Dispatch

Xi Pivots to Moscow

Xi Pivots to Moscow

BEIJING — In January 1979, shortly after he rose to power as paramount leader of China, Deng Xiaoping visited the United States. While there, he defined the direction he would take the country, donning a cowboy hat and symbolically steering away from the Soviet Union-which he never visited as China’s ruler-and toward the markets of the West.

But Xi Jinping, who completed his formal leadership ascension by being crowned president on Thursday (he was appointed chairman of the Communist Party and head of the military in November), is heading first to Moscow.

Will Xi’s late March trip to Vladimir Putin’s Russia — a bastion of authoritarian state capitalism — symbolically define China’s path ahead, like Deng’s U.S. tour?

It’s too early to say, but he’s certainly taking care to make it a success.

Xi has been brushing up on his rudimentary Russian, which he learned at Beijing’s most exclusive school, No. 101, when it was reserved for the children of high ranking leaders. He has even been rehearsing Russian poetry to impress his hosts, according to one of his close associates.

And he has sought the assistance of his female friend Li Xiaolin, a princeling – the term used for the children of high-ranking officials — who heads a ministry-level back-channel diplomatic organization called the Chinese People’s Association for Friendship with Foreign Countries, according to the close associate. Li’s father, Li Xiannian, worked closely with Xi’s father, Xi Zhongxun, when both men were vice premiers in the 1950s. Li’s husband Gen. Liu Yazhou is an important confidante of Xi’s.

One of Li’s aides has been seconded to the economic planning agency, the National Development and Reform Commission, from where she had been shuttling between Beijing and Moscow to prepare a huge new oil and gas supply deal to sweeten Xi’s arrival.

Whether Russia can open an energy artery to China will depend, essentially, on price. For years, the two countries have been negotiating deals that would double China’s imports of Russian oil, making it less dependent on the Persian Gulf and East Africa. The two countries are also planning a huge new joint investment fund, with Li’s aide penciled in to be vice chair, according to a source familiar with the matter.

Whether or not the deals come through, Xi’s use of Li shows how networks of the red aristocracy enable him to work around the Communist Party’s sometimes sclerotic bureaucracy.

There are some close observers who believe, or hope, that Xi’s Moscow tour is designed to draw upon symbolism from the revolutionary era when his father was vice premier and China’s policy was "to lean to one side" in favor of the Soviet Union.

"Xi will shortly execute China’s own pivot," says one well connected observer who has a seat in one of the two legislatures that are meeting in Beijing this week.

The observer says Beijing’s move toward Moscow is a response to Washington’s "military" pivot, just like when "the Western powers totally ostracized" China in the 1950s.

But the historical parallels are not so clear cut. Unlike the Soviet Union of the 1950s, China runs a successful, market-oriented economy, integrating into the global financial system and heavily dependent on exports to the West.

The economic reforms that Deng is credited with launching in December 1978 propelled China away from Soviet-style autarky into connected capitalism. But Deng was not the architect of reforms as much as an important part of an elite consensus. One of the most important members was Xi’s father, Xi Zhongxun.

While Xi Zhongxun and Li Xiannian both served then Chairman Mao Zedong in the 1950s, they left their marks following Mao’s death in 1976.

Xi Jinping will remember Li Xiannian from when the revolutionary leader kindly brought him in for a home-cooked meal in the early days of the Cultural Revolution in the late 1960s, when Xi’s family was in disgrace. He is also likely grateful for how Li signed off on his father’s rehabilitation in August 1977.

And around the time when Deng was photographed waving a 10-gallon hat at a rodeo in Texas, it was Li Xiannian who endorsed Xi Zhongxun’s most radical project, according to Warren Sun, a historian of modern Chinese history at Monash University in Australia. Li endorsed Xi’s radical idea of a free trade zone and allocated him the piece of land that has now expanded into the bustling export city of Shenzhen.

Since then, the Chinese economy has grown at an average of nearly 10 percent a year, and its GDP has risen from just over $175 billion to $7.3 trillion. But unlike 1979, when China was exuding optimism and the Communist Party was rallying around the promise of reform, there is a pervasive sense of fear and foreboding that the power and corruption of the party-state could derail efforts at reform.

China is once again at a "crossroads," to use a word in vogue among the Beijing intelligentsia. Conservatives hope Xi will move to the conservative left, as symbolized by Putin’s Russia. But if Xi Jinping is truly his father’s son, he will use the Moscow visit to shore up his left flank while quietly re-starting Deng’s journey of opening and reform.