CHINAMacroReporter

The 20th Party Congress with All Eyes are on Xi Jinping

The attention to Mr. Xi is in large part because he will exit the Party Congress with even greater power, no discernible opposition, and a new five-year term (with more likely to follow). And many of the constraints that may have been in place not to jeopardize his reappointment will be gone.
by

Malcolm Riddell

|

CHINADebate

October 10, 2022
The 20th Party Congress with All Eyes are on Xi Jinping

‘All eyes are on Xi Jinping at the Chinese Communist Party’s 20th National Congress that begins on Oct. 16,’ says The Washington Post.

  • The Congress itself has largely a ‘symbolic function given that nothing will be seriously debated during its week-long passage,’ writes Harvard’s Tony Saich in ‘What To Expect from the Twentieth Congress of the Chinese Communist Party.’
  • ‘This year’s gathering of some 3,000 delegates in Beijing will be special in that it will likely see Xi Jinping confirmed for a third term as leader of the CCP.’
  • Hence all eyes are on Mr. Xi; the Congress itself not so much, besides the also important appointment or reappointment of other senior leaders.

The attention to Mr. Xi is in large part because he will exit the Party Congress with even greater power, no discernible opposition, and a new five-year term (with more likely to follow).

  • And many of the constraints that may have been in place not to jeopardize his reappointment will be gone.

With this in mind, here are two things to watch for after the Congress adjourns:

  • Will Mr. Xi, as one commentator put it, be ‘unleashed’ on some issues?
  • Will he hold steady with his current policy directions on others?

In considering these questions – and there will be many more fine analyses to come – there is a constant theme at play both before and after the Congress:

  • Mr. Xi’s commitment to Marxist ideology.

And this is key to understanding Mr. Xi’s policies and actions after the Congress.

  • If you think Mr. Xi is just paying lip service to communism, think again.

Regular readers here know this recurring theme:

  • Xi Jinping is and always has been a Marxist – a true believer.
  • He aims to put China back on the socialist road after a few decades of using Deng-inspired capitalist tools to create ‘overwhelming abundance.’
  • Whenever he takes an action that looks irrational to us, check first to see if it’s rational in Mr. Xi’s Marxist ideology.

And that theme recurs in today’s issue.Kevin Rudd, president of the Asia Society, former Australian Prime Minister, and astute China expert has just published a terrific analysis in Foreign Affairs:

Here are a few excerpts plus a real-world example of Xi the ideologue at work.

1 | An understandable omission

‘In the run-up to the 20th National Congress of the Chinese Communist Party (CCP), Western analysts have sought to decode the worldview that drives him and his ambitions for China,’ writes Kevin Rudd.‘One important body of thought has been largely absent from this search for understanding, however:’

  • ‘Marxism-Leninism.’

‘The omission is understandable.’

  • ‘Most Western thinkers long ago came to see communist ideology as effectively dead.’
  • ‘In China, too, where, in the late 1970s, the CCP leader Deng Xiaoping set aside the Marxist-Leninist orthodoxy of his predecessor, Mao Zedong, in favor of something more akin to state capitalism.’

‘Xi has brought that era of pragmatic, nonideological governance to a crashing halt.'

  • ‘In its place, he has developed a new form of Marxist nationalism that now shapes the presentation and substance of China’s politics, economy, and foreign policy.’

‘In doing so, Xi is not constructing theoretical castles in the air to rationalize decisions that the CCP has made for other, more practical reasons.’

2 | Ideology drives policy

Under Xi, ideology drives policy more often than the other way around.’

  • ‘Xi has pushed politics to the Leninist left, economics to the Marxist left, and foreign policy to the nationalist right.’
  • ‘He has reasserted the influence and control the CCP exerts over all domains of public policy and private life, reinvigorated state-owned enterprises, and placed new restrictions on the private sector.’
  • ‘Meanwhile, he has stoked nationalism by pursuing an increasingly assertive foreign policy, turbocharged by a Marxist-inspired belief that history is irreversibly on China’s side and that a world anchored in Chinese power would produce a more just international order.’

3 | Back to the future

For a real-world example, consider how shocked institutional investors were when they lost a trillion+ dollars in China’s tech ‘crackdown’ last year.

  • It spawned some of my favorite reporting. Here are a few.

1 | 'Shocked Investors Scour Xi’s Old Speeches to Find Next Target' | August 4, 2021

‘As $1 trillion evaporated from Chinese stocks last week, some investors realized they hadn’t paid enough attention to the country’s most important man:’

  • ‘President Xi Jinping.’

‘Traders began scouring Xi’s speeches to find clues about which industries might be next after his administration abruptly smashed the country’s $100 billion for-profit education sector.’

2 | ‘Is Capitalism Just a Phase?’ | August 4, 2021

‘Global investors are shocked to have discovered that China is run by Communists.’

  • ‘Beijing is using the market economy to evolve toward an ideal Marxist society.’
  • ‘But lots of things (like Big Tech) get broken on the way to communism.’

‘The most lucid and logically coherent explanation also happens to be the simplest:’

  • ‘Take China’s Communist Party at its word.’

‘For decades, foreign investors have told themselves a comforting story.'

  • ‘China was no longer truly Communist, after late paramount leader Deng Xiaoping embraced markets in the late 1970s and kicked off the country’s spectacular economic rise.’
  • ‘The wealth and growth generated by capitalist techniques had converted the government and people.’
  • ‘While the ruling party continued to wrap itself in the rhetoric of Communism, its members knew they were paying lip service to a bankrupt ideology, or so the thinking ran.’

‘The era of such creative ambiguity is over.’

  • ‘With a true believer holding the reins of power, there can be no doubt that China’s rulers mean what they say.’

3 | ‘Wall Street Gets a Chinese Education’ | July 27, 2021

‘The big surprise from this week’s slump in Chinese company stocks is that people are claiming to be surprised.’

  • 'President Xi Jinping has made plain for years that he intends to bring ever greater swathes of China’s private economy under the state’s control.'

‘Guess what, Wall Street:’

  • ‘He meant it.’

4 | The right side of history

More from Kevin Rudd: ‘Like all Marxist-Leninists, Xi bases his thinking on:'

  • ‘historical materialism (an approach to history focused on the inevitability of progress through ongoing class struggle) and’
  • ‘dialectical materialism (an approach to politics that focuses on how change occurs when contradictory forces collide and are resolved).’

‘These concepts may seem abstruse and arcane to those outside China.'

  • ‘But they are taken seriously by elites in the CCP, senior Chinese officials, and many of the international relations scholars who advise the government.’

Historical materialism. ‘In his published writings, Xi deploys historical materialism to position the Chinese revolution in world history in a context in which China’s move to a more advanced stage of socialism necessarily accompanies the decline of capitalist systems.’Dialectical materialism. ‘Through the lens of dialectical materialism, he portrays his agenda as a step forward in an ever-intensifying contest between the CCP and reactionary forces at home (an arrogant private sector, Western-influenced nongovernmental organizations, religious movements) and abroad (the United States and its allies).’‘Marxism-Leninism still serves as the ideological headwaters of a world view that places China on the right side of history and portrays the United States as struggling in the throes of inevitable capitalist decline, consumed by its own internal political contradictions and destined to fall by the wayside.’

  • ‘That, in Xi’s view, will be the real end of history.’

5 | Ignore at your peril

‘Xi’s pronouncements about history, power, and justice might strike Western audiences as impenetrable or irrelevant,’ says Mr. Rudd.

  • ‘But the West ignores Xi’s ideological messaging at its own peril.’

‘No matter how abstract and unfamiliar his ideas might be, they are having profound effects on the real-world content of Chinese politics and foreign policy.’

  • ‘And thus, as China’s rise continues, on the rest of the world.’

6 | Read Qiushi!

‘Xi’s ideological pronouncements shape how the CCP and its nearly 100 million members understand their country and its role in the world.’

  • ‘They take such texts seriously; the rest of the world should, too.’

Going back to China’s tech ‘crackdown’ in 2021, institutional investors got this message.

  • Again, some of my favorite reporting.

1 | 'Shocked Investors Scour Xi’s Old Speeches to Find Next Target' | August 4, 2021

‘Traders began scouring Xi’s speeches to find clues about which industries might be next after his administration abruptly smashed the country’s $100 billion for-profit education sector.’

2 | 'Shocked Investors Scour Xi’s Old Speeches to Find Next Target' | August 4, 2021

‘ “Investors and analysts have tended to dismiss party-speak, usually because it’s so impenetrable,” said Dan Wang, a technology analyst at Gavekal Dragonomics in Shanghai, who regularly reads the Qiushi Journal, a bi-monthly Communist Party publication.’

  • ‘ “But much of it is perfectly readable.” ’

‘ “And we should know at this point that Xi usually follows through on what he says.” ’

3 | ‘The Real Reason China Is Cracking Down on Its Tech Giants’ | July 31, 2021

‘When politics are in command, the markets-based models Western financiers use to calculate China risk aren’t much use.’

  • 'This explains why some of China’s savviest investors spend their time studying Xi’s speeches on the economy.’

‘Eric X. Li, a Shanghai-based venture capitalist, says he adopted his entire investment thesis from recent copies of Qiu Shi—literally “Seeking Truth”—the Chinese Communist Party’s leading theoretical journal.’‘Li’s advice:

  • “We should read Seeking Truth seriously, roll up our sleeves and work hard.” ’

These are from the investment world.

  • But the lessons apply across the board.

To get you started, here’s the link to the English version of Qiushi.

And keep an eye out for speeches by Mr. Xi and other leaders.

  • Remember: ‘With a true believer holding the reins of power, there can be no doubt that China’s rulers mean what they say.’

Ignore at your peril.

  • And never more so than after the 20th Party Congress.

More

CHINAMacroReporter

September 26, 2022
China Coup: How Worried Should Xi Be?
‘Xi and the phrase #ChinaCoup trended on social media after tens of thousands of users spread unconfirmed rumors that the president was detained and overthrown by the China's People's Liberation Army.’
keep reading
September 18, 2022
'How do you spy on China?'
Many of you have asked about my own take on the issues I analyze in these pages and about my background. Today is some of both.I am honored to have been interviewed by the terrific Jeremy Goldkorn, editor-in-chief of The China Project. Below is part of that interview.
keep reading
September 5, 2022
Xi’s Dangerous Radical Secrecy
In a world of political hardball, investigative reporting, and tabloids, we know a lot (if not always accurate or unspun) about world leaders, especially those in functioning democracies. Not so with Xi Jinping.
keep reading
November 22, 2022
'Strangling with an intent to kill.’
I began to have some hope of getting our act together with Mr. Biden. He worked to rebuild relations with allies who could join the U.S. in the competition. And he understood the need for America to strengthen itself for competition. Hence, the infrastructure, CHIPS, and other acts. But whether Mr. Trump or Mr. Biden, one thing nagged me beyond all the rest. Why is America strengthening our competitor? — In the instant case: Why is America giving our competitor advanced semiconductor resources to strengthen itself to compete against us?
keep reading
October 31, 2022
Xi's China: 'less reliable, less predictable, and less efficient'
‘China’s predictability is being eroded by the frequent, erratic policy shifts that have taken place in recent months, such as the unexpected disruptions to power supplies that took place in 2021, and the sudden mass lockdowns that were imposed in an attempt to contain COVID.'
keep reading
October 18, 2022
Xi Jinping: ‘Crossing a threshold to outright dictatorship?’'
The view from inside China appears to be quite different. Yes, the Chinese people may grumble about the Zero-COVID lockdowns, and just a few days a banner critical of Mr. Xi and his regime was unveiled over an overpass in Beijing.
keep reading
October 10, 2022
The 20th Party Congress with All Eyes are on Xi Jinping
The attention to Mr. Xi is in large part because he will exit the Party Congress with even greater power, no discernible opposition, and a new five-year term (with more likely to follow). And many of the constraints that may have been in place not to jeopardize his reappointment will be gone.
keep reading
September 26, 2022
China Coup: How Worried Should Xi Be?
‘Xi and the phrase #ChinaCoup trended on social media after tens of thousands of users spread unconfirmed rumors that the president was detained and overthrown by the China's People's Liberation Army.’
keep reading
September 18, 2022
'How do you spy on China?'
Many of you have asked about my own take on the issues I analyze in these pages and about my background. Today is some of both.I am honored to have been interviewed by the terrific Jeremy Goldkorn, editor-in-chief of The China Project. Below is part of that interview.
keep reading
September 5, 2022
Xi’s Dangerous Radical Secrecy
In a world of political hardball, investigative reporting, and tabloids, we know a lot (if not always accurate or unspun) about world leaders, especially those in functioning democracies. Not so with Xi Jinping.
keep reading
July 10, 2022
Building Biden's 'Great Wall' Around China
Whether you view it as an aggressive adversary or a nation asserting itself in ways commensurate with its rising status, China is creating risks – some subtle, some obvious - that, along with reactions of the U.S. and its allies, have to be factored, into every related business, investment, and policy strategy.
keep reading
July 1, 2022
A Debt Crisis of its Own Making
Ever since Xi Jinping announced ‘One Belt, One Road’ in 2013, I watched it expand China’s economic and geopolitical influence and lay the foundation for projecting its military power – and become by many accounts an exploiter of the developing world itself.
keep reading
June 22, 2022
No. Ukraine Won't Change Xi's Plans - or Timetable - for Taiwan
Ukraine won't speed up or delay Mr. Xi's timetable. (But it may cause him to work harder to strengthen China's military and insulate its economy from external pressure.)
keep reading
June 12, 2022
'The competitiveness of China is eroding.'
Understanding the drivers of China’s rise to supply chain prominence gives (me anyway) insights to help analyze the changes – or not – of ‘decoupling.’
keep reading
June 5, 2022
U.S.-China Relations: A Chinese Perspective
Wang Jisi notes that the views are his own, and certainly we don’t know how closely, if at all, they reflect the thinking of anyone in the leadership. But given his straightforward and thorough analysis, free of canned arguments and slogans, I hope they do. I also hope the Biden administration pays heed.
keep reading
May 30, 2022
Is Xi Jinping China's Biggest Problem?
And while the impact of Zero Covid may be relatively short-lived, the impact of Mr. Xi’s return to the socialist path will be felt for a very long time, both in China and the world. So the impact will no doubt be felt as long as Mr. Xi leads China.
keep reading
May 22, 2022
The Next U.S.-China Crisis: CEOs & Boards Are Not Ready
‘The bad news is that very few corporations engaged in China have contingency plans or long-term strategies to hedge against the downside risks of growing geopolitical competition.’
keep reading
May 14, 2022
China GDP: 'A very long period of Japan-style low growth.’
Here are some of the insights from ‘The Only Five Paths China’s Economy Can Follow’ by Peking University’s Michael Pettis. This excellent analysis of China’s economy is worth a careful reading.
keep reading
May 1, 2022
'Zero Covid' & the Shanghai lockdown
Joerg Wuttke is the president of the EU Chamber of Commerce in China - the 'official voice of European business in China.'
keep reading
April 17, 2022
Is China's Tech 'Crackdown' Really Over?
Today, I’m sharing with you a bit of Ms. Schaefer’s analysis of the tech ‘crackdown’ (but not of the AI and algorithm law). She explains why...
keep reading
April 17, 2022
China: 'Sleep Walking into Sanctions?'
A looming risk is Russia-like sanctions on China. The sanctions on Russia are causing plenty of disruptions. But those disruptions would be nothing compared to the catastrophe of Russia-like sanctions on China. The good news is that if China does violate the sanctions, the violations would likely be narrow and specific - even unintentional. So secondary sanctions - if they come at all - likely won't hit China’s economy and financial system deeply – or (fingers crossed) U.S.-China relations.
keep reading
April 5, 2022
Russian Sanctions' Impact on China
In the meantime, some contend, China has a payment system, the Cross-Border Interbank Payment System or CIPS, that could make it independent of SWIFT.
keep reading
March 21, 2022
Faint Cracks
For some time now we’ve taken it for granted that Xi Jinping has so consolidated his power that his will is China policy.
keep reading
March 13, 2022
Is China in a Bind?
It wants to support Russia, but also wants to support the international order from which benefits and doesn’t want to alienate the major economies its own economy is intertwined with.
keep reading
February 19, 2022
Under Construction: Two (Opposing) World Orders
Years ago, before the so-called ‘New Cold War,’ when asked what China issue interested me most, I said, ‘China and the liberal world order.’
keep reading
February 17, 2022
'A Fateful Error'
As the 1904 cartoon from Puck magazine shows, this isn’t the first time in the past 100 or so years that Russia has shattered the peace. [Or has been defeated, as it was in 1905 by the Japanese in the Russo-Japanese War.]
keep reading
February 2, 2022
Ukraine, Taiwan, & the 'Nightmare Scenario'
This in no way diminishes the calamity of a war with China. But the ability of the U.S. to wage that war would not be diminished by having to fight Russia at the same time.
keep reading
January 18, 2022
This is Mr. Xi's Big Year - and Nothing Better Spoil It
Every politician going into an election wants a strong economy. Xi Jinping is aiming to be reelected (and all indications are he will be) to a third five-year term at the National Party Congress this autumn. So Mr. Xi will ease (and stimulate ) as much as he can without creating major headaches to deal with after his reelection - all in the name of 'stability.'
keep reading
January 5, 2022
Bachelors, Mother-in-Laws, & China's Economy
‘In the long-term, demographics is one of the most important forces that will shape the growth momentum of China for the next decades. Two demographic features that are especially worth paying attention:’
keep reading
December 30, 2021
Q&A 6 | China Reverse Its Declining Birthrate?
‘A lot of people feel like the ideal, the optimum number of children is a maximum of two children. So it's not a surprise to me that the three-child policy hasn’t had a high response in the short term. But I think in the long term it will be much better.’
keep reading
December 30, 2021
Shang-jin Wei Presentation-1 | Drivers of Growth Momentum
‘In the last year and a half we saw a spate of government actions all contributed to not just falling stock prices for companies in certain sectors but a deterioration in investor sentiment more broadly. These include:...’
keep reading
December 30, 2021
Q&A 1 | How Much Does the Gender Imbalance Contribute to China’s Rising Housing Prices?
‘Gender imbalance accounts for about one-third of the increase in China’s housing prices in the last two decades or so.’
keep reading
December 30, 2021
Q&A 4 | Is China Exporting Inflation?
'‘China has its own issues. If you look at the CPI inflation, it looks more moderate. ‘If you look at the producer price inflation, it looks more severe.’
keep reading
December 30, 2021
Q&A 2 | Will the Gender Imbalance Keep Housing Prices Firm in the Medium Term?
‘The part of housing prices caused by gender-ratio imbalance is not going to go away in the medium term. But the government has ways to create volatility in the housing market.’
keep reading
December 30, 2021
Q&A 3 | Property 2022: Stabilization or Growth?
‘The goal is to stabilize housing prices while having housing sector grow.’
keep reading
December 30, 2021
Shang-jin Wei Presentation-3 | Analyzing the Gender Imbalance Data
‘Compare these with graph showing the impact of the same factors on rental prices...'
keep reading
December 30, 2021
Shang-jin Wei Presentation-2 | Gender Imbalance as a Driver of Housing Prices
‘Why does gender imbalance have such an outsize impact on China’s housing prices?'
keep reading

Heading

Lorem ipsum dolor sit amet, consectetur adipiscing elit. Suspendisse varius enim in eros elementum tristique. Duis cursus, mi quis viverra ornare, eros dolor interdum nulla, ut commodo diam libero vitae erat. Aenean faucibus nibh et justo cursus id rutrum lorem imperdiet. Nunc ut sem vitae risus tristique posuere.