Behind Closed Doors: Decision-Making Processes in “Communist” China

One the most insightful features of the Chinese system, is the distinction between “normal mode” and “crisis mode”. Traditionally, it has been the case that in times of "politics as usual", decisions were reached after protracted processes of compromise and prolonged consultation with large numbers of experts; in times of crisis, however, an exceptional mode of decision-making came into force. When the need to tackle an issue became particularly pressing, like in case of the 2008 earthquake in Sichuan, or the bombing of the Chinese Embassy in Belgrade by the US in 1999, the national leader took matters in his hands, and with very limited consultation took final decisions.

Nowadays, and more specifically since the election of Xi Jinping in 2012 to the position of Party Secretary, Heilmann claims, China has moved towards a permanent “crisis mode”, with procedures being centralized, militant rhetoric reactivated, and sense of urgency transmitted in specific policy areas. A crucial tool used by Xi Jinping to centralize decision making, is the increased number of Leading Small Groups (LSGs). These task forces are composed of a mix of top officials and large numbers of experts which provide political coordination among several areas of responsibility, facilitating the formulation of overlapping and long-term programs. What's particularly relevant, is that President Xi has personally taken the lead in seven LSGs, while his predecessor headed only up to three of them during his tenure.

An important feature that prominently distinguishes the Chinese communist system from liberal democracies, is long-term planning. This tool is regarded by the Chinese leadership as one of the key advantages vis-à-vis its western competitors, as it grants the chance to elaborate and coherently implement mid- and long-term visions. This is without a doubt a great advantage. There is no need to look further than the US, as the Trump Administration is prominently rolling back a great number of provisions of the Obama era, to appreciate the competitive advantage that stems from this approach. Contrary to a commonly held belief, Chinese 5-year plans differ greatly to what has historically been the case in the USSR. They have become much more malleable, and since the 90s make reference, for example, to international markets, a feature unthinkable from a traditionally Marxist stand point.

Even though long-term development planning offers clear advantages to Chinese policy-makers, a sober outlook is essential to guarantee an objective evaluation. It is manifest that on one hand, in fields like infrastructure development, poverty alleviation and technology policy, considerable result have been yielded, on the other, it is undisputable that planning failure has manifested itself in attempts to introduce a new growth model which is not investment or export-led. From these examples, it can be observed that in specific policy areas it has been easier to yield results, while in broader areas of more general interest, like the fundamental structure of the economy, results lag behind. This can be explained by the fact that the latter requires much greater resources (financial, intellectual, political etc.) to be invested over a longer period of time, and the interests of an exponentially greater number of individuals are affected. In fact, it can be argued that in the case of a complete overhaul of the fundamental orientation of the economy, virtually every single citizen in the country is affected.

Since the early days of Mao's revolutionary struggle, China has changed immensely. However, one overarching feature remained constant: the experimental approach. Drawing from my personal experience as a Startup founder, a striking parallel comes immediately to mind: the Lean Startup approach. This method's aim is to shorten the development cycle of a product, combining iterative product releases and validated learning. In other words, a series of experimental products are released on the market, and through constant feedback from customers, the product is improved until it is ready to be massively marketed. Something very similar happens for policy implementation in China. Policy experimentation at the local level parallels the early releases of a product, and validated learning through customer’s feedback parallels the surveys that local governments use to test the people’s response to governmental measures. Personally, I find it absolutely astonishing how today's approach to startup innovation can be linked to early experimentation put forward by the Chinese Communists in the 1920s.