Xi Jinping consolidates grip on power, but will he take heed of his failures? 

President Xi Jinping has cemented his rule over China for at least another term. On Sunday, 23 October 2022, he was appointed as general secretary of the ruling Communist Party for a third term since he was named leader in 2012. This is a departure from all his predecessors, who resigned after two terms. He is expected by some to keep his ascendancy for life. 

Xi has secured his grip on the Eastern superpower by garnering space for his allies in the 205-member Central Committee and in the inner circle of power in China – the seven-member Standing Committee. Noticeable was the making redundant of Premier Li Keqiang, the No. 2 leader and an advocate of market-style reform and private enterprise. Xi, all through his tenure, has keenly pursued political motive over economic prerogative. 

Li was dropped from the leadership on Saturday, 22 October 2022, the final day of the 20^th Congress of the Chinese Communist Party. That was despite Li being a year younger than the party’s informal retirement age of 68. Xi is 69, and Xi is, now, certain to be nominated the President of China when the legislature meets in March of 2023. 

Xi’s control over the new power dynamic is highlighted by the fact that he has populated the top jobs with his loyalists and those who stand by his policy of tighter control over society and the economy.   

Li Qiang, the Shanghai party secretary, will be appointed as No. 2 leader or premier, the highest economic official in China. While the No. 3 position, that of head of the legislature, has gone to Zhao Leji. These appointments will be validated in March 2023.  

Li Qiang worked with Xi in the Zhejiang province in the southeast in the early 2000s. Other Xi loyalists, the Beijing party secretary Cai Qi, Ding Xuexiang and Li Xi, the party secretary of Guangdong province, have also been appointed to the seven-member Standing Committee. While Wang Huning has retained his position on the committee. 

Li Keqiang, who was dropped from the Central Committee, was already sidelined by Xi in his two-term tenure. In fact, Xi had assumed leadership of all policy-making bodies, snubbing the former. Another notable dropped from the Standing Committee was Wang Yang, a reform advocate. Wang, 67, is below the unofficial retirement age. 

What Xi has managed to do is concentrate power in his own hands to a maximum degree. And this will see further implementation of his policies of social equality and stricter control over business. There is no real counterpoise to Xi in his newly created scheme of things.  

All eyes, globally, were on the 20^th Congress meet – on whether there would be a relaxation of Covid strategy or measures to reverse the economic slowdown. There were none forthcoming. Xi has tightened control over private entrepreneurs all through his tenure, thus forestalling economic growth and jobs creation in his pronounced policy of higher wages for the masses, creation of jobs in the rural sector and social equality. 

Xi’s attempt to control what is viewed as the profusion in the market, and cracking down on the power and influence of companies, particularly in the tech sector, and his priority to reduce carbon emissions, coupled with the recent power crisis, the bursting of the real estate bubble, zero-Covid measures, demographic decline, the limits of capital-intensive growth, and a gradual deceleration in productivity growth, have weakened the Chinese economy 

Economic growth slumped to 2.2 percent in the first half of 2022. Since 1978, the Chinese economy has been growing at an average of 8 percent, but GDP rose by just 0.4 percent over the previous four quarters to June 2022, compared to the national target of 5.5 percent growth. Some consolation can, however, be obtained from the fact that the Chinese economy grew 3.9 percent in the third quarter of 2022. Nonetheless, youth unemployment stands at nearly 20 percent.  

The International Monetary Fund recently cut its forecast for China’s growth to 3.2 percent in 2022, representing a stark downturn from 8.1 percent in 2021. That would be the country’s second lowest growth rate in 46 years, better only than 2020 when the initial coronavirus outbreak hammered the economy. 

More than USD 1 trillion has been wiped off the market value of tech giants Alibaba and Tencent over the last two years. Sales growth in the sector has slackened, and thousands in the workforce have been rendered unemployed. 

The real estate sector has also been thrashed, causing grief to some of the country’s biggest property developers. The collapse in real estate — which accounts for as much as 30% of GDP — has triggered widespread and rare dissent among the middle class. 

There is increasing worry among the international community, that China is on a slowing trajectory, or what is worse, it could be on the brink of economic collapse. If Chinese demand falls, prices will slump for everything from oil to steel. And all markets will sink, including global financial markets.  The fact is, with China being the factory of the world and its predominance as the world’s resources guzzler, if China sneezes the world will catch the flu. 

Xi has managed to secure his power over the Eastern giant while curbing the market reforms that were set off by one of his prominent predecessors – Deng Xiaoping. It is now a return to a more state-controlled economy with private enterprise being held on a shorter leash. 

Xi, in his report to the Congress, stressed for “regulating the mechanism of wealth accumulation,” the importance of national security and control over China’s supplies of food, energy and industrial goods. His policies of subsidising Chinese exports led to an acrimonious tariff war with former US President Donald Trump with no equanimity exhibited by Trump’s successor Joe Biden as well.  

Xi, in turn, is hoping that consumption and services become the triggers of growth rather than investments and exports. But Xi’s tighter state controls on businesses may see these hopes dashed. 

Xi’s zero-Covid strategies has led to much frustration among the public and businesses alike. Entire regions were shut down during the pandemic. There is no sign that Xi is likely to change his strategy and no announcements were made at the 20^th Congress in that regard. With Xi hardliners all on display in the inner circle, there are no detractors to indicate to Xi that his is not the right path to take. 

During the 20th Congress, Xi invoked heightened military development, “self-reliance and strength” in technology and defence of China’s interests abroad, which implies a more protracted tiff with the West.  

Xi’s tenure has seen the awesome rise of China as a military power as well as increased belligerence on its part, much to the consternation of the Western block and China’s neighbours. He has a dream for China’s peerless greatness.  

The Chinese government announced a 2022 defence budget of CNY1.45 trillion (USD229.5 billion), a nominal year-on-year increase of 7.1 percent.

The expenditure – announced on 5 March 2022 at the opening session of the annual National People’s Congress (NPC) – represents the seventh consecutive year of single-digit growth. 

Increases in 2020 and 2021 were recorded at 6.6 percent and 6.8 percent respectively. 

Xi seems not to be in any mood to retract his policy of antagonising the West. China’s rhetoric in favour of Russia (in its war in Ukraine), its recent aggression towards Taiwan and Xi’s explicitly saying that force cannot be ruled out in seeking reunification, China’s illegitimate claims on the South China Sea, and Xi’s obduracy to international protestations of human rights abuses in Xinjiang, have won him no international accolades and are all prompting a relentless contest with the US and its allies. The hegemonistic tussle with the US for global power and influence is not making things any easier. And the US is seeking to take increased measures at deterrence – economic, military and diplomatic.   

Xi’s tenure has seen simmering tensions with not only the US, but also with its neighbours in South-east Asia, as well as with South Korea and Japan, due to his obstinate territoriality. Indo-Pacific powers like India, Japan and Australia are confronting the problem of China’s redoubtable truculence by increasing military spend and forming alliances with the US like Quad and AUKUS. 

For Xi, he has much to take heed of in his third-term tenure (and possible future terms in power). Will he admit (at least to himself) the failure of his major policies that have become part of his political legacy as chief? Will he set in motion fresh market reforms to revitalise the slumping Chinese economy? Will he seek to pacify the West to prevent alienation and sanction? Or will he seek to preserve his own footprint and the centrality of his power and ignore the caution of adversaries in his pronunciation of the “great rejuvenation of the Chinese nation” that may seem like a diminishing prospect with the predominance of his seemingly economically and geopolitically self-inflicting policies, measures and strategies?