A Divided China

04/09/2015 05:51 pm ET | Updated Jun 09, 2015

Understanding the dynamics of Chinese politics has always been part science, part art, and part mystery. At the heart of these discussions are the factions around which Chinese politics is conceptualized. A recent paper has challenged many of these assumptions, simultaneously clarifying how power is distributed in China while raising new questions for where Chinese politics are headed.

In "The Trouble With Factions," Alice Miller, a fellow at the Hoover Institution and lecturer in East Asian Studies at Stanford, argues that much of what passes for analysis of China's factions is ill-defined, arbitrary, and with little in the way of real predictive or interpretative value for those assessing China's leaders.

Factions as understood today are based on a complex mix of individuals, shared backgrounds, and institutional support bases. They have placed the princeling and Shanghai factions (personified by Xi Jinping and Jiang Zemin) and Youth League (epitomized by former president Hu Jintao and current premier Li Keqiang) factions at the forefront. But as Miller writes, potential membership in these groups is often overlapping or contradictory and yields little insight into what a faction will do. Then there are the lesser factions, or "gangs" as they are often referred to in the Chinese media. The "secretaries gang," "petroleum gang," and "Shanxi gang" have all been targets of Xi Jinping's anti-corruption campaign.

Miller asserts that there are three primary types of factions: ideological factions whose adherents modeled themselves as statements working for the good of China; power-seeking factions of patron-client ties; and bureaucratic factions which supported policy that best support the interests of their bureaucracies. These definitions offer a better framework for understanding the actors at play and the outcomes they support. But even this framework has its limits.

An alternative perspective would argue that last two of three factions that Miller articulates are not factions at all, but interest groups. The distinction is more than merely definitional. The Communist Party claims -- and by all measures -- has earned broad-based legitimacy as China's leaders. Unlike governments that have earned that legitimacy through the ballot box, China has earned its legitimacy through its performance in delivering sustained improvements in the quality of life of the Chinese people and China's international standing. A faction worthy of the name, then, must compete on the basis of a claim to that legitimacy. A mere interest group or gang is far narrower, adopting ideological or policy positions as no more than a screen for advancing the interests of the members and minimizing the accretion of power by other groups.

Unchecked, interest groups can become cancers on any political system and, in China, have succeeded in blocking needed reforms that threatened their monopoly on rent-seeking. These are the very groups that are in the targets of Xi Jinping's anti-corruption campaign. His aim is not just to mitigate the legitimacy risks caused by corruption or concentrate his personal power, but to make real reform possible.

How best, then, to define and identify what genuine factions exist within China? There is potentially a simple, yet revealing test: Were China to move towards some form of more transparent intra-party competition, on what basis would Party members organize themselves? These factions would need to have some claim to representational legitimacy beyond their own self-interest. Moreover, they would need to have meaningful ideological or identity differences related to the different constituencies they would claim represent.

By this test, most of the current groupings that pass as factions in most analyses would disintegrate. The only real schism that could meaningfully pass this test would be one between interests representing urban and rural China. Addressing this divide was a constant rhetorical focus of Xi Jinping's predecessor, Hu Jintao, and his premier, Wen Jiabao. Progress -- beyond efforts at land reform -- however were limited. In the meantime, inequality has soared.

This urban-rural divide will likely become more pronounced under Xi Jinping for two reasons. The first reason is the pressure caused by China's economic slowdown, which shows no sign yet of having reached bottom. As wealthy cities and provinces likely power forward, the differences between them and the second-tier upstarts that took upon unsustainable levels of debt to power their fictional economies will only grow more pronounced. Managing a cohesive economic and monetary policy in such disparate circumstances risks stretching the limits of government capacity. Moreover, it will intensify the competition for resources in China between groups seeking to maximize growth (however uneven) versus those seeking to distribute it. This debate over what does it mean to "be good for China" will not be the mere domain of elite level politics but will be felt -- as it has before -- on the streets.

The second reason is a direct consequence of Xi's anti-corruption campaign. By clearing away the interests that have stalled reform, Xi will effectively reopen ideological debate over China's future. As Xi has repeatedly stressed, the legitimacy of the Communist Party in the eyes of its people is at risk. The increasingly unavoidable unevenness of China's success risks leading to the same conclusion among the Chinese people as unchecked corruption: that the system is broken.

The urban-rural division can be leveraged for good if it can break beyond what Miller calls the "façade of unanimity" that stalled reform under Hu Jintao and forces a genuine competition of ideas and decisive action. But it also introduces the risk of volatility. Xi may indeed be the most powerful leader of China since Mao, but he is also at the helm of a China that has never been more starkly divided or with more to lose.