As the CPC prepares for its 20th Congress in the autumn and tracks the ‘China Dream’, there may be some contrast.
As the CPC prepares for its 20th Congress in the autumn and tracks the ‘China Dream’, there may be some contrast.
When the Communist Party of China (CPC) held its annual Central Economic Affairs Conference In December last year, the slogan was “Sustainability”. This was reiterated with even greater emphasis in the March 2022 sessions of the National People’s Congress (NPC) and the Chinese People’s Political Consultative Conference (CPPCC).
path to review
Later this autumn, the CPC will hold its 20th National Party Congress, which will see a huge turnover in leadership positions. The trajectory towards the realization of the “China Dream” will be reviewed – the rejuvenation of China, its emergence as a fully developed modern and powerful nation and its capture at the heart of a transformed international order. The target year is 2049, which marks the 100th anniversary of the founding of the People’s Republic and, therefore, is of considerable symbolic importance.
It is also projected that President Xi Jinping will retain his party, state and military leadership positions even after the informally observed 10-year term for party leadership positions, in line with reforms instituted by Deng Xiaoping. This was done in the wake of the huge damage caused to the party and the country by the then party president Mao Zedong’s Cultural Revolution (1966–1976). China’s constitution was amended to allow only two five-year terms for the head of state, its purpose being to restore the principle of collective leadership and to ensure predictable leadership change, and to allow a personality to develop around an ambitious individual leader. The cult had to be stopped. The constitution has now been amended again to allow the president to serve a term of more than 10 years and, in theory, for life indefinitely. The party has no fixed tenure for the party general secretary; Only one informal criterion is applicable. While in this position, Xi Jinping will not violate any party law.
On Xi Jinping’s tenure
The 20th Party Congress is important because it is expected to support Mr. Xi’s continuation as China’s top leader. The question is whether he will only get another five-year term or will he be assured a lifetime leadership position. The latter would indicate that his power is not available for the present. A limited expansion would indicate that the CPC is opposed to the notion of leadership for life. For other leadership positions, the unofficial age limit of 68 years has been generally observed even during Mr. Xi’s tenure.
Current Premier Li Keqiang announced at a recent press conference that he would step down after completing his 10-year term at the end of this year. If the unofficial age limit is followed, 11 of the 25 members of the Politburo and two of the seven members of the Politburo Standing Committee will have to retire at the 20th Party Congress. Appointments to these top positions, including the naming of a new prime minister, will signal to the world the orientation of Xi Jinping’s political influence as well as China’s domestic and external policies, towards the realization of the next leg of China’s visit. is in. “The Dream of China”.
Stability refers to a predictable and carefully choreographed outcome for the Party Congress. There must be neither a “black swan” nor a “grey rhinoceros” to trouble the apple cart – both portend unexpected perils. By now, it is clear that no such smooth path would be possible for the celebratory 20th Congress. In his work report to the NPC, Premier Li Keqiang acknowledged: “A comprehensive analysis of the dynamics developing at home and abroad indicates that this year[,] The risks and challenges to development are enormous and we must continue to strive to overcome them.”
a crippled economy
Domestic risks have increased manifold as the economy slows down and is hit by severe lockdowns in major cities, disrupting normal life, disrupting production schedules, disrupting supply chains and causing widespread There is public anger and protest. Of particular concern is the case of Shanghai, China’s major industrial and commercial hub and the world’s largest container terminal. Pictures of ordinary citizens battling public health workers, people begging for food and medical aid and generally expressing anger at the government’s immunity to their suffering do not bode well for social stability.
And yet, Mr. Xi has publicly defended the very stringent lockdown. There is a barely hidden controversy within the party leadership about whether such serious measures are necessary. Shanghai’s current party secretary, Li Qiang, is believed to be close to Mr Xi but may be in the doghouse for failing to contain the spread of infection in the city. Rumor had it that he was in line to be appointed premier later in the year. It may have been a casualty of COVID-19.
The Chinese economy was already slowing due to the outbreak and widespread disruptions of the COVID-19 pandemic, which has spread not only in China but around the world. The “disengagement” of China’s economy from the United States has been a challenge, at least in the high-tech and sensitive sectors. But Mr. Xi himself tried to reorient China’s economic direction through several important decisions.
One, they tried to bring China’s hugely successful and profitable (and politically influential) privately held commercial multinationals such as Alibaba, WeChat and Didi Chuxing into the tech platform category, especially with several new and stricter regulations in the area. By presenting of data security. His overseas actions have been brought under close scrutiny and regulation. As a result, nearly US$1.7 trillion of their market capitalization has been wiped out, which would have been considered an economic disaster in any other major economy.
Two, it has hit China’s large and expanding property market with equally strict regulatory measures, resulting in the near bankruptcy of some of the country’s biggest property firms, including Evergrande, which has a huge US$300 billion exposure. The property sector accounts for about 30% of China’s GDP. Chinese banks give 30% of their loans to housing construction and 60% of all bank loans are backed by assets as collateral. 60% employment in urban areas is related to creation. Therefore, the cascading effect of the asset slowdown across the economy can only be imagined.
Another serious vulnerability is related to local government funding vehicles (LGFVs) floated by local governments and municipalities to finance infrastructure and real estate development. The outstanding on this score has increased from US$2.3 trillion in 2013 to $8 trillion at the end of 2020. They are probably still big today. This accounts for about 50% of China’s GDP and constitutes an economic vulnerability that is not very visible.
Ukraine war
The great uncertainty for China is the result of Russia’s Ukraine war. Whatever the end result, Russia has lost the war, even as it continues to win many more battles. One cannot see how reducing Ukraine to virtual rubble could constitute victory in any practical sense. More importantly, whatever the outcome, Russia will stay away from the global trade and financial system still dominated by the West. Western sanctions on Russia will continue and may be tighter than ever.
China has denounced sanctions in general, but has been forced to comply with sanctions whose violation would result in secondary sanctions to its own firms. China’s “no boundaries” cooperation with Russia has limits. On balance, Russian audacity in Ukraine has exposed China to greater vulnerability in its external relations. The strengthening of the US-led Western Coalition, a revival of European unity and a renewed narrative of “democracy versus autocracy” mean that Chinese hopes of a steady march toward the “China Dream” can be belied on. Certainly, the chances of Taiwan returning to the Chinese side, which is an essential component of the “China Dream”, may be low for the time being.
Xi Jinping’s position may have weakened, but it is unlikely that he will face a serious leadership challenge in Congress. In an earlier remark made shortly after the release of the historic Sino-Russian Joint Statement of February 4, 2022, I said that China did the same to Russia as the US did with US President Richard Nixon’s visit to China in 1972, America put China’s tax on Russia. This latter gamble seems to have failed. To that extent, India has some breathing room to rework its foreign policy calculations.
Shyam Saran is a former Foreign Secretary and a Senior Fellow, Center for Policy Research (CPR).