China’s 19th Party Congress has elected a new leadership team that promises to bring continuity in the country’s gradual domestic reform and stronger focus on internationalism.
Proving many political observers wrong, the new leadership line-up is an A-team in terms of economic and international credentials.
New leadership team
President Xi’s “new era” of Chinese development and economic growth is defined by the reform agenda he laid out when he came to power in 2012. This vision was most clearly articulated in his personal comments on the 60-point policy document that laid out the President’s vision for the governance reform of China.
The newly elected leadership team comprises five new members, all of whom bring economic and international experience to the table that will shape the direction of Chinese policies over the next five years.
Wang Yang and Han Zheng have led China’s most successful and most internationalised province-level economies, Guangdong and Shanghai. Li Zhanshu and Zhao Leji have overseen growth and reform in China’s inland provinces before assuming central party posts. Wang Huning, the chief theoretician, speaks fluent French and has a PhD in philosophy from Johns Hopkins University.
All five newly elected members (they join the existing Premier Li Keqiang) have been groomed for the top positions by serving at least one term on the politburo. The composition of the seven-member standing committee of the politburo is evenly balanced between economic reformers and the political power base.
Premier Li Keqiang’s focus is on economic policy-making, while Wang Yang and Han Zheng have steered China’s most open economies. Together, they represent economic stability and continued globalisation. The other three new members will oversee continuity in domestic policies and the continued role of the party.
Li Zhanshu was in charge of party administration over the past five years and is seen in the role of the party “whip”. Zhao Leji, as a power broker, was running the party’s Organisation Department and served as the second in command for the Party’s discipline inspection system in charge of anti-corruption policies. Wang Huning, who formulates Xi Jinping’s political agenda, has served the previous two leadership groups in exactly the same role.
Together, these six closest associates of Xi Jinping demonstrate the continuity of policies from the first half of Xi Jinping’s five-year term into this second five-year term to a domestic as well as an international audience.
Renewed focus on internationalism
One of the key advantages of the new leadership team will be their solid international credentials.
Wang Yang, former Party secretary of Guangdong Province, has been closely involved in China’s strategic economic dialogue with the United States. At the same time, he was in charge of the internal steering committee for the Belt and Road Initiative. His appointment means that China will continue the balancing act between its own regionally focused strategy and the (western) rules-driven form of globalisation.
Han Zheng, the former Party Secretary and mayor of Shanghai, served during the 2010 Shanghai World Expo and oversaw the globalisation of Shanghai with its co-existence between commercially viable state-owned enterprise sector and a growing private sector.
Moving these internationally connected decision-makers to the front line signals pragmatism in China’s economic policies and globalisation. Their experience in dealing with foreign governments and businesses, and their awareness of the interdependence of global markets, suggests that current reforms in financial industries, advanced manufacturing and overseas investment will continue.
A new leadership direction
President Xi’s governance reform is a driver behind his anti-corruption campaign that has been in place for five years. In western terminology, Xi’s contribution to socialist theory is his attempt to institute a “separation of powers” by strengthening the role of the legislative in supervising the executive.
Currently, the party has direct control over the executive through appointments of all relevant government officials and direct interference in detailed government processes. Xi Jinping’s governance reform envisages a rules-based supervision of government through the system of people’s congresses and less direct interference by the party.
The governance reform includes practical aspects, such as reform of public finance as a precondition for banking reform; further tax reform, social security and medicare reform. These reforms will open new markets and are relevant for foreign economic cooperation.
Xi’s speech to the Party Congress cited unresolved issues, including social inequality, poverty, environmental pollution, health care and food safety. These are urgent matters than affect general public support for his policies and the government.
In view of the urgent need for progress in these areas, he foreshadowed a stronger role of the market and international cooperation in areas such as health care and social services.
Implications for Australia
For Australia, continuity in China’s leadership transition means stability in long-term economic relations, from forthcoming revisions to ChAFTA to Australian involvement in China’s “One Belt, One Road” Initiative.
The new leadership will continue to promote regional economic integration. Australia, with its location between Southeast Asia and the Pacific, is recognised by China as an important economic hub with mature institutions that will underpin regional economic cooperation.
Authors: Hans Hendrischke, Professor of Chinese Business and Management, University of Sydney