We’re halfway through China’s crucial 19th Communist Party Congress. As of this writing (Saturday night China time) there have been no momentous revelations. It’s not that major policy or personnel issues have yet to be decided (undoubtedly they have); rather it’s that those decisions won’t be shared beyond the party’s inner circle until this week’s gathering officially concludes on October 24th.
Still, the first days of the congress offer tantalizing clues to China’s future. If nothing else, Xi Jinping’s opening speech to the congress on Sept. 18 highlighted the degree to which he has consolidated his control over the party and the Chinese state. That speech was notable for its length (well over three hours) and convoluted phraseology. Pundits read much into the title of one section of the address: “Thoughts on Socialism with Chinese Characteristics for a New Era.” That’s not a formulation that trips off the tongue. But many China watchers interpreted it as a signal Xi aspires to a stature equal to Mao Zedong in the pantheon of Chinese politics. “Socialism with Chinese characteristics” is the phrase associated with Mao’s successor, “paramount leader” Deng Xiaoping, who opened China’s economy to global trade and investment. But in the canon of Chinese communist party ideology, Deng’s ideas rank only as “theory” (lilun) a notch below those of Mao, which are enshrined as “thought” (sixiang). There is wide speculation that the Xi speech suggests the congress will vote to have “Xi Jinping Thought” written into the party’s constitution, which would elevate Xi to Mao’s level and, according to some experts, assure that he remains a dominant force in Chinese politics for the rest of his life.
Many have interpreted Xi’s repeated use of the phrase “new era” (xin shidai) as a sign he is laying the groundwork for bold departures from Deng’s thinking and the collective, consensus-driven approach to leadership that characterized the party after Deng’s death.
We still have no word on who will be chosen for the Politburo Standing Committee, the party’s highest decision-making body, or whether the party will stick to its internal rules for rotating membership of that group. Currently the committee has seven members, five of whom are due for retirement if the party sticks to its “seven-up, eight-down” rule, which holds that leaders 67 years-old or younger are eligible for reappointment to the Standing Committee while those 68 years-old or older are not. All eyes are on Wang Qishan, a key Xi ally who serves as chairman of the party’s Central Commission for Discipline Inspection. Wang is 69, but it’s widely assumed that Xi wants him to remain on the committee anyway. Many argue that if Wang stays, it would create a precedent for Xi, who is 64, staying on as party chairman after his second five year term expires. Oki Nagai, writing in Japan’s Nikkei Asian Review, argues that Wang will step down, and be succeeded by Li Zhanshu, a Xi ally who now serves as director of the party’s General Office.
It’s a good guess. My take—and this is pure speculation—is that Xi already is powerful enough that he doesn’t need to reappoint Wang. But to keep his options open he will probably try to avoid appointing to the standing committee young officials he thinks might potentially challenge him for a third term. The South China Morning Post suggests that neither Guangdong party boss Hu Chunhua, nor Chongqing party boss Chen Min’er will make the standing committee. Both men have been widely described as Xi loyalists, but they have also been tipped as possible Xi successors. The Financial Times has a nice primer on potential standing committee members here. Its headline sums up all you need to know for now: “Only Xi is indispensable.”
More China news below.
The 19th Communist Party Congress
China's security lockdown. Airbnb has been banned, VPN apps disabled and nightclubs and bars in Beijing have been ordered to shutter. Across the country, security officials with assault rifles, batons and shields in hand are conducting drills and an increasing number of dissidents have been thrown behind bars. This New York Times piece looks at the lengths the Chinese government has gone to to ensure a disruption-free party congress this week. New York Times
Where have all the women gone? Fewer than a quarter of the 2,280 delegates at the 19th Communist Party Congress were women, prompting outlets like the BBC and New York Times to question if the Chinese Communist Party has a woman problem. The lower national retirement age for women and difficulties in being promoted beyond county and township level reinforce the political glass ceiling for women, say experts, who call for more state intervention to bolster women's progression in politics. BBC
With love from Pyongyang. North Korea sent congratulatory note to China on Wednesday to wish for "satisfactory success" of the 19th congress of the Chinese Communist Party. The letter came amid escalating tensions between the two countries, and contradicted fears that North Korea would conduct another nuclear test to coincide with the start of the five-yearly caucas. South China Morning Post
Politics and Policy
Foiled coup. Chongqing's former party chief Sun Zhengcai, along with a string of recently disgraced cadres, had a plot to seize power by usurping the party’s leadership, according to Liu Shiyu, chairman of the China Securities Regulatory Commission. Liu spoke on the sidelines of the 19th Communist Party Congress this week. His are the first comments on Sun's abrupt fall from grace since the latter's expulsion from the Party a month ago. South China Morning Post
China decries "biased" U.S. view of its foreign policy? Rex Tillerson has chastised China for its “provocative actions in the South China Sea" that undermine the “international, rules-based order”, a month before Trump – with Tillerson likely in tow – is due to make his first visit to China. Tillerson also blamed Chinese financing for riddling developing countries with debt. In response, China's Foreign Ministry told the US to “abandon its biased views of China and make concerted efforts with China to focus on cooperation”. South China Morning Post
Unscramble the letters. Australia's prime minister has dismissed a letter sent from North Korea's Foreign Affairs Committee sent to their parliament and other countries' as a "rant" against Donald Trump. The latter, which attacked threats by Trump to "totally destroy North Korea" in his speech to the United Nations General Assembly last month, is a sign that Pyongyang was "starting to feel the squeeze" of escalated sanctions, Australia said. New York Times
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US company nears deal to create Forbes spin-off in China Financial Times
The next phase of China’s offline VR boom is here: virtual reality cinemas Tech in Asia
Trade and Economy
Minsky moment. China's central bank head has warned against excessive optimism and financial risks that could lead China to a “Minsky moment”, or an abrupt decline in asset prices after sustained periods of prosperity or growth. Speaking on the sidelines of the Communist Party Congress, People’s Bank of China Governor Zhou Xiaochuan said regulatory agencies will tighten supervision of local government borrowing and rising household debt. Reuters
Workers protest at iPhone factory. An Apple iPhone supplier’s factory in eastern China was the target of a protest involving hundreds of Chinese factory workers this week, over unpaid bonuses and factory reassignments. Apple, who last year stepped up oversight of its factories after negative reports about worker suicides and injuries, said it was investigating the matter. Associated Press
Going down that road. Volvo Cars launched its first high-performance electric-car model in Shanghai this week, in keeping with its commitment to only produce electric or hybrid vehicles starting in 2019. Together with its Chinese owner, Zhejiang Geely Holding Group, Volvo additionally pledged a further $755m investment to grow the company. Wall Street Journal
Back with a bang. Troubled Chinese insurance conglomerate Anbang has resumed selling its high-risk "universial life policies" after a months-long ban. Though the resumption was green-lighted by the China Insurance Regulatory Commission after an approval process, it has prompted some industry executives to question the regulator's commitment to reducing liquidity risks, particularly among less-capitalized insurers. Caixin
Technology and Innovation
The reverse firewall. While China residents are scrambling for now-banned VPNs to traverse limits set by Chinese internet censors, many overseas Chinese living are turning to apps such as Transocks and N2ping to get back behind the Great Firewall. The apps use similar VPN technology to help users outside of China qualify for free video and music content only accessible to mainland residents, often offered free-of-charge by cash-rich Chinese platforms in a bid to boost their user base. South China Morning Post
China's $30bn giant. Meituan-Dianping, China's largest online booking platform often compared to Yelp or Groupon, is now valued at $30bn, after a recent $4bn round of funding. The round led by existing investor Tencent Holdings, will boost the company's continued investment in offline services and artificial intelligence technology (AI), amid a push by e-commerce rivals Alibaba Group and JD.com Inc to venture into brick-and-mortar retail. Reuters
Clap for Xi Jinping. As the Communist Party’s congress opened Wednesday, videogame company Tencent Holdings Ltd. released a free game in which users try to outdo one another with hearty virtual applause for Mr. Xi. By Thursday afternoon, the game, “Clap for Xi Jinping: An Awesome Speech,” had generated more than 1 billion claps, according to the game site’s running tally. Wall Street Journal
Summaries by Debbie Yong. @debyong
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