20th CCP congress: Xi Jinping consolidates power as economic problems and tensions with US worsen

China's 'National People's Congress'. Credit: (public domain)

The 20th National Congress of the Chinese Communist Party (CCP), which took place in Beijing from 16-22 October, saw a marked increase in the centralisation of power around the figure of General Secretary Xi Jinping. He was made president of the country for an unprecedented third term (the absence of any heir apparent to Xi indicates that he intends to rule China for another five years and perhaps longer, although that is not at all guaranteed). The powerful Politburo Standing Committee will now be dominated by Xi’s allies (both the seven-member Politburo Standing Committee and the 24-seat Politburo were filled exclusively with males of Han ethnicity – hardly an advertisement for the so-called Chinese Communist Party’s ‘diversity’!)

In a move reminiscent of the cult of personality under the rule of Mao Zedong, the congress decided to incorporate “Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era” into the party’s constitution.

These congress decisions mark a definitive break from the years of supposed ‘collective leadership’ that followed the turmoil of the ‘Cultural Revolution’ and the death of Mao.

Furthermore, the tightening of centralised control of the CCP and government is indicative of the oppressive regime’s nervous reaction to the slowing down of the Chinese economy – not least it is their fear of an upsurge of labour disputes – and growing trade and military tensions with the US.

The congress saw a reshuffle in China’s top military leadership, signalling that the People’s Liberation Army will be focused on Taiwan.

The regime undoubtedly still has huge resources at its disposal and reservoirs of social support that are largely based on continuing to deliver economic growth. But Xi’s elevation to the third term in power, and his increasingly Bonapartist role, are not signs of the strength of the ruling CCP, but its underlying weakness and uncertainty in the face of multiple problems.

In the run-up to the highly staged congress, 2,296 delegates were elected to represent the CCP’s 96.7 million members. However, there were voices of dissent. On 13 October, a lone protester hung banners and burned tyres on Beijing’s Sitong Bridge. The protest banner themes included Xi Jinping’s cult of personality, dictatorship, human rights, censorship, Xi Jinping seeking re-election, the implementation of the ‘zero-Covid’ policy, and long working hours. One banner said: “Go on strike at school and work, remove the dictator and national traitor Xi Jinping!” The protester was quickly removed by state personnel, but the protest went viral on Chinese social media until references to Sitong Bridge were censored by the regime.

The nervousness of the regime to any form of opposition, and its resort to swift repression, is a reflection of the more difficult period that has opened up before it domestically and in foreign affairs.

Another unscripted event also took place on the closing day of the congress, when former president Hu Jintao was escorted out of the meeting. The incident was barely reported in the Chinese media but has still given rise to speculation about whether Hu was genuinely unwell and needed help to leave the hall, or if his removal was an act of public humiliation of a figure more closely associated with the ‘collective leadership’ years, and who is close to the youth wing of the CCP, which is reported to be critical of Xi.

On the opening day of the congress, Xi gave the keynote speech, dealing with Covid policies and the economy, and Hong Kong and Taiwan, which set the mood for the rest of the meeting. Xi stated that the congress marked the beginning of a new era, which will eventually see China become a “modernised and prosperous world power” in around three decades. To achieve that, Xi insisted the Communist Party’s leadership is crucial. In other words, no opposition will be brokered by the ruling regime, not least one based on an independent workers’ movement.

Covid policy

Xi defended China’s approach to the Covid-19 pandemic. This policy may well have saved many more lives in its initial phases than the reckless, short-term, profit-driven Covid policies of ‘western’ governments, but it was implemented in a top-down, bureaucratic and repressive manner, and contributed significantly towards China’s economic problems. Now there is growing popular opposition to the ‘zero-Covid policy’.

Xi announced that under the banner of “socialism with Chinese characteristics” the economy would concentrate on “national development”. This is a reflection of military tensions between Beijing and Washington, exacerbated by the Ukraine war, and the evolving process of the ‘decoupling’ of their economies. In reaction, the International Monetary Fund (IMF) has warned against the “fraying of global linkages”, which first spiked in 2018 amid rising US-China trade tensions, and again in recent months as a result of Russia’s invasion of Ukraine.

Although there has been a slowing down of globalisation, the two leading economies, China and the US remain reliant on the world economy. China still requires access to the world market to sell its goods and for international capital and advanced technology. Indeed, the country’s foreign direct investment rose by 15.6% from a year earlier in the first nine months of this year. China’s state planners recently issued an expanded list of sectors for foreign investment to encourage foreign capital to flow into manufacturing sectors in a bid to improve industrial and supply chains.

But US imperialism regards China as the greatest threat to its hegemony and is determined to undermine Beijing. President Biden maintained the trade tariffs imposed by former president Trump and added advanced semiconductors to the list. This entails banning sales of advanced semiconductors to China, as well as the equipment that China would need to produce semiconductors. It is expected that the US will follow this up with new sanctions targeting China’s biotechnology and artificial intelligence industries.

These severe trade sanctions by the US (semiconductors, for example, are essential in any modern economy) will see frantic efforts by the Chinese regime to develop its own technology. President Xi called on China to “win the battle” in core technologies during the 20th party congress. For now, the sanctions clash between the US and China can act as a serious factor in pulling the world into a new recession. The IMF warns of so-called “friendshoring”, where nations decide to trade with “friends” and “give up on efficiency”, and the capitalist institution pleads for “globalisation and multilateralism to be preserved”. The ‘decoupling’ of trade between China and the US has its limits for the two co-dependent world economic powers.

There is no way out of its long-term problems for the Chinese regime, either on the basis of a more national-based programme, through the world market, or a combination of both. Only a genuine socialist China, including a planned economy under democratic workers’ control and management, and real socialist internationalism – a workers’ state in China acting as a spur for socialist revolution in the region and worldwide – can secure prosperity and peace for the working masses. This much is clear from the history of the modern Chinese state.

The 1949 Chinese Revolution that overthrew capitalism and landlordism, and expelled foreign capitalist powers, was a huge step forward for the toiling masses. It resulted in significant economic and social gains for the working class and poor peasantry under a planned economy (notably, the ‘iron rice bowl’, security of employment, as well as state-provided health, housing, education, and welfare), albeit with the burden of a monstrous Stalinist regime. Unlike the early years of the workers’ state in Russia after the 1917 revolution, under the rule of Lenin and Trotsky, and the Bolsheviks, workers’ control and democracy were never implemented in China post-1949. Instead, Mao modelled his regime on that of Josef Stalin and the murderous bureaucracy that usurped power from the Russian working class.

By the 1970s, the ruling Stalinist regime in China, facing economic problems as its dead-hand bureaucratic rule acted as an enormous drag on the planned economy, allowed capitalist market forces to develop from 1978 onwards and invited foreign capitalist investment.

‘Controlled capitalism’

The lessons of the catastrophic restoration of capitalism in the Soviet Union, which saw the plummeting of living standards and banning of the Communist Party, led the Beijing regime to attempt to oversee the reintroduction of capitalist relations in China in a ‘controlled manner’, with the Chinese Communist Party/state maintaining a key role. Today, China has a unique form of state-capitalist economy, where the CCP/state apparatus plays a big role in steering capitalism in a way that preserves its power. However, this cannot continue indefinitely, as sections of the capitalist class will not always be prepared to accept CCP ‘guidance’, as indicated by the exodus of some of the super-rich figures from China recently.

Economic growth, based on China acting as the cheap labour exporter of goods to the world, saw spectacular rates over the last 40 years. China now accounts for more than 18% of the world’s economy and ranks as the second largest. But this extraordinary growth has brought its own huge contradictions and problems. It has seen an intensification of social tensions in China, a massive gulf between the rich and poor, and the ruthless exploitation of the Chinese working masses.

With the Chinese economy forecast to record its lowest growth rates for 30 years, and already high youth and rural unemployment figures rising, social explosions are on the cards. Covid border controls and intermittent lockdowns have been a big factor in slowing China’s economy, not least causing a consumer spending slump. And China also faces a property crisis. A growing number of property developers are defaulting on their debt. The currency is weakening, capital outflow is rising and youth unemployment hit a record high of 19.3% in June.

Facing discontent simmering among workers, Xi used his congress speech to advocate for “common prosperity”, and he pointedly denounced corruption. Many labour disputes in China are reportedly centred on the actions of local corrupt officials and management.

The IMF expects China’s growth to slow to 3.2% this year, its smallest expansion in four decades, excluding the first year of the pandemic. China has longer-term problems, the IMF warned, including productivity loss and an ageing population. The IMF expects that China’s slowing down will be “significantly bad” for Asia, which has strong trade links with China, including Japan and South Korea. Any slowdown or recession in China and Asia will only compound the economic problems facing the US and Europe, which are teetering towards recessions.

The China and United States tensions are most explicitly centred on Hong Kong and Taiwan. In his congress speech, Xi said that Hong Kong had “a major transition from chaos to governance” – code for the repressive crackdown on opposition, and elimination of any pretence of free and fair elections on the island. Xi also called for Taiwan’s “peaceful reunification” but vowed to not renounce the use of force. On China’s position on the world stage, Xi boasted that: “China’s international influence, appeal and power to shape the world has significantly increased.”

Soon after the 20th National Congress, a Pentagon defence strategy document said while a conflict with China “is neither inevitable nor desirable”, efforts must be made to prevent Beijing’s “dominance of key regions”. This is a reference to the large military build-up by China in the South China Sea and its increased pressure towards Taiwan. The US is also ramping up its military presence in the region, including the threat of locating nuclear arms naval vessels for Australia. The United States and the United Kingdom and Australian governments released a joint statement on 23 September saying that they have made “significant progress” towards Australia acquiring a nuclear-powered submarine. This reckless and provacative move is explicitly linked to an effort to counter China’s growing power and influence, particularly its military buildup, in the South China Sea.

The Pentagon document notes Russia’s war in Ukraine and says Russia is a serious threat to the US and its allies, with its nuclear weapons, cyber operations and long-range missiles. But China “is the only competitor out there with both the intent to reshape the international order and increasingly the power to do so”, stated US Secretary of Defence, Lloyd Austin. The Pentagon document states that the US is facing two major nuclear-armed competitors in Russia and China. Indeed, soon after the congress, China’s foreign minister, Wang Yi, phoned his counterpart in Russia, Sergey Lavrov, to say that any attempt to “block the advancement of China and Russia would never succeed.” Beijing has been guardedly critical of Russia’s disastrous war effort in Ukraine, yet Moscow remains an essential ally in opposition to the US and its allies.

Taiwan invasion?

While an invasion of Taiwan by China is not imminent in the view of most military commentators, it is lodged in the ‘logic’ of the situation for as long as the rising power of China and the declining power of the US continue to square off. Ultimately, only the organised working class in China and throughout Asia and the world can cut across wars and militarisation by mobilising on an independent class programme.

Beijing will have learnt from the military blunders of Moscow, which sent its army to Ukraine unprepared for a Ukrainian army that has been professionalised and heavily resourced and trained by Nato forces since the two countries last serious engagement in 2014. Although Beijing is developing its military abilities considerably, it is estimated by most Western military experts that China is some years away from being able to successfully invade Taiwan. Even if this is the case, in the meantime, any number of ‘accidental’ events in the region, including skirmishes between US and Chinese military naval vessels, could trigger a wider and a devastating conflict, given the high tensions.

The stakes cannot be higher for the Chinese working class and the masses of the region. The building of mass parties of the working class, with an independent class programme, in China and across Asia, is an essential prerequisite to the working class removing the tycoons and enriched bureaucrats and introducing workers’ genuine democratic running of society.

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