The Dawn of a New Era for China

Transcription

1

2 The Chinese nation has stood up, grown rich, and become strong and it now embraces the brilliant prospects of rejuvenation. It will be an era that sees China moving closer to center stage and making greater contributions to mankind (Xi Jinping 19 th CPC National Congress) The Dawn of a New Era for China The 19 th National Congress of the Communist Party of China ( 19 th CPC National Congress ) represents the dawn of a New Era for Chinese politics and power. Speaking in the Great Hall of the People in Beijing at the start of the Congress, Xi Jinping told delegates that thanks to decades of tireless struggle China stood tall and firm in the east. Xi added that it was time for China to transform itself into a mighty force that could lead the world on political, economic and environmental issues. Xi also declared that, the Chinese nation has stood up, grown rich, and become strong and it now embraces the brilliant prospects of rejuvenation. It will be an era that sees China moving closer to center stage and making greater contributions to mankind. This historic Congress shows that China feels it has developed to such an extent that it has the accumulated power and influence to play a leading role in setting the global agenda. This report provides a brief overview of the background, significance, decisions and implications of the 19 th CPC National Congress. What is the 19 th CPC National Congress? The CPC National Congress is a key political meeting held every five years with the purpose of setting the Party s national policy goals for the next half-decade and electing its top leadership, specifically the Politburo Standing Committee (currently seven members) and the Central Committee (currently 204 members). The 19 th CPC National Congress was held at the Great Hall of the People in Beijing between October 18-24, 2017 and brought together around 2,300 delegates representing all areas of the Party. Why is the 19 th CPC National Congress Significant? This year s CPC National Congress had been hailed by many observers as the most important political meeting in China for over a decade. It was widely predicted that the outcomes of this Burson-Marsteller 2

3 Congress will have significant implications for many years to come. Why has the 19 th CPC National Party Congress generated so much interest and what questions was it expected to address? Assessment of President Xi Jinping s Achievements The 19 th CPC National Congress represents the mid-point of Xi Jinping s 10-year term as General Secretary of the Communist Party of China. Over the past five years, Xi has aggressively sought to consolidate his power base, eliminate corrupt elements from within the Party, and attempted to reinsert the Party more forcefully into politics, society and the economy. The 19 th CPC National Congress was expected to provide a summary of Xi s accomplishments during his first term, and the decisions taken during the Congress should provide an indication of how successfully Xi has consolidated power, how much support there is for his agenda, and how this agenda will evolve in the coming years. Essentially, the 19 th CPC National Congress is thought to provide clarity on the power that Xi has within the party and thus his ability to drive through significant reforms and changes in the years ahead. China s Future Direction and Goals The CPC National Congress is not traditionally a platform for introducing specific policies and firm targets, but rather sets the tone for the party s overall direction and vision for the following five years. Many policy developments and government initiatives over the coming halfdecade will be clearly linked to themes and phrases addressed at the 19 th CPC National Congress. For example, when looking back at the 18th CPC National Congress, held in 2012, the challenges of corruption and the environment were high on the agenda. Both areas have proven to be key focus areas for the Chinese government over the past five years. A Turning Point for China China now boasts the world s second largest economy and its presence and influence is being felt around the world. In a widely-publicized speech at the World Economic Forum in Davos earlier this year, Xi mounted a strong defence of economic globalization and promised that China will play a more assertive role on key global issues such as trade and climate change. These comments are representative of a broader desire by the Chinese government for the country to increase its global role and influence. Meanwhile, China is also going through a period of economic transition that prioritizes quality and innovation-led development at the expense of slower economic growth, referred to as the New Normal. This global push, economic transition at home, and political dynamics around the world, provided an intriguing backdrop for the 19 th CPC National Congress and observers were watching closely to see if China will continue its path of further opening up to the rest of the world. China s Leadership for the Next Five Years The Politburo Standing Committee, elected at the CPC National Congress, is ultimately where power resides within the Party. In the run-up to this year s Congress there was plenty of speculation as to who would secure a place within the seven-person Politburo Standing Committee. Question marks around whether aging members will be required to retire, possible successors to Xi, and which cliques within the Party will be most represented, have all added to Burson-Marsteller 3

4 the intrigue. The Central Committee were also elected at the Congress and the people who were elected provide signals as to the future direction of the Party. Summary of Key Decisions Taken at the 19 th CPC National Congress With this in mind, the following decisions were made at the Congress: - Xi Jinping re-elected as General Secretary of the Communist Party of China - The New Communist Party Politburo Standing Committee was elected as follows: Xi Jinping (General Secretary) Li Keqiang (Premier) Li Zhanshu Wang Yang Wang Huning (Secretary of the Central Committee Secretariat) Zhao Leji (Secretary of the Central Committee on Discipline Inspection) Han Zheng (Xi Jinping and Li Keqiang are the only returning members from previous Politburo Standing Committee) - The New Communist Party Central Committee was elected, consisting of 204 members. Notably Wang Qishan, Xi s former anti-corruption chief, was not included due to his age and was thus ineligible to be included in the Politburo Standing Committee. Zhao Leji has replaced Wang Qishan as the new anti-corruption chief. - Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era was voted unanimously to be enshrined into the Communist Party constitution as one of its guiding principles. Burson-Marsteller 4

5 - Additional constitutional amendments include absolute leadership over the military, the continuation of the fight against corruption, Xi s Belt and Road development initiative, supply-side reforms, and giving play to the decisive role of market forces in resource allocation. Analysis and Implications The 19 th CPC National Congress lived up to expectations and will be remembered as the time when Xi Jinping secured his position at the center stage of Chinese politics for many years to come. There are many direct and indirect implications of the decisions and comments made at the 19 th CPC National Congress and it would not be feasible to give a detailed analysis of them all. However, we have identified a few of the key political and economic takeaways from the Congress that all those interested in China should be aware of. Political A New Era with Xi Jinping at the Core The Congress shows that Xi has further cemented his grip on power and is in an almost unchallengeable position to drive significant change and reform over the coming years. Xi was center stage throughout the Congress, culminating in the delegates voting unanimously for his name and ideology, namely Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, to be enshrined into the Communist Party constitution essentially elevating him to a status only achieved by Mao Zedong and Deng Xiaoping. Xi s predecessors, Hu Jintao and Jiang Zemin did have their ideologies included in the constitution but without their names being attributed to them. The stage is now set for Xi to shape Chinese politics well beyond when his time in office comes to an end. Xi s headline Belt and Road infrastructure project has also been included in the Communist Party constitution, which states that the Party will pledge to pursue the Belt and Road initiative. Xi s elevated status means that he will meet with other international leaders in the full confidence that his power and influence over China are stronger than ever before. Without a doubt, we can expect a very significant five years ahead. Burson-Marsteller 5

6 Striking a Balance Between Increased Party Control and Setting Boundaries During the 19 th CPC National Congress, Xi emphasized in his report that, the Party exercises overall leadership over all areas of endeavour in every part of the country. Xi has sent a clear statement that there will be a more hands-on approach from the Party in all affairs. His comments represent a continuation of the trend of the past five years that has seen the Party tightening their grip on all areas of state affairs. One way this has The party exercises overall been done is through the establishment leadership over all areas of of several Leading Groups covering endeavour in every part of everything from finance, law, foreign the country affairs and cyber security, among other (Xi Jinping 19 th CPC areas. The increased involvement of the National Congress) Party will create new challenges for both domestic and foreign enterprises who will now have to contend with increasing direct interaction with the Party. For example, there have been indications that the Party may become more active in private sector companies including MNCs. At the same time as increasing control, the Party is also making efforts to set boundaries on what the Party can do. The 19 th CPC National Congress saw the establishment of the Comprehensive Law-based Governance Leading Group, with Xi in charge, which aims to promote the rule of law, increase respect for the Constitution and avoid abuses of Party influence. A multi-level Supervision Committee outside the jurisdiction of the Party will also be established to provide more effective supervision of Party members this was previously handled only by the Party s internal inspection department. This does not mean in practice that the Supervision Committee is outside the control of the Party indeed this development means in fact that the coming Party disciplinary organization will expand its scope to cover non-party members in government and state-owned enterprises. New Politburo Standing Committee This new Politburo Standing Committee has maintained a membership of seven people. Xi Jinping and Li Keqiang are the only two people to have retained their places from the previous Politburo Standing Committee and they are joined by five new members, namely, Li Zhanshu, Wang Yang, Wang Huning, Zhao Leji and Han Zheng. The all-male standing committee consists of Party leaders with long careers in Chinese politics and includes allies of Xi and a scholar of international relations and legal affairs. It reflects a balancing of interests and provides complementary expertise generated through the members many decades of combined experience serving in various capacities in China s governance system (led by the Party). Interestingly all new members named in the Politburo Standing Committee are now in their sixties, theoretically making all of them too old to be a guaranteed successor to Xi. This has created a great deal of uncertainty regarding how membership of the Politburo Standing Committee will take shape after the next reshuffle in five years time. Burson-Marsteller 6

7 Economic China will not close its doors to the world The theme of increased opening up to the world was prominent throughout Xi s speech at the Congress. He said, "it is time for us to take center stage in the world and to make a greater contribution to humankind," before adding that, the door of China's opening-up will not close. In theory, this should create more opportunities for foreign firms in China, especially given China s recent efforts to attract and retain foreign investment. However, we Openness brings should not expect that comprehensive progress for ourselves, opening up will take place overnight. The seclusion leaves one process of opening up will take a long time behind. China will not and several sectors will continue to remain close its doors to the off-limits to foreign participation for many world, we will only years to come. In addition, as China seeks to become more and grow domestic champions and reduce more open dependency on foreign suppliers, we should (Xi Jinping 19 th CPC expect that Chinese brands will continue to National Congress) benefit from a certain level of protection and support. Addressing Imbalances Speaking at the Congress, Xi stated that, "what we now face is the contradiction between unbalanced and inadequate development and the people's ever-growing needs for a better life. The term unbalanced can be applied to several areas, including unbalanced distribution of wealth among Chinese people, China s environmental challenges and uneven prosperity across China s different regions. This implies that environmental protection will remain high on the agenda and that traditionally neglected regions in China will benefit from increased attention. Poverty alleviation will also be a key priority as the Chinese government looks to reduce the wealth divide that has been widening for many years. Creating a Nation of Innovators At the Congress, Xi called for more efforts to turn China into a country of innovators as well as reach frontier areas of science and technology. According to Xi, innovation is the primary force driving Innovation is the primary development, and it is the strategic force driving development, underpinning for building a modernized and it is the strategic economy. Xi said, "we will strengthen underpinning for building a basic research in applied sciences, modernized economy launch major national science and (Xi Jinping 19 th CPC technology projects, and prioritize National Congress) innovation in key generic technologies, cutting-edge frontier technologies, Burson-Marsteller 7

8 modern engineering technologies, and disruptive technologies. Efforts in these areas will provide powerful support for building China's strength in science and technology, product quality, aerospace, cyberspace, and transportation, as well as for building a digital China and a smart society. Xi also stressed the importance of fostering a culture of innovation and that at the same time, the country must strengthen the creation, protection, and application of intellectual property. Whilst this should provide encouragement for foreign firms looking to bring their expertise to China, many challenges continue to exist, and it remains to be seen whether IP protection will genuinely be improved and whether forced technology transfers for foreign firms operating in China will be relaxed. GDP Growth No Longer the Key Indicator GDP goals have featured fairly prominently at the previous three CPC National Congresses (2002, 2007 and 2012). For example, at the 18th CPC National Congress in 2012, the goal of doubling China s GDP and per capita income by 2020 (from 2010 figures) was announced. However, at the 19 th CPC National Congress, no quantitative GDP goals were announced and the focus instead has shifted to building a moderately prosperous society in all respects. This does not mean that the Chinese government is ignoring GDP figures and it does not necessarily mean that growth targets have been lowered. Quite the opposite, it may well indicate that the Chinese government feels very confident that GDP growth will continue in a positive direction, regardless of whether a specific external target exists. It also shows that other metrics and non-quantifiable indicators are being given increased prominence in assessing the performance of development and economic growth. The shift in the way that successful development is defined will trickle down to all levels of the Party and influence the behaviour of both central and local officials. Burson-Marsteller 8

9 Appendix Brief Bios of the members of CPC Politburo Standing Committee Xi Jinping Xi Jinping, the head of the Communist Party since 2012 and state president since 2013, has established himself as China's most powerful leader since Deng Xiaoping in the 1980s. Li Keqiang An economist by training, Li Keqiang is China's head of government as well as one of the leading figures behind Chinese economic policy. He is also the second-ranked member of the Politburo Standing Committee of the Communist Party of China. Burson-Marsteller 9

10 Appendix Xi s chief of staff since 2012 is considered one of his most trusted allies. Li served in provincial posts until Xi took national power in Li Zhanshu One of China s four vice-premiers since 2013, Wang is generally considered an economic reformist. Wang Yang Wang Huning A veteran political strategist who has served three successive Chinese leaders. He has served as a valued adviser to Mr Xi on international trips, continuing a role he played for former leaders Jiang Zemin and Hu Jintao. Zhao Leji Headed the Party s organization department since His elevation to head the Central Committee on Discipline Inspection makes Mr Zhao the country s new anti-corruption chief following the retirement of Wang Qishan. Most recently Party Secretary for Shanghai and he has spent his entire career in the city. Han Zheng Burson-Marsteller 10

11 About the Authors Qu Hong Managing Director, Beijing Market Leader Qu Hong has a diversified professional background and a wealth of experience in Government Relations and spent 7 years with the Ministry of Commerce (MOFCOM), where he was also assigned as a diplomat to the Chinese Embassy in Santiago, Chile. Building on his deep understanding of the political, economic and commercial environment in China, as well as strong strategic capabilities, he has helped MNCs such as Microsoft, Visa, BHP Billiton, Total, ExxonMobil, Mars, Fonterra and Haier to develop and implement communication strategies that effectively support their business objectives in China and other markets. Thomas Howard Associate Director, Corporate & Public Affairs Based in Beijing since 2009, Thomas works primarily with Chinese brands, across sectors, to build and protect their global reputation. Current and recent clients include several top tier Chinese brands and some of the world s leading MNCs. Bosun Liu Manager, Government Affairs Bosun, based in Beijing, has over 5 years experience in the globalization of Chinese enterprises with an additional 6 years in government relations. Bosun serves clients who are interested in policies and legislation in many areas, including market entry, product quality, intellectual property, standardization and anti-monopoly. Burson-Marsteller 11

12 About Burson-Marsteller Burson-Marsteller, established in 1953, is a leading global strategic communications and public relations firm. It provides clients with strategic thinking and program execution across a full range of public relations, public affairs, reputation and crisis management, advertising and digital strategies. The firm s seamless worldwide network consists of 77 offices and 87 affiliate offices, together operating in 110 countries across six continents. Burson- Marsteller is a part of Young & Rubicam Group, a subsidiary of WPP (NASDAQ: WPPGY), the world s leader in communications services. For more information, please visit Contact For further detail about Burson-Marsteller s offierings please contact: Thomas Howard: thomas.howard@bm.com Bosun Liu: bosun.liu@bm.com Burson-Marsteller 12