The New Xi Era

On Thursday 18 October, Chinese President Xi Jinping gave the keynote address – his official report – to the Chinese Communist Party’s 19th Party Congress in Beijing.

More than a speech

Lined up in front of him were not only a huge filled hall, but a line-up of former leaders, including his immediate predecessors Hu Jintao and the 92-year-old Jiang Zemin.

Xi gave this speech to this crowd and cameras for a marathon three and a half hours with no break, and only taking a sip of water once.

Indeed, to call it a speech does not do it justice. This is a report compiled through a long collective process involving thousands of people that sets out the government’s official assessment of its progress over the last five years, as well as its priorities and plans for the future.

Furthermore, it includes an extended outline of Xi’s political philosophy, that Xi has since had the Congress adopt within the Party constitution.

Many observers are asking, what does this mean?

 

A New Era

The overall theme of the speech concerned “the Chinese dream of national rejuvenation”, with Xi saying that China had ‘entered a new era’ and that “the Chinese nation now stands tall and firm in the East”, a reference to Mao Zedong’s comment that China had ‘stood up’.

Xi did mention ‘democracy’, but not in the Western sense. Indeed, in promoting China’s path to a ‘socialist democracy’ i.e. its consultative system under the leadership of the Communist Party, he is showing that it is time for China to be more confident about its system of government. This rules out any remaining dreams that China will undertake political liberalisation.

Further, he not only said that China ‘would never copy political systems in other countries’, but noted that China’s model “offers a new option for other countries and nations who want to speed up their development while preserving their independence”.

Under Xi, China has begun a more proactive foreign policy and demonstrated global leadership on numerous issues e.g. environment, globalisation, and perceived stable, long-term decision-making. In contrast, the last two years have seen the rise of populism in the West and what is seen by many in China as poor short-term decisions resulting from it. 

Previously China was guarded about its authoritarian system and was sensitive to political criticism from Western democracies. This has clearly now changed. Xi is not only calling for China to brush off these criticisms, but is likely to promote China’s own model for others to follow.

 

The Party strengthened

Xi gave a very confident section on ‘party-building’ including loyalty to the core

leadership in fighting corruption, exercising strong leadership and good governance. This also stressed the uniqueness of China’s road to modernisation.

Later in his speech he returned to the key role of the Party in ‘advancing law-based governance’.

This justifies Xi’s role at the ‘core’ of the Party his commitment to the Party’s stranglehold on power and how it intends to change with China to become a major global power. Although not explicitly stated, it is part of the Party’s change from a revolutionary Party to a governing one.

 

Xi Jinping Thought

 A central part of his speech revolved around his “Thought on Socialism with Chinese Characteristics for a New Era”, which detailed his new political philosophy, distilled into 14 points.

Since the speech, this has now been ratified by the Congress to be included in the Party constitution under Xi’s name, an accolade not afforded to Jiang Zemin or Hu Jintao, and put’s Xi on theoretical par with Deng Xiaoping and even Mao Zedong. This is a measure of his powerful ‘core’ status within the Party.

 

Two-stage development plan

Xi outlined China’s two-stage grand strategic plan, first introduced in 2012, to become “prosperous, strong, democratic, culturally advanced, harmonious, and beautiful”.

These stages cover 2020-2035, and 2035-2050, with Xi outlining his roadmap and projections for progress in China’s development considering material, political, cultural, ethical, social, health, and ecological factors, as well as China’s international influence.

 

Developing the economy

Economically, there were no big surprises, with Xi reiterating that China’s path of growth and slow opening would continue, including:

  •  ‘Supply side structural reform’: primarily improving the efficiency of State-Owed Enterprises – which will retain their dominant market position – and reducing dependency on debt.
  • A shift towards growth quality rather than raw growth figures
  • Easing market access in services
  • Provide equal treatment to ‘all businesses registered in China’. This has been promised many times before, and it remains to be seen how it is implemented in practice
  • Continued pursuit of the Belt and Road Initiative and ‘Made in China 2025’
  • Further opening of China’s Western provinces
  • Expanding Free Trade Zones, such as in Xi’an, and exploring Free Trade Ports
  • Building a digital China and smart society, and mention of ‘clean cyberspace’
  • Promotion of ‘quality of development’, innovation and creativity
  • Also ‘quality … and a sense of pride of workmanship’, including ‘fostering respect for model workers’. The Party is probably intending to lead this; there are increasing reports of Western multinationals now having open Party committees in them – which are likely to become controversial[1]?

 

Poverty & development

Xi’s speech gave significant discussion to unbalanced development, which was referred to in many places. Unbalanced development, or poverty alleviation, has been notable throughout Xi’s major speeches – a repeated theme in his national Work Reports at the Liang Hui meetings in recent years, and has led to tough targets for officials in this field.

This is likely to continue for the rest of the Xi era, with strong emphasis to develop the ‘unbalanced’ West of China.

One issue of note was housing, with Xi specifically noting that “We must not forget that housing is for living in, not for speculation.” He is known not to like housing speculators, but it is interesting to see this so directly stated.

 

Ecological protection

Ecological protection was also repeated throughout his Report, with Xi favouring the term ecology/ecological’ rather than ‘environment/environmental.

Ecological/environmental protection continue to be a high priority for the government, which understands this as an important element in ‘quality of life’ – another concept repeated from earlier Work Reports.

 

Culture & soft power

Xi’s report had a surprisingly large emphasis on culture, noting it’s strength with ‘soft power’. This includes: strengthening related ideology/philosophy, including expansion of related academic research and think-tanks; promoting the appeal of Chinese culture, and increasing credibility of media; and, people’s social etiquette and civility.

This illustrates how the Chinese leadership have grasped the importance of culture and soft power (which the West is seen to use very effectively), and are ramping up their capability for this too.

 

Summarising the New Era

Xi has laid a powerful marker for a new era under which China will become more confident whether in culture or and even less inclined to accept the ‘status quo’.

There is no chance of a loosening of the Party’s grip over society. Indeed, quite the contrary is likely: the Party will strengthen its grip using stricter education, censorship and Big Data.

Furthermore, more international companies and associations will soon need to get used to having official Party committees within their organisations. This may exacerbate existing tensions around confidentiality and control.

The Party’s increased power will mean more centralised government control. This may be able to drive change better, but it also means less flexibility or routes of appeal.

In short, Xi’s vision demands the maintenance of authoritarian rule at home. In return he promises a better life for the people promising improvements in environment, income disparity and corruption.

[1] E.g. https://www.reuters.com/article/us-china-congress-companies/china-says-foreign-firms-welcome-benefits-from-internal-communist-party-cells-idUSKBN1CO0HQ

Author

Mark Pinner

Managing Partner, China

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