A few days ago, I met the author of
, and we chatted about this “pendulum effect”, a phenomenon that seems prevalent in Chinese policy-making. The surprising economic policy pivot, which was unfolding right while we were chatting, was but another instance of this effect. The end of the Zero-Covid policy in late 2022 was another.Later,
published a great article linking more events, such as anti-pollution campaigns and the suffering of the Baijiu sector during the anti-corruption crackdown of 2013-2014, to this phenomenon.Something I find missing though, is a discussion about why. Only when we understand why, can we make predictions about whether this pendulum effect will continue to hold true.
It turns out that Wei Lingling of Wall Street Journal, who would jump at whatever opportunity to fit a story to her “Xi Bad” narrative, also set out to explain why. According to her, both the current stimulus and the end of Zero-COVID show that it’s the fault of Xi’s centralizing grip on power that prevents the “right” policy change until the very last moment.
Really? So these wild swings of the pendulum are all because of one man?
Is this as simple as that?
Why
The pendulum effect goes farther back than Xi Jinping. In fact, a great pivot that changed the course of history happened every few years. The 1994 tax-sharing reform centralizing fiscal resources to the top, giving birth to a unique land-financed-based development model, was such a pivot. 1992 was also a pivotal year, when Deng’s southern tour sounded the trumpet for continuing reforms, just when people were afraid of reforms post-Tiananmen. The Tiananmen of 1989 was in turn a pivot in itself, marking a boundary for the liberalization program of the 1980s. The one-child policy was started in 1983, only to be abolished more than 3 decades later. The age of reform of the 80s was started by the 3rd Plenum of the 11th Central Committee, which also marked the death sentence for the Cultural Revolution and Maoist cult of personality, and was undoubtedly a great pivot that separated the history of the nascent PRC into half. The Cultural Revolution itself was a huge pivot too, smashing party and state apparatuses which were only recently set up less than 2 decades prior.
The Great Pendulum swings back and forth, back and forth.
(The great pendulum goes even farther back than the PRC. It goes all the way to the foundation of our civilization. But I will pause here)
The analogy I always have in mind is that of a massive corporation. When you imagine the Communist Party of China to be a gigantic corporation, many things will make sense.
This corporation has around 10 million essential employees and a few tens of millions of non-essential employees. It has a board of directors, which is the Politburo and/or its standing committee. The General Secretary is its Chairman and CEO. Who are the shareholders is less clear, but the Party will want to say it’s the Chinese people to whom the CPC Inc. declares dividends.
This analogy works best when looking at its internal dynamics.
Like any corporation, it has layers and layers and layers of reporting lines and subsidiaries. When the HQ decides on something, its directive trickles down through all these layers of “subsidiaries”. At any given moment, every cog in this machine is working on a variety of directives at their hands. For any new directives, they will hold study groups to make sure they are aligned with the spirit of HQ, formulate plans to execute them and make up plans on how to send their directives farther down the ladder to lower layers.
When people think about China’s power structure, there is an enduring myth that the system is very adaptive and very nimble. This may be true, but only if you zoom out, looking across years. But when you zoom in, you will tend to see more chaos rather than order. This is because it’s simply difficult for an organization as huge as this one to be “nimble” on a day-to-day basis. Inefficiency and redundancy are massive. A recently popular Chinese phrase “世界就是一个草台班子The world is but a shabby troupe on a makeshift stage” is an apt description for this reality.
Let’s take one specific policy as a thought exercise. For example, the one-child policy. Imagine we are now, say, in 2008. Clearly, the one-child policy’s positive dividends have been exhausted, and its negative effects are gradually felt. Even without such a policy, young people are increasingly unwilling to bear children. Any good statistician could make projection for a population falling down the cliff. Clearly, this policy has run its course.
If we were living in a perfect world, we should have a gradual, “tapering” program in the 2000s or even 90s, so our population can stay stable. In this perfect world, the pendulum should stop in the middle, the equilibrium point.
But that scenario only exists in the perfect world. In the real world, however, there is always the question of who gets to initiate, and to implement any change.
Now you imagine yourself as a low-ranking or even mid-ranking official in the system. You see the facts and you know what’s the right thing to do. But will you do it? You are but one part of the machine. Will you report to your bosses that you see this problem? Probably yes, but most likely not. There are many things to consider here. For instance, maybe seeing the problem itself is not enough and can be easily rebuffed by your boss. Maybe you need more departments to join forces so you can make a specific and comprehensive plan of action. But such inter-departmental efforts won’t be possible without the boss giving the go-ahead. Chicken and egg.
So, just like anyone working in a big corporation, you will most likely choose to do nothing, even though you know what’s the right thing to do, even though every low-level or mid-level apparatchik like you knows what’s the right thing to do. Doing something could be wrong. Doing nothing can never be wrong.
Just imagine this type of thought process happening at every level.
Still, it’s possible that the top leaders also see the problem. But before they make the decision about whether to do anything about it, they will also need to think about to whom they should give this task. They will also think about how to motivate those people. They will also need to think about how to deal with the people who are made redundant by this. For example, the one-child policy is not just a policy but it also has a huge bureaucratic structure with real people behind it. How do you deal with this army of bureaucrats who suddenly lose relevance?
All of these eventually lead to the issue of priority. There are maybe 1000 areas of concern at any given moment, but only a few of them can be dealt with at any moment. It’s only when a problem becomes so urgent, so glaring, can the system has enough political capital to mobilize itself from top to bottom into some action. And by that time, the problem (the pendulum) has usually swung far away from the “equilibrium point”, to an extreme. So only through a forceful measure, a full mobilization of forces, a barrage of fire, a decisive force of gravity, a big BANG, can the pendulum be pulled back down.