On a quiet Sunday afternoon after new year festivities had concluded, several Chinese media accounts published a short edict on a proposed amendment to the Party’s constitution. The following 24 hours saw an explosion in online discussion, banned posts, censored search terms, controlled comment sections and an email update from just about every ‘China Watcher’ in my inbox. The wheels are in motion for Xi Jinping to lead China for as long as he sees fit, and anyone with an interest in China and its consumers should take note of its ramifications.
Of course, the scene was set in October’s National Congress, where Xi Jinping was made the first living leader since Mao to be written into the constitution with his “Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era”. The resulting effect of Xi’s position was not at the time clear to the general Chinese public, who were swept up in the general pomp and celebration of his much praised first stint and the promise of his ‘New Era’. At the time, seasoned China expert Bill Bishop succinctly noted its magnitude;
“The enshrinement signals that it is Xi’s Party and makes the question of succession while Xi is alive a moot issue. So long as Xi has not yet met Marx he is the man with an eponymous theory in the Party Constitution, which means no other official will have more authority than he does.”
And now, at next week’s National People’s Congress, the State Constitution will likely be changed to no longer contain a two-term limit for the President and Vice-President of the Party. The proposed change passed through the 2nd Plenum in January only to have its very low-profile announcement held-off until now, buried in amongst a raft of minor amendments (here on Xinhua at number 14 of 21).
So, beneath all the political intrigue and Game of Thrones-esque moves to bring us here, what does it mean for the public/consumers and those who wish to understand them? Firstly, the characterization that Chinese are mute and uninterested in public discussion has continued to fall away as of late, but the reaction here is unprecedented. The Chinese public, particularly those 772 million online, are becoming far more vocal about their views – even boldly stepping out in their opinions concerning their leadership. Weibo has jettisoned this discussion across the net. Censorship has quickly jumped to levels almost matching the Beijing kindergarten scandals of last year, with terms like “two-term limit” and “continued rule” unsearchable within hours. Any negativity however has been strongly drowned out by commentators lauding the move on official posts and embracing their now long-term leader. Of course, also good to keep in mind that ~40% of Weibo ‘users’ are generally accepted to be manufactured.
Even with a rising minority speaking out against technically unconstitutional behavior (as Xi himself even made reference to recently), they are still just a minority. Since last October’s Congress, the Xi Jinping propaganda machine has been in overdrive. Only looking back over the last couple of weeks, headline stories each day in Chinese media have ranged from his poverty alleviation battle, to his recount of 2017’s glory, through to his position on family values; pictures and videos of him holding his mother’s hand were promoted everywhere in a wide-reaching new year campaign.
Opinions the world over are fearful of repercussions that will come of this, many lying in human rights issues and China increasingly influencing the world’s moral code. Yet what are the positive takes that someone as invested in China as you or I should look to?
There is no doubting that Xi Jinping has revitalized China, reflected in the newfound pride that I discussed a few weeks ago. He has kept the keenly observed GDP growth at unimaginable levels – and received general praise from economists globally. Yet there are huge concerns bubbling under the surface – Angus Grigg’s excellent article upon his China departure brings much of this to light.
China has some turbulent waters to navigate in the coming years, and a strong, stable and proven leadership will be critical in ensuring a successful course. China’s reliance on fixed asset investment to spur growth (it accounted for 41% of all economic activity in 2017) is a measure that cannot be sustained. 2019-2020 is thought of as a ‘crunch period’ for many, with a 2-3% drop in growth forecasted at current trajectory. Assured of his tenure, Xi is likely to prioritize economic growth, which will make some ugly sacrifices no doubt, but his stay at the helm can only hearten those who want to see a strong Chinese consumer.
Where real potential for growth lies, is in household consumption. The World Bank states the average contribution of household consumption across 200 countries’ economies hovers at 58%. China’s falls far behind, at 39.3% in 2016 (Chinese government reporting puts this higher). It is little wonder that Xi Jinping has stoked the fires of consumption as much as possible attempting to “foster new growth areas” (like the sharing economy models) and “grow mid-to-high end consumption” – of course in many situations this has seen China’s macro debt issues spill over into personal accounts – another intriguing consumer trend to explore.
The news of Xi Jinping’s establishment as the face of China for what could be decades brings fear to some, and joy to others. His leadership has been, bar a bolder online community, overwhelmingly supported by the public and incessant propaganda leading up to any notable announcement only cements this. The Xi Era is here to stay, and those invested in China should be heartened that there is a stable hand guiding through an uncertain economic future, but aware of the unique situation that now befalls China’s people.