Friday will wrap up the first three-day stretch of China’s 19th Communist Party Congress, and what a couple of days it has already been.
The week-long political extravaganza has thus far met or exceeded all expectations for how much party leadership will rally around the man at the center of it all, Xi Jinping. Some economic policy details have also been revealed, though much of what we’re hearing is not new.
Three rounds of press briefings are scheduled (link in Chinese) for Friday, starting at 10 am Beijing time, when officials from the party’s Central Propaganda Department, the Ministry of Culture, and the state committee in charge of the broadcasting will speak about strengthening China’s intellectual, moral and cultural development.
The second briefing, starting at 3pm, will be more about arts, culture and media, while the last briefing – beginning at 7pm – will switch gears to focus on science and technology. This might be an opportunity for officials to shed light on China’s national strategy of becoming a leader in high-tech fields, as well as efforts to encourage “military-civilian integration,” referring to cooperation between China’s military and the private sector.
“Innovation” will likely be the key word for today.
On to what we have learned so far.
Xi’s new era
Chinese state media organs wasted no time in proclaiming that the ideological contribution for China’s “new era” – a concept Xi unveiled in his work report on Wednesday – can be attributed to Xi himself. Several top party leaders did the same thing.
The catchy term “Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era” reported by the official Xinhua news agency, added the General Secretary’s name to the phrase from Xi’s speech. The addition of his name, along with the all-important choice of the word “thought,” makes it easy to imagine a less cumbersome, shortened form: “Xi Jinping Thought.” This subtlety potentially elevates the country’s top leader above the status of Deng Xiaoping and his “theory” to be on par with Mao himself.
An official nod to Xi’s ownership of this new “thought” might come when the Party’s constitution is amended at the end of the congress next week.
Emphasis on the transition to a “new era,” which was seen in coverage leading up to the congress, has also continued, with some observers noting that the change has effectively erased the legacies of Jiang Zemin and Hu Jintao. The Mao and Deng era will now seamlessly lead into an era which Xi can claim all his own.
Overseas coverage of the congress has focused on rhetoric emphasizing the party’s central role in China’s development, including in the private sector, as enumerated in the new “thought” mentioned above. But, despite the fact that “ensuring party leadership over all work” is the first point listed by Xi, “deepening reform” and “adopting a new vision for development” are not far behind. Some details of relevance to foreign firms and investors have been revealed.
On Tuesday, specific policy clues were given when People’s Bank of China Governor Zhou Xiaochuan and China’s top banking regulator Guo Shuqing spoke at a press briefing.
Zhou inadvertently spooked markets when he let the words “Minsky moment” slip out of his mouth in the context of reaffirming China’s commitment to ensuring stability of financial markets, prompting some to proclaim he was worried about asset bubbles in China. What his remarks really underscored is that Chinese regulators will likely continue a careful push towards reigning in excess leverage, a process they managed to do while maintaining economic growth at the start of this year.
Market access for banks:
China Banking Regulatory Commission chairman Guo Shuqing said that China will give foreign banks more market access in China. Reforms, he said, would give more space in terms of banks’ establishment, shareholder qualifications, the size of stakes allowed to be held by Chinese shareholders and scope of business, as Reuters reported. Concrete results on this front will be anxiously awaited by foreign lenders who have long been clamoring for movement on the issue.
Belt and Road:
Xi’s three hour-long report is a lot to unpack, and included a lot of emphasis on priorities that have already been enumerated in various forms over the past several years, including in the 13th five-year plan.
Worth highlighting, though not new, is China’s continued commitment in the context of the Belt and Road Initiative to provide more flexibility in trade and investment sectors. As Jeff Pao reports for Asia Times, Xi stressed that “China will fully implement the ‘negative list’ system while significantly increasing market access, open up its service sectors, and protect the legal rights of foreign investors.”
Those waiting for signs about who will make the cut for positions on the Politburo Standing Committee will in all likelihood have to continue to wait until next Wednesday.