Xi Jinping’s rise to power since 2013 has prompted a major reassessment of US foreign policy towards China. In this regard, US policymakers are faced with two substantial issues. The first is the widespread Cold War-era belief that economic liberalization will inevitably lead to political liberalization; US foreign policy has been guided by the assumption that economic liberalization and global integration can bring greater openness to China. The second issue is an insufficient attention to domestic conditions in China; policy analysis has often been conducted by geopolitical strategists with little understanding of the internal workings of the Chinese state.
Elizabeth C. Economy, a seasoned China specialist at the Council on Foreign Relations, seeks to overcome these problems in The Third Revolution: Xi Jinping and the New Chinese State. Economy accomplishes two admirable objectives in this work: she dissects how the evolving domestic political situation under Xi and China’s foreign policy intersect, and she generates a set of recommendations for US policy makers. Drawing on a wide range of sources including media reports, existing scholarship, and her own fieldwork in China, Economy weaves together an excellent account of the changes and continuities in Xi’s China, particularly in the areas of politics, economy, and foreign policy.
The core of Economy’s analysis of China’s “third revolution” is Xi’s political centralization. In chapter 2, Economy details the various political manoeuvres that Xi has employed to build a control mechanism, including the elevation of his personal power, the launch of ideological campaigns, and the enlargement of party leadership in the media, among others. This centralization process fundamentally distinguishes Xi’s era from those of his two predecessors, Jiang Zemin and Hu Jintao, during whose administrations state decision making was characterized by collective leadership. Chapter 3 examines the Chinese government’s success in dominating state-society relations in the age of the Internet. The new Chinese state has constructed, in Economy’s words, a “Chinanet” that controls the flow of information both within the country and from outside of it. Contrary to some political analysts’ expectation that the Internet can serve as a “political change accelerator,” Xi has expanded the technological and human resource capacity of the state to successfully rein in any “vibrant virtual political space” (57) that appeared before he took office.
Chapters 4, 5, and 6 highlight the nature of the state-led economy under Xi. Economy zooms in on three complex governance challenges—SOE reform, innovation, and environment—that are “at the heart of Xi’s drive to modernise the economy” (13). Economy’s thorough documentation of China’s half-hearted efforts to conduct market reform since the Third Plenum in 2013 suggests that Xi will guide the state sector to “incur ever-high levels of debt, consume valuable credit and provide few new jobs” (120). At a time when media and scholarly interest have focused on China’s innovation capacity, Economy spots a major flaw in Xi’s innovation model, namely that the continued dominance of the Chinese state in the country’s innovation ecosystem leads to a “significant waste of resources and inefficiencies” (150). Economy also uncovers similar problems associated with the excessive role of the state in tackling environmental issues.
Economy finds that the most drastic changes under Xi’s China are in the area of foreign policy. In chapter 7, Economy provides a deep understanding of how Xi broke away from Deng Xiaoping’s principle of low-profile foreign policy. She captures a wide range of policy issues, including the Belt and Road Initiative, the South China Sea, Arctic exploration, and the relationships with Taiwan and North Korea. Economy’s analysis indicates clear limitations in Xi’s vision to recast China as a great power, in particular that the state’s aggression is believed to “often undermine the government’s effort to improve its soft-power standing” (219). She is also sceptical about China’s capability to take a global leadership role, emphasizing that it cannot yet place global responsibilities ahead of its own national interests.
Economy’s recommendations for US policy making in the concluding chapter are as insightful and well written as her analysis of China. She does not endorse a containment strategy, arguing instead that the long-standing strategy of the US to “engage but hedge” still has “the virtue of orienting the relationship on a positive trajectory while nonetheless protecting U.S. interests in case China’s intentions are malign” (235). She advocates a long-term strategy that relies on both proactive diplomatic engagement with China and cooperation with traditional democratic allies. She also remains attentive to the scattered discontent from different segments of Chinese society, therefore thoughtfully recommending that US policy makers “must remain attuned to the potential—however unlikely—for China to experience significant social unrest” (249).
Economy’s examination of Xi’s China could have benefitted from a discussion of the state’s approach to rein in major business leaders. Since the era of Jiang Zemin, the Communist Party has increasingly integrated itself with the private sector by allowing business elites to join the Party and by encouraging Party members to go into business. Under Xi, has the state’s strategy shifted from a model of co-optation and cooperation with the private sector to one of more control? Shedding light on this important question would have strengthened the book’s evaluation of the new Chinese state.
Overall, The Third Revolution is an excellent example of high-quality academic research on China with a strong policy focus. The book is written in a journalistic style and is thus very readable, and would benefit anyone interested in China’s new political landscape and future growth prospects.
Tian He
The Chinese University of Hong Kong, Shenzhen