BEIJING - At the end of the 1970s, Deng Xiaoping launched the greatest reform of the army since the Communist Party took power in 1949. The poor performance of the PLA (People's Liberation Army) in the war against Vietnam in 1979 led Deng to reduce the army's forces by one-quarter; he sent about 1 million soldiers home.

Alongside this reform and the subsequent reduction of military expenses, the green light given to the military to get into business paved the way for both larger economic reforms and for Deng to take firmer control of the army, traditionally the strongest constituency of the communist power base in China. The remaining generals and officers were loyal to Deng and grateful for the opportunity he had given them to line their pockets by using military privilege to open all kinds of companies.

A second large military reform occurred in the late 1990s, with president Jiang Zemin excluding the PLA from many businesses following huge smuggling scandals in the southern provinces of Fujian and Guangdong. The PLA was found to have been running a parallel trade, costing billions of yuan in lost customs fees.

While China was resisting joining international trade agreements (the General Agreement on Tariffs and Trade, or GATT, and then the World Trade Organization) and reducing import tariffs, the PLA was covering or abetting a burgeoning smuggling trade that hurt domestic production. Economists calculated that if China were to stop the smuggling and join GATT, the overall impact on Chinese internal trade would be positive. Moreover, young officers wanted the army to do more military work and bolster national security, not get involved with money-making schemes.

Jiang in 1997 enacted even greater changes that gave him a firmer hand in the military, helping him strengthen his grip on power, shortly after the death of Deng died and the retirement of Qiao Shi as head of security, legislative, and party organization. In return for the PLA's withdrawal from business, Jiang increased the military budget, buying new toys (weapons) for the soldiers, and in the process started a real modernization of the army. This also took place under the influence of PLA officers who were shocked to compare their military hardware to the technology that US army generals had at their disposal.

Something similar may be happening with the army now under President Xi Jinping.

The rumor mill in Beijing has it that the formerly mightiest vice chairmen of the Central Military Commission, generals Xu Caihou and Guo Boxiong, are under investigation for corruption. [1] The accusation against them is the sale of promotions, something that deeply undermines the very structure of the army and has put all past promotions under review. This in a way is possibly more significant than Deng's and Jiang's reforms.

With Deng, the charge against the officers who were forced to retire was simply that they were inefficient (they fought badly against the enemy). With Jiang, it was a minor inefficiency (they went into business and neglected their military duties, but they did that with some permission from Deng) in the face of a political change - joining the international community with GATT and bringing order to external and internal trade. In both cases, the security apparatus was not heavily involved in the restructuring.

Xi is now leveling a new and graver kind of accusation. Xu and Guo betrayed their duties by buying and selling promotions, something that is against all military laws and saps all discipline in the army. This in turn could leave a freer hand to Xi to promote his men and change the overall direction of the army. A purge in the military coupled with the purge in the security apparatus, after former security czar Zhou Yongkang was reportedly put under virtual house arrest late last year, gives Xi possibly unprecedented control over the two main levers of power in China. Perhaps not even Deng had this kind of power.

Deng became the paramount leader thanks to a "coup" in 1976 against the Gang of Four led by others (including Marshal Ye Jianying) and had to share power with economic planner Chen Yun. Only Mao had the clout over these two levers that Xi is now going to command. Starting with these two areas, once the changes are completed, Xi could steamroll over all other aspects of Chinese power and thus bring about reforms of unprecedented scope in China's modern history.

But before that, there already seem to be new movements in the military and security. Chinese investment giant CITIC has contracted former US operative Erik Price, founder of Blackwater, the most important US security contractor in Iraq and Afghanistan. Price is to rethink the whole Chinese security system in Africa. Here, Chinese workers are often kidnapped for ransom, and Chinese companies operating there are bled almost dry by all kinds of threats and requests for "protection money" by local power brokers.

So far, the basic Chinese response in Africa has been to pay up, whatever the request. Aside from the narrow security necessity, this kind of collaboration opens Chinese military and security systems to foreign eyes - in this case, Price's - in a very rare way. Moreover, it seems ideas are floating around that the Chinese military may want to train abroad with other forces. Therefore, there are hints that a new overall idea of Chinese security is appearing, although its content is still unclear. This is further enhanced by the recent establishment of new National Security Council with very broad responsibilities.

In more than one way, this massive anti-corruption campaign in the security and military establishment could work like the Cultural Revolution did for Deng. When Deng launched his reforms, he met no resistance because the Cultural Revolution had unhinged the whole system of officialdom.

The new officials put in place by the Gang of Four were delegitimized, feared for their own lives and positions under the new wave of reforms, and felt they had nothing to defend but their own personal safety; the old officials, put down by the Gang of Four, were then brought back, but after many years of absence they had no turf to defend and they were open to persuasion.

Both kinds of officials felt wronged and had no attachment with the new system and thus were more than willing to accept change, even if radical. They felt they had nothing to lose. After that, however, officials started to develop their own interests to defend and increasingly felt their lives and welfare were inextricably linked to the preservation of the status quo. In this way, a sense of hostility to radical change has been gradually taking root in as a class of officials grown to believe they have everything to lose from such transformation.

Xi's anti-corruption campaign is again unhinging the system of official power (although in a very different way) and could lead to a greater acceptance among officials for the reforms that Xi is now proposing. The campaign is of little interest to people with their own private businesses or to those outside of the circles of bureaucracy since it is not disrupting social and economic life. Therefore it has gained the support of common people, who believe they have everything to win if the power of administrators is reduced.

It is still too early to predict where all of this will take China, and certainly nobody knows what is in the mind of Xi, but in any event, a change this big and structural goes well beyond the security urgencies of the disputes in the South China Sea, the Senkaku/Diaoyu islands, and even the official Chinese concerns about the US new rebalance in Asia.

In any case, a backlash against Xi is very unlikely. If a conspiracy of officials, retired or not, were to try to take out Xi, now the absolute head of the party, this would delegitimize the whole system and then everybody would lose, as the Chinese Communist Party could well fall apart. Any official who can sit tight and weather the present campaign will hope to avoid the blows in one way or another. Officials rising to fight the campaign can surely expect to be cut down, individually or as a group.

This logic was also a reason that many cadres decided not to rebel against Mao during the Cultural Revolution, even amid the high possibility that they would become its victims.

Note:
1. China's Xi purging corrupt officials to put own men in place: sources, Reuters, April 16, 2014. (http://www.reuters.com/article/2014/04/16/us-china-corruption-xi-insight-idUSBREA3F1UT20140416) (2014-04-23 Asia Times)