Three questions for Xi

Every five years, China stages before the eyes of the world the machinery that governs the state and its single party. On October 16, the 20th Congress of the Chinese Communist Party (CCP) begins at the Palace of the People’s Assembly in Beijing, which will decide the composition of the core of the Asian superpower’s political power: the 205 members of the Central Committee, the 25 of the Politburo and the 7 of the Standing Committee of the Politburo. Although it is a purely formal voting exercise, where 2,296 delegates from all over the country elect names and positions agreed upon in advance, it is nonetheless an event of the highest political interest inside and outside the People’s Republic. China’s course for the next five will be set in just one week.

This 2022 Congress was destined to be especially significant, since it was to elect the new general secretary of the CCP and president of China if the limitation of two successive five-year terms had not been abolished. Xi Jinping was elected general secretary of the CCP in the 2012 Congress and appointed president of China in 2013, so this year the party had to appoint a new leader. However, in March 2018, Xi changed the rules of the game, approving a modification that unlimitedly extended his power as head of state. The general secretary of the CCP is also chairman of the Central Military Commission, commanding the People’s Liberation Army and the Armed Police.

Xi justified the abolition of the term limits in the necessary continuity of political leadership at a time when China is consolidating itself as a global power, in an increasingly competitive international scenario and, above all, in the face of the inevitable change in its growth paradigm. economy, moving from an export-manufacturing model to a more innovative one with a stronger domestic market. According to Xi, the historical moment requires firm control over the party, the state and the armed forces.

The bet was risky five years ago. Today, after what happened, both inside China and abroad, it seems to be even more so. For three reasons: first, the economic situation has deteriorated throughout the world; second, for the first time in decades, the rules of the game of power succession in China have been broken; and third, the international scene, as a result of the war in Ukraine, has become more hostile towards Beijing. This leads us to ask three interrelated questions about the future of Xi, the CCP and the People’s Republic. Will the Chinese economy hold up? Will the CCP and Chinese society maintain cohesion? Will the international position of the country of the conflict in Ukraine come out successful?

“For the first time since 1990, China is expected to grow slower than the rest of Asia”

Once a source of pride, the Chinese economy is now a headache for the CCP leadership. For the first time since 1990, China is expected to grow slower than the rest of Asia this year. The main macro problems are “oversaving, its concomitant, overinvestment, and its corollary, the growing mountains of non-performing debt”, explains Martin Wolf in Financial Times. The paradigm of everything that has gone wrong can be found in the real estate sector, which had been contributing around a quarter of GDP. What began as a real estate crisis – characterized by falling property sales and a series of defaults by developers, after years of cheap credit and increasingly permissive regulation – is turning into a financial crisis at the level of local governments, stifling economic growth. In this area, it does not seem that things have changed much since, in 2007, the then Prime Minister Wen Jiabao described the national growth trajectory as “unstable, unbalanced, uncoordinated and unsustainable”.

On the other hand, the “Covid zero” policy imposed by the regime has added salt to the wound: the massive confinements have been continued, with the consequent stoppages in production. The long shadow of the PCCh has also been felt in strategic markets such as technology, reducing the value of the Chinese giants in the sector, which in the last year have been increasingly intervened by the State.

Fears of a global recession over the war in Ukraine, meanwhile, further undermine confidence in the strength of the Chinese economy. Despite all this, Xi’s plan remains unchanged: to move from an investment model to a consumption model, turning China, by 2035, into a middle-income economy with a mostly well-off society. A major challenge, as difficult as the one carried out in the eighties, when the regime opted for a growth model based on exports. Will Xi pull it off, like Deng Xiaoping did?

Chastened by the excesses and disasters caused by Mao’s policies, Deng established a system of collective leadership that strengthened the PCCh and accompanied China in its process of economic development, while putting an end to any hint of a cult of personality. Xi has now broken with all this.

Make no mistake: like other ruling communist parties, the CCP has always been a top-down, hierarchical, and opaque organization. Since 2012, however, Xi has given the Party-State a new twist, reinforcing verticality and the accumulation of power in decision-making, while promoting the elevation of his figure, as in Mao’s time. . According to the French sinologist Jean-Pierre Cabestan, all of this would have fueled criticism not only among the liberal and reformist factions, but also among the CCP elite as a whole. Has Xi gone too far?

“The Covid Pandemic Has Allowed The CCP To Roll Out Tighter Control Of The Population, Thanks To Cutting-Edge Technologies Such As Facial Recognition”

Parallel to this process, China has deepened its transformation into a state-of-the-art police state. The Covid pandemic has allowed the CCP to deploy stricter control of the population, with thermal controls, geolocation and facial recognition, to which is added a system of censorship through the internet to monitor and stifle citizen criticism.

In Xinjiang, experts debate whether to label the crackdown on the Uyghur minority a genocide. Since 2016, at least one million people have been detained without trial in the autonomous region. And in Hong Kong, the assimilation of the enclave has rendered the “one country, two systems” agreement signed by London and Beijing a dead letter. Today the former British colony is much less free and autonomous than it was in 1997. How much repression can minorities in the country withstand? And the majority of the population?

Perhaps it is the international front, however, where Xi’s plans have suffered the biggest setback. The Russian invasion of Ukraine has not changed the CCP’s goal of making China the great global superpower, replacing the United States, but perhaps it has changed the timetable and the roadmap. Today the West does not seem as needy, as in decline as in 2017, when Xi visited Davos assuring those present and the world that they could count on China to defend multilateralism and free trade.

The war in Ukraine undoubtedly offers advantages to China. First, she throws Russia into her arms. The yuan is today the most traded currency on the Moscow stock exchange. Second, the conflict momentarily distracts Washington from the Indo-Pacific, fixing its attention on Europe. At the same time, the war may offer China, when the time comes, a negotiating lever with the US and the European Union.

But these are short-term gains. A Russian defeat would be bad news for Xi. Worse still would be if Vladimir Putin makes good on his nuclear threat, forcing Xi to remove any ambiguity in his now implicit support for Moscow. Furthermore, the Ukrainian experience does not provide a good example of everything that can go wrong in Taiwan.

In recent years, history seems to have conspired against Xi and his dreams of becoming the new Grand Helmsman of an unrivaled China. Or maybe not, maybe he conspires on his behalf. We will see it in the next five years.