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China’s cabinet shuffle suggests that Xi will rule China through the state, not the Party

Late Tuesday afternoon China unveiled plans for a major government reorganization, cutting the number of top-level ministries and streamlining management reporting structures. China’s cabinet, the State Council chaired by Premier Li Keqiang, will be reduced from 35 members to a more manageable 27. The stated aim of the reorganization is to increase the “capacity for governance of the State.”

The unstated aim seems to be to get inefficient and often corrupt Communist Party apparatchiks out of the business of government.

“Deepening the reform of the Party and State institutions is an inevitable requirement for strengthening the long-term governance of the Party,” according to Liu He, a close associate of Xi Jinping, writing in the People’s Daily, the official newspaper of the Communist Party of China (CPC). He went on to say that “unlike past institutional reform, which mainly was related to government institutions and administrative systems, this institutional reform will be comprehensive.”

Just how comprehensive is anyone’s guess. But the reorganization of the government does fit in with the unlikely mantra of this year’s National People’s Congress (NPC) meeting: promotion of the rule of law. Most economists agree that rule of law is necessary for advancing beyond the middle-income trap. Seeking the key to 21st century economic prosperity, Xi’s China seems to be moving toward embracing the rule of law while maintaining a one-party system.

That means “building China into a socialist country of rule of law,” as the NPC Standing Committee puts it, without all the fuss of personal freedoms or multi-party democracy. China’s recent constitutional amendments, too, were cast in terms of improving the rule of law. They do so by transferring Xi’s trademark tigers-and-flies anticorruption campaign from the Party’s Central Commission for Discipline Inspection into a new state body, the National Supervision Commission. It may be the same people doing the disciplining, but the idea is that in the future they will do it using state courts, not Party tribunals.


From Party discipline to personal discipline

From the bad old days of Mao Zedong through the Tiananmen Square Massacre to the anticorruption campaign of Xi Jinping’s first term, repressing dissent has been the job of the Party first, the military second, and the government only as a matter of last resort. Recalcitrant intellectuals, human rights activists, and other malcontents were kept in line through secret tribunals operating outside the rule of law. Such tactics still exist in China, but low-tech thuggery is fast giving way to high-tech social engineering.
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Today, China is in the process of building the world’s most sophisticated citizen surveillance network, combining biometrics, behavioral modeling, and social ratings to create a national social credit system. It works on the same principle as an Uber or Airbnb rating, but managed by a totalitarian government and on a national scale. And it is run by the state, not the Party.

In an era of all-electronic payments, blacklisted citizens can be prevented from traveling or accessing the internet through a social disqualification that constitutes an internet-based form of house arrest. Lower-level government officials, too, can be monitored by those higher up the hierarchy with access to their data. The social credit system gives the state a centralized system of informal social control, bypassing long-established Communist Party back-channels.

A project of the State Council, the building of the social credit system has effectively been outsourced to private companies like Alibaba and Tencent. The Communist Party was once very good at monitoring people’s “social credit” by encouraging people to spy on their friends and neighbors, but it simply doesn’t have the expertise to run a 21st-century big data surveillance system. These days it’s not your neighbor listening in on your private conversations; it’s a contract data center reporting directly to the state intelligence services.


Legal leader for life

Similarly, the highly controversial constitutional amendment abolishing Presidential term limits and allowing Xi Jinping to stay in office past 2023 only makes sense if Xi intends to continue to rule the country as President — i.e., by rule of law. Despite creating the office of President in his 1982 constitutional reforms, China’s paramount ruler Deng Xiaoping never bothered to take the office himself. He chose instead to rule as informal Party supremo and Chairman of the Central Military Commission (an office Xi also holds).

Xi could easily have retained effective control of China’s government beyond 2023 by keeping his Party and military titles while installing a puppet protege as President. Instead, Xi seems to have decided to make the President, not the Party General Secretary, the true chief executive of China. Of course, Xi wears both hats. The issue isn’t who will rule China, but which hat he will wear. By wearing the Presidential hat, Xi has placed administrative efficiency and the rule of law above Communist Party orthodoxy.

That doesn’t mean that the influence of the Communist Party will fade away. Far from it. If Xi Jinping Thought means one thing, it’s Party First. In Xi’s Chinese Dream, only one party will ever rule the People’s Republic of China, and that’s the Communist Party. But in the Xi Jinping era, it won’t rule the country from the bottom up. Mao Zedong’s dream of a Communist Party grounded in the rural peasantry was put to sleep by Deng Xiaoping, and it isn’t coming back. In the Xi Jinping era, the Party will rule China from the top down. And we all know who will be at the top.

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Sydney-based globalization expert Salvatore Babones is available to speak on the Chinese economy (demographics, growth, technology), the Belt & Road Initiative, global trade networks, and Australia-China relations. Contact: