A Primer on the Chinese Communist Party

Today: The CCP, its goals, how it’s been evolving, and the tech perspective; also “Thumbs Up/Down”.

The Agenda 👇

  • Why it’s hard to understand the CCP

  • Details about the CCP and its cadre

  • How the CCP has changed over the years

  • The CCP’s interactions with Chinese tech

  • A few things I liked/disliked last week

It’s difficult for us Westerners to understand the CCP, for at least three reasons:

  • Opacity. Most of what’s happening in China happens behind closed doors, in a society subject to censorship and deprived of a free press, in the impenetrable language that is Mandarin—and that’s before even getting to the fact that China is a “high-context culture”.

  • Dissemblance. The CCP might be called a ‘party’, but it doesn’t have much in common with our political parties in the West. It’s much more diffuse within China, and not subject to outside institutional constraints (on the inside, it’s another matter).

  • Constant reinvention. The CCP today doesn’t have much in common with what it was under Mao or even Deng. The way it’s led and how it interacts with the rest of Chinese society has changed so much that it’s difficult for us to compound knowledge and make intertemporal comparisons.

But because the CCP really matters these days and you cannot afford not to understand it, let me share a few things I’ve learned from my extensive watching/listening/reading about China over the years.

First, the CCP is a good starting point for understanding China. Xi Jinping is often depicted as “President of the People's Republic of China”. But those who know China well are happy to recall that Xi's most important function is that of “Secretary General of the CCP”. In China, the Party takes precedence over the state, and local politics are much better understood through the prism of the CCP and its cadre than of the state government and those who lead it.

Another thing is that the CCP is a huge organization. It is said to have more than 80 million members (one in 12 adults!). It’s present at all levels and in all dimensions of Chinese society: government of course (in Beijing, in the provinces, in cities and towns across the country), but also universities and even businesses (as was recently remarked regarding ByteDance).

  • In China, any large organization is required to have a Party cell within it, which becomes a sort of mirror organization within the host. Every leader, whether in the public or private sector, has a direct correspondent/overseer in the CCP.

The fact that the CCP branches out into the depths of Chinese society is rightly seen as a means of control. And it is through this, of course, that Beijing enforces compliance with the Party line.

  • What is less well understood, however, is that the CCP’s pervasiveness in all spheres of society is also a way for Beijing to be highly aware of how people are feeling. For an authoritarian regime like China’s, that kind of sensitivity to everything that’s going on is absolutely vital. Since the Chinese cannot express what they think by voting in an election, it is critical for the government to listen to them in another way—in this case, by multiplying the points of contact and having many glimpses into daily life, allowing Beijing to know at all times how the country is doing and the state of mind of its inhabitants.

Indeed, to survive and grow, the CCP needs stability, which cannot be imposed by force only. Rather, it needs to combine continuous improvement in the standard of living (hence the importance of the economic development strategy) and the ability to know and process what is happening on the ground.

Another important thing is the development of careers within the CCP. A frequent misconception about China is that everything is decided in Beijing.

  • The reality, as explained in Richard McGregor’s The Party, is more nuanced. Every Party leader, at every level, is pretty much the master of their kingdom. The mandate given by the Party is unequivocal: a cadre’s mission is to collect information and preserve stability at all costs. If prices rise too quickly, if jobs are too scarce or if corruption becomes too shockingly visible, it degrades the Party's image. The local leader will then be subject to negative evaluations: their career will stagnate and, if misappropriation is discovered, they may well end up in prison (or worse). 

  • On the other hand, a local leader will take on more responsibilities (and likely enrich their family) if they achieve the expected results: an increase in the standard of living in their city or province, not too much discontent or too many demonstrations by angry citizens, no corruption and personal enrichment out in the open. All known Party leaders, starting with Xi Jinping himself, have run this marathon: their career started at the head of a local cell deep in the countryside, then they rose in rank to lead the Party at the level of a city, a province, a ministry... before finally joining the Politburo Standing Committee in Beijing.

Fourth, because the CCP has been ruling China since 1949, we have this impression of continuity. But the way its leadership is organized and the balance of power among its ranks has changed a lot from one period to another:

  • Right after the civil war and at least until 1969, Mao ruled with an iron fist, with his reign culminating in the Cultural Revolution that started in 1966. Back then China was still poor and insulated from the outside world.

  • The brutality of the Cultural Revolution triggered a reaction within the party ranks, which led to the curbing of Mao’s power from 1969 onward. At that time, China resembled a military authoritarian regime, with the rise of Marshal Lin Biao as the heir apparent.

  • When Lin died in mysterious circumstances in 1971, China entered a new period of turbulence: Mao was still the uncontested leader, but there were constant rivalries and brutal fights happening in his shadow. The impossibility of settling these disputes explains the fall from grace of prominent leaders, with the likes of Deng Xiaoping being exiled to the countryside—even with China having already made its first attempt at opening by getting closer to the US in 1971.

  • Then Mao died in 1976, further increasing the level of uncertainty until Deng Xiaoping came back from exile in 1978. Interestingly, Deng never bore much of an official title (a bit like the character Sam Rothstein in Scorcese’s Casino, who manages the whole operation without officially being the boss). It’s an example of why context matters in China: Deng was never explicitly in charge, but everyone knew that he alone had the authority—which he used first to orchestrate China’s impressive economic development, then to crush the student revolt on Tiananmen Square.

A more methodical approach to the division of power was part of Deng’s legacy. Deng trusted himself to not abuse his power, but he didn’t trust his successors to do the same. And so he generated a few rules, such as having the next paramount leaders effectively hold three positions (Secretary General of the CCP, Chairman of the Central Military Commission, President of the People’s Republic), and imposing a term limit on the presidency. This was implemented under Jiang Zemin and Hu Jintao, but it started falling apart under Xi Jinping.

Let me just add three elements of context about Xi:

  • Xi is the son of a major historical figure of the CCP (Xi Zhongxun). Family ties matter a lot in China, where they serve to compensate for the low level of trust within the society, and they compound with each generation. Xi derives a lot of power from being a ‘princeling’.

  • He has notoriously used anti-corruption as a weapon to consolidate power. It’s been a way to strike a chord with ordinary people shocked by the sheer level of embezzlement within the CCP as well as to topple or intimidate rivals on his path to the leadership and beyond.

  • Many observers think that Xi is content with the current context of a New Cold War with the US, as it forces the CCP to close ranks and legitimates his moves toward dismantling Deng’s ‘constitutional’ legacy and tightening his grip (removing term limits, reinstating the title of “Chairman” which nobody had used since Mao, imposing Party rule over Hong Kong, etc.).

Here are a few additional ideas if you want to reflect on the consequences of all that for the tech world (as always with China, take everything you read with a pinch of salt):

  • The CCP is obviously involved in Chinese startup communities, notably via networks formed on university campuses, but also because for an entrepreneurial venture, success depends a lot on complying with Party-issued regulations—and so being in touch is important.

  • Once a Chinese tech company scales up successfully, not only does it have a legacy connection with the Party through the in-house cells, it is also said that it has to share the wealth with the Party and its cadre. See Alibaba's Jack Ma: Whistling Past The Graveyard (by a China hawk).

Finally, France shares China’s approach to designing and implementing policy (we call our technocrats “Mandarins” for a reason), but as I explained in The Rise of a New China, it’s not making the best use of this asset. China has no problem with implementing a techno-utilitarian industrial policy, and its tech industry objectively owes a lot to the CCP’s deciding that economic development was a national priority and that China had to excel not only in catching up, but also in leapfrogging to get to the frontier.

📚 I shared a comprehensive reading list about China and the CCP in a previous edition: China and the West. Also have a look at my 12 Books on China.

😀 Talking about China, Deng, and economic development, I’m amazed by the revival of the conversation around industrial policy. Every government is now all about reshoring, national champions, supporting entrepreneurs, etc. Have a look at this article in Agglomerations.

🙂 And we thought tech stocks were bound to increase in price forever because the pandemic was hastening the shift to the Entrepreneurial Age. It appears it’s also because SoftBank has been buying options tied to a lot of them—then came a mini-crash, and more to come.

😏 In contrast with all the bad news re: the COVID-19 economy, it seems the manufacturing sector is rebounding in the US. However, don’t expect jobs to come back alongside the factories: today’s assembly lines employ more robots than humans.

😐 One week ago, there was talk among pundits about the polls tightening in Trump’s favor. It appears it was just a blip—if it was true at all. In any case, one thing I’ve learned about US politics is that we need to stop paying so much attention. Not only is it too painful, it’s also less relevant than in the past.

😒 We have some figures about employment in the US and, as stated by Brian Chiappatta in Bloomberg, the pandemic recession is now turning into a full-fledged one, with many people having been without a job for months, unable to find a new one.

😖 The anthropologist David Graeber died unexpectedly in Venice. I’m not sure how much the inventor of the concept of “bullshit jobs was known in the US, but I, for one, liked his anarchist, thought-provoking take on the world and bureaucracy in particular—and found that he had a lot in common with radical innovators in tech

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From Normandy, France 🇫🇷