Interview
China’s Congress: an inflection point?
- President Xi Jinping is widely expected to secure a third five-year term, marking a departure from the two-term convention and confirming a leadership shift toward a more authoritarian, centralized government established over the last decade.
- Susan Shirk predicts the 20th Party Congress will not be a turning point for cyclical policies, noting that a fundamental shift toward moderate policy requires a balanced Politburo Standing Committee or the presence of reform-minded figures like Wang Yang and Li Keqiang.
- Wei Shan forecasts that immediate post-Congress reopening is unlikely until specific medical benchmarks are met, including increased elderly vaccination rates, progress in drug approval, and healthcare guidance changes to allow home quarantine for asymptomatic individuals.
- Economic expectations include property sector easing if recovery stalls, while long-term structural policies like "housing for living, not for speculation" and "common prosperity" are viewed as unlikely to change.
- Growth trajectories are forecast at 3% for the current year against a 5.5% government target, followed by approximately 4.5% next year and in 2024, declining to below 4% by 2025 within a 3% to 4% baseline range for subsequent years.
- David Lee anticipates a fundamental policy adjustment following the 20th Party Congress to prioritize economic growth, driven by the view that current economic slowing is primarily due to COVID policies which are expected to change by year-end or spring.
- Under the Lee outlook, private entrepreneurs are expected to be reassured regarding their status in the socialist economy, internet platform regulation campaigns are predicted to taper, and local government KPIs are set to shift toward GDP growth, tax revenue, and employment metrics.
- Demographic concerns are downplayed by David Lee, who argues that human resources and education outweigh pure population figures, supporting a prediction that China's economic growth will continue for one to two decades.
- Susan Shirk identifies a military move on Taiwan as the greatest risk, warning that failure would likely end Xi's leadership, and notes a widespread belief that reunification is a priority for the current term.
- Diplomatic strategies discussed include a potential U.S. push for communication after the midterm elections, face-to-face meetings between Biden and Chinese leaders, and a debate on the efficacy of sanctions versus engagement for resolving issues in the South China Sea and economic policy.