CEAC Commentary

April 28, 2022 

General Secretary Xi’s grave concerns heading

toward a third term at the 20th Congress of

the Chinese Communist Party

By SAKAMOTO Masahiro

1. Remarkable achievements for the third term

 The March 2022 Political Report of the People’s Representative Congress of China identified 2021 as an extremely significant year in the history of the Party and the nation. Actually, the following achievements can be considered as General Secretary Xi’s path to the third term. First was the announcement in July at the centennial of the founding of the Chinese Communist Party that the national goal of “moderately prosperous society” had been achieved. Then at the 6th Plenary Session held in November, a “Historic Resolution” was passed, the third after Mao Zedong and Deng Xiaoping .The resolution identified the next centennial goal to be achieved by 2049 as “Common Prosperity ”which eliminate social disparities under the leadership by Xi Jinping as the core of the Party. Second, the “Zero-COVID” policy, which was carried out with an unprecedented surveillance and monitoring system, succeeded in controlling the spread of the disease, and the 2021 GDP growth rate exceeded 8%. The 14th five-year plan included innovations in cutting-edge technologies such as AI, which acted as an extensive lever on the Chinese market and has been lauded as a “dual circulation” strategy that dominates world markets as well. Third, the modernization of the military is set to be completed in 2027, another of the centenary goals of PLA which also touches upon with the “liberation” of Taiwan. Actually, Chinese missiles are superior, and the number of Chinese naval ships exceeds that of the United States. Fourth, it was mentioned that US is in decline with its democracy in disarray while China would prevail together with the axis of authoritarian China and Russia.

2. Concentration of Xi’s power

 The concentration of Xi’s power has been remarkable with these achievements. First, while the Historic Resolution admired Xi Jinping as the “core of the Party” ,it also states that the “Xi’s new era Socialism with Chinese Characteristics “is a leading philosophy that will guide the Party thus demonstrating something akin to “worship” of Xi by name. Second, while Xi has created many Leading Groups in the Party, the Groups becomes quite influential as Xi Jinping appoints himself as the Leader of the Groups. And the Groups strongly intervene in the work of the State Council of the People’s Republic of China. Third, regional governments in China are under the strong leadership of the central government. Fourth, regarding the People’s Liberation Army, the Central Military Commission was reorganized into five theater commands with the goal of creating a military that is able to fight. Here again, Xi aims to have complete command.

3. Policy-triggered recession: The COVID-19 epidemic and Common Prosperity

 General Secretary Xi’s road to the third term has been facing a number of difficulties emerging this year. The first is his “Zero-COVID” policy. China is proud of the Communist Party dictatorship system that succeeded in controlling COVID-19. However in March of this year Jilin Province, Xi’an, and other locations went into lockdown due to new outbreaks of the virus. Furthermore, the new outbreak had expanded to dozens of cities throughout China in April, and the number of infected persons exceeded 20,000 in Shanghai in particular. The Chinese authorities tests 26 million people in Shanghai, instituted a lockdown, and restricted movement in and out of the city, but frustration over the extended lockdown boiled over among the residents, leading to sporadic outbreaks of violence in some places. Amidst doubts as to the effectiveness of Chinese-made vaccines, the Chinese Zero-COVID Policy has resulted in placing many Chinese people outside the scope of immunity from COVID-19. Some of the leaders in the city of Shanghai have been reshuffled, and the competences of Li Qiang、current Party Secretary of Shanghai and candidate to be the next Prime Minister, will be put to the test. Recently the COVID=19 is spreading also in Beijing. The infallible Communist Party system has found it difficult to make corrections to its Zero-COVID Policy, and depending upon how circumstances develop in the future, this may be a blow to the Xi administration itself.

 Second is the policy-triggered recession caused by “Common Prosperity.” In August 2021, the Communist Party Central Finance Committee placed emphasis on three industries in order to reduce disparities : Real estate development, educational support, and IT. In the IT industry, fines have been levied against Alibaba, Tencent, and other companies for violations of the monopoly law and they have been forced to make even larger donations. The cost of education is placing pressure on household budgets and many cram schools have closed. Thirds、hundreds of real estate development companies, for whom loan terms have become more strict, the Evergrande Group is a typical example, have been forced into bankruptcy. However, the real estate development industry occupies an important position in the Chinese economy. In particular, for regional governments, which has not enough own revenue, reductions in real estate development income work as detrimental. In January of this year the IMF stated in its Annual Report on the Chinese Economy that “there is a risk that loss of momentum in the real estate sector may have a negative effect on finances and fiscal policy.” It also included a recommendation that “expansion of consumption will require effective vaccination and a loosening of the Zero-COVID Policy.” The Chinese economy has been diagnosed as suffering from policy-triggered recession, and since late last year, the Chinese government shifted to a policy of business stimulation. “Common Prosperity” have less been mentioned in the administration’s documents . The shift in their centerpiece policy has been a blow to the administration and there has even been reporting that there is opposition to a third Xi term. However, Xi has been aided by the fact that he has no clear successor.

4. The invasion of Ukraine and the Sino-Russian relationship

 Third is on foreign relations. The Xi administration has been suffering with the conflicts with the US, But with the attack on the US Congress as well as awkward handling of the COVID-19 pandemic, China claims now the US is in a process of decline. On the other hand, China insists superiority of authoritarian system quoting of the Sino-Russian summit meetings over 30 times. In particular, a joint statement issued by the leaders of China and Russia during the Beijing Winter Olympics expressed that the strategic partnership between the two countries is a friendship without limits. However, China has become confused about its relationship with Russia since the latter’s invasion of Ukraine. Xi, who is against economic sanctions against Russia and has expanded trade with Russia, is facing his third term in office and feels that it is difficult to maintain control of Sino-Russian relations.

5. Freedom and democracy vs. tyranny and authoritarianism

 In his State of the Union Message, President Biden stated that “Freedom will always over tyranny,” but Jude Blanchette highlighted in a paper titled “Xi Jinping’s Faltering Foreign Policy” that, while Xi Jinping is not the same as Putin, they are the same in that as dictators they are liable to lose the ability to make rational judgments. Maintaining a grip on power for a long period of time, surrounded by a small number of yes-men, and isolated, diplomacy has become Xi Jinping’s own as opposed to that of China, and those below him simply wait for his orders. Australia, Japan, and India are seen as enemies, pressure is being placed on Hong Kong, and the US is viewed with animosity for its aid to the resistance in Taiwan. Through these actions, Xi is on the path of mistakes taken by dictators. Nevertheless, while China presumably has the intelligence to avoid a crisis, it is not clear whether this will hold true this time.

(This is an English translation of the article written by Dr. SAKAMOTO Masahiro, Distinguished Research Fellow, the Japan Forum on International Relations (JFIR), which originally appeared on the e-forum "Hyakka-Somei (Hundred Ducks in Full Voice)" of CEAC on April 22, 2022.)