Xi Peak or China Peak?
China now joins the rest of the world in the downward slide.
The China Peak Mountain Resort, Google tells you, is California’s premier ski and winter vacation spot, located at the scenic Huntington Lake. “China Peak” is, however, also a term which comes up more frequently now in the debates about the future development of the People’s Republic of China. Chinese officials, including the outgoing Xi and Li couple, have voiced serious warnings about rough seas and dire threats ahead in recent speeches.
This topic was discussed also in these pages before, with the key arguments being the loss of the demographic dividend, the implosions of the Ponzi schemes which fuelled the real estate market for many years, the growing levels of unemployment especially among educated youngsters, and the increasingly felt results of the climate catastrophe. China imports more energy and food than any other country in the world and still creates the biggest amount of pollution globally. It is doubtful if the Chinese economy can, in the future, grow strong enough in both quantitative and qualitative ways to offer solutions to all these challenges.
However, not much thought is given to the question how much of the China Peak is actually a Xi Peak. At the moment the “Two Sessions” are underway in Beijing. Both the National People’s Congress (NPC) and the Chinese People’s Political Consultative Conference (CPPCC) are holding their annual meetings. The CPPCC is an advisory body, whereas the 3,000-member NPC is China’s legislative body, often called a “rubber stamp” parliament. Its members include business executives, celebrities and celebrated individuals, even though this time some former delegates like Pony Ma are missing. In October last year the Congress of the Communist Party reappointed Xi Jinping to the two most important of his three formal titles, Secretary General of the CCP and Chairman of the military commission. The third title, President of the Chinese government, he is also certain to receive for an unprecedented third time during the NPC session. Confusingly, the new Vice-President will probably be Mr. Li Qiang, taking over from Li Keqiang.
Most commentators describe the increase in power for Xi, as he is filling up even more positions with his allies and is weakening even further the position of the government against the influence of the party and the military. In terms of practical policies, however, a lot of his key positions have been overturned in the last three months. The abrupt end of the Zero-Case policy, the opening of the borders, the charm offensive especially towards Europe, the pause in the destruction of the Fintech sector, even the end of his expensive pet project of the Belt and Road Initiative, now rebranded “Global Development Initiative”, are all pointing towards a major repositioning in the face of growing international isolation among the major players, growing economic problems and the post-pandemic wave of brain drain and flight of capital.
Given the opaqueness of Chinese politics, it is hard to say if the newly empowered trusted allies managed towards the end of 2022 to convince the leader that changes are needed or if there has been a mild version of a putsch behind the scenes. In any case, what we are witnessing these days is, in the view of your humble editor, as much a Xi Peak as it is a China Peak.