The new Chinese leadership under Xi Jinping seems to be making some bold opening moves with its attacks on corruption and the announcement on February 5 of plans to reduce the polarization of incomes. Does this mean Xi is leading China in new directions? I think not. The reforms are continuations of priorities long pursued by the Hu/Wen regime.
Hu Jintao and Wen Jiabao came to power 10 years ago saying they needed to attack corruption and raise rural living standards. And, contrary to widespread perceptions, they acted on their words. Faster, tougher prosecutions of higher-level officials may not have rolled back corruption, but seem to have stopped it from getting worse, according to Andrew Wedeman’s recent book, Double Paradox: Rapid Growth and Rising Corruption in China (Cornell Unversity Press, 2012).
On the income side, Hu and Wen abolished the agricultural tax, extended free public education to nine years, loosened restrictions on labor migration, and started the arduous process of building a health insurance system—a mix of measures designed to improve peasant incomes in the short and long terms. Last year, the World Bank and the Development Research Center of the State Council jointly published a report called China 2030: Building a Modern, Harmonious, and Creative High-Income Society, which recommended further steps in the same direction, such as speeding liberalization of the hukou (household registration) system, enhancing the social safety net, and protecting land rights. Since this report was conducted under the aegis of incoming Premier Li Keqiang, it surely forecasts the trend of social and economic policy in the coming years.
These are adaptive changes, not signals of a new direction. The party knows it has to evolve if it is going to stay in power over a society in which expectations are constantly rising.