The 20th National Congress of the Communist Party of China (hereinafter referred to as the “Party Congress”) concluded successfully in Beijing on October 22, 2022. The once in every five years Party Congress is of great significance and far-reaching influence. At the opening ceremony of the Party Congress, Xi delivered a report containing 14,500 words in 1 hour and 45 minutes. The official report, authorized by Xinhua News, was released after the meeting. It contains 72 pages, around 20,000 words and 15 sections in total.
In their latest paper, Ogilvy PR’s teams in China look at what the 20th Party Congress report reveals about China’s trajectory and outline some of the key takeaways. The full paper can be downloaded further down below.
One of the highlights of the 20th Party Congress is the presentation to the public of the new central leadership — the Politburo Standing Committee. In retrospect, while many now say the final lineup is unsurprising, beforehand few China watchers were able to accurately predict the outcome1. From the panic in the Shanghai, Shenzhen and Hong Kong stock markets (not to mention New York’s) after the meeting, it is apparent that many have lost confidence in the economic direction of the Party under this new line up. As a public policy counsel, Ogilvy’s advice to multinationals is to make your business decisions based not only on the dramatis personae, but also by reviewing the content of the 20th Party Congress work report itself.
The work report of the 20th Party Congress focuses on the long-term development direction and macro-level thinking of the Party. We see both consistency and course-correction in the policy directions set out in the report. We also see concerns addressed and questions that many had before the Congress answered:
– China will not abandon the “market economy” and will not return to a planned economy; instead, it will continue building a “high-level socialist market economy”.
– Dual circulation” should not be interpreted as China returning to isolation; instead, China will continue pushing for “high-level opening up” and increase its influence over international standard-settings.
– “Common prosperity” and “standardizing the mechanism of wealth accumulation” are not designed to “kill the rich and give to the poor”. Accumulating wealth and distributing wealth need to be achieved concurrently. China should not harm those who got rich first or discourage the development of the private economy.
In addition to answering some fundamental questions on China’s direction, the report also put forward some new concepts. It:
– Clearly put forward the concept and characteristics of “Chinese modernization” for the first time, which will be China’s goal moving forward.
– Further clarified the “new national security concept”, placing equal emphasis on “security” and “growth”.
– Emphasized the “country’s rejuvenation strategy through science and education” and “strengthening support for talent modernization”.
– Emphasized the development of the “real economy” and enhancing China’s ability to resist external risks. Independent scientific and technological innovation will be encouraged, and the platform economy involving data security will continue to face strong regulation.
– Proposed to expand the “institutional opening in the fields of rules, regulations, management and standards” for the first time, which means that China will launch a higher level of ‘opening up’.
The Party Congress did not specifically articulate any steps on China’s “dynamic zero Covid” policy, but policymakers are making preparations for an eventual exit — although when these policies may be implemented remains to be seen. Some expect to see improvements after the Two Sessions in March next year, while others expect a slower trajectory for relaxing Covid restrictions.
By convention, personnel decisions are made at the First Plenary session and policies are made at the Third Plenary session. The Party Congress only sets the macro-outlook. Specific economic policies will not be clarified until the Annual Economic Work Conference at the end of this year and the Third Plenum of the 20th Party Central Committee next year.
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