In The Third Revolution: Xi Jinping and the New Chinese StateElizabeth Economy offers an exhaustive study of Xi Jinping’s first five-year term as the leader of China, the world’s most populous nation. This panoramic evaluation is as thorough as it is balanced, writes Vasilis Trigkas, and should be core reading for anyone looking to understand how Xi’s revolution is transforming China. 

The Third Revolution: Xi Jinping and the New Chinese State. Elizabeth Economy. Oxford University Press. 2018.

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Economists and pundits alike have shed much ink to discuss China’s 40th anniversary of opening up and reform, yet it is a sweeping neo-Leninist political revolution with Chinese characteristics that is remaking the Middle Kingdom: Xi Jinping’s revolution. This is the core idea in The Third Revolution, Elizabeth Economy’s exhaustive study of Xi’s first five-year term as the revolutionary head of the world’s most populous nation and America’s prime geopolitical challenger.

Not many authors would be as qualified as Economy to write about a neo-Leninist revolution within a clandestine one-party polity. A sovietologist by training, Economy turned to China in the 1990s when the Soviet Union was no more and Cold War experts faced a difficult job market. As a C.V. Starr senior fellow and director for Asian studies at the Council on Foreign Relations – a networked powerhouse – Economy has the advantage of cordial exchanges with a vast network of officials, scholars, dissidents and business executives who provide key insights on China in the epoch of Xi.

In act one Xi enters the stage as Economy panoramically guides readers through the revolution. In half a decade Xi has been a prolific ideologue: the two undeniables, the four comprehensives, the twelve ideas on core socialist values and the three confidences are all his ideological catchphrases in an effort to solidify his narrative about the past, tighten his grip on the present and make sure that China’s future will follow the path he envisions with the Communist Party of China (CPC) always in charge as the nation rejuvenates:

Xi seeks a uniquely Chinese model that he believes will deliver the Chinese dream and perhaps become a standard bearer for other countries disenchanted with the American and European model of liberal democracy (12).

Image Credit: President of China, Xi Jinping, in London, 19 October 2015 (Foreign and Commonwealth Office CC BY 2.0)

The first arena where Xi’s policies have found solid application is the ChinaNet – a vast firewalled internet under the decisive informational control of the CPC. During its early period, the great firewall was more of a defensive line to insulate China from ‘Jasmine Revolutions’; now it has allowed the CPC to foster a massive internet market (by blocking US Silicon Valley companies and then cloning them) and monopolise the narrative about Chinese history. Yet, perhaps most importantly, the success of China’s domestic internet economy has empowered Beijing with the normative authority to challenge the open internet globally by proclaiming the need for ‘Internet sovereignty’.

Another arena of Xi’s revolutionary practice has been the ‘Socialist market’.  For Xi the CPC must rule supreme, and Economy notes that while the Third Plenum in 2013 declared that the market will have a ‘decisive role’ in the Chinese economy, in practice ‘monopolies that had been broken during the age of Zhu Rongji have now reconstituted themselves’ (104). The visible arm of the state has expanded, yet China’s meteoric success in the internet economy could mostly be attributed to its private internet corporations which have tapped into a ‘Chinese middle class that is wired, ready to buy and big on convenience’ (121). Economy frames Jack Ma, the founder of Ali Baba who recently declared his long-time party membership, as a paradigmatic entrepreneur and rightfully submits that for Chinese leaders, innovation is seen as key for China’s economic future (123).

At a moment when pundits have sensationalised China’s rising innovation capacity, Economy’s analysis on China’s political economy enlightens: China, Economy asserts, innovates, but it rarely, if at all, invents. China is a champion of incremental innovation, not disruptive invention. This is more of an outcome of cost minimisation and massive (and often wasteful) industrial subsidies, BYD, the battery and automobile manufacturer, being a revealing case. With unresolved problems in attracting human capital and an environment which does not allow ideas to flow freely, China’s innovation ecosystem is problematic and Xi’s revolution seems to ignore the ‘structural reforms that would enable China to lead in basic research and develop breakthrough technologies’ (150).

No study about Xi and China could be complete without a thorough evaluation of the Belt and Road Initiative (BRI) – Xi’s pivotal foreign policy initiative to ‘make all roads lead to Beijing’ (190). Echoing Pang Zhongying, Economy submits that China’s effort to expand its global economic outreach reflects a modern equivalent of huairou – ‘pacifying and winning the hearts of foreigners through tributary trade’ (222). As the US has faltered in its global developmental strategy, many countries celebrate China for its ability to ‘identify and address the developmental needs of other countries’ (222). Thus, the BRI could in the long term become a normative competitor to the Western developmental model.

Economy concludes with a series of recommendations on how the US should respond to Xi’s global strategy. She believes that the US must observe China’s domestic agenda and deal proactively instead of just reacting to China’s regional and global initiatives. In this sense, the ‘engage and hedge’ strategy that the US has followed since its post-Tiananmen interaction with China remains relevant as it ‘allows the relationship to be oriented in a positive trajectory but also protects the US in case of malign Chinese intentions’ (235). Economy’s operational advice to US policymakers is not to short China but to long it and therefore work closely with allies, invest more in domestic R&D, protect critical US assets and approach the BRI as an opportunity as well as a challenge. Economy rightfully asserts that the key challenge for the US will be how to deal with China’s ‘wherewithal to accept suboptimal economic and efficiency outcomes generated by non-market practices in the near-term to try to ensure market dominance in the long-term’ (236).

Economy’s treatise is as thorough as it is balanced. She approaches China through the lens of an expert-scholar and not an ideologue, yet in many instances she evaluates China’s polity as prima facie restrictive for China’s global leadership. She even asserts that Trump’s debacles will not suffice to make China a global leader (229). Nature, however, abhors vacuums. With America retrenching, countries may bandwagon with China – the way the Philippines and especially Pakistan have bought Xi’s calls needs to be explored. As Xi himself has declared, with recent events (i.e. the rise of populism in the West), the time of strategic opportunity for China has expanded. Thus, with America falling from within due to its unprecedented political predicament, China with all the limitations of its authoritarian Leninist system could crowd out the United States from the Asia-Pacific. It is therefore the wild card of politics within China and the US that will be the key determinant of how the two behemoths will perform in the years ahead. The US may be a ‘financial crisis or a war of choice away’ from passing the global leadership to China. Similarly, Xi’s revolution could slow down China’s economic development or even lead to domestic unrest.

Economy is extremely well read, citing a plethora of primary sources and discussions with experts. Yet her opus would have perhaps been more complete had she elaborated on the ideas of Xi’s ideological allies in the clandestine corridors of power. For instance, the contribution of senior apparatchiks like Wang Huning and Wang Qishan and how their ideas incubate within the structure of the CPC – an analysis that Richard MacGregor (author of The Party: The Secret World of China’s Communist Rulers) had done exceptionally well for the period until Hu Jintao.

To be sure, reading Economy’s panoramic evaluation of Xi’s first five-year term, one thing is certain: the long-held US belief that China’s polity would morph into the image of America’s has failed. For students of politics, diplomats, economists or all those who seek to understand how Xi’s revolution is transforming China and the impact that a more assertive neo-Leninist behemoth will have on the global order, Economy’s book is core curriculum.

Vasilis Trigkas is an Onassis scholar and research fellow at the Belt & Road Strategy Institute, Tsinghua University. A former visiting scholar at Columbia University’s European Institute, Vasili’s articles on Chinese economy and politics have been featured at the Carnegie Endowment for International Peace, the Columbia Journal of International Affairs, the South China Morning Post and the Diplomat, among others.

Note: This review gives the views of the author, and not the position of the LSE Review of Books blog, or of the London School of Economics. 

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