China’s political direction could soon get clearer. On Thursday, Beijing’s official Xinhua news agency revealed an October 18 start date for the biggest set-piece in the political calendar, the twice-a-decade Communist Party congress. A reshuffle at the top will say a lot about President Xi Jinping’s plans.
Xi has already amassed unusual amounts of power, including tighter control of the military, the title of “core” leader, and fawning media coverage. A blitz on corruption has weakened rival power centres. As a result, the party’s insistence on collective leadership and term limits for leaders, meant to avoid Mao-style personality cults, appears to be weakening.
So who leaves or joins the ruling Politburo Standing Committee will matter. A conventional approach would be to pick a clear understudy, like Chongqing party boss Chen Miner. That would prepare for a transition in 2022, after a decade of Xi, and suggest the wider elite can still contain the current leader.
But if no up-and-comers join, and the committee shrinks to a few Xi allies, that would hint at bigger ambitions. So would keeping ageing graft-buster Wang Qishan. That would add to evidence that recent party norms on age limits no longer matter, which could in turn enable a third Xi term.
Domestic and international politics aside, three big questions matter to foreign investors and executives. First, is China ready to open up more? Second, how fast can it grow? Third, can it control debt?
Some answers are already apparent. Beijing likes overseas capital, but not foreign competition; it also likes trade and globalisation, but strictly on its own terms.
Slower economic growth, like the 6.6 per cent economists forecast for this year, is tolerable, yet radical economic reform is probably off-limits. And so debt is likely to keep rising, notwithstanding an unpredictable crackdown on glitzy foreign takeovers and other risky behaviour. Xi will provide more clues as he lays out afresh his economic approach in a flagship speech at the gathering.
Overall, Xi is less of an economic liberal than sidelined Premier Li Keqiang, and places a premium on control. If he tightens his grip, China is even less likely to let market forces rip, or to level the playing field for foreign firms. It could also drift further from technocratic to strongman rule.