Regardless of which top Chinese officials appear on stage alongside Xi Jinping at this month’s Party Congress, certain fundamental issues will remain at the center of debates about China’s place in the world. Any changes in leadership will reflect differences in style, not substance.
OXFORD – The Communist Party of China (CPC) is scheduled to begin its 20th National Congress on October 16. While this quintennial gathering is typically preceded by speculation about who will sit at the high table – the Standing Committee of the Politburo – bookmakers are no longer taking bets on who will occupy the center seat. An unprecedented third term for Xi Jinping as the country’s undisputed leader is the closest thing to what we can call a certainty.
Still, that leaves six places to fill. While Li Keqiang has made it clear that he will not be pursuing a third term as China’s premier, he may still remain in the top tier, perhaps becoming chairman of the National People’s Congress, which has little autonomous power. Will his replacement bring a mild change of direction?
If it is Wang Yang, who successfully led Guangdong and Chongqing, two of the country’s most economically dynamic areas, that choice might indicate a turn toward giving the market more leeway. Or the position could go to someone not yet in the top seven, such as vice premier Hu Chunhua, who has expressed concerns about youth unemployment. That might indicate a turn toward more state intervention when it comes to jobs.
Either way, these changes would reflect differences of style, not substance. The CPC is Xi’s party now, and everyone else is just living in it. The bigger question concerns the wider forces that may yet unsettle China through the rest of the 2020s and beyond.
One-Man Rule
Although Xi’s grip on domestic politics has grown only stronger since he came to power in 2012, he remains one of the least-understood leaders of any major power. Before the war in Ukraine, even Vladimir Putin’s Russia had a limited public sphere where the leader could be discussed and major decisions debated. But in Xi’s China, such topics are off-limits.
Nonetheless, after ten years of Xi’s rule, we have trustworthy field guides. Kerry Brown of King’s College, London, has a good claim to be the West’s foremost interpreter of Xi’s life and ideology, and he has produced several books on the man. The latest, Xi: A Study in Power, gives a detailed account of Xi’s worldview, and argues that while Xi’s name is “still in lights” on the Chinese stage, he will need to be careful to avoid “over-promising, overreaching, and over-idealizing.” By concentrating so much power in himself, Xi runs the risk of being the only one to blame when things go wrong.
Another valuable new book is Xi Jinping: The Most Powerful Man in the World, by German journalists Stefan Aust and Adrian Geiges. Despite the title, it is more of a tour of Xi’s China than a study of the man himself; but the authors recognize that Xi wants above all to “put his own mark on China – and on the world,” and their book will serve as a valuable primer for those who don’t know much about today’s China or its leader.
There is no doubt that Xi’s authoritarian, technocratic, and nationalist vision for China is closely tied to his own personality. Yet, as a self-described “twenty-first century Marxist,” Xi might be the first to point out that broad social and historical forces will have a greater effect on China over the next decade than will any decisions by even the most powerful politicians.
The Economy, Stupid
As the Party Congress opens, Xi and the CPC’s most immediate task is to restore robust economic growth. But the biggest single obstacle to recovery, the zero-COVID policy, cannot be openly discussed, because it is associated so strongly with Xi himself. Throughout 2022, consumer confidence has declined and small and medium-size enterprises have faltered in Shanghai, Chengdu, and other major cities, owing to a lack of certainty about whether and when businesses might suddenly be forced to close again (usually with only a few hours’ notice).
But simply decreeing an end to the zero-COVID policy won’t be enough, because China has declined to use foreign mRNA vaccines, and because many of its elderly have not even received shots of its less effective domestically produced vaccines. Safely reopening the economy now may depend on whether China can develop a higher-quality vaccine and get it into the arms of the population’s most vulnerable cohorts (a task that most likely would require even greater coercion).
The knock-on effects of China’s economic downturn are already visible. The Belt and Road Initiative, the keystone of China’s efforts to project geopolitical influence for most of the past decade, is quietly adapting. With fewer big government loans for financially unsustainable projects in the Global South (such as high-speed rail lines in Sub-Saharan Africa), there is a greater emphasis on getting the Chinese private sector to chip in, which translates into more projects that can provide a swift return to shareholders.
While China’s new Global Security Initiative is still a work in progress, it clearly will be trying to shape global and regional institutions to serve Chinese interests – for example, by advocating more state sovereignty over the internet – rather than focusing on things that China itself will have to pay for. But the attractiveness of a global ideology that comes with little funding has not yet been tested.
Whither the Market?
China does have clear opportunities to devise an effective model for managing the next phase of its economic development; but it remains to be seen if its leaders will seize them. Its technological ecology remains extraordinary in global terms, with companies such as Bytedance, Huawei, and Tencent providing a strong basis for a higher-value-added, higher-income economy.
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Moreover, Hong Kong’s integration into the Greater Bay Area makes possible a new commercial and technological network in southern China. Hong Kong’s deep pools of capital can be funneled across the border into Shenzhen to finance electric-vehicle battery manufacturing and other burgeoning industries of the future. At the same time, new high-speed rail connections between southern China and Southeast Asia could tie China more directly to one of world’s most economically dynamic regions.
But for that model to work, China will need to change direction on a number of fronts. While authoritarian politics are not necessarily incompatible with scientific innovation (plenty of politically repressive countries have strong science bases), talented scientists, technologists, and entrepreneurs don’t like being told what to do, and in today’s world, they can easily vote with their feet. Tech entrepreneurs who are flying in for a two-hour business meeting don’t want to quarantine for two weeks ahead of time, nor will they risk being locked away in a hospital for weeks in the event that they test positive for COVID-19.
Moreover, China has created new problems for its domestic talent pipeline. For years, Chinese students were encouraged to learn English and study overseas, so that they could eventually bring the knowledge they acquired back home. But now, those returning home must spend a long spell in quarantine, and there is a more generalized sense that going abroad is detracting from the national project, rather than contributing to it. This does not bode well for the economy. While encouraging more Chinese to study domestically can foster a sense of national pride, it also will further isolate the country from international scientific trends and the broader exchange of knowledge and knowhow.
Yet another problem is the growing sense in China that entrepreneurship attracts too much attention to be worth the risk. The government’s sweeping crackdowns on major tech companies in 2020-21 generated headlines around the world, most notably when Alibaba founder Jack Ma was removed from public view for having dared to criticize financial regulators.
Even though senior government figures such as Vice Premier Liu He have publicly made the case for why the tech sector is key to sustained growth in high-value-added employment, domestic and international investors have become wary of sudden, unanticipated policy changes. Politics may be in command, but markets follow their own logic.
Great Temptations
China also will have to deal with its demographic crisis. Four decades of the one-child policy left the country with a rapidly aging population and all the problems that come with it. Over the next decade, the government will face the unenviable but essential task of figuring how to pay for social programs and health care over the long term, including by raising the retirement age to prevent the country’s shaky pensions system from going bust. High spending will be in high demand. But paying for it will require sustained economic growth, which in turn will depend on sustained stability.
Any number of unforced errors could undermine that stability. Particularly consequential would be an effort to incorporate Taiwan. For the past half-century, an uneasy balance has been preserved: most countries stop short of recognizing Taiwan as an independent country; China maintains its claim over the island but does not interfere in most of its domestic or overseas activities; and Taiwanese voters (since the 1990s) elect parties that maintain the status quo in practice, even if not always in their rhetoric.
But under Xi, there has been a far stronger push to end this ambiguity. While China’s new white paper on Taiwan reiterates that a Hong Kong-style “one country, two systems” framework would be imposed on the island as part of reunification, China’s draconian 2020 National Security Law in Hong Kong sent a strong signal to Taiwan that its democracy would be heavily restricted under such an arrangement.
Nobody but China’s top leaders can know whether the attempt to seize greater control of Taiwan will come in the 2020s or later. What is almost certain, however, is that any such effort – including a blockade of the island – would lead to major sanctions from the geopolitical West, including the US, Japan, and the European Union. That outcome would unquestionably damage the global economy, but it would also prove highly costly for China. The disruption, or even destruction, of Taiwan’s semiconductor factories, for example, would have a huge impact on China’s own technology supply chains.
Global China
By contrast, lowering the temperature over Taiwan would allow for a greater focus on Xi’s other big priority for the next five years: strengthening China’s influence in those parts of the world where control is still fluid. The potential for a great-power clash in China’s own backyard is eye-catching but perhaps overblown. China does not usually confront US power directly, and it is hard to imagine Chinese navy vessels turning up off the coast of California anytime soon. But there are plenty of other new frontiers where China is already gaining a foothold.
Within the United Nations, China’s aim is not to overturn existing norms in the way Russia has done, but rather to reinvent and reshape norms to suit its own worldview. The Human Rights Council, for example, would start to prioritize collective rights (such as guarantees of economic subsistence) over individual liberties such as freedom of speech and association.
China also will be seeking a greater role in areas such as the Indian and Arctic Oceans, where the norms are thinner and still more malleable than those found in the Atlantic or the Pacific. The same goes for outer space and cyberspace, where technology is changing much faster than law. We should expect an ongoing struggle to control the global norms governing artificial intelligence in the 2030s. China already is seeking to be the dominant leader in this critical sector.
On issues ranging from zero-COVID to Taiwan, Xi’s leadership and personal preferences will certainly matter in the coming years. Yet China’s long-term importance will also follow from its immense economy, its large and growing military, and its capacity for technological innovation. It remains to be seen how far it can go in narrowing domestic freedoms and individual liberties while also presenting itself as an exemplar of global leadership: global powers must expect criticism as well as praise from around the world; indeed, they should welcome it. Regardless of which leaders appear on stage at the end of the CPC Congress this month, these fundamental issues will remain at the center of debates about China’s future and its place in the world.
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Minxin Pei
doubts China’s government is willing to do what is needed to restore growth, describes the low-tech approaches taken by the country’s vast security apparatus, considers the Chinese social-credit system’s repressive potential, and more.
China’s authorities have powerful economic-policy levers at their disposal to achieve their 5% growth target this year and put the economy on a more sustainable long-term growth path. But several trends – from the shift toward state capitalism to population aging to the loss of goodwill between Chinese and Americans – could thwart China’s ambition to join the ranks of high-income countries by mid-century.
OXFORD – The Communist Party of China (CPC) is scheduled to begin its 20th National Congress on October 16. While this quintennial gathering is typically preceded by speculation about who will sit at the high table – the Standing Committee of the Politburo – bookmakers are no longer taking bets on who will occupy the center seat. An unprecedented third term for Xi Jinping as the country’s undisputed leader is the closest thing to what we can call a certainty.
Still, that leaves six places to fill. While Li Keqiang has made it clear that he will not be pursuing a third term as China’s premier, he may still remain in the top tier, perhaps becoming chairman of the National People’s Congress, which has little autonomous power. Will his replacement bring a mild change of direction?
If it is Wang Yang, who successfully led Guangdong and Chongqing, two of the country’s most economically dynamic areas, that choice might indicate a turn toward giving the market more leeway. Or the position could go to someone not yet in the top seven, such as vice premier Hu Chunhua, who has expressed concerns about youth unemployment. That might indicate a turn toward more state intervention when it comes to jobs.
Either way, these changes would reflect differences of style, not substance. The CPC is Xi’s party now, and everyone else is just living in it. The bigger question concerns the wider forces that may yet unsettle China through the rest of the 2020s and beyond.
One-Man Rule
Although Xi’s grip on domestic politics has grown only stronger since he came to power in 2012, he remains one of the least-understood leaders of any major power. Before the war in Ukraine, even Vladimir Putin’s Russia had a limited public sphere where the leader could be discussed and major decisions debated. But in Xi’s China, such topics are off-limits.
Nonetheless, after ten years of Xi’s rule, we have trustworthy field guides. Kerry Brown of King’s College, London, has a good claim to be the West’s foremost interpreter of Xi’s life and ideology, and he has produced several books on the man. The latest, Xi: A Study in Power, gives a detailed account of Xi’s worldview, and argues that while Xi’s name is “still in lights” on the Chinese stage, he will need to be careful to avoid “over-promising, overreaching, and over-idealizing.” By concentrating so much power in himself, Xi runs the risk of being the only one to blame when things go wrong.
Another valuable new book is Xi Jinping: The Most Powerful Man in the World, by German journalists Stefan Aust and Adrian Geiges. Despite the title, it is more of a tour of Xi’s China than a study of the man himself; but the authors recognize that Xi wants above all to “put his own mark on China – and on the world,” and their book will serve as a valuable primer for those who don’t know much about today’s China or its leader.
There is no doubt that Xi’s authoritarian, technocratic, and nationalist vision for China is closely tied to his own personality. Yet, as a self-described “twenty-first century Marxist,” Xi might be the first to point out that broad social and historical forces will have a greater effect on China over the next decade than will any decisions by even the most powerful politicians.
The Economy, Stupid
As the Party Congress opens, Xi and the CPC’s most immediate task is to restore robust economic growth. But the biggest single obstacle to recovery, the zero-COVID policy, cannot be openly discussed, because it is associated so strongly with Xi himself. Throughout 2022, consumer confidence has declined and small and medium-size enterprises have faltered in Shanghai, Chengdu, and other major cities, owing to a lack of certainty about whether and when businesses might suddenly be forced to close again (usually with only a few hours’ notice).
But simply decreeing an end to the zero-COVID policy won’t be enough, because China has declined to use foreign mRNA vaccines, and because many of its elderly have not even received shots of its less effective domestically produced vaccines. Safely reopening the economy now may depend on whether China can develop a higher-quality vaccine and get it into the arms of the population’s most vulnerable cohorts (a task that most likely would require even greater coercion).
The knock-on effects of China’s economic downturn are already visible. The Belt and Road Initiative, the keystone of China’s efforts to project geopolitical influence for most of the past decade, is quietly adapting. With fewer big government loans for financially unsustainable projects in the Global South (such as high-speed rail lines in Sub-Saharan Africa), there is a greater emphasis on getting the Chinese private sector to chip in, which translates into more projects that can provide a swift return to shareholders.
While China’s new Global Security Initiative is still a work in progress, it clearly will be trying to shape global and regional institutions to serve Chinese interests – for example, by advocating more state sovereignty over the internet – rather than focusing on things that China itself will have to pay for. But the attractiveness of a global ideology that comes with little funding has not yet been tested.
Whither the Market?
China does have clear opportunities to devise an effective model for managing the next phase of its economic development; but it remains to be seen if its leaders will seize them. Its technological ecology remains extraordinary in global terms, with companies such as Bytedance, Huawei, and Tencent providing a strong basis for a higher-value-added, higher-income economy.
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Access every new PS commentary, our entire On Point suite of subscriber-exclusive content – including Longer Reads, Insider Interviews, Big Picture/Big Question, and Say More – and the full PS archive.
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Moreover, Hong Kong’s integration into the Greater Bay Area makes possible a new commercial and technological network in southern China. Hong Kong’s deep pools of capital can be funneled across the border into Shenzhen to finance electric-vehicle battery manufacturing and other burgeoning industries of the future. At the same time, new high-speed rail connections between southern China and Southeast Asia could tie China more directly to one of world’s most economically dynamic regions.
But for that model to work, China will need to change direction on a number of fronts. While authoritarian politics are not necessarily incompatible with scientific innovation (plenty of politically repressive countries have strong science bases), talented scientists, technologists, and entrepreneurs don’t like being told what to do, and in today’s world, they can easily vote with their feet. Tech entrepreneurs who are flying in for a two-hour business meeting don’t want to quarantine for two weeks ahead of time, nor will they risk being locked away in a hospital for weeks in the event that they test positive for COVID-19.
Moreover, China has created new problems for its domestic talent pipeline. For years, Chinese students were encouraged to learn English and study overseas, so that they could eventually bring the knowledge they acquired back home. But now, those returning home must spend a long spell in quarantine, and there is a more generalized sense that going abroad is detracting from the national project, rather than contributing to it. This does not bode well for the economy. While encouraging more Chinese to study domestically can foster a sense of national pride, it also will further isolate the country from international scientific trends and the broader exchange of knowledge and knowhow.
Yet another problem is the growing sense in China that entrepreneurship attracts too much attention to be worth the risk. The government’s sweeping crackdowns on major tech companies in 2020-21 generated headlines around the world, most notably when Alibaba founder Jack Ma was removed from public view for having dared to criticize financial regulators.
Even though senior government figures such as Vice Premier Liu He have publicly made the case for why the tech sector is key to sustained growth in high-value-added employment, domestic and international investors have become wary of sudden, unanticipated policy changes. Politics may be in command, but markets follow their own logic.
Great Temptations
China also will have to deal with its demographic crisis. Four decades of the one-child policy left the country with a rapidly aging population and all the problems that come with it. Over the next decade, the government will face the unenviable but essential task of figuring how to pay for social programs and health care over the long term, including by raising the retirement age to prevent the country’s shaky pensions system from going bust. High spending will be in high demand. But paying for it will require sustained economic growth, which in turn will depend on sustained stability.
Any number of unforced errors could undermine that stability. Particularly consequential would be an effort to incorporate Taiwan. For the past half-century, an uneasy balance has been preserved: most countries stop short of recognizing Taiwan as an independent country; China maintains its claim over the island but does not interfere in most of its domestic or overseas activities; and Taiwanese voters (since the 1990s) elect parties that maintain the status quo in practice, even if not always in their rhetoric.
But under Xi, there has been a far stronger push to end this ambiguity. While China’s new white paper on Taiwan reiterates that a Hong Kong-style “one country, two systems” framework would be imposed on the island as part of reunification, China’s draconian 2020 National Security Law in Hong Kong sent a strong signal to Taiwan that its democracy would be heavily restricted under such an arrangement.
Nobody but China’s top leaders can know whether the attempt to seize greater control of Taiwan will come in the 2020s or later. What is almost certain, however, is that any such effort – including a blockade of the island – would lead to major sanctions from the geopolitical West, including the US, Japan, and the European Union. That outcome would unquestionably damage the global economy, but it would also prove highly costly for China. The disruption, or even destruction, of Taiwan’s semiconductor factories, for example, would have a huge impact on China’s own technology supply chains.
Global China
By contrast, lowering the temperature over Taiwan would allow for a greater focus on Xi’s other big priority for the next five years: strengthening China’s influence in those parts of the world where control is still fluid. The potential for a great-power clash in China’s own backyard is eye-catching but perhaps overblown. China does not usually confront US power directly, and it is hard to imagine Chinese navy vessels turning up off the coast of California anytime soon. But there are plenty of other new frontiers where China is already gaining a foothold.
Within the United Nations, China’s aim is not to overturn existing norms in the way Russia has done, but rather to reinvent and reshape norms to suit its own worldview. The Human Rights Council, for example, would start to prioritize collective rights (such as guarantees of economic subsistence) over individual liberties such as freedom of speech and association.
China also will be seeking a greater role in areas such as the Indian and Arctic Oceans, where the norms are thinner and still more malleable than those found in the Atlantic or the Pacific. The same goes for outer space and cyberspace, where technology is changing much faster than law. We should expect an ongoing struggle to control the global norms governing artificial intelligence in the 2030s. China already is seeking to be the dominant leader in this critical sector.
On issues ranging from zero-COVID to Taiwan, Xi’s leadership and personal preferences will certainly matter in the coming years. Yet China’s long-term importance will also follow from its immense economy, its large and growing military, and its capacity for technological innovation. It remains to be seen how far it can go in narrowing domestic freedoms and individual liberties while also presenting itself as an exemplar of global leadership: global powers must expect criticism as well as praise from around the world; indeed, they should welcome it. Regardless of which leaders appear on stage at the end of the CPC Congress this month, these fundamental issues will remain at the center of debates about China’s future and its place in the world.