-term challenges the government has had to deal with this year. But it’s still notable how little substantive progress the working machinery of the government has made on it: there is no sign, for instance, of a promised “action plan” for common prosperity. The slogan has certainly not vanished from official discourse, and given Xi’s firm control over the propaganda and ideology apparatus, it is highly unlikely that there would be any formal retreat from common prosperity. The Politburo meeting in August specifically mentioned that the Party Congress would cover how to achieve common prosperity, so the term seems likely to feature prominently in Xi’s speech setting out his agenda for the next five years.

The question is what ends up happening in practical terms as a result of this declared priority. It is possible, for example, to imagine a scenario in which Chinese officials and scholars spend months discussing and debating how to deliver common prosperity per Xi’s instructions, and then, at the end of an exhaustive exploration of possible options, decide that the best course is to make some modest adjustments to existing policies (such as more funding for regional development initiatives in lagging areas). Any signs of officials slow-walking Xi’s priorities, or talking them to death, would be indeed be a significant change from the current rush to show eager participation in his campaigns.