The Chinese Communist Party and its leader Xi Jinping are not doing so well. Sky-high youth unemployment, a collapsing stock market and ongoing real estate turmoil threaten to derail his “China dream” and potentially drag Xi down with him. And a spate of purges of senior officials over the past year – including some former Xi protégés – has fueled speculation that his position in the party is not as secure as it seems.
At least this is the narrative presented in much of Western media discourse. The Communist Party sees it differently.
This was evident from the recently concluded annual session of China's National People's Congress (NPC). The week-long session is the most important annual meeting in China's political calendar, producing an official account of the past year's achievements and setting priorities for the coming year. Everything presented at the congress is initially approved by the ruling Communist Party after a long period of drafting and deliberation, making it one of the clearest glimpses into the party's thinking.
According to the NPC meeting, the party does not see itself as a regime in crisis. The government work report presented by Premier Li Qiang depicted a China that “faces both strategic opportunities and challenges, with favorable conditions outweighing unfavorable ones.” This is not empty propaganda – the work report is the most authoritative statement of high-level policy for the coming year and is aimed primarily at internal government circles.
The report acknowledges that the year will not be easy due to geopolitical pressures, weak external demand and a host of domestic economic challenges and financial risks. Still, her tone is rather triumphant, pointing out that these challenges have not prevented China from posting solid economic growth of 5.2% last year. The report fails to mention the low starting point due to terrible economic performance in 2022 or the widespread questions about the accuracy of official figures – Rhodium Group estimates last year's growth to be closer to 1.5%. In any case, the party is confident that it is targeting growth of “around 5%” for 2024 as well.
As for Xi's leadership, the work report credits him with single-handedly guiding China through the economic and political challenges of 2023. “We owe our achievements in 2023 to General Secretary Xi Jinping leading the way and setting the course,” it said. This is unprecedented language – previous work reports gave full credit to “the strong leadership of the Party Central Committee with Comrade Xi Jinping at the center.” Rhetorical improvements like these make a big difference in an overly formalistic system where every word counts.
And it's more than just rhetoric. Xi's “New Era” vision permeates almost every section of the work report. In addition, the NPC on Monday adopted new amendments to the Organic Law of the State Council that further strengthened the Communist Party's control over the Chinese Cabinet and made the Cabinet responsible for implementing Xi Jinping Thought. The entire government of the People's Republic of China was already answerable to Xi in practice, but now it is more official.
In fact, the Communist Party appears to be happy with Xi's leadership. But how can that be, given that the economy is in shambles and investor sentiment is at a multi-decade low? The answer is simple: these are not the metrics by which the party measures its performance. Western audiences seeking to assess Xi's political fortunes should take note.
Under Xi, the Communist Party has greater control than ever before, thanks both to its broader control over government decision-making and the surveillance state that allows it to quickly identify and neutralize dissent. Nothing is more important to the party than its political control. Investors can whine, but they are not Xi's voters. The Chinese people are not even among his voters. His only voter is the Communist Party, and it is far more interested in maintaining and strengthening its power than overseeing a thriving economy.
That doesn't mean the economy isn't important. On the contrary: it is one of the party's most powerful instruments for pursuing its political goals. But the rapid growth of the reform era was unsustainable and entailed long-term risks. The party has long seen the need to restructure its economy by addressing these risks and moving to a more sustainable – albeit slower – growth model. That's exactly what Xi is doing, and his ruthlessness and unprecedented consolidation of power have helped him overcome the vested interests that prevented his predecessors from making significant progress in this endeavor.
Of course, the party cannot neglect economic growth. But it just needs enough growth to maintain stability while it pursues larger priorities such as overhauling regulation, technological self-reliance and closing the wealth gap through “shared prosperity.”
Leaders are well aware that these efforts are detrimental to growth, but they see them as crucial to reducing the risk of crises in the longer term. They might take their foot off the pedal if they fear that the short-term damage to the economy could trigger the very crisis they want to avert. Or they could launch a major economic stimulus, as their predecessors did during previous periods of economic difficulty. So far they are doing neither, and the fact that they are continuing to push ahead with economic restructuring is a sign that they believe they have things under control.
Are they correct? Only time can tell. For all anyone knows, Xi's leadership may rest on a giant house of cards that will eventually collapse. But America should not bet on a rapid collapse or sustained weakening of the regime in Beijing. China has proven its critics wrong many times before, and the Communist Party seems genuinely confident that it will do so again.
About the author
Michael Cunningham is a research fellow at the Heritage Foundation's Asian Studies Center.
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