Welcome to the Xi Jinping show. The curtain went up on the Fourth Plenum of the 19th Congress of the Chinese Communist Party on Monday behind closed doors.
Politics, not the headwinds buffeting the world’s second-largest economy, will take center stage at the Soviet-era Jingxi Hotel in Beijing.
Predictably, the conclave will be shrouded in secrecy while security will be tighter than a panda’s grip on a bamboo cane. Media access has also been restricted as the Party elite, consisting of more than 300 senior CCP members of the powerful Central Committee, set the political agenda.
News will dribble out with the consistency of a leaky water spigot before the official state-run Xinhua news agency releases a mission statement later this week, which will run, and run, and run.
Still, one outcome looks certain. President Xi will emerge from the People’s Liberation Army-run hotel with his power enhanced.
“Taking place nearly 600 days after previous plenary session – the longest gap since the start of the post-Mao era – the meeting comes amidst mounting internal and external challenges for the Party’s leadership, including unrest in Hong Kong, the upcoming election in Taiwan, growing hostility with the United States, and an economy growing at the slowest pace in three decades,” Jude Blanchette, an expert in China studies at the Center for Strategic and International Studies, said.
“These difficulties have prompted speculation that Chinese leader Xi Jinping is facing a growing backlash amongst the Party elite, but the focus of the upcoming plenum on a key element of ‘Xi Jinping Thought’ indicates that he remains firmly in power,” he wrote on the Washington-based US think tank’s website.
“For years, narratives have swirled that the grumbling one hears emanating from the halls of the State Council or the board rooms from credit-starved private companies is coalescing into a more pronounced challenge to Xi’s authority. To date, none of these insurrections have materialized,” Blanchette added.
If anything, Xi is in an even stronger position. Most of his old rivals have been purged from the CCP, with many locked up on corruption charges.
Last year, the Party also scrapped the presidential-term limits at the National People’s Congress, allowing him to remain in power after his second five-year stint ends.
Xi’s pomp and circumstance were there for the world to see during the 70th birthday bash of the founding of the People’s Republic of China on October 1.
Overlooking Tiananmen Square complete with a Mao-style suit, he was the master of more than all he surveyed amid a bristling military parade.
As Blanchette pointed out:
“Just weeks ago, Xi was glorified, Mao-like, in the massive parade commemorating the 70th anniversary of the founding of the People’s Republic of China. Now, his theory of governance is being discussed by the entire Party leadership.
“If he is facing blowback from his mishandling of the US-China trade tensions and the unrest in Hong Kong, it’s not manifesting in any observable way.
“Indeed, it’s likely that the more overt narrative of ‘great power competition’ emanating from the United States has allowed Xi to push a ‘fortress besieged’ mentality back home that allows him to redirect, to some extent, criticism that would otherwise be directed his way.”
Yet there are other problems that need to be fixed. The trade war with Washington has acted as a brake not only on China’s economy but also on its trading partners across the globe.
Earlier this month, Beijing confirmed that GDP growth in the third quarter eased to 6%, the slowest rate in nearly three decades.
“[China] has faced mounting risks and challenges both at home and abroad,” Mao Shengyong, a spokesman for the National Bureau of Statistics, told a media briefing.
The downturn continued across a broad range of sectors, from retail sales to industrial output, which plunged to a 17-year low in August. Big-ticket items such as new car sales stalled, while residential property prices also suffered as consumer debt increased.
To compound a miserable month of economic figures, the services sector grew at its slowest pace in seven months in September.
The Caixin/Markit PMI fell to 51.3, the weakest since February, compared to 52 in August. The only silver lining, as the dark clouds rolled in, was that the number stayed above the 50-point mark, which separates expansion from contraction.
“The trade conflict with the US remains a wild card,” Tommy Wu, of Oxford analytics, said. “Elevated US-China tension will continue to weigh on the external outlook, despite the delay of additional US tariff imposition on a range of consumer goods.
“And we think that a [substantial] US-China trade deal remains unlikely any time soon [despite a planned phase one agreement],” he added.
But for this week, Xi will bathe in the reflective glory of his political theory and put the economy on the back burner. For now.