[MUSIC] Now let's talk about the selection of leaders. What do we know about the selection of leaders? We know a lot of things, but I'm just going to highlight some of the points that I think are really interesting. One of the key points that I find really interesting, is that the new leaders in China do not pick their own team. And that means that succession is a long term process. You come into office, and you don't really pick the team that's going to be working with you right away. In fact, it's the retiring leader who selects your incoming leadership group. The incoming elites that will surround you, both the Prime Minister, and the new General Secretary on the Politburo Standing Committee. Because the key decisions about who's going to be promoted in the new leadership group, are taken by the people who are retiring. Or have retired, or the Organization Bureau of the Communist Party. And if you think about it, I like to say it's as if Bill Clinton, the former US President, had been able to pick George Bush's cabinet. And so here you get a major shift in people's views and ideology, but the new President can't pick his own team. And that's pretty ironic, right? What that means is that it's slow, there's a slow process to really consolidate power. You come in as the new leader and you go into the room the first day and you look around at the group around you and you sort of say, hey wait a second, those aren't my people. So I've got to figure out a way of consolidating my power. They're going to all be challenging me, so I need to find a way to get stronger. And we see this kind of pattern for both Jiang Zemin, who comes into power in 1989. And Hu Jintao, who comes in, in 2002. It takes them several years, if not longer, to consolidate power. And there's policy implications here, because it means that they can't introduce their new policies until they're really in a powerful position. So, for Jiang Zemin, he was brought in as General's Secretary in 1989 after Tiananmen, but he had none of his people on the Politburo Standing Committee. And it's not until 1997, eight years after he begets the top post, he becomes the General Secretary of the Communist Party, that he can finally move his people in from Shanghai to join the Politburo Standing Committee, and then he's able to push his policy agenda. He also has to wait. Dung dies in February. Dung Chow Ping dies in February 1997, and then he really starts introducing a lot of new policies. He privatizes the small state owned enterprises. And in the spring of 1998 he pushes for, he has his own, what I call reform way, which I'll describe in more detail. And he really starts to change policy in a very significant way. Now to a certain extent what that means is, you may become the General Secretary of the Communist party, at a Party Congress. Your first party congress where you become the General Secretary, but that doesn't really give you full authority, because as I said you're being moved up, but people from previous leaders, the guy who's retiring, his people are likely to remain in power. So it really means that it's in your second five year term, the second round that you become the General Secretary of the Communist party. That's really when you're going to be able to have influence, because it's in your second round, you are already in a position to be able to control who gets appointed to very top positions. You are able to purge some of your opponents. And you're able to introduce some of your new policies. Unfortunately Hu Jintao, he becomes the General's secretary in 2002, and he never really gets full power then. It takes him two years to even become the Chairman of the Military Affairs Commission, because Jiang Zemin holds onto it. And he never, we now look back and we say he never really controlled the Military Affairs Commission. And in many ways he really never overcame the influence of Jiang Zemin, because he never really controlled the Politburo Standing Committee. And here, this is at the 17th Party Congress. Hu Jintao is the leader of China, right? But this is his Politburo Standing Committee. And what I've done is I've circled in yellow, three leaders from Jiang Zemin's Shanghai Faction, right, who are still members of the Politburo Standing Committee. And Wu Bangguo is actually the number two person on the Politburo Standing Committee. And these other two people are also quite influential. And he, the leader Hu Jintao, he is part of a faction, of The Young Communist League. And he only has Lee Ka Chung who had been active in the Young Communist League, to be able to work with him closely. So he only has one ally on the Politburo Standing Committee, three clear opponents who are leftover from the Jung era. And then we have here Xi Jinping who's on his way up and a few other people. Now, to a certain extent, this argument that it takes time to consolidate power, and only then you can introduce your own policies. I felt pretty comfortable with making that argument for a long time, and when Xi Jinping became the new leader, I didn't expect him to be able to introduce so many new policies, but he's been able to challenge this perspective. And the third plenum, his third plenum, as General Secretary of the Communist Party, was really a surprise for most of us, because he was able to push a lot of changes. But even though he's been able to introduce new ideas, and has this very nice 60 points of reform. We don't see the reforms going forward very quickly. The reforms that the Prime Minister can push, who are his ally, those are going forward. But he cannot pass on to other members, of his Politburo Standing Committee, policies and let them do them, because he can't be sure that they're going to implement them. He is in some ways what we've discovered, is there's all these committees, and he is the chairman of all of the committees. And that may be because he trusts nobody else, except his Prime Minister. He trusts another guy, we'll talk about him in a minute, Wang Qishan. But by and large, he cannot trust the other people around him on the Politburo Standing Committee, because they're simply not his people. And so, he may have to wait until the 19th Party Congress, which will be his second Party Congress, when he can bring in, all of his people. And then he will be able to implement all of his new policies. Now, one of the things about China, because we don't know in fact, we don't even know how Xi Jinping was elected to be the leader of China. So the succession process in China. Who gets to be the next leader, is really not institutionalized. It's not like in the West, where in the United States you know which day of the year, every four years, there's going to be an election for the President and you know the process, it's very clear. In Prime Ministerial governments, Britain, Canada, Australia, the politics of getting to be the leader is pretty clear. But in China, as I said, it's just not institutionalized, we just don't know how things happen. So, in fact In 1954 one of the people who had a good chance to get ahead, a guy name Gao Gang, potential successor, disappears. [SOUND] Just gone. Doesn't show up at some meetings that he's supposed to, and so for a long time people have tried to figure out what actually happened to him. A very sad character is Liu Shaoqi, who worked with Mao most of Mao's life, they worked closely together. Liu Shaoqi, early in the 1920s, was in the underground Communist Movement within the cities, while Mao was in the countryside. Came to power with Mao and was really number two, in the Chinese leadership throughout most of the period. But he becomes the major target of the culture revolution in 1966, and in 1969, the poor man dies of pneumonia in prison. Mao has him locked up and sent off to a cold, dank prison, and he dies of pneumonia, and that's really very sad. A third example would be here in 1981, where Hua Guofeng, who in some ways is Mao's unofficial successor, Mao dies in 76, Hua then takes over most of the key positions in China. He becomes Prime Minister. He become the Chairman of the Communist Party, just like Mao. And he becomes Chairman of the Military Affairs Commission. Yet In 1981, he can no longer hold onto his position, and Deng Xiaoping is able to push him out. Now here you have a longer list, I've only mentioned three of them. But just think about how much waste of talent, right? How much energy is spent by these people, just like on the board that I showed you, trying to stay alive, trying to stay ahead, trying to build up their own power base so they can move forward. But in the West we do have people who run for office. They run against other people. And they lose. And very often in politics in the West, we don't remember the names of people who ran for President and lost. We certainly don't remember the names of Vice Presidents, who run with the President, and their side loses. But here, different than in the West, loser often dies or is put under house arrest, and we never hear from them very much in future.
