Xi Jinping Emerges as China’s Unquestioned No. 1 Leader

Chinese President Xi Jinping has been anointed as his country’s most powerful leader in over a generation.

After eight days of the National Party Congress, a once-every-five-years political showcase by the Chinese Communist Party, Xi sidelined rivals and emerged even stronger than before. Already the leader of the party, state and the military, Xi now has his name and his political philosophy enshrined in the constitution, the first living Chinese leader accorded that recognition since Mao Zedong.

On Wednesday, it emerged that Xi had replaced five of the seven members of the Politburo Standing Committee, the inner core of the Beijing regime. Furthermore, none of the committee members is a clear successor to Xi, in what could be a signal of his intent to break with recent tradition by continuing to rule China past a second term.

Xi also set out plans for improving China’s brand of socialism and further driving China’s economic growth. That might sound like familiar rhetoric, but in setting out a policy for the next 30 years and describing the next steps as the beginning of the third era of Communist rule in China, Xi is pointing to something bigger.

An important part of his message was about reducing the inequalities within China that have grown in the second era, which roughly cover the past 20 years. During that time, leaders had borrowed market economic principles to drive GDP expansion at a furious pace, and to lift the majority of the population out of poverty. Now, reducing the wild inequalities that have resulted may mean new curbs on free-wheeling capitalism, which could make China a less attractive place for foreigners to do business.

 

Foreign entertainment companies are already largely kept out of the Middle Kingdom, or are shackled by heavy regulation. Netflix, Google, Facebook and Twitter are not permitted. Hollywood studios are permitted only to distribute a fraction of their content, and only then in the form of sub-distribution through government-owned entities. Just last week, the Ministry of Industry and Information Technology abruptly turned off cellular access to Apple Watches. Foreign businesses that had been counting on China loosening up as it became larger and more successful are likely to have to reset their strategies.

That’s true even for Chinese companies, including media giants Tencent, Baidu and Weibo, which were all recently fined maximum amounts for failing to fully censor content. Though shares in Chinese conglomerates Fosun and HNA bounced as the NPC did not impose any further restrictions on overseas acquisitions.

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