In the southern Chinese city of Kunming last week, a team of knife-wielding thugs hacked 29 people to death and injured 130 others on the local subway. A week earlier six people died after a man set fire to a bus in neighbouring Guizhou province.

Clearly all is not well in the world’s most polluted nation a year after Xi Jinping (pictured), the son of one of the country’s most revered revolutionary generals, added the role of President to his core roles of Secretary General of the ruling Communist Party and Chairman of its Central Military Commission — which makes him the boss of the world’s largest standing army, with about 2.4 million troops.

This week, the country’s National People’s Congress, appointed by the Communist Party, meets in the imposing Great Hall of the People on Beijing’s Tiananmen Square to rubber-stamp decisions made by the CCP. It’s a 10-day show where every vote is pre-ordained. Most ordinary Chinese simply ignore it, despite blanket media coverage.

While Xi’s predecessor, Hu Jintao, took at least two years to consolidate his power — and arguably never quite did — the new Secretary General has come out of the gate remarkably strongly and with an apparent sense of purpose: maintaining the CCP’s grip on power.

It’s so far been a political — rather than policy — master class serving the dual effect of kicking off his term in office by appealing to citizens offended by blatant corruption of party officials, and rubbing out internal party dissent, arresting some 30 ministerial-level officials along with hundreds of others. If the rumours are true, Xi’s former Politburo Standing Committee colleague Zhou Yongkang, who served as security chief under Hu Jintao, will soon find himself expelled from the party and face a criminal trial. Zhou will be the most powerful cadre to be purged since the days of Mao Zedong.

The dire state of Chinese social services has been illustrated by a growing wave of violence against doctors and nurses across the nation, with a Hebei doctor’s throat slashed and another beaten to death with a pipe in the country’s northwest.

In the western province of Xinjiang, home to 9 million oppressed Uyghur Muslim people, close to 200 have died in clashes with the police in the past year. It was recently revealed that lung cancer rates in Beijing are soaring as the capital city suffers ever more regular bouts of off-the-charts pollution, which can last days. With the number of coal-fired power stations set to increase for anther decade and millions of new cars hitting the streets each year, it’s hard to see this changing. The capital and dozens of other metropolises across the country are become cancer cities — outsized versions of infamous cancer villages caused by unchecked environmental vandalism by factory owners across the country.

Xi has been assiduously wrapping himself in the cloak of economic reform, but so far all he has to show is a program light on the details unveiled after the Party Congress last October.

“Long-time exponents of reform in China are sceptical of the top-down process favoured by Xi. Major changes since 1978 have always been accomplished with a good measure of bottom-up initiatives, as local actors, firms, and civil society worked to drive change,” the European Commission’s resident China expert, Francois Godement, said.

So far the main event at the NPC, the annual “work report” by China’s Premier Li Keqiang, points to more of the same rather than striking any new ground. There was remarkably little detail about economic reforms, a mantra repeated so constantly by the country’s leaders that it appears they are convinced it might happen if they say its name enough.

In fact, the single piece of evidence that would point to the seriousness of the reform plan — a lowering of the CPP’s 7.5% GDP growth target — was missing. The target stayed, and to get there China will once more require a loosening of monetary policy.

In the short term, at least, this is good news for Australia, whose economic health is increasingly dependent on China. More credit for Chinese business means more steel, more buildings, more projects, more iron ore.

But it also means debt levels in China will continue to mount and non-performing loans will increase, further endangering the longer-term economic health of Australia’s main sponsor and allowing China’s wealthy to continue to push Australia’s property prices into the stratosphere.

The other key piece of financial data that emerged from Li’s speech yesterday was not such good news for Australia. China is ratcheting up its official military spending by 12.3% to 808 billion yuan, a figure that Western military analysts believe is as much as 50% short of reality. Under Xi, China has ramped up, rather than toning down, its aggression towards its neighbours — particularly United States’ allies Japan and the Philippines in its disputes over territory. Even its very small handful of friends in the region, Myanmar and Cambodia, are distancing themselves to some extent from China and are openly embracing the US and Japan, despite Xi and Li’s economic charm offensive in south-east Asia.

Xi has certainly made his mark in his first year.  But it’s what happens next that will be most telling.

Peter Fray

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