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Editorial: World must watch for risks posed by Xi’s expanding power

  • November 17, 2021
  • , Nikkei Asia , 1:05 p.m.
  • English Press

At the sixth plenary session of the Chinese Communist Party’s Central Committee, the CCP adopted a “historic resolution” that cements President Xi Jinping’s status in the nation’s political history.  

 

Xi’s growing power will likely trigger rapid political, economic and social changes at home. The international community must closely watch for risks such changes may pose to both China and the rest of the world. 

 

The CCP’s third and latest historic resolution looked back over the 100 years since its founding. With this resolution, Xi — who also serves as the party’s General Secretary — is looking to assume a similar status to that of Mao Zedong, the founding father of the People’s Republic of China, and Deng Xiaoping, who laid the foundations for economic growth with the policy of “reform and opening up.”

 

The communique said the Central Committee, with Xi at its core, had “prompted historic achievements and historic shifts in the cause of the party and the country.” The document went on to praise Beijing’s anti-corruption campaign for successfully eliminating political wrongdoing.

 

Recent discussions within the party have focused on advancing “common prosperity,” a term coined for distribution policies meant to reduce inequality. This is a shift from the “get rich first” principle that characterized the time of Deng, under which those who were first able to become wealthy were allowed to do so. Politically, the shift in focus also serves as a way to dilute the achievements of former presidents Jiang Zemin and Hu Jintao, who continued to execute Deng’s policies.

 

The political objective of cementing Xi’s authority has been combined with the sharp turn toward the common prosperity policy — a complex arrangement that may impact the business community and people’s lives in an unpredictable way. This is troubling. 

 

For a year now, the Chinese leadership under Xi has rapidly been changing course without offering the people sufficient explanation. This began with the sudden postponement of the public listing of Ant Group, a subsidiary of Alibaba Group Holding. Since then, pressure on emerging information technology companies has continued to mount under the guise of preventing the uncontrolled expansion of capital. The gaming sector and private tutoring businesses were also hit hard when regulations were suddenly tightened.

 

As the authorities changed policies, the debt crisis facing real estate giants like China Evergrande Group became more serious, and international markets were thrown into chaos. That private business owners and the wealthy would atrophy is only natural.

 

Some in the party, concerned about the sudden economic slowdown, have said the speed of the common prosperity initiative needs to be dialed back. The Central Committee’s communique made little mention of common prosperity or distribution policies, and observers will be watching closely for future developments.

 

Xi is aiming for an unprecedented third term as head of the CCP at the party congress that will be held in the latter half of 2022. As such, there may be an authoritative pronouncement about policy changes that prioritize politics for at least the next year. Amid such an environment, foreign investors and businesses must be alert to risks stemming from unexplained policy shifts in China.

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