Xi Jinping, The Smiling Chinese Leader

By Michael J. Economides

There is still an element of opaqueness on how China moves from here to there. But progress and change are apparent.

Even if the public spectacles, rich with symbolism but short in time are the tips of the iceberg of long internal struggles and jockeying for power, on November 15 at the end of the 18th People’s Congress of the Communist Party of China (CPC) the hard-to-pronounce by foreigners Xi Jinping led a procession on the stage at Beijing’s Great Hall. He was there to accept his nomination as Party general secretary plus chairman of the Central Military Commission, a title that created some speculation and which had a history of uncertainty with Xi’s predecessor, Hu Jintao, when he replaced his own predecessor, Jiang Zemin.

In a smiling but ritualistic fashion, forming a one person phalanx, Xi led seven black-suited men in white shirts and red ties (so the Standing Central Committee of the CPC will now consist of seven rather than nine). He was followed onto the stage by Li Keqiang, the man set to succeed Premier Wen Jiabao.

Standing Committee of the Communist Party of China
China Daily

The other five, in order of seniority, were Vice-Premier Zhang Dejiang, Shanghai party boss Yu Zhengsheng, propaganda chief Liu Yunshan, Vice-Premier Wang Qishan and Tianjin party boss Zhang Gaoli.

They are supposed to be conservative but Xi does it with a smile. In a recently widely used expression in the just completed United States presidential election, he looks “presidential.” He is clearly a next generation leader, born in 1953, four years after Mao Zedong established New China. Xi grew up as a Chinese “princeling”, the son of a founder of the PCP.

He brings to some foreigners memories of Mikhail Gorbachev, the affable last leader of the Soviet Union. To this day, Gorbachev is still considered by many as the most popular Russian/Soviet leader ever, certainly because of the substance of his reforms, the glasnost and perestroika. But not just. Gorbachev’s foreign popularity was partly because of his relative youth and also because of his attractive, elegant wife, Raisa, with her fur coats and her American Express shopping sprees overseas.

Xi has his own asset in his widely popular and known before him wife, glamorous singer and actress Peng Liyuan. He is also a technocrat, with a highly admired pedigree in China: a chemical engineering degree from China’s MIT, Tsinghua University.

The new Chinese leader has a monumental task in front of him, much bigger than Gorbachev’s, because China has evolved into so much bigger economy and country. He would have to tackle corruption, an endemic and institutionalized malaise that affects all levels of the society and engulfs all government institutions. Ferreting out corruption will not be an easy task, smiling or not. One would hope that Gorbachev’s current position in the Russian minds does not repeat itself in China with Xi. Internationally popular Gorbachev in one of the most astonishing disparities anywhere, is historically one of the least popular leaders inside his country. He was replaced eventually by the most conventional and KGB-style-brooding Vladimir Putin.

It was not insignificant that the China Daily on November 16, the date when the front page coverage splashed a symbolically loaded picture of the Seven Standing Committee members marching in order on stage, that the business section headlined with the article: “Share of imported oil to rise.” If corruption is the albatross across China’s throat that needs to be eradicated, energy will be its “choke point.”

It will be Xi’s equal, if not more important, challenge. Next year will mark the twentieth anniversary of China’s beginning of oil imports. Total consumption in 2013 is expected to top 10 million barrels per day, 60 percent of which must be imported.

The country has not been idle. China last year spent more than $200 billion throughout the world seeking oil and gas properties, much of it in South America, Africa and the Caspian. This is beyond the usual suspects of oil supply, such as Saudi Arabia (20 percent of imported oil), Iran (11 percent) and Russia (7 percent.)

Shale gas and shale oil are the only new domestic hopes for energy supply. They will pose considerable challenges of exploitation. Finding affordable and reliable sources of natural gas for highly-polluted, coal-dependent, China is probably as critical as oil.

The energy future is diametrically different from that of rival United States. According to the International Energy Agency in Paris the United States will become the world’s largest crude oil producer by 2020, surpassing Saudi Arabia and Russia. With a surfeit of natural gas from the unmitigated success of US shale gas, the future tale of the two countries looks different. Xi has his work cut out for him to continue smiling.

Michael Economides is Editor-in-Chief of the Energy Tribune