Xi’s Signature Governance Innovation: The Rise of Leading Small Groups

As Xi Jinping’s first term ends and his second begins, it is a particularly opportune moment to evaluate the major changes he has wrought in Chinese politics. Prior to his assumption of power, conventional wisdom saw China’s leadership as increasingly institutionalized, collective, and incrementalist. Analysts believed that written and unwritten rules shaped leaders’ tenure, their division of labor, channels of interaction, and level of civility toward one another. Moreover, China’s large, sprawling bureaucracy and powerful entrenched interest groups have contributed to Chinese-style gridlock, with new initiatives being blocked outright or heavily watered down.

As we’ve written elsewhere, the recent routinization of Chinese politics may be about the idiosyncrasies of specific leaders and their relative power as much as it is about long-term, “objective” dynamics. Xi has shaken things up in ways, large and small, that few predicted. One of the most important innovations of his leadership has been the expansion in number and role of leading small groups (LSGs). LSGs are coordinating bodies that address important policy areas that involve several different (and occasionally competing) parts of the bureaucracy. Their history can be traced back to the revolutionary period, and the process was continued and broadened in the early years of the People’s Republic as the leadership of the Chinese Communist Party (CCP) transitioned from rebels to the stewards of a new nation. With the onset of reform in the 1980s, many of the original LSGs were disbanded or reorganized, but the Party continued to rely on these institutions as a key coordinator of policy.

When we first looked at LSGs in mid-2015 for an article in Foreign Affairs, we counted 39 of them, 18 under the management of the central CCP apparatus and 21 under the direction of the government’s State Council, China’s executive-branch cabinet. We include in this category not only bodies called LSGs (lingdao xiaozu, 领导小组), but any organization that has the same coordinating function and is headed by a Politburo member, the premier, a vice premier, or a state councilor. These would include groups known as “coordinating small groups” (xietiao xiaozu, 协调小组), “coordinating working groups” (xietiao gongzuo zu, 协调工作组), and several commissions (weiyuanhui, 委员会). We’ve taken another look, this time trying to examine absolutely every public source available, and we found that not only did we under-count the number of groups that existed then, but also that a substantial number of new LSGs have been created in the interim. Although there are likely many other CCP organizations operating entirely outside of the public’s eye and off the grid, we think we have a fuller picture than two years ago.

We now estimate that there currently are 83 LSGs in operation, more than double our original estimate. As Figure 1 shows, there now are 26 Party LSGs and 57 under the State Council. (We have created downloadable lists for all party and government LSGs that are arranged by their creation date, chairperson, and subject area.) By our count, 54 current LSGs were in operation prior to when Xi assumed power in late 2012, and 29 (35 percent) have been created on his watch.

Figure 1: Communist Party & Government LSGs

LSGs cover almost every public policy issue imaginable, from economic policy to governance of China’s border regions to foreign and security policy. That said, they are not distributed evenly across the Party and government. Although there are a few Party-based LSGs that deal with the economy, those under the Party predominantly address domestic political issues (such as propaganda and legal reform), as well as border issues and security policy (such as Taiwan, Xinjiang, Tibet, and national security). By contrast, government-based LSGs primarily focus on social issues (30) and the economy (19). Many of these groups focus on issues that are very specific yet require cooperation across bureaucratic actors and regions. Typical are those for state-owned enterprise (SOE) reform, the 2022 Winter Olympics, poverty alleviation, disaster relief, and—yes—soccer reform.

Figure 2: Distribution of Party & Government LSGs

The makeup of LSGs sometimes may reflect the vicissitudes of elite politics, but they primarily are meant to help centralize authority in Beijing and provide greater strategic coordination among the different parts of the national bureaucracy. Xi personally heads eight LSGs, but leadership of the LSGs appears to be spread among Politburo members and the State Council members based on their official regulatory responsibilities and irrespective of the individuals’ factional leanings. For example, Politburo Standing Committee (PBSC) member Liu Yunshan naturally heads LSGs related to propaganda and ideology, while his PBSC colleague and Executive Vice Premier Zhang Gaoli heads 10 LSGs related to the economy, especially regional issues, such as on the Yangtze River economic belt and the “One Belt, One Road” Initiative.

The busiest newly created organ is the LSG on Comprehensively Deepening Reform (LSGCDR), headed by Xi Jinping with PBSC members Li Keqiang, Liu Yunshan, and Zhang Gaoli as deputies. It was created by the Third Plenum of the 18th Central Committee in November 2013. It is in some ways a shadow State Council. It has met 38 times, usually monthly, and has issued 286 documents with policy guidance on a wide range of issues. The largest number are related to legal and public security issues (41), but many have been issued on the environment and natural resources (36), the economy (36), public administration (27), science and technology (14), discipline and Party building (11), SOE reform (10), and culture and sports (10).

LSGs were originally created to be information-collecting organs that thought broadly about policy but were not deeply involved in setting or implementing policy. Over the Reform Era, government bureaucracies and the National People’s Congress have played an increasingly substantive policy role, with the Party setting major directions and the leadership intervening on important priorities. Under Xi LSGs are much more involved in the policy process than ever before. In one specific case, for example, the leadership’s emphasis on “supply-side reform” in the 13th Five-Year Plan came about when the LSG on Economics and Finance bypassed the normal drafting process to insert this new mantra in the document just before it was made public. Similarly, it is no coincidence that meetings of the LSGCDR are often followed by subsequent policy movement in the related areas, both at the central and local levels. Moreover, that group also broadly oversees the implementation of policy items by periodically reviewing and examining reform progress reports in response to the guidance the LSGs issue.

To highlight a second important example, the LSG on the Development of Integrated Circuits, created in 2014 and headed by Ma Kai, has played an important role in China developing a much more strategic approach toward developing this sector, including the development of the national integrated circuit (IC) fund and overseas acquisitions. Industry analysts believe China’s current initiative to reduce dependence on imports of chips is much more likely to yield success compared to previous efforts; the role of this LSG should be recognized as part of that change. In particular, this LSG has helped integrate elements of China’s booming private technology sector into achieving the goals it has laid out, a marked difference from earlier efforts—like the 863 and 963 Programs—to advance China’s science and technology prowess.

Although it appears LSGs are an important innovation that have been a key component of policy centralization under Xi, as with other initiatives, such as the anticorruption campaign, there is no certainty that past is prologue. In the immediate future, the first question to ask is who will chair the Party LSGs after the conclusion of the 19th Party Congress, and who will chair the government LSGs following the holding of next March’s new National People’s Congress session. Speculation can begin once the new members of the PBSC and the full Politburo are announced.

But the larger question is about LSGs themselves. One fundamental issue turns on the degree to which the proliferation of these bodies under Xi in his initial tenure reflects a major change in the way the CCP does business (by which we mean both policy formulation and implementation) or, as has been suggested by some commentators, instead should be viewed as simple work-arounds for dealing with the typical challenge facing a new top leader—that of being handed a stacked deck in the Politburo friendlier to your predecessor(s) than to you. In Xi’s case, it may depend in large part on which LSG we are talking about. Although, as noted above, the LSGCDR certainly has been the most active of the new bodies he has created, it is not as clear that the body has been the most consequential of these new institutions. It certainly has weighed in on some of the most vexing issues plaguing China’s unique Leninist system, but if we look at the public readouts of some of its meetings, it also has dealt in its share of what can only be called banalities. Moreover, as has been noted elsewhere, the presence of three other PBSC members as the group’s vice chairs suggests it is more a convenient funnel for sorting (or perhaps just attempting to sort) the hodgepodge of reform priorities highlighted in the Decision of the 2013 Third Plenum than a manifestation of Xi’s power.

It may behoove analysts, then, to pay more attention to the LSGs whose mission dovetails most specifically with the policy agenda that seems to matter to Xi most, or reflect policy departures or new innovations that can best be credited to him. In our estimation, these include groups such as the LSG for National Defense and Troop Reform and the Central Military and Civilian Integration Commission. Both issues were highlighted in the defense reform section of the Third Plenum Decision, and both cover areas that previous administrations had either ignored entirely or had tried to push forward only to have to relent in the face of overwhelming opposition from vested interest groups. Moreover, each of these institutions, to the degree their meetings can be tracked publicly due to their sensitive responsibilities, has been active, and it is notable that Xi chairs them both.

Of course, the most intriguing—and vexing—of the new groups that fall into this category is the National Security Commission (NSC). Although little is known about its activities, the general consensus among China experts is that it has struggled to find its footing and that its remit has, whether deliberately or not, drifted toward a narrower focus on domestic stability and security issues rather than also shaping foreign and security policy, as earlier advocates of establishing an NSC had called for. There also is abundant speculation that the body has been hamstrung in this latter purview by opposition from the military and the security services, both of which logically would stand to lose influence if the NSC took on more of those responsibilities. Moreover, with the departure of Cai Qi to become Beijing CCP municipal secretary in May 2017, it is not even clear who is in charge of the group’s day-to-day operations (though we believe it to be in the hands of those more focused on the domestic security issues mentioned above). Still, many of the NSC’s functions remain impenetrable to public view, and it would be a mistake to suggest that the body is not important, powerful, and if we were to bet, likely to become more so in Xi’s second term.

So, looking at the future of LSGs in Xi’s second term, what are we most likely to see? Three broad options seem possible. One would be for LSGs to return to their earlier modest role of information coordination, and as issue-oriented LSGs complete their stated purpose, they will be eliminated. A second would be for LSGs to continue to provide strategic guidance to the Party and government bureaucracy and, perhaps in some instances, shift some of their tasks back to the government. A third would be for LSGs, especially those under the Party, to take on a more permanent privileged position in the policy process, with the Party itself expanding its overall involvement in day-to-day governance.

The first option seems highly unlikely under Xi because of the clear preference for centralization. That said, we should expect those LSGs whose missions are time or task sensitive to be eliminated once their goals are achieved. Aside from the current 83 LSGs, we identified another 26 that were previously created and later closed, with their work devolving to a specific government ministry. For example, in the 1990s there was a working group on the World Trade Organization and free-trade areas, but it was disbanded and its work entirely assumed by the Ministry of Commerce. Another on bird flu had its work absorbed by the Ministry of Agriculture.

The second option, which probably most reflects the current situation, seems the most straightforward and consistent with Xi’s desire to have LSGs complement the bureaucracy, particularly on important initiatives. If Xi is able to install his allies across the entire Party and government leadership at the 19th Party Congress, he may feel less compelled to expand usage of LSGs. That said, Xi has not proven to be a friend of practice as usual. He clearly wants to give greater direct authority to the Party, which is visible in many ways, for example, the plan to have Party committees play a greater role in SOEs, private firms, and perhaps in foreign-invested firms as well. And so it is possible that Xi will continue to experiment and come up with some new hybrid formula for how LSGs operate and interact with the country’s top political leadership and the regular bureaucracy.

As to the third option, we believe the best indicator that this is the direction of travel will come from the personnel appointments to be made in conjunction with the Party Congress. One bold option would be to add new—and more—individuals to the CCP Secretariat. As the operational arm of the Politburo, the Secretariat has been used in a roughly analogous way in the past. Deceased paramount leader Deng Xiaoping named several “young Turks” to that body at the extraordinary National Conference of Party Delegates in 1985 to get around recalcitrant Mao-era holdovers still sitting on the Politburo after the 12th Party Congress in 1982. So, in addition to the common Secretariat portfolios (such as personnel, propaganda, the CCP General Office, etc.), a modern-day reboot of this approach could see new Secretariat members taking the helm at many of the new LSGs to drive policy implementation while simultaneously underscoring Xi’s greater emphasis on the Party’s enhanced role in policy implementation, supervision, and execution.

A more modest version of this same notion could see a close Xi ally—we would think Liu He—named to replace current Politburo member Wang Huning at the CCP Policy Research Office. Now notionally the Politburo’s think tank, with an empowered leader at the helm, its role could be transformed into that of a strategic operations center overseeing policy formulation across a broad array of areas, perhaps including some of the unfinished business of the Third Plenum. We could easily see the new LSGs being closely integrated into such an effort. In short, if we’ve learned anything during the past five years, it is that we should expect the unexpected. This holds true for LSGs as much as any other element of elite politics and governance in China.

Christopher K. Johnson holds the Freeman Chair in China Studies at the Center for Strategic and International Studies (CSIS) in Washington, D.C. Scott Kennedy is deputy director of the CSIS Freeman Chair, and Qiu Mingda is a research associate with the CSIS Freeman Chair. The authors are grateful for the research support provided by CSIS research intern Mark Akpaninyie.

Commentary is produced by the Center for Strategic and International Studies (CSIS), a private, tax-exempt institution focusing on international public policy issues. Its research is nonpartisan and nonproprietary. CSIS does not take specific policy positions. Accordingly, all views, positions, and conclusions expressed in this publication should be understood to be solely those of the author(s).

© 2017 by the Center for Strategic and International Studies. All rights reserved.
Photo Credit: WANG ZHAO/AFP/Getty Images

Scott Kennedy
Senior Adviser and Trustee Chair in Chinese Business and Economics

Mingda Qiu