Xi Jinping consolidates hold on China’s levers of power

For a highly choreographed set piece staged by the Chinese Communist party, last week’s 20th national congress held several surprises. The scenes of a reluctant Hu Jintao — predecessor to Xi Jinping, China’s ever more authoritarian leader — being hustled from his seat during the closing ceremony and escorted offstage has prompted speculation over the meaning of his public humiliation. What is clear is that the congress returned the most profound overhaul of the ruling politburo in a generation. That will have fundamental implications for China’s political, economic and strategic direction over the coming five years at least.

Three aspects stand out. Xi’s loyalists pack both the seven-man Politburo Standing Committee, the pinnacle of Chinese power, and the broader 24-man politburo. For the first time since the 1990s no women are included. The uniformity is repeated in the allegiances of the cadres picked. None owes their elevation to a political lineage separate from that of Xi and none is known to espouse different philosophies or policies, breaking the precedent of at least two decades.

Xi has avoided indicating any obvious heir apparent, suggesting that he may stay in power beyond the current five-year term ending in 2027. The ages of the standing committee members picked means that all but one will be near or past retirement age by then.

Further buttressing Xi’s prestige was an amendment to the constitution that makes it “an obligation” for all party members to uphold his status as the “core” of the party leadership.

The retirement or removal of several independent technocrats from the higher echelons of party power rounds out the sense of strengthening one-man rule. Economic tsar Liu He, banking regulator Guo Shuqing and central bank governor Yi Gang all appear likely to step down, having not been named in the 205-member Central Committee. Liu, 70, seems set to retire from active policy roles due to his age. Guo and Yi were, in theory, young enough to remain Central Committee members.

Financial markets showed their apprehension with Hong Kong’s Hang Seng share index down about 6 per cent on Monday to levels last seen during the 2008 financial crisis. The new politburo line-up does, however, include several officials with considerable experience of handling economic matters and key portfolios may not be filled until around the National People’s Congress next March.

Li Qiang, 63, named to the second position in the Politburo Standing Committee last week, appears set to become premier next March. Unlike his predecessors over the past two decades, he has not held the post of vice-premier. Yet Li is not unfamiliar with economic work, having held senior positions in the booming provinces of Jiangsu and Zhejiang. In international policy, foreign minister Wang Yi, 69, made it on to the politburo, suggesting he will become China’s most senior foreign affairs official, replacing Yang Jiechi. Beijing’s tough stance toward western powers appears likely to continue.

For the wider world, the implications of China’s congress are clear. A loyalist hierarchy dominated by Xi and sworn to uphold internal unity and struggle against threats posed by the US-led west has taken power. That is likely to mean more “fortress China” economically — a focus on self-reliance and indigenous innovation, with huge spending on technology research. It is also set to entail a stronger military build-up and more assertiveness towards Taiwan and the South China Sea. It will mean more engagement with the “global south” — and more divergence from the west, and the US in particular. Tense times lie ahead.