Updates from the Policy Change Index.
 
Policy Change Index
 
 

Dear Human Readers,

As Russia’s war against Ukraine enters the second week, the world is shrouded in deeper uncertainties. Beijing, having announced a new pact with Moscow just weeks ago, is now walking a tightrope on how much to actually support the Kremlin.

Beijing’s hesitance is not surprising. With just months before Chinese President Xi Jinping is expected to take on a third term, there are enough challenges on his plate, which is why we should not lose focus on China, an arguably longer-term challenge to the liberal world order.
 

PCI-China

Xi tightened his control on several fronts last year: reining in Chinese Big Tech, managing the decline of the property giant Evergrande, and restricting the role of private capital in Chinese media. Are these moves, under the “common prosperity” umbrella, the beginning of a new Mao era or just snapshots in time that haven’t yet altered the path of the Chinese economy? Latest updates from the PCI-China suggest that the latter is a more plausible scenario.

A marked lack of turns. The chart below shows the latest PCI-China data up to the fourth quarter of 2021. The spikes indicate changes in propaganda, which suggest upcoming policy moves, and the labels show the major (historical) policy changes. The fact that the index is near a low in recent years indicates that a return to Maoism is not on the CCP’s agenda — yet.

Figure: PCI-China, 1951 Q1 to 2021 Q4

Note: The PCI-China predicts if and when the Chinese government will change its policy priorities. A spike in the indicator signals a policy change, while a vertical bar marks the occurrence of a policy change labeled by the event. 

Remember the “harmonious society”? That was former President Hu Jintao’s attempt in 2005 to maintain China’s economic reforms while using state intervention to solve a host of social problems. That policy initiative marked a major slowdown of the pro-market reforms his predecessors had pursued, and the PCI-China picked up the move over a year prior to that.

Subsequent years have proved that Hu’s government didn’t aim for a Maoist level of “harmony,” and the market reforms in China continued, albeit at a slower pace. The recent lack of spikes in the PCI-China suggests that Xi’s “common prosperity” may well be intended to be old wine in a new bottle — not a Maoist extreme either.

But this economic agenda is by no means smooth sailing ahead. As Morning Consult’s Matthew Kendrick pointed out, Xi’s heavy-handed approach might mean little more than kicking the can down the road, which could put a damper on Beijing’s global ambitions.

 

Wei To Think Again

We mentioned Weifeng Zhong’s new newsletter, Wei To Think Again, that focuses on the various fronts of the intensifying U.S.-China competition. Initial editions have covered issues ranging from the U.S.-China decoupling and forced labor in China to America’s Taiwan policy and open-source intelligence. It’s also in the middle of a special three-part series on China’s telecom giant Huawei. Please sign up here to follow along on these and other nuanced China issues.
 

PCI Resources

Zhong had the pleasure to chat with former House Speaker Newt Gingrich in his podcast about the PCI project, the power of propaganda, and Beijing’s delicate dance in handling its relationship with Moscow. Xi’s tighter grip on Chinese media also reinforced, once again, the need for the West to up its game on utilizing open-source methods to produce valuable intelligence, as Zhong recently explained in The Dispatch.

The open-sourced PCI projects are meant to crack a window to otherwise opaque political systems like China's, so everyone can look inside—for free. You can find out more about the projects on the PCI website. Don’t hesitate to reach out!

 

Edited by Weifeng Zhong and Julian TszKin Chan.

 

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