President Xi Jinping increases his power as party leader

BOFIT Viikkokatsaus / BOFIT Weekly Review 2016/44

The final communique from last week’s four-day plenum of the Central Committee of the Chinese Communist Party said that Xi Jinping had been elevated to the status of  “core” party leader. While the new status is informal, political scientists say the move grants Xi unconditional authority within the party and the right to veto party decisions. Xi’s predecessor, Hu Jintao, was never granted core status, but his predecessor, Jiang Zemin was. As a result, some interpret Xi’s elevated status as a drop in Jiang’s post-presidency influence.

From the standpoint of badly needed economic reforms, the developments on the political front are quite interesting. President Xi openly praised an anonymous letter from an “authoritative” person that was published on the front page of China Daily, the party’s main paper. The letter strongly criticised debt-fuelled growth policies and demanded comprehensive economic reforms. The emerging economic policy framework depends, however, on the outcome of the party conference to be held in the latter part of 2017. At that time, in addition to other changes in party posts, there will be the membership rotation of the Politburo’s seven-member Standing Committee. Xi’s status upgrade should give him more personal discretion on who gets picked.

The prospects for comprehensive market reforms, however, are overshadowed by the fact that domestic surveillance has increased under Xi’s leadership, leading to greater censorship, a variety of morality campaigns and changes in the business environment that directly conflict with development of a market economy. Moreover, in spite of Xi’s increased clout, ongoing differences within the party over the direction of economic policy and its implementation will persist.

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