Valentin Popescu*

Meeting against the back drop of an array of economic challenges that range from real estate crisis to the fall-out from the tryst with “zero Covid” policy, the annual Beidaihe conclave of the Communist Party of China (CPC) has expressed support for a third term for General Secretary Xi Jinping as President. And discussed about the successor to Premier Li Keqiang as also major appointments to be made at the twice-a-decade Party Congress this fail.  The flip-side of economy does not appear to have dominated the deliberations, though.

The name of Vice Premier Hu Chunhua, is doing the rounds both as a possible successor to Xi in 2027 or immediately as a successor to Li Keqiang, according to Nikkei Asia. In the past two decades, promotion of party leaders was usually predicted by analysing the work experience and age of the candidate. But the 19th Party Congress and President Xi Jinping’s rise have rendered that formula unreliable. Potential candidates have received fat promotions for their unwavering loyalty to Xi.

Two speculations are currently doing the rounds. First is that the Politburo Standing Committee (PBSC) could be expanded to nine members from the current strength of seven, the other possibility being that the PBSC could shrink to five members. The size of PBSC was cut from nine to seven during the 18th Party Congress a decade ago. It was in 2002 that the PBSC was made a nine-member body as China faced a complex domestic and international environment.

Nikkei Asia suggests that one of the names circulating in the corridors of power is that of Hu Chunhua, who is relatively young at 59. If he does become a member of the PBSC, he could be a potential successor to Xi at the 2027 Party Congress. He is now one of four vice premiers and has found a place on the 25-member Politburo.

Hu Chunhua has the reputation of being a skilled, hands-on administrator. He studied at the prestigious Peking University and subsequently, led the Communist Youth League (CYL). His career has included a stint in Inner Mongolia and Guangdong as party secretary. According to People’s Daily, President Xi has been wary of the CYL’s power, and, therefore, kept Hu at arm’s length after becoming party supremo in 2012.

Hu appears to have since recovered the lost ground. Recently, he wrote in the People’s Daily (27 July 2022) praising Xi’s leadership on the agricultural policy. The article mentions Xi’s name more than fifty times.  Observers aver that Hu’s career course has put him in a strong position to aim for the top post. However, some analysts, see Hu Chunhua succeeding Li Keqiang as Premier. If this happens, he would be stepping into the shoes of the economic wizard just when, according to July data, economic activity has slowed with down turn in consumer spending and factory output alike.

Over the years, the CPC has had an unwritten consensus that divides power between the General Secretary and the Premier. Most general secretaries have come from the elitist coalition, while the Premiers come from the league faction, sometimes called tuanpai.

‘Elitist coalition’ is a group of princelings (children of party elite), who took over top power ranks; Xi is one of them. If Hu succeeds Le Keqiang, it would mean the bargaining of power, which maintains a balance of power within the CPC, is still functioning. And, if, a different candidate, who is close to Xi, becomes Premier, that would indicate that Xi Jinping has broken the consensus tradition and consolidated his grip on the power structure.

Chen Min’er, presently party secretary of Chongqing, is amongst the notable candidates due for promotion.   He appears slated for a berth in the Standing Committee. He has served in prominent positions such as Governor and Party Secretary of Guizhou province.

Chen Min’er has been described as Xi’s protégé since his time as Director of the Propaganda Department in Zhejiang, where Xi was the Party Secretary between 2002-2007.  He is said to have assisted Xi in his rise during his time in Zhejiang by preparing his weekly column for the party newspaper, Zhejiang Daily.

Another candidate for promotion is Li Xi, who could be inducted into the PBSC. He is now party secretary in the province of Guangdong. Li started his career in the Gansu province’s Propaganda Department after graduating in Chinese Language and Literature from Northwest Normal University. He cemented his chances for graduating to national politics during his time in Shanghai and as a member of the Shaanxi clique.

Li developed ties with Xi in the mid-1980s when Xi was serving as the personal assistant to Li Ziqi, who was Party Secretary of Gansu at the time.

The fate of Wang Huning and Zhao Leji, both Xi allies and below the retirement age could also be decided in the run up to the Party Congress. Chen Min’er and Li Xi could either succeed the duo. It is also possible that all the four become part of the expanded PBSC.  

Wang is China’s top theorist, credited as the “ideas man” behind each of Xi’s signature political concepts that range from the “China Dream” to the anti-corruption campaign and the Belt and Road Initiative (BRI). He is also seen as the brain behind the assertive foreign policy, and “Xi Jinping Thought.”   The short-point is that given his crucial position, Xi is unlikely to replace Wang, unless, of course, he is to be made the Premier!

As pointed out at the outset, the churning in the political arena is taking place, when the economy is refusing to look up. For the last several months, real estate sector, which had seen a Yuan pour, has witnessing a hemorrhage.  Scores of home buyers are refusing to pay mortgages on properties they’ve bought, because the developers have yet to complete projects.  The boycotts are tied to more than a hundred delayed projects and have raised concerns that the property market could collapse. Such a scenario would undermine China’s financial system. It will have ripple effects on the global economy.

July 2022 data shows a lacklustre economic performance and slowdown in credit growth. Both retail sales and industrial production increased 2.7 percent and 3.8 percent compared to the same period a year ago but this is well short of market expectation of 5 percent and 4.6 percent growth respectively. While political confabulations were on at Beidaihe, the apex bank, People’s Bank of China (officially PBC, informally PBOC) tried to come to grips with sputtering economy. And slashed medium-term lending by 10 basis points to 2.75 per cent in a clear signal that recovery is tapering off.

Last year, China more than regained pre-pandemic economic activity, but the rebound appears to have been short-lived. There is no gain in saying the fact that China’s economic slowdown is more a self-inflicted wound owing to President Xi Jinping’s fixation with “zero covid” policy.

Concerns of a global downturn have already taken hold as aftershocks from the Russian invasion of Ukraine continue to reverberate, sending oil, wheat, and fertilizer prices skywards.

Yet, the political establishment in China continues to focus on regime stability and the upcoming Party Congress. Xi knows how to play the game! Any doubts? ###

 —* The writer is a London based blogger with interest in South and East Asian issues