By Clay Chandler
October 14, 2017

CEO Daily subscribers are a remarkably high-powered group, which I know from the sophistication of e-mail feedback to Sino-Saturday posts. I also know not all of you follow China stories day to day (and some of you don’t want to read about China at all).

Even so, if you spend only one week this year trying to parse what’s going on in the second-most powerful country in the world, this should be it. On Wednesday, more than two thousand delegates from China’s ruling Communist Party will assemble in Beijing for their quinquennial party congress, the 19th such session held since the founding of the People’s Republic in 1949. In Chinese politics, this is the equivalent of Super Bowl Sunday. Over the course of the next week, party leaders will make a host of key personnel and policy decisions that will set the agenda for China’s next five years.

What we know about this year’s party congress is that delegates are virtually certain to affirm a second five-year term as general secretary for “core leader” Xi Jinping. Nearly everything else about this gathering is shrouded in mystery. China scholars—and anyone who does business in or with the Middle Kingdom—will be seeking clues to China’s future from party appointments to a host of crucial economic and security functions, as well as changes in the membership of the party’s 25-member Politburo, and its inner sanctum, the Politburo standing committee.

The Council of Foreign Relations has published an excellent primer on the 19th party congress, complete with astute handicapping of which cadres are up for promotion. I’d also recommend Harvard University’s Fairbank Center for Chinese Studies’ handy visual guide to China’s current party leadership structure. Andrei Lungu, president of the Romanian Institute for the Study of the Asia Pacific, has a detailed assessment of potential personnel changes in The Diplomat here.

Among the policy issues China watchers will be following this week: whether Xi will name a successor (unlikely); whether Xi intends to ease off his anti-graft campaign or double down (probably the latter, but with more attention to corruption among the party’s rank and file); whether he’ll expand on the “China Dream,” his vision for how to make China great again (expect an appeal for renewed patriotism); whether he’ll offer new details on his ambitious “Belt and Road” strategy to build a new network of road, rail and maritime links connecting China with the rest of Eurasia; and whether Xi will try to bend party rules to allow his right-hand man, Wang Qishan, to remain in power beyond the party’s unofficial retirement guidelines. Wang’s future may signal Xi’s own intentions to remain in power “forever”—or at least beyond a second term—along the lines of Russian strongman Vladimir Putin.

A number of leading China analysts have warned in recent weeks that Xi could emerge from the 19th party congress more powerful than ever, and in position to reimpose a form of authoritarian leadership the country hasn’t seen since Mao Zedong. Financial Times‘ Asia Editor Jamil Anderlini declares China under Xi is “turning back to dictatorship.” The Economist asserts Xi has far more power than U.S. president Donald Trump and that the world should be afraid, very afraid of that.

For my money, the most intriguing assessments of Xi’s bid to consolidate his political power suggest his main concerns aren’t party rivals or Donald Trump but the leaders of private Chinese technology companies like Alibaba, Tencent or Baidu. The Wall Street Journal reports Beijing is pushing some of China’s biggest tech companies, including Tencent, Weibo and a unit of Alibaba, to offer the state a stake in them and allow government officials a direct role in their corporate decisions. In a sharp essay in the Journal, my friend Richard McGregor argues persuasively that Xi sees China’s entrepreneurs as “the rising power destined to battle the established power of the party and the state.” He notes that “as China’s private sector has blossomed, the state has hardened its Leninist core, which dictates that the communist party should face no rival centers of power.”

The dilemma for Xi, of course, is that if he squeezes China’s private companies too hard, he risks killing the growth and innovation that undergirds the legitimacy of his party. It’s the global economy’s most complex and important balancing act, and at least for the next week, is worth some extra scrutiny.

Clay Chandler
@claychandler
clay.chandler@timeinc.com

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