(Bloomberg) -- As the world waits for China’s lawmakers to put a price tag on fiscal stimulus, one thing is increasingly clear: Anything they produce will reflect the growing control of President Xi Jinping over all aspects of government and society.
Nearly 70% of laws made this year feature language explicitly affirming the party’s authority, exploding from 4% in 2018, according to a Bloomberg News analysis of legislative records. While the majority of such documents concern the running of state organs, national security or defense, others relate more directly to risks in the economy.
Top lawmakers are poised to pass in the coming months a financial stability measure putting legal control of the sector firmly under party ideology. That same body is expected to rubber stamp trillions of dollars in government spending at a huddle as soon as next week to ensure China hits its annual growth goal of about 5%.
The legal lip service is emblematic of Xi’s campaign to weaken state institutions that’s seen him shift traditional State Council policy areas to party organs and diminish the role of the premier. For investors, erosion of the Chinese government’s already limited checks and balances on the top leader’s swelling power raises the risk of unpredictable policy swings.
“You don’t really have any procedures for course-correction anymore,” said Katja Drinhausen, head of the politics and society program at the Mercator Institute of China Studies in Berlin, calling shifts in lifting Covid controls in 2022 and unleashing big economic stimulus in recent weeks “very late and abrupt efforts at damage control.”
While such clauses are mostly symbolic with little impact on day-to-day operations, one 2020 law showed the potential consequences, by making opposing the party leadership a fire-able offense for civil servants.
Efforts to entrench the Communist Party into spheres once dominated by the government come as the Asian nation battles an economic downturn that’s spurring rising social discontent among citizens grappling with the slowest income growth in decades. For generations, Chinese citizens have tolerated having little say in how they’re governed, as long as they keep getting richer under the current leadership.
Legislation now demanding adherence to the leadership includes a measure governing encrypted information passed in 2019, and the State Council Organic Law amended in March that gave the party a tighter grip on the bureaucracy.
“Those areas are among the core interests of the Communist Party regime,” said Changhao Wei, a fellow at Yale Law School’s Paul Tsai China Center, referencing security issues, state organs and national defense. “Obviously to stay in power, the party needs to have tight grip on all the state institutions.”
Supremacy Codified
While the Communist Party has, in practice, always towered over the governing bureaucracy since founding the People’s Republic in 1949, the change in legal wording weakens any notion of the party-state separation championed by former paramount leader Deng Xiaoping.
Xi made clear his position when he came into power, declaring in 2012 that “from the east to the west, south, north and central, the party leads everything.” China’s most-important man has “done away with the pretense of having a more substantial and meaningful separation,” said Drinhausen of the Mercator Institute.
Legal references to abiding by the party began to surge after 2018, when lawmakers amended the nation’s constitution to enshrine Xi Jinping Thought and removed presidential term limits. That cleared the way for Xi, now 71, to rule for life as he committed to long campaigns to wipe out corruption and wean the economy off debt-fueled growth.
In 2018, just two statutes promulgated by the top leader included such a reference. By 2020, the pace had picked up with 29% of new laws referencing party leadership, and about half doing so in 2022 — the same year Xi clinched a precedent-defying third term in office and installed a coterie of loyalists to top posts.
The deliberate emphasis of party leadership can be seen in revisions to China’s counter-espionage law. While the initial bill drafted by the Ministry of State Security in 2014 stipulated anti-spy work must adhere to the party’s leadership, parliament dropped the word “party.” Last year, the law was amended and the “party” was reintroduced.
Xi’s slogans are also being woven into legal documents. A 2022 law on managing the Yellow River, for example, featured a clause on following the party’s command to ensure the “high-quality development” of regions along the waterway — a nod to the top leader’s catchphrase on making advanced manufacturing a guiding principle of the economy.
The Chinese leader believes making explicit what was once implied “strengthens the party’s rule,” says Neil Thomas, a fellow on Chinese politics at the Asia Society Policy Institute’s Center for China Analysis, adding it could also further ensure Xi’s legacy.
“Codifying the party’s supremacy in national laws could make it harder for future leaders to undo Xi’s weakening of state institutions,” he said.
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