Asia and Eurasia
China on the Way to the 20th CPC Congress

It can be said without exaggeration that the decisions taken during the 20th Congress will determine the trajectory of China’s development for the next five years, and could affect it for ten years or more, writes Valdai Club expert Yana Leksyutina.

On October 16, 2022, the 20th National Congress of the Communist Party of China will begin its work, leading to appointments to key positions in China’s top leadership, including, as expected, the confirmation of Xi Jinping’s authority for an unprecedented third term. The CPC Congresses are landmark events not only for China, but also, due to the scale of China’s economy and its ability to influence world processes, for the whole world. The congresses, held every five years not only form the composition of a narrow group of party nomenklatura which will make crucial decisions for the development of the country (the Standing Committee of the Politburo of the CPC Central Committee and the Politburo of the CPC Central Committee), but also fix the main priorities and guidelines of state policy. It can be said without exaggeration that the decisions taken during the 20th Congress will determine the trajectory of China’s development for the next five years, and could affect it for ten years or more.

The 20th Congress will also mark the end of Xi Jinping’s first decade in power and be an opportunity to once again highlight the successes achieved under Xi Jinping’s leadership in China’s socio-economic development, foreign policy and national security. Xi Jinping’s achievements include the complete elimination of poverty in China (although the reversibility of this process is not ruled out, which is reflected in the provisions of official Chinese documents on the need to prevent a large-scale return to poverty). Under Xi, China has met the goal of completely building a middle class society by 2021, timed to coincide with the centenary of the CPC. Many important reforms have been launched to promote China’s further economic and social development and mitigate various national development imbalances.

These include improving the social security system: expanding the coverage of the population of China with a system of basic medical insurance, pension insurance, unemployment insurance, etc. They also include strengthening the reform of the registration system (hukou), and reforming the nation’s birth control policy (a transition to the policy of “three children”), as well as the creation of an ecological civilisation and more. Over the past decade, China has changed a lot. China has not only managed to achieve high macroeconomic gross indicators and significantly improve the well-being and quality of life of the Chinese population, it has also begun its transformation from a “global factory” to a “global market”. It sees itself as shifting from an assembler of finished products to a technological power that already claims leadership in fields such as AI development, the digital economy, etc. In the field of foreign policy, Xi Jinping put forward a number of striking initiatives that testify to the proactivity of China’s modern foreign policy line and Beijing’s intention to offer the world “global public goods”: the concept of a “community with a common destiny for mankind”, the Belt and Road project, the AIIB initiative, the concept of “international relations of a new type”, the initiative in the field of global security and many others.

Economic Statecraft
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The close bilateral relationship between China and Russia is one of the most important features of the evolution of international relations in the early 21st century. At the same time, the changing international order has also created new areas for Sino-Russian cooperation. Today, politicians and scholars from the PRC habitually refer to the changes in the modern international order as "a big change not seen in a century"

During the 18th CPC Congress, held in 2012, the process of transferring power in China from the fourth to the fifth generation of Chinese leaders was accompanied by an intense internal party struggle and a serious internal political crisis (this was most clearly manifested in the so-called Bo Xilai case). However, the current congress will be held amid a much calmer domestic political situation. During the decade-long anti-corruption campaign, a serious purge of the party ranks was carried out, and Xi Jinping managed to consolidate power in his hands. “Xi Jinping’s Ideas on Socialism with Chinese Characteristics for a New Era” were consolidated as guiding principles in China’s political and social life. In 2017 they became — along with Marxism-Leninism, Mao Zedong’s ideas and Deng Xiaoping’s theory — the ideas of the triple representation and scientific concept of development as an integral part of the Charter of the CPC. A year later they were incorporated into the Constitution of the PRC. The study of Xi Jinping’s ideas began to be introduced everywhere in China — from party and government circles and state-owned enterprises to universities and elementary schools. The status of Xi Jinping himself was defined as “the core of the CPC Central Committee and the entire party.” A social credit system was introduced and party control over social and political life in China was strengthened. The adoption in 2018 of an amendment to the PRC Constitution, which abolished the limitation of the term of office of the President of the PRC, changed the algorithm for the transfer of power in the PRC that had been formed under Deng Xiaoping and made it possible for Xi Jinping to be re-elected for a third term.

Meanwhile, while the prolongation of Xi Jinping’s powers is already a foregone decision, the main intrigue of the 20th Congress is whether Xi Jinping is able to “promote” his proxies to key party posts. The formation of a loyal composition of the Standing Committee of the Politburo of the CPC Central Committee will influence the extremely strong position of Xi Jinping among the Chinese party elite and will open up even greater opportunities for him to implement his political course. Xi Jinping has in the past promoted a strong state role in the economy. He has called on China to take the lead in setting global trade rules and technical standards.

After confirming his mandate for a third term, Xi Jinping will continue to guide China in realizing the dream of the great rejuvenation of the Chinese nation and achieving the second centenary goal of turning China into a rich, powerful, democratic, civilised, harmonious and beautifully modernised socialist power by 2049. There is also an intermediate goal in this process — by 2035, socialist modernisation should be carried out in China. However, achieving these goals will be very difficult. Contrary to the notion officially declared by the Chinese authorities that China is still in a “period of important strategic chances” — a term introduced by then President Jiang Zemin in 2002 at the 16th CCP Congress to describe an international situation favourable for China — there are signs that the period favourable for the rise of China is already behind it.

In the coming years, Xi Jinping will have to implement foreign policy initiatives in the context of growing geopolitical rivalry with the United States, an open confrontation between Russia and the West, and a downward trend in the development of relations with Europe. The tightening of the EU’s approach to China is already clearly visible, and the mechanism of China’s interaction with Eastern and Central Europe has already shrunk from a 17+1 formula to 14+1. The most serious challenge for Xi Jinping will be the Taiwan problem, the solution of which is an integral part of the realisation of the Chinese dream of the great revival of the Chinese nation. The fact that Tsai Ing-wen, the leader of the Democratic Progressive Party, who traditionally supports the island’s movement towards independence and will remain in power in Taiwan until at least 2024, coupled with the activation of Washington and its allies in supporting Taiwan, creates serious risks.

A combination of factors such as the ongoing US-China trade and technology war, the COVID-19 pandemic, and the new round of the Ukraine crisis (which has caused uncertainty in energy and food markets) are putting strong external pressure on the Chinese economy. Although China continues to lead the world in terms of economic growth (8.1% in 2021), maintaining it is becoming increasingly difficult. The Chinese government’s 2022 GDP growth target is already 5.5%, the lowest target in forty years. The pressure of the downward trend in the development of the Chinese economy is forcing the leadership of the PRC to formulate a strategy and plans for socio-economic development, aimed no longer at achieving outstanding results, but rather at maintaining the stability of the overall macroeconomic situation and maintaining social stability.

China relies on the “three S” principles and guidelines for ensuring its economic development: “stability”, “stress resistance” and “self-sufficiency” (technological, food, energy, etc.). Against the backdrop of a changing global environment, in May 2020, Xi Jinping announced a “dual circulation” economic strategy, where the formation of a powerful domestic market and the disclosure of domestic consumer potential is seen as a new driver for the development of the Chinese economy.

Two and a half years have passed since the coronavirus struck; the Chinese leadership found itself fighting difficulties and challenges which were unprecedented in the entire forty-year history of the “reform and openness” policy. Efforts were made to ensure economic growth in the face of systematic lockdowns in China, to support the technology sector (due to increasing pressure on Chinese technology companies from the United States and its allies) and the construction industry (against the backdrop of financial problems for the second largest developer in China, the Evergrande company). A number of states decoupled from the Chinese economy. Fears associated with the possible “closure” of China have appeared in the world community against the backdrop of the severe restrictive anti-epidemic measures which have been taken by Chinese authorities. An important task for Beijing has become to convince foreign investors not to leave the Chinese market, demonstrating its continued attractiveness. In this regard, in particular, the range of areas open to foreign investment has expanded, and the process of creating pilot free trade zones in China has continued. Special attention was paid to issues of food security (in 2020, even a “clean plates” campaign was launched to stimulate the rational use of food in China), as well as the energy security, technological self-sufficiency (especially in the field of semiconductor production), supply chain stability, and pandemic prevention and control.

One of the first urgent tasks for the Chinese leadership after the 20th Congress, and especially after the so-called “two sessions” in the first quarter of 2023, will be to review the policy of dynamic zero tolerance for COVID-19. The Chinese economy is under great pressure due to the ongoing lockdowns in China prompted by COVID-19 outbreaks, and the continued isolation of the Chinese population. The freedom of cross-border movement enjoyed by the majority of the rest of the world’s population may cause discontent among the Chinese population. The general tasks of Xi Jinping after the 20th Congress will be to protect China’s “core” interests, move towards achieving China’s second hundred-year goal, and ensure the stability, stress resistance and self-sufficiency of the Chinese economy.

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Views expressed are of individual Members and Contributors, rather than the Club's, unless explicitly stated otherwise.