Artículo Foreign Policy, 14.10.2022 Christopher Marquis, profesor (Cambridge Judge Business School)
A legacy of mistrust hampers the Chinese leader’s decision-making.
In aiming to seize a third term as China’s paramount leader at the impending 20th Party Congress, Xi Jinping has broken decades-long leadership norms put in place following the disastrous tenure of Communist China’s revolutionary founder, Mao Zedong. Many have compared Xi’s moves to a second coming of Mao. He frequently invokes Mao’s revolutionary slogans to justify his strategies, imitates Mao in speeches, and visits places that commemorate Mao.
But how does Mao’s legacy help us understand Xi and his approach to governing China moving forward?
A powerful aspect of Mao’s governance was his combination of political campaigns and industrial ambitions. In the late 1950s, Mao wanted China to quickly match the Soviet Union’s success in industrialization. His Great Leap Forward redirected agricultural labor to industry, and people were ordered to melt down their metal cooking utensils for failed attempts at steel production. At least 30 million people died from starvation in the resulting three-year Great Famine. Then, in the 1960s and 1970s, Mao’s Cultural Revolution sidelined enemies and mobilized the populace in continuous revolution. China descended into a decade of institutional upheaval and turmoil.
In aiming to seize a third term as China’s paramount leader at the impending 20th Party Congress, Xi Jinping has broken decades-long leadership norms put in place following the disastrous tenure of Communist China’s revolutionary founder, Mao Zedong. Many have compared Xi’s moves to a second coming of Mao. He frequently invokes Mao’s revolutionary slogans to justify his strategies, imitates Mao in speeches, and visits places that commemorate Mao.
But how does Mao’s legacy help us understand Xi and his approach to governing China moving forward?
A powerful aspect of Mao’s governance was his combination of political campaigns and industrial ambitions. In the late 1950s, Mao wanted China to quickly match the Soviet Union’s success in industrialization. His Great Leap Forward redirected agricultural labor to industry, and people were ordered to melt down their metal cooking utensils for failed attempts at steel production. At least 30 million people died from starvation in the resulting three-year Great Famine. Then, in the 1960s and 1970s, Mao’s Cultural Revolution sidelined enemies and mobilized the populace in continuous revolution. China descended into a decade of institutional upheaval and turmoil.
Like Mao, Xi is obsessed with industrial-oriented campaigns that he promotes with the Maoist slogan “Concentrate strength to do big things.” As he enters into a third term as leader, these could become only more common. But, as with the Great Leap Forward, his plans seem to lack a grip on economic reality. Perhaps the biggest example today is China’s campaign to become an international leader in semiconductors, originally laid out in the Made in China 2025 program.
A decade ago, I lived for five months on the corporate campus of Semiconductor Manufacturing International Corp. (SMIC), China’s leading chip company, and interacted with its leaders on many occasions, including founder Richard Chang. They were clear that given the complexity and globally interconnected nature of semiconductor production, there was no way China could ever be anything but a low-cost supplier, delivering chips a few generations behind, for use in lower value-added applications. China’s limited access to global knowledge and supply chains, and especially machine tools, was a permanent impediment.
Today more than ever, semiconductor expertise is built across many different regions in the world, each with their own focus and comparative advantage that rests on decades of research and development. But the guiding logic of China’s semiconductor development differs substantially, aiming for self-sufficiency and shaped by political more than economic motivations—not least by the dominance of Taiwan’s semiconductor industry. In one telling instance, I was told that to satisfy the local government, SMIC’s Shanghai operations employed 4,000 people, while a similar plant in Taiwan might employ only 1,000.
Recently, some of the fundamental problems with China’s approach have been emerging. After raising more than $40 billion in two rounds of funding, the China Integrated Circuit Industry Investment Fund, launched in 2014 and commonly known as the “Big Fund,” proved largely to be a bust. A recent round of purges claimed a wide range of financial and tech figures who had worked on the Big Fund, amid accusations of rampant corruption. And a number of chip companies that boasted billions of dollars in funding have collapsed without producing a single chip. With virtually unlimited government subsidies and grants, it is not surprising that resources have been misdirected and aimed at ineffective goals.
Per the Made in China 2025 plan, published in 2015, China was supposed to be at 40 percent domestic production by 2020, yet it hit only 16 percent. During my time at SMIC, the company trumpeted its place as one of China’s Top 5 patenters. But it was driven by incentives focused on patent quantity, not quality, and so a decade later, the company is still a few generations—about four years of development time—behind the most advanced producers, about the same as when I lived on the SMIC campus.
Xi’s focus on semiconductors seems like the 2020s version of Mao’s 1950s focus on steelmaking. While it won’t lead to widespread famine, it is an ostensibly sensible development priority that will fail, as it is guided by an ineffective top-down campaign logic and lack of connection to economic reality. As the United States and other countries around the world enact chip policies to limit China’s growth in the sector, they should keep the failures of China’s campaign strategy in mind. Rather than panicking about ultimately unhittable targets, U.S. leaders should focus on multilateral approaches and ensure any financial incentives are closely tied to observable production in China.
Much has been made of Xi’s revival of a Maoist personality cult, but beyond attributing it to a thirst for power, there is less agreement on why he feels the need to upend post-Mao leadership norms. Mao’s other major political campaign provides some clues.
Scholars have shown that the decade-long period of state-sanctioned violence known as the Cultural Revolution had a lasting negative effect on the Chinese populace. Research in political science and economics has exposed that experiencing the Cultural Revolution led to significantly less trust among the general population and less respect of institutions, particularly of political leaders.
My research with Kunyuan Qiao finds a similar pattern among business leaders. Those with Cultural Revolution experience are more likely to bribe and commit other crimes, default on their debts, and aim to escape China through expatriation. As Yongyi Song of California State University, Los Angeles put it, “The Cultural Revolution turned people into beasts.” Real estate developer Huang Nubo reflected that the Cultural Revolution made the people who lived through it “demons.”
That lack of trust is visible in Xi’s own approach to both domestic and international norms. Xi is a product of the Cultural Revolution. The scion of a revolutionary family, his father—already purged in 1962—spent years in jail during the Cultural Revolution, while Xi was banished to the countryside. He lived for seven years in rural Shaanxi province, effectively ending his formal education at age 15 until he returned to Beijing to attend Tsinghua University from 1975 to 1979 as a “worker-peasant-student.” Chinese propaganda emphasizes the empathy for ordinary working people he supposedly learned in this period, but the truth may be darker. Xi hinted at this in an interview in 2000 with Chen Peng, a Chinese journalist. “People who have little contact with power, who are far from it, always see these things as mysterious and novel,” he said “But what I see is not just the superficial things: the power, the flowers, the glory, the applause. I see the cowsheds [a term for the improvised prisons used by Red Guards] and how people can blow hot and cold.”
Thus, is it any surprise that he has ignored prior Chinese norms and laws on succession? That China flouts international agreements from the World Trade Organization to the governance of Hong Kong? And that China abducts and jails citizens of other countries if they cross Xi?
Some analysts predict that when Xi steps into his unprecedented third term following the 20th Party Congress, his position will be secured, and so his hard-line policy approaches—such as toward COVID-19—may soften. But considering the deep effects of the Cultural Revolution, the opposite may be the case more generally, and following the Party Congress, Xi may feel further emboldened and likely double down on the Maoist strategies that have clearly been his inclination in the past.
Cross-historical comparisons must always be taken with a grain of salt. But there is still much to be learned from the influence of Mao’s campaigns on Xi’s politics and governance—and they portend continued economic troubles for China and concomitantly more and more tension with the West.
