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The Xi era and doubts about economic growth

Oct 25, 2022

Redacción Mapfre

Xi's ability to shape China's policy depends on his ability to gain the support of other Communist Party leaders. Recent months have been fraught with negotiations over leadership selection, delegate appointments, and haggling over the drafting of the Party Congress Work Report, which will serve as the Party's platform for the next five years. Normally, all of this occurs out of public view. This year, however, an odd situation has emerged where signs of friction have become public, suggesting weaknesses in Xi's influence. Signs of friction that led to purges at levels that seem almost dystopian, such as the ousting of President Hu in front of the cameras.

Xi came to dominate China's political system by centralizing power. He created “super-committees” to directly control policy areas previously managed by China's government; he eliminated potential rivals by charging them with crimes as part of a nationwide anti-corruption campaign. And, in recent years, he has made demands of the other 24 members of China's Politburo that make it clear that he prioritizes loyalty over suitability.

This strategy - which is very typical of Maoism - may however cause Xi to go too far and lead to unintended effects, and may even backfire in terms of results, especially with regard to accumulation of power and economic growth.

The latest move signals something of a disconnect from the party's objectives arising out of a long internal debate on the importance of economic growth. Since its "Reform and Opening-Up" in 1978, China's activity and the rising prosperity of Chinese citizens have been the basis of the party's internal legitimacy. It has also allowed it to claim greater influence in world affairs.

However, Xi has been arguing since 2014 that China's security interests are as important as its economic development. China's citizens, he also said, should be prepared for a "new normal" of slower growth.

Xi prevailed in that debate in 2020, and only then did his intentions become clear to outside observers, leading the government to embark upon a wave of programs to make the Chinese economy more self-sufficient at the expense of growth. Also, to adopt a markedly tougher line in foreign policy and military activities. All this clearly defines Xi's current line of thinking.

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