16.02.2023.

Xi Jinping’s new politburo and China’s trajectory

With loyalists in key positions, China’s supreme leader theoretically can use his power as he pleases. In reality, General Secretary Xi faces dangerous challenges.

In October 2022, the Chinese Communist Party (CCP) held its 20th National Congress, handing General Secretary Xi Jinping a precedent-defying third term and positioning him to advance his policy agenda seemingly undeterred for the next five years and beyond.

Few were surprised by Mr. Xi’s reappointment, but the extent to which he consolidated power was unprecedented since the decades after Mao Zedong’s leadership (1949-1976). By forcing factional rivals into early retirement and installing proteges in key positions, Mr. Xi now has allies in all seven Politburo Standing Committee seats. This network includes his second-in-command, Li Qiang, who was tapped to be the next premier despite never having served as a vice premier, breaching a precedent that has held since the People’s Republic’s founding in 1949. Half of the 24 members of the full Politburo are longtime Xi proteges, and most of the others are Xi allies for all intents and purposes.

This outcome was no accident or fluke of the system. China’s state-run media reported that Mr. Xi personally oversaw the vetting of candidates and that support for Mr. Xi’s leadership was among the top selection criteria. Contrary to previous leadership transitions, characterized by political positioning and horse-trading between party factions, this time, maximizing General Secretary Xi’s power seems to have been one of the party’s main objectives.

Xi Jinping 3.0

With Mr. Xi’s consolidation of power nearly complete, he has a strong mandate to continue pursuing the course he charted in the previous 10 years. A reading of the work report he presented during the Party Congress – the most authoritative statement of the CCP’s priorities for the coming five years – confirms that ideology still trumps pragmatism, and the party will continue to inject itself into all aspects of society. The report also foreshadowed a continuation of China’s focus on indigenous technological innovation, its abrasive “wolf warrior” diplomatic style, its challenging the United States for international leadership and its efforts to court developing countries and subvert international norms.

A more serious concern is the groupthink that tends to accompany such a concentration of power.

The new leadership lineup will facilitate the pursuit of these priorities. By making loyalty to General Secretary Xi the most critical qualification for party leaders, the CCP hopes to overcome the gridlock that plagued previous leaders’ efforts to address deeply rooted risks to the country’s sustained development and the party’s continued hold on power. These efforts – from anti-corruption to crackdowns on noncompliant business practices, such as anticompetitive behavior and food and drug safety infractions, to shifting the focus from quantitative growth to “common prosperity” – require taking on powerful interests, which proved impossible under Mr. Xi’s predecessors.

The premium placed on loyalty to one man means that the people appointed to the party’s top leadership bodies are not necessarily the most qualified. That does not mean they are incompetent, however. Mr. Xi’s proteges have advanced so far under his direction not only because of their loyalty but because he trusts their judgment and their ability to deliver the results he desires.

A more serious concern is the groupthink that tends to accompany such a concentration of power. Mao-era disasters like the Great Leap Forward and the Cultural Revolution occurred in part because few in senior leadership positions dared oppose Chairman Mao’s ideas. Similar dynamics have already played out under Mr. Xi. His zero-Covid policy and its zealous implementation at all levels of government smacked of a Maoist political campaign. Ominously, this occurred before Mr. Xi had won his near monopoly on political power when there were still some checks on his authority.

The party’s focus on technology

The new lineup also reflects the CCP’s efforts to turn China into a technological superpower that can rival the U.S. commercially and militarily. Six members of the new Politburo – a quarter of the group – are experts in fields such as aerospace, engineering and public health who did not rise through China’s political ranks the traditional way and lacked substantive political experience before being handpicked for provincial leadership positions earlier in Mr. Xi’s tenure.

There was likely a political element to these appointments. Many of the general secretary’s most trusted proteges are nearing – or have already reached – retirement. He needed a new support base clean of factional loyalties who owe their political careers to him.

But the elevation of these figures to the party’s most senior ranks also reflects the CCP’s emphasis on technological innovation. Even before Mr. Xi took power, the party sought to become less reliant on the U.S. for key “chokepoint technologies” and become a technology powerhouse in its own right. That is necessary for China to complete its rise as a global superpower that can rival the U.S.

With hospitals and crematoriums filling up, youth unemployment hitting record levels and the real estate sector teetering on collapse, Mr. Xi likely has a rough patch ahead.

China’s trajectory

For the reasons mentioned above, Mr. Xi’s further consolidation of power last October is unlikely to result in any drastic policy changes. However, short-term adjustments are likely from time to time. No country’s leaders operate in a vacuum, and decisions are often driven more by unforeseen crises than by the platform leaders present upon taking power.

The priorities presented at the previous Party Congress in 2017 made no mention of the then-unforeseen pandemic or the highly restrictive response to it that would define Mr. Xi’s second term. Nor did last year’s congress account for the scrapping of the zero-Covid policy or the outbreak of the most widespread protests since the 1989 Tiananmen Square massacre.

Mr. Xi begins his third term facing both the worst public health crisis and the most significant economic challenges anyone in the current leadership has ever had to manage. With hospitals and crematoriums filling up, youth unemployment hitting record levels and the real estate sector teetering on collapse, Mr. Xi likely has a rough patch ahead. If not handled well, these challenges could delegitimize his leadership in the eyes of the public.

Scenarios

Considering these challenges, three possible scenarios could play out over the next five years.

Xi temporarily refocuses

The likeliest scenario is that 2023 will be characterized by a refocus on economic growth and trying to ensure the CCP survives the political fallout of the failure and abrupt abandonment of its zero-Covid policy. The party will continue to push for progress in its technology goals. However, there will be less emphasis on regulatory enforcement campaigns, economic restructuring and other priorities that are hard on growth. The government will likely provide assistance to residents of impoverished regions and struggling businesses and sectors, though a massive stimulus like the one used during the 2008-2009 global financial crisis is unlikely. Once economic growth has recovered, perhaps as early as 2024, Mr. Xi will likely recommence his anti-monopoly and regulatory enforcement campaigns.

That is the most likely trajectory because it aligns with the aggressive long-term policy agenda set forth in the Party Congress work report and recent policy pronouncements by the central leadership that economic stability will be a top focus in 2023. It also conforms with Mr. Xi’s well-established pattern of rolling out difficult “reforms” (though often not the liberal reforms the West desires) when economic growth exceeds official targets and pivoting toward more growth-friendly policies when the economy is under strain.

Xi doubles down

An alternative, though less likely, scenario would be for Mr. Xi to use his unrivaled power to force through the difficult aspects of his policy agenda despite the economic and public health crises his country now goes through. This option would result in a hard landing for China’s economy. It would likely threaten social stability in the country, as layoffs in the hard-hit sectors further enflame the record-high youth unemployment.

Developments over the past couple of months make it unlikely that Mr. Xi has the disposition to take this approach. While he may have the power to push his agenda undeterred if he so wished, this would jeopardize his “common prosperity” agenda, a prerequisite of which is a base level of prosperity. It would also heighten the risk of social instability and public opposition to his leadership, especially given the opposition he already faces among many of the more educated Chinese and many citizens residing abroad.

Xi discredited

A final, extremely unlikely scenario would be for Mr. Xi to be so thoroughly discredited by the Covid-19 outbreaks that he loses his hold on power or, at the very least, is temporarily forced into the background.

For most of the past three years, the general secretary tied his legitimacy to the zero-Covid policy, which was scrapped in December. While many heralded the policy shift as evidence that the party listened to the voices of the people, the abrupt way the policy was ended left many citizens feeling abandoned. The government was evidently unprepared for the public health emergency that followed.

However, Mr. Xi appears to be weathering the situation well. He has not disappeared from the public eye for an extended period, as he did in 2020 to duck the fallout of the initial cover-up of the SARS-CoV-2 virus. In addition, Mr. Xi controls China’s propaganda and security forces, which will help him deter or put down dissent while crafting clever narratives to bolster his claim to legitimacy. Mr. Xi’s overwhelming factional dominance within key leadership bodies makes it unlikely he will face a serious challenge from within the party. Furthermore, the next leadership transition will not occur until late 2027, giving him almost five years to recover from any damage caused by these challenges.