20th Party Congress: Post-Mortem

Oct 27, 2022

While the dust has barely started to settle on China’s now competed 20th Party Congress, a few tentative conclusions can be reached:

  • National security was the key take-away. This came through loud and clear in Xi Jinping’s opening oration as well as in the communiqué released at the conclusion of the gathering. Xi’s emphasis on the “unparalleled complexity, graveness, and difficulty” that China faces in “navigating perilous, stormy seas” connects the risks of conflict to the focus on security.
  • Economic growth is now secondary to national security. While the communiqué referred to “modernization as the central task,” that was a hollow statement compared with the thrust of the Chinese Communist Party that has lost itself in endless praise of Xi as a “core leader” and in the all-encompassing ideological focus on Xi Jinping Thought.
  • Xi’s clean sweep on leadership. The Standing Committee of the Politburo is now packed with Xi loyalists. By “running the table” on leadership and not designating a successor, Xi Jinping has cemented the transition from the Deng Xiaoping consensus governance model to the Mao Zedong autocracy precedent. The surprising reappointment and elevation of Wang Huning ups the ante on ideology and conflict as driving forces in Xi’s third term.
  • Economics team completely replaced. Senior leadership ranks in the economics and financial areas have been purged of both market-based experience and clout in the international arena.  This is consistent with the elevated focus on security coming at a cost of de-emphasizing the economy. This raises the possibilities of economic policy mismanagement in the years ahead, underscoring downside risks to economic growth.
  • Political factions have been obliterated. Say goodbye to the Tuanpai of China’s Youth League (Hu Jintao’s proteges) as a competing faction, This had nothing to do with the unfortunate incident surrounding an aging and unwell Hu’s exit at the end of the CPC conclave and was more a reflection of the loyalty test that XI required of leadership vetting leading up to the Congress.

In short, China’s 20th Party Congress was all about Xi and the iron grip he now has on all aspects of a rising power.  While unsurprising relative to China’s Xi-centric trajectory of the past ten years, it rules out the possibility of a market-based correction to economic growth and underscores the worrisome geostrategic implications for Xi’s increasingly conflict-prone China.

You can follow me on Twitter @SRoach_econ

Sign up for Stephen’s Dispatches: