Xi says China’s power has increased, warns of ‘dangerous storms’
PRESIDENT Xi Jinping declared China’s global power had increased while warning of “dangerous storms” ahead, striking a defiant tone to kick off a twice-a-decade Communist Party meeting on Sunday (Oct 16) at which he’s expected to clinch a precedent-busting third term in office.
“China’s international influence, appeal and power to shape the world has significantly increased,” he said in Beijing in a wide-ranging speech to kick off the week-long party congress. Still, he warned of a more unstable international environment, saying China must be prepared for “strong winds and high waves and even dangerous storms”.
“Confronted with drastic changes in the international landscape, we have maintained a firm strategic resolve and shown a fighting spirit,” said Xi, 69, in his speech. “Throughout these endeavours, we have safeguarded China’s dignity and core interests and kept ourselves well-positioned for pursuing development and ensuring security.”
His speech kicking off the congress is one of the party’s most important political declarations, trumpeting the Communist Party’s achievements and charting a course for the nation’s development over the next few decades. It ran for almost two hours – considerably shorter than the last one in 2017, which lasted for over three hours – although Xi did not read the entire speech.
The congress comes at a particularly perilous time for China, with economic growth near the slowest in four decades and tensions soaring with the US over a range of issues, including the status of Taiwan. Xi is widely expected to maintain his position and consolidate power when the new leadership lineup is revealed about a week from now.
Xi largely stuck with the same economic goals in the speech, repeating language in previous party congress speeches that development is the party’s “top priority” in governance. He also reiterated recent policy slogans calling to “balance development and security,” alongside “common prosperity” and “dual circulation”.
“High-quality growth is the top priority of building a socialist modern country in all aspects,” Xi said. “Development is the party’s top priority in governing. It’s impossible to build a socialist modern strong country in all aspects without solid material and technology foundation.”
Prominent in Xi’s speech was the “common prosperity” slogan, referring to a campaign to limit income and wealth inequality that has been closely linked with China’s tighter regulation of large tech companies.
China will continue market reform, Xi said, reiterating a vow to let the market play the “decisive” role in allocating resources, while “encouraging, supporting and guiding” privately owned companies. He also said Beijing should “strengthen co-operation between fiscal and monetary policy.”
Economic development should be focused on building China into a manufacturing powerhouse in hi-tech sectors, he added. China will rely on technology, talent and innovation as its main growth drivers, he said, adding that the party should “exert effort” to increase total factor productivity, a measure of the contribution of innovation and ideas to the economy.
The president repeated the party’s key economic policies, including “dual circulation” – driving growth through domestic demand, a nod to concerns about decoupling from the West. The “resilience and security” of supply chains should be improved, he added.
Xi praised China’s Belt and Road Initiative, calling for the “high quality” development of the global infrastructure building project. Analysts have been questioning Beijing’s commitment to the initiative due to a slump in overseas lending by Chinese banks. He also said he wanted to harness China’s “huge” domestic market to attract overseas investment, and that regulations banning foreign investment from certain sectors could be “reasonably” eased going forward.
On the property market crisis engulfing the economy, Xi’s slogan that “housing is for living, not for speculation” appeared in the official written version of his address, suggesting strict regulation of the sector that has dragged on growth will continue. He also reiterated comments from five years ago that China needs to develop a housing market that ensures supply from multiple sources, and which provides support to encourage both rentals and purchases.
He also emphasised calls for “self-reliance” in technology, using the phrase at least twice compared with no references in his last congress speech in 2017. It takes on added importance as the US tightens restrictions to curb China’s tech ambitions: The Biden administration earlier this month announced sweeping curbs on how chip companies do business with Chinese firms, roiling tech stocks and threatening a worsening downturn in the chip market.
“Chinese-style modernisation has shattered the legend that modernisation can be only achieved by sticking to capitalism,” Xi said. “It has overcome the natural drawbacks of capitalist modernisation, provided a brand new choice for modernisation, and displayed bright prospect for the modernisation of mankind.”
Xi’s vow to “stand tall in the east” at the 2017 party congress set China on a collision course with the US over the past five years. Beijing’s move to crush dissent in Hong Kong and Xinjiang, a lack of transparency on the origins of Covid-19, its partnership with Russia ahead of the latter’s invasion of Ukraine, and a more aggressive posture towards Taiwan and in the South China Sea have all increased tensions between the world’s two largest economies.
The Biden administration has called China the main threat to the US-led international order, accusing Beijing of undermining global rules that helped foster its rise, as well as the expansion of democracy and respect for human rights. Xi has resisted calls from President Joe Biden to condemn Russia’s war in Ukraine, while also not providing Moscow with material assistance in navigating US sanctions.
In his speech, Xi also defended China’s Covid-zero strategy. While that policy has kept virus deaths low, it has also closed borders for nearly three years, and its lockdowns and mass testing drives to eradicate the virus have weighed on economic growth.
“We have protected the people’s lives, health and safety to the greatest extent possible,” Xi said, speaking without a mask at a distance. Most of the 2,340 delegates in the audience, including provincial leaders, top military figures, farmers and minority representatives, wore facial coverings.
Xi added that order had been restored in Hong Kong, marking a “major turn for the better” in the city. China imposed a national security law on the former British colony in June 2020, that has been condemned by the US and other Western democracies for diminishing democratic freedoms in the city.
His praise for the party’s efforts to oppose Taiwan independence was met with applause. China’s growing military aggression towards Taiwan has heightened tensions between Beijing and Washington.
Economists expect Beijing to miss its annual gross domestic product target by a wide margin this year for the first time since it started setting such goals in the early 1990s. Beijing has downplayed the importance of this year’s target, in line with gradual de-emphasising of growth in recent years, including in last year’s historical resolution, which said GDP was not the “sole criterion” of success. BLOOMBERG
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