After China’s National People’s Congress annual parliament voted Sunday to remove presidential term limits, questions loom among U.S. business leaders: What should they expect if current President Xi Jinping remains China’s leader for life? Will the business climate in China change significantly?
While no one knows for sure what the future holds, we can make calculated bets on what will transpire based on Xi’s articulated agenda and the motivations that underpin the perceived need for his continued leadership in China.
The Belt and Road Initiative (BRI), Xi’s signature foreign policy program, will likely remain a centerpiece of Beijing’s engagement with the rest of the world for the foreseeable future. This massive and ambitious transnational infrastructure project will take decades, if not generations, to complete. China’s leaders believe that the initiative will kill multiple birds with one stone. If it goes according to plan, the BRI will not only help alleviate the overcapacity issue in Chinese industrial production, but also create new markets in developing countries, win allies by assisting them with economic development, diversify China’s trade routes, and provide a vehicle for spreading the use of the yuan outside China’s borders.
Since the BRI is only in the beginning stages and already fraught with political challenges abroad, Chinese policymakers have likely concluded that keeping Xi at the helm will remove any doubt about China’s commitment to the initiative’s success.
While some in Washington may bristle intensely at the thought of China’s economic development of Central Asia, the U.S. business community should be ecstatic about such a development. The region is rife with opportunity for economic growth, as large populations have not been fully participating in the modern economy. Plus, Xi has openly welcomed all countries to take part in the BRI. U.S. businesses that want to participate in this bonanza should encounter little resistance from the Chinese; there is more than enough opportunity to go around for everyone.
Although some of its efforts have been confusing and uncoordinated, the fact remains that the BRI will require technology of all shapes and sizes, technical assistance, logistics management, management training, marketing expertise, and recruitment of human resources, among other things, to succeed. U.S. businesses can easily step in to fill that void, so long as they are willing to stomach the uncertainties that come with nation building.
In regard to working with the Chinese in China under a permanent Xi regime, U.S. businesses will likely have to learn to exercise more patience in this sphere as well. Xi made his anti-graft campaign a major focus of his first term, rooting out tens of thousands of cadres from the government in a bid to eliminate bribery and a culture of corruption. This culture is deeply embedded in China, and it could take decades to upend the old ways of operating and thinking.
With Xi at the top for an indefinite period, the Chinese citizens will know that engaging in corrupt practices will not be tolerated for the foreseeable future. This new ethos will mean that some Chinese may not act on requests as quickly or efficiently as they did when they received bribes. U.S. businesspeople who were once told to wine and dine Chinese government officials to grease the wheels will likely discover that doing so going forward may no longer materialize into anything more than a nice time out with their new Chinese friends.
Xi’s legacy may bring some more surprises to the international community. But given how far the People’s Republic of China has come from its backwater origins, the Chinese government would not rationally want to give up its hard-won gains by turning against itself now the way it once did under Chairman Mao. Therefore, it is a good bet that Xi’s continued rule will simply mean that Chinese policymakers want to follow through on their stated promises to continue their economic development and reforms. Assuming this is true, U.S. businesses can breathe a collective sigh of relief.
Ann Lee is the author of Will China’s Economy Collapse? and What the U.S. Can Learn from China.