Reading Xi

Chairman Xi’s report to the 20th Party congress is a mixture of triumphalism, aspiration, besiegement and global ambition. (The title pretty much says it all: Hold High the Great Banner of Socialism with Chinese Characteristics and Strive in Unity to Build a Modern Socialist Country in All Respects.)

The triumph is the long list of what they have accomplished so far, the aspiration is Chinese modernization and the rejuvenation of the Chinese nation. The besiegement is from “external attempts to blackmail, contain, blockade, and exert maximum pressure on China” among other things. And the global ambition can be seen in statements like “we will continue to work hard and build China into a great modern socialist country that leads the world in terms of composite national strength and international influence by the middle of the century.”

Investors looking for clues to specific future policies will have to wait. The Party congress does not enact detailed policies. Those come between now and around the National People’s Congress meeting in March 2023. Based on this report, the general direction of travel of economic policies over the last several years looks unlikely to change materially, and while the importance of development is heavily emphasized, so is national security and Common Prosperity.

Chinese modernization is the key theme of the report and is now the “central task” of the Party. The stated goal is to “build China into a great modern socialist country that leads the world in terms of composite national strength and international influence by the middle of the century.”

The Party is reminding everyone in no uncertain terms that it wants the PRC to be the world leader in national strength and global influence.

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