China’s Horizontal of Incompetence

During Vladimir Putin’s early years, his media team were very proud of spreading the concept of the “vertical of power,” the idea that the presidency had consolidated so much authority that the inconveniences of bureaucratic process would be magically dissolved by executive privilege. Of course as time wore on, and the idea of a unified power in Russia began to be exposed as the myth it really was, the state became better known for its horizontal of incompetence.

The same could be said about China’s recent struggles under the powerful presidency of Xi Jingping, whose ambitious anti-corruption drive initially garnered trust from the business community followed by paralysis, for it was not law being imposed, but the arbitrary whims of one group controlling how law is applied.

The incompetence engendered by an authoritarian system overlaid on weak institutions couldn’t be clearer than the Chinese government’s recent ham-fisted attempt to intervene in the massive stock market slide. While there is a much bigger story to tell here, I’ll leave you with an excerpt from yesterday’s fascinating Financial Times piece on the flaws of Xi’s expanded powers.

But in recent weeks there have been suggestions that Mr Xi’s imperial presidency has its downsides as well. In particular, his leadership style can give rise to a kind of policy paralysis as officials try to “guess the will of the emperor”, as a Chinese adage puts it. Some believe this was in evidence during the government’s initially unconvincing response to China’s recent stock market sell-off.

“People are afraid of the big man and everyone is trying to guess what he is thinking,” said one investment strategist, who asked not to be identified. “The problem is that the policy-making mechanisms are not working. Everything is top-down. When you wait for Moses to come down from the mountain, you can wait for a long time.” (…)

To some analysts paid to peer into the black box that is elite Chinese politics, these belated responses suggested that an altogether more powerful body than Mr Li’s cabinet — the Communist party’s Leading Group for Financial and Economic Affairs, headed by Mr Xi — had finally knocked heads together after 72 hours of drift.

“Sometimes [the government] acts kind of like a bumbling idiot,” said another analyst. “Like with the stock market, that was not China in control. Initially it was a kitchen-sink approach.”