China’s Five-Year Plan and Leadership Transition

China’s Communist Party recently released a new five-year plan and introduced to the world the next Chinese head-of-state — Xi Jinping. In an interview with Reuters Insider, Cheng Li discusses the leadership styles and strategies Xi will likely employ in moving China’s economic and political reforms forward.

REUTERS: Tell us, Dr. Cheng, what is the most important thing we should know about the outlook of Mr. Xi Jinping towards the international economy and the market economy?

CHENG LI: He is a very market-friendly person and he worked as a provincial chief or municipal boss in three places in China, namely, Fujian, Zhejiang, and Shanghai. These are all the economic-rich and the market well-developed areas. So during his tenure in these three provinces, he always works very well with private sector, with entrepreneurs, whether foreign companies, joint venture, or private sector. So he has a good reputation as a market-friendly leader. I think that serves well when he becomes top leader.

REUTERS: Within China, we know that there tensions between the successful provinces of the kind that Mr. Xi is very familiar with and at the areas that had been left behind, and some of these tensions play out in- against China’s dealings with friction- in trade friction from abroad. How will a man like Mr. Xi balance the competing demands of- from the West to China open up more to other people in China who want to go a little bit slower?

CHENG LI: Well, this is exactly what is whatever his shortcomings, because he did not have the leadership experience in inland region although during the cultural revolution he was sent [to the coastal region], one of the poorest provinces in China. And that experience may help him, but still he did not have a solid leadership experience in poor inland province. But on the other hand, I think that he represents a group of leaders, what I call the “Elitist Coalition,” which really represents interest of entrepreneurs, middle class, and the coastal region. I think in a way that can balance with Hu Jintao’s approach called “harmonious society” allocated more resources to inland region so that tension, that competition is a healthy development in China’s leadership or politics. I think Xi Jinping could contribute at the process. But if his power always will be balanced by Hu Jintao’s protégé still favor more balance in the regional development, still pay more attention to social safety net, low income housing. But Xi Jinping, in my view, will promote private sector, including property development, including the openness for foreign investment and also China’s participation in global economy.

Watch the interview or read the transcript at reuters.com »