At the Twentieth Congress of the Communist Party of China, Chinese President Xi Jinping secured a third five-year term as the party’s general secretary and formed its seven-member Politburo Standing Committee with his loyalists. These leadership appointments, along with Xi’s speech to Congress, imply that primary decisions in China will now focus more on politics, i. e. , loyalty to Xi, than on economic performance.
Li Qiang, the Shanghai party secretary, rose to the current rank of China’s political hierarchy. Li Qiang is known for overseeing the harsh COVID-19 lockdown in Shanghai, which has had primary economic consequences. Its promotion shows that loyalty to Xi is now more vital than competition in economic governance. Party cadres and officials at all levels of government are likely to prioritize loyalty to Xi over the commitment to reform and opening-up initiated through China’s last transformative leader, Deng Xiaoping, in 1978.
The content of Xi’s speech at the party congress suggests he is determined to reduce China’s economic vulnerability to global shocks. China’s “technological autonomy” five times, China’s desire to “improve the reliability, resilience and security of the supply chain” 3 times, and China’s “national security” twenty-six times. None of those narratives made such a strong impression in his report to the party’s 19th congress in 2017. In addition, this year, Xi called for a “diversified and sound foreign economic system” and reiterated his ambition for China to exert more influence in setting foreign norms and standards.
More about:
Taken together, Xi’s words and his selection of appointees imply that China’s economic clients are increasingly dependent on politics rather than source and demand dynamics. But the supremacy of market policies undermines China’s four-decade reform and opening-up process. it is likely to exacerbate tensions in China’s relations with the West and ultimately diminish China’s potential for long-term expansion.
A blow to the Chinese economy would have profound and far-reaching repercussions on the global economy; China is the world’s second-largest economy and the largest trading partner of more than 120 countries. Moreover, China’s sweeping pandemic stimulus policies since May may complicate or even undermine inflation-control measures taken through major Western central banks.
Xi’s main task in his first two terms was the Belt and Road Initiative (BRI), a global infrastructure task. In his speech at the party congress, Xi spoke of continued efforts to publicize the BRI, but focused more on strengthening China’s self-sufficiency in generation and supply chains through the “dual circulation” strategy.
Xi and his comrades introduced the dual-circulation strategy in 2020, when China’s relations with the West deteriorated. The dual-circulation strategy deviates from the “exit” strategy of former Chinese leader Jiang Zemin, who ruled in the late 1990s and early 2000s. “Exit” has prioritized the use of global markets to expand China’s economy, while “dual circulation” minimizes the role of global markets, or “external circulation,” and instead prioritizes “internal circulation” through China’s domestic market and consumption. Xi has emphasized self-sufficiency for economic expansion and technological innovation.
A variety of original analyses, knowledge visualizations and commentary, examining debates and efforts for global health. Weekly.
To announce the national circulation, in December 2021, Xi proposed building a “unified national market” and taking advantage of the unified market to “add resources, promote growth, inspire innovation, optimize the hard work department and decorate competition. “In addition, Xi has continuously under pressure the desire to identify and improve a new pan-national formula to achieve breakthroughs in fundamental technologies in the face of increasingly stringent U. S. export controls. U. S. The purpose is to make full use of state force to concentrate resources on China’s technological progress. and capacity for innovation.
More about:
China’s economy faces two urgent domestic challenges: weak domestic demand and rising debt, either of which is related to difficulties in the housing market. concrete and chemicals, and oozing demand for consumer goods, such as appliances and home décor. In addition, the slowdown in real estate growth is reducing local government revenues from the sale of land-use rights, putting additional pressure on their fiscal capacity and expanding their fiscal capacity. debt. In addition, a colossal loan burden weighs more heavily on household consumption. All those points imply that there will be no simple way to announce the internal movement of Xi’s third term.
It is very likely that China will also age before becoming richer in the coming decades. It suffers from low birth rates, an aging population, and emerging retirement and social security costs. However, demographic replacement is not a crisis in itself; The lack of an adequate political reaction is. The Chinese government has responded to demographic change by launching a three-child policy and has committed to its childcare and social welfare systems. These reactions will increase budgetary pressure in the future.
The most important external challenge for the Chinese economy is the intensification of geopolitical tensions between China and the West, especially between China and the United States. High-tech production technologies and apparatus in strategic industries such as semiconductors, synthetic intelligence and quantum computing. The deterioration of relations between China and the European Union may also prevent China from obtaining limited technologies in European markets.
The lack of pro-reform spirits in the new Politburo Standing Committee suggests that China’s industrial policy and international relations are likely to be more assertive and less conciliatory, amplifying the threat of an escalation of industrial tensions between the U. S. and China. A Less Reformist Chinese Central Leadership that prioritizes domestic trafficking is likely to attract growing complaints from U. S. lawmakers and cause some U. S. corporations to reconsider their positions in China.
Biden’s management is expected to establish stricter export controls for more industries China considers strategic, making it incredibly complicated and costly for Xi to expand China’s local innovation capacity. tariff and non-tariff barriers, especially in spaces where China has a comparative advantage, such as the production of solar panels and wind turbines. Xi and his loyalists are unlikely to make simple compromises. Quick reconciliation in times of industrial tension will be less likely.
To be sure, the industry with China is still very important to the U. S. economy. The U. S. and the American people. Exports of goods and to China supported about 758,000 jobs in the U. S. This is the latest year in 2019, the newest year on record. a China in 2021 were subject to licensing requirements through the U. S. Department of Commerce’s Bureau of Industry and Security. U. S.
It is very likely that tensions in industrial relations between the U. S. and China. The U. S. and China continue to focus on small but very delicate spaces. The media’s attention to these high-tension spaces gives the impression that the U. S. is not yet in the U. S. The US and China are moving towards large-scale industrial decoupling. In reality, however, countries will remain vital trading partners for the foreseeable future. Both Beijing and Washington resist the temptation to play the blame game and escalate tensions.