October 5, 2022
IntelBrief: The 20th Party Congress: Xi Jinping’s Opportunities and Challenges in China
On October 16, the 20th National Congress of the Chinese Communist Party (CCP) will open. The week-long gathering that occurs every five years will determine China’s leadership for the next term, including the likely re-election of Xi Jinping to lead the CCP and the potential replacement of the current premier, Li Keiqiang. During the 19th Party Congress in 2018, Xi—originally selected to serve from 2013 to 2023—eliminated the two-term limit, essentially paving the way for his re-election to a third term in 2022 and possibly lifetime rule. Xi is expected to utilize this forthcoming Party Congress to further consolidate power and eliminate opposition, which will have implications for China’s domestic and foreign policy, and the geopolitical landscape of neighboring regions, from Central Asia to the Indo-Pacific. Xi’s quest for centralized power will certainly take center stage at the Party Congress, but there are also several opportunities and challenges facing Xi as he seeks to continue to rule China. Domestically, the faltering economy and the implementation of the CCP’s “dynamic zero-COVID” policy are front and center. The aggressive foreign policy promoted under Xi has driven US-China relations toward a nadir, with uncertainty over whether or how China will seek “re-unification” with Taiwan impacting the security situation in the wider Indo-Pacific.
As propaganda banners fill the streets of Beijing, the usually carefully scripted and planned Party Congress—void of public debate—conceals the years of political maneuvering, guanxi (alliance) building, and lobbying that has led up to the selection of officials for key party positions during the event. Critically, the Party Congress will yield the composition of the 20th Politburo and its Standing Committee (PSC), with the latter being the most powerful decision-making body in China. While it is commonly understood that Xi yields ultimate decision-making power in the government, the composition of the 20thPolitburo and its Standing Committee will provide insights into how successful Xi is in his venture to eliminate opposition and promote protégés that would support his ambition of lifetime rule.
China’s economic slowdown—accelerated by prolonged lockdowns due to the CCP’s “dynamic zero-COVID” policy—is the key domestic issue facing Xi’s rule. The World Bank forecasts that China’s 2022 GDP growth will be 2.8 percent, falling noticeably short of the CCP’s March “guidance” of 5.5 percent. Observers continue to look for signs of whether Xi will ease the zero-Covid policy following the Party Congress; however, other economic woes plague the Chinese economy as well, including the ongoing real estate crisis. Additionally, both domestic and foreign policy decisions appear to have made economic engagement with China less attractive for Western markets and companies. In September, the president of the European Chamber of Commerce in China noted that no new European companies had entered the Chinese market since 2020, with many European companies losing interest in continued investment in the country—instead looking elsewhere in Asia.
If Xi consolidates power, the aggressive foreign policy that has come to characterize his tenure is likely to continue. It is expected that following the Party Congress, Xi—as the Chairman of the Central Military Commission (CMC)—will continue to move forward with the modernization of the People’s Liberation Army (PLA). With four of the six current CMC members likely to retire, the composition of the CMC following the Party Congress will yield important insights into Xi’s priorities for China’s armed forces, including the Eastern Theater Command (Taiwan Strait). Last week, Chinese government officials hailed the progress of China’s foreign policy and diplomacy under Xi—dubbed “Wolf Warrior” diplomacy exemplified by brazen statements, including on social media, by Chinese diplomats. The most recent example of China’s “wolf warriors” was in full swing over the weekend, piggybacking off Russian disinformation narratives insinuating that the United States orchestrated the sabotage of the Nord Stream 1 and 2 gas pipelines in the Baltics.
With war raging in Europe and a revanchist Russia undeterred, Xi’s expected consolidation of power presents geopolitical challenges in the Indo-Pacific for the United States and allies, especially related to freedom of navigation, international trade, and the uncertainty of military conflict in the Taiwan Strait. In addition, throughout his rule, Xi has capitalized upon nationalist sentiments at home to shore up support, including by criticizing the US-led world order and Western attempts to stymie China’s power. With an economic downturn in China, Xi and the CCP will likely continue appealing to nationalist sentiments—an unpredictable force that cannot always be controlled by the political elite.