What to expect and why it matters: China’s 20th CCP National Congress

What you need to know

• The 20th Chinese Communist Party (CCP) National Congress begins on October 16 in Beijing.
• This key meeting is held once every five years and is the most important political event on the Chinese calendar.
• The highlight of the meeting will be 69-year-old Xi Jinping's likely re-election as president.
• If successful, it would mark the start of an unprecedented third term in office for Xi, essentially rubber stamping his unencumbered control over China and leaving little opposition to his vision for restoring what he believes is China’s rightful place in the world.
• Traditionally members of the CCP retire at 68, this remains common practice for everyone but Xi.
• Xi successfully changed the Chinese constitution in 2018 to remove the previous two-term presidential limit.
• 2,296 delegates (all members of the CCP) from around China will attend the National Congress. This serves as a crucial opportunity for young members of the party to elevate themselves to the ruling class of the party.
• Following almost three years of extreme Covid restrictions, an increasingly isolationist and aggressive foreign policy, a housing market crisis, and a weakening of the Yuan, some analysts have speculated there may be discontent in the CCP ranks towards Xi.
• The National Congress serves as a key test for Xi as certain clues will indicate the control he commands over the party. Even if he is re-elected as President, the election of a non-Xi loyalist to the position of Premier could indicate the party does not want Xi to have unfettered power. By the same token, the number of Xi loyalists elected to the Standing Committee and Politburo will be telling.
• The National Congress has no set timeline but has historically lasted for around seven days.

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How to Tell if The National Congress is a Success For Xi Jinping

As Xi Jinping eyes off a third term as president, his ambitious vision of one united China dominating global economics and politics is at stake. The 20th National Congress will mark the first test for how on board the CCP is with Xi’s vision (and how likely it is to succeed). Here’s how to tell if Xi is successful:

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Standing Committee

• The Standing Committee is the most powerful body in the CCP. Consisting of the seven top members from the 25 person Politburo, it is where the major Chinese political power is centralised. Xi Jinping currently serves as the General Secretary of the Standing Committee.
• Should Xi enforce the 68-year-old retirement age, there will be two vacancies to be filled at this National Congress. Xi currently enjoys a 4-3 factional majority on the Standing Committee, an advantage he will look to retain or increase.
• Xi allies that may be selected for the Standing Committee include: Ding Xuexiang, Cai Qi, Chen Miner, and Li Qiang.
• Xi factional opponents that may be selected include: Li Keqiang, Wang Yang, and Hu Chunhua. Hu Chunhua is seen as a possible alternative president to Xi.
• The highlight of the National Congress is when the Standing Committee walks onto stage, only then will we know who will lead China for the next five years. The order they walk in is also often indicative of their power within the Standing Committee.

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Politburo

• In addition to the two Standing Committee retirements, a further nine Politburo members are set to retire.
• Again, the making of this body and the number of Xi’s allies on it is a crucial indicator of the power Xi yields over the CCP.

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Premier Appointment

• Current Premier Li Keqiang, 67, has announced his retirement from the role of Premier.
• The potential appointment of Xi loyalist Li Qiang, the Party Committee Secretary of Shanghai, to the position of Premier would indicate little resistance to Xi’s power.
• Li Qiang has come under criticism for his handling of the controversial Shanghai lockdown policy.
• Wang Yang and Hu Chunhua are both seen as possible successors to Premier Li, neither of them are viewed as Xi loyalists. This could indicate a limit on Xi’s power.

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A Change in Title for Xi

• Xi currently holds three titles: party secretary, president, and commander-in-chief of the military.
• There has been speculation that Xi could also assume the title of party chairman, a title not held by anyone since Mao Zedong.

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Renmin Lingxiu

• Deng Xiaoping had reformed the party system to ban personality cults, hoping to avoid repeating the mistakes of Maoism.
• Despite this, Xi continues to be publicly referred to as “Renmin Lingxiu'' which translates to “People’s Leader”. Xi could potentially look to formalise this title at the conference, further establishing Xi as a historical figure on par with Mao.

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What to Watch Out For in The Next Five Years

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The Economy

• China’s economy has slowed significantly since the start of the Covid-19 crisis (GDP growth dropping to 2.24% in 2020 from 5.95% in 2019, according to the World Bank). The country is also facing a housing crisis, with Macquarie Bank’s Chief China Economist saying “the property sector is still in deep trouble” following the defaults of property giant Evergrande.
• Earlier this month, the Chinese Yuan hit a record low against the US dollar even though the Chinese trade surplus is set to top $1 trillion USD this year, the highest surplus of any country in history. Despite this, China continues to have a large trade deficit with Australia.

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Common Prosperity

• In 2021, Xi launched his ideology of “common prosperity” aimed at reducing income inequality, increasing social cohesion, and increasing investment in rural areas.
• In practice, this policy has led to increased regulations on various sectors, banning of children playing certain video games, and a moratorium on public gatherings such as running groups.

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Taiwan

• Tensions continue to rise in the Taiwan Strait as China persists with its official policy of reunification.
• With limited checks on Xi Jinping’s power, any military ambitions for Taiwan will be largely unopposed.
• This week, US President Joe Biden released his new National Security Strategy, citing China as the key foreign policy threat to the US, claiming China intends to “layer authoritarian governance with a revisionist foreign policy”.

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Covid Zero Policy

• China continues to persist with the controversial Covid Zero policy despite the detrimental human and economic impacts. State media reports in the week leading up to the National Congress have been supportive of the policy continuing. This is notable as Li Qiang (the architect of the policy and party chief in Shanghai) is potentially up for large promotions at the National Congress.

• Sticking to the course of Covid Zero will be a significant barrier to economic growth, potentially slowing China’s likely assumption to the place of the largest economy in the world. Additionally, it will further damage the Yuan as foreign investment avoids China.

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Australia Relations

• In 2020, China imposed import tariffs of 80% on Australian barley, 116-214% on Australian wine, and restricted the purchasing of Australian beef, coal, and grapes. The move has been labelled by the USA and Australia in their joint 2021 AUSMIN statement as “economic coercion”. However, China claims the measures are anti-dumping. Australia is continuing with a number of trade dispute complaints to the World Trade Organisation against China as a result of these actions.

• Minister for Foreign Affairs Penny Wong has met with her Chinese counterpart Wang Yi twice, once on July 8 on the sidelines of the G20 Foreign Ministers’ Meeting in Bali (marking the highest level meeting between the two countries in three years), and second on September 22 on the sidelines of the United Nations General Assembly in New York.

• Following both meetings each leader acknowledged the tensions between the countries and expressed a desire for them to be repaired. In New York, Wang stated that the “Chinese side is willing to properly resolve differences and promote the healthy and stable development of bilateral relations,” going on to say that “the two sides should meet each other halfway”. This marks a considerable improvement in Chinese diplomatic dialogue towards Australia.

• Should Xi’s power be further formalised in the National Congress, it will be worth watching any change in both positive and negative rhetoric towards Australia.

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