BEIJING – Much of the world is watching Chinese President Xi Jinping with concern. Not only has he been re-concentrating power in the hands of the central government; many believe that his radical anti-corruption campaign is a fig leaf for a political purge. They worry that Xi is building a cult of personality, much like the one that surrounded Mao Zedong and fueled the Cultural Revolution.
The truth is far less sinister. While it is true that Xi is, to some extent, amassing power, his motivation is the need to strengthen China – both its government and its economy. To succeed, he must bring a bureaucracy that has spun somewhat out of control back in line.
Over the last three decades, power in China has been decentralized considerably, with provincial and municipal governments receiving, in an incremental fashion, substantial autonomy to experiment and test reforms aimed at attracting foreign investment and spurring GDP growth. Moreover, they have been granted direct control over resources – such as land, finance, energy, and raw materials – and local infrastructure development. As a result, subnational governments accounted for an average of 71% of total public expenditure in 2000-2014 – a far larger share than in the world’s largest federal countries (US states’ share of public spending, for example, is 46%.)
The goal was to spur overall economic growth by encouraging competition among regions. Local party bosses knew that their career paths depended on their municipalities’ economic performance. And by working hard to spur growth, they have fueled China’s rise to become the world’s second-largest economy (by some measures, the largest) and secured the ruling Communist Party’s legitimacy in the post-Mao era.