What can we expect from the Party Congress?
In mid-October five years ago, the 19th Party Congress opened with Xi Jinping delivering a political report lasting three-and-a-half hours. He will repeat the performance on October 16, the opening day of this year’s 20th Party congress.
Bland as its name may be, this political report is one of the Party Congress’s core items of business. It remains the most authoritative public account of the Chinese Communist Party’s path on all major policy fronts, containing a laundry list of policies undertaken by the outgoing Central Committee in the past five years, while putting forward guidance for future policy.
It represents the view of the current Politburo Standing Committee and that of the CCP. The 20th Congress report is a collegial effort and should not be considered Xi’s personal manifesto, nor should it be counted as another of his speeches to his comrades.
However, as general-secretary of the party for the past decade, it will most probably reflect many of the elements that Xi has influenced.
What are China’s political priorities?
No matter how complicated the geopolitics of the world becomes, Xi sticks to the conservative approach that has served his country well for past centuries: that China prioritizes the management of its own affairs.
Since the Cold War ended, two recurring themes have dominated the political report: the economy and security. For the 20th session, Xi will use the phrases ‘common prosperity’ as shorthand for the economy and ‘self-reliance’ for security.
Xi introduced the slogan ‘common prosperity’ at the start of his third term in August 2021. His aim was to close the income gap, address regional economic inequality and improve social welfare provision. Rebalancing social inequality was seen as essential to avoid the social disruption witnessed in other parts of the world.
Xi’s concept of ‘common prosperity’ was influenced by his childhood experiences living in exile in a remote village in Shanxi Province, in northwest China, during the Cultural Revolution. The ensuing upheaval was to prove a tragedy for his family and a disaster for the country.
His ambition is to define progress not in terms of producing double-digit growth but in dealing with the long-standing challenge of scarcities across different sections of society to meet ‘people’s ever-growing needs for a better life’. This direction was indicated at the 19th Party Congress by the term ‘shifting the principal contradiction’.
What state is the Chinese economy in?
Xi may have arrived at the right diagnosis but he has so far failed to find a cure that invokes ‘common prosperity’. After sweeping regulatory measures, the CCP has clamped down on its most successful private companies and spooked investors. While providing 80 per cent of China’s jobs, private enterprises are worried that the ‘common prosperity’ initiative may jeopardize their business.
Equally, Beijing’s zero-Covid policy has discouraged much-needed investment and failed to win the hearts and minds of Chinese youth, who have suffered most, both economically and socially.
The challenge facing Xi over the next five years will be to manage the financial risks in downsizing China’s property sector while coming out of a rigidly imposed Covid lockdown without reducing economic growth to such an extent that it damages the personal wealth of millions of people.
One hopes that Xi’s policies in future will be based on an innovative reading of the first-century phrase ‘seeking truth from facts’ adopted by Mao Zedong and last promoted as the political philosophy of Deng Xiaoping in the Seventies. A healthy market economy is not only essential for China’s development but as the only means of maintaining the party’s legitimacy, something vital for Xi.
Does China need more security?
China’s weakened export markets and less-friendly relations with the United States have encouraged it to become more self-reliant. Expect an emphasis on greater self-sufficiency in sectors of strategic importance to form a substantial part of this year’s political report.
In view of increased international hostility, Xi and his lieutenants have publicly recognized the need to take control of production and supply chains. These supply chains need to become ‘self-determined, self-controlled’ they have said, voicing frustration that the highest value-added elements of the Chinese tech sector remain reliant on overseas suppliers and vulnerable to geopolitical tensions.
Equally, on food and energy security, Russia’s invasion in Ukraine has exacerbated China’s already fragile food supplies as both countries are vital sources of food imports. Xi has already called for a ‘comprehensive thrift strategy’ to manage China’s food and energy needs.
Beijing is equally worried about the increase in oil and commodity prices which is driving up the cost of living. This may push parts of Chinese society out of ‘common prosperity’ and into ‘common poverty’, as it threatens to in some parts of Europe.
For the next five years, Xi needs to strike a balance between ‘common prosperity’ and ‘self-reliance’ to mitigate the storms ahead. He cannot afford to lockdown the world’s second largest economy indefinitely.
The hope is that the 20th Party congress will bring much-needed course corrections.
Read the two further articles in this series: the first provides a guide to why the Chinese Communist Party Congress matters; the third analyses the foreign policy issues likely to be discussed at the congress.