Overview

The Communist Party of China (CPC) has continuously ruled China since 1949. As the ruling party, the CPC exercises significant policy control over China’s development. The government structure is divided into various administrative levels:  National, Provincial, Prefectural, County, Township and other local administrative divisions. In a bureaucracy the size of China’s, it is not possible for the central government to exercise control over the development and implementation of all policies.

The Party has legitimised its one party rule for the past three decades by providing significant economic growth. The environmental and social costs, however, have been enormous and it is felt within the CPC that the efficacy of this model is coming to an end. Xi Jinping and other Chinese leaders are grappling with how to develop and implement reform without threating the CPC’s legitimacy.  

Reform

Under Xi Jinping’s leadership, the central government’s rhetoric on reform has been strong. He and other senior leaders, as well as bureaucrats, have advocated for economic, social, legal and environmental reform just to name a few.  

The first reform issue to be tested was economic reform. The Chinese leadership outlined its economic reform agenda when it released a 60-point reform plan after the close of the Communist Party of China's third plenum in late 2013. It was ambitious document that sought a wide ranging set of reforms including an increased role for the market and reduced role for State-owned enterprises in the economy. To this point reform implantation looks to have been modest.

Reform implementation is a difficult business in modern China. There are a large number of actors trying to influence policy development and implementation.  Significant political and economic power rests with some actors, such as provincial and lower level governments, as well as State-owned enterprises. Many of these actors have interests that are directly opposite that of the CPC. So reform plans can stall during the process and sometimes it takes many years to see if a reform is successful. 

Corruption

Corruption is probably the biggest governance issue facing China and it also seen a potentially destabilising issue for the CPC. Within this context,  Xi Jinping has taken on the largest anti-corruption drive since 1949. Xi said the drive will chase after ‘tigers and flies’ – both top-level and lower-level corrupt officials. So far, former security chief Zhou Yongkang is the most senior official to be investigated (also the most senior official to be investigated since 1949). But he is just one of many senior state-owned enterprise executives, provincial leaders and military officers to be caught in the purge.

Questions have been raised about the sustainability of the anti-corruption drive because of it apparent arbitrariness - Almost every senior official in China is tainted by corruption, and so there is a perception that the anti-corruption drive only targets Xi’s enemies. For a longer-lasting anti-corruption effort, some analysts argue that an independent judiciary, that separate state and courts, is necessary.   

What the Lowy Institute does

The Lowy Institute has provided in-depth analysis on the Chinese economy since 2003. In 2014, as China seeks to implement reforms, East Asia Program Director Merriden Varrall and Nonresident Fellow Linda Jakobson provide ongoing examinations of Chinese governance and, in particular, its implications for Chinese foreign policy. Julian Snelder, Stephen Grenville and Andrew Winterbottom also provide regular commentary on China for the Lowy Interpreter.

Additionally, the Institute has developed a partnership with Rio Tinto to provide a two-month fellowship for a senior Chinese analyst at the Lowy Institute and a three-month fellowship for an Australian analyst, including two months of research in China. In the first year Professor Zha Daojiong of Peking University researched Chinese investment in Australia. The first Australian analyst, Ms Lisa Williams, delivered a paper in 2014 on China’s climate change policies, which is an issue intrinsically linked to Chinese governance.