China’s ‘Two Sessions’ and the geopolitical impact of Xi’s third term

By Orçun Göktürk *

China’s annual “Two Sessions”, which began on Saturday 4 March, was successfully completed last weekend. The newly elected deputies of the Chinese National People’s Congress (NPC) and the Chinese People’s Political Consultative Conference (CPPC) held the first meeting of the five-year (2023-2027) term. The National People’s Congress unanimously approved Xi Jinping’s third term as President. At the same time, the senior leadership that will govern China in the next 5 years was also determined.

Western comments: Reformists purged

Under the leadership of Xi Jinping, the General Secretary of the CPC and President of China since 2012, China has accelerated the state-led construction of Socialism with Chinese characteristics in domestic politics in the new era. Meanwhile, the construction of the Belt and Road Initiative (BRI) in foreign politics has made it a center of attraction for international cooperation mechanisms such as the Shanghai Cooperation Organization (SCO) and BRICS. In this process, the declining hegemony of the US and the change in the geopolitical balance, especially in the Asia-Pacific, in favor of “oppressed nations” have also accelerated. 

The end of the terms of office or non-reappointment of the so-called “reformist” figures, after Xi became President for a third term, caused deep concern in the West. “Xi is installing a slate of loyalists in key positions amid the biggest government reshuffle in a decade, as a generation of more reform-minded officials retires and Xi further consolidates power after being elected president for an unprecedented third term.”(1)  

The Wall Street Journal had the following comments about the new Premier Li Qiang: “He is an agent to deliver what Xi wants, perhaps an effective agent, and interlocutor. But he will not change China’s development model or persuade Xi to lead a charge back towards market reforms.”(2) The New York Times reported Xi’s third-term appointments under the headline “China’s Leader Cements Dominance” and continued: “Xi has signaled that he will focus on strengthening security and seeking self-sufficiency in strategic technologies to push back harder against what he perceives as an effort by the United States to block China’s rise.”(3) 

Similar comments can be found in almost all pro-Atlantic media. The common commentary in the Western media about the newly appointed Prime Minister, Vice Prime Ministers, Speaker of the National People’s Congress, Chairman of the Chinese People’s Political Consultative Conference, Chairman of the National Development and Reform Commission is that they are “loyal to Xi” and “not moderate towards the West”. 

Reformist or moderate?

In Western sources, the term “reformist” is the litmus paper for the evaluation of Chinese rulers. Accordingly, “reformists”, who are claimed to advocate a “peaceful” solution to the issues of Taiwan, the Xinjiang-Uygur Autonomous Region, Hong Kong and the South China Sea, which are seen as China’s soft underbelly, and who are characterized as those who advocate the private sector to take more initiative economically, were removed from critical levels of the state during Xi’s third term. The smear campaign against Xi in the West was also based on the narrowing of the capitalist sector and the intervention in property and distribution relations in favor of the welfare of the people. Even George Soros, the sponsor of the color revolutions, declared last year that Xi was “the greatest threat to open societies.” (4)

In the two-line struggle in the CPC after the Reform and Opening Era (1978), those who were in favor of softening relations with the West rose to higher positions in the leadership in the 1990s, leading to an increase in the influence of neoliberal policies in China. The rise of the pro-planned economy within the CPC leadership since the early 2000s was crowned with Xi’s inauguration in 2012. Under Xi’s leadership, the private sector has been subjected to increased scrutiny and warned to reprioritize its national security and rural development strategy. In the cover story “Xi’s New Economy” in the August 15, 2020 issue of The Economics (5), it was stated “All companies, no matter who owns them, exist for China’s glory. The lines between the state and the private sector have blurred, and the state has increased its strategic control over firms through party committees within the private sector.” As the Economics says, the latest focus of Xi Jinping’s market reforms has been on the financial system. He has begun to reassert government control over banking, intermediaries and investment firms. The reforms implemented should not exactly be called ad hominem. There have been a real series of structural changes.

Increasing state control over the market

In the aftermath of the property market crisis in China last year, when Evergrande, the country’s second largest real estate company, was on the verge of bankruptcy and the real estate crisis, Xi announced that they would step up the fight against speculation in the real estate sector. The record increase in the private sector debt stock was a failed consequence of the strategy of liberalization and opening more space for private sectors in the Chinese economy after the 1980s. The antidote to the crisis in the financial and real estate sectors was found by increasing state intervention in the economy. 

While the Western propaganda of “the reformists have been purged” continues, China’s State Council has submitted an important reform package to the National People’s Congress. In this package, in which the aforementioned developments are put into flesh and blood, the role of the State Council in financial markets is increased. The National Financial Regulatory Administration (NFRA) will be established directly under the State Council, so that the regulation of the financial sector, except for securities, will be directly in the hands of the state. In other words, financial regulation will be further consolidated under a single government body instead of different agencies. We can say that regulatory policies will be clearer, unified and coordinated. In another development, the local branches of the People’s Bank of China, China’s central bank, will be closed, and the regulatory mechanism over state-owned financial capital will be improved. (6)

The country that achieves reconciliation between Tehran and Riyadh will solve even the most intractable crises

As a result, the development of a state-led, and planned economy in China is continuing to be scaled up. A stronger state at home will also benefit oppressed nations in international relations. The historic March 11 agreement in Beijing between Iran and Saudi Arabia to resume diplomatic relations after a seven-year hiatus and to open embassies to each other signals the end of a world system in which the United States has brought bloodshed and destruction, especially in West Asia. 

As China’s Xi-led strategy of a modern socialist country at home approaches success, the door to an era of multilateral, people-oriented and sharing values in the international order is opening wide open. At the second session of the Two Sessions, China’s top legislature, Xi said, “Western countries, led by the United States, have carried out all-round containment and pressure against China. This has brought unprecedented and serious difficulties to the country’s development.” (7) US imperialism was the biggest obstacle to the development of humanity, not only in China but also in all oppressed geographies of the world. Xi’s promise to turn the Chinese People’s Liberation Army into an “iron Great Wall” is also important for a possible armed struggle against imperialism. The appointment of Li Shangfu, who is on the US sanctions list, as Defense Minister is another challenge to the US. With all these developments, the power of humanity to fight against imperialism is much more advanced than in the 20th century and this power will make the 21st century the “Asian Age”.

Finally, the opportunities that a strong China creates for Türkiye will determine the position of the forces in government in Türkiye in the coming period. Türkiye has the opportunity to get out of the Atlanticist hot money quagmire under the name of liberalization after being detached from the post-1980 production economy and return to Ataturk’s path with a public sector and planned economy in Eurasia.

* Participant of International Master of Public Administration, future leaders program, Tsinghua University, Beijing / China

Sources

1. https://www.theguardian.com/world/2023/mar/11/li-qiang-xi-jinping-chinas-president-nominates-next-premier
2. https://www.wsj.com/articles/chinas-new-premier-li-qiang-has-xis-ear-78415935
3. https://www.nytimes.com/2023/03/09/world/asia/xi-economy-us-rivalry.html?name=styln-china-congress&region=TOP_BANNER&block=storyline_menu_recirc&action=click&pgtype=Article&variant=undefined
4. https://www.foxbusiness.com/politics/soros-china-xi-jinping-greatest-threat-open-societies-face
5. https://www.economist.com/weeklyedition/2020-08-15
6. http://english.www.gov.cn/statecouncil/xiaojie/202303/08/content_WS6407da4cc6d0a757729e7dc6.html
7. https://www.scmp.com/news/china/diplomacy/article/3212627/chinas-two-sessions-2023-xi-jinping-directly-accuses-us-leading-western-suppression-china?module=inline&pgtype=article