xi jinping is using his growing authority to amass even more - Xi Jinping is using his growing authority to amass even more

IDEOLOGICAL flexibility has long been critical to success in China. The office of a state-owned company in Wuhan, a big central city, testifies to its enduring importance. On the bookshelf behind a senior manager’s desk are a few red-bound Communist Party tracts, including a collection of speeches from a recent meeting where “Xi Jinping Thought” was written into the constitution. Stacked alongside these is literature of a different breed: two analyses of blockchains, a primer on the “industrial revolution 4.0” and a recently published guide to life and business by Ray Dalio, an American hedge-fund billionaire.

The manager sees no contradiction. Like many of his peers, he is as fluent talking about the business models of semiconductor-makers as he is reciting Mr Xi’s contributions to socialism with Chinese characteristics. Yet the latter has, over the past few years, taken up more and more time. One staff member says they must regularly gather in study groups to pore over Mr Xi’s words and write essays of self-criticism, identifying their failings as party members and state employees. It is, she says, “quite a headache”, though she insists that their business has not suffered as a result.

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There has been a marked shift in Chinese politics under Mr Xi as he has placed more emphasis on the power of the Communist Party, and on his own power within the party. For the economy, as for the Wuhan state-owned company, there has been little downside so far; growth has remained strong. But the test may soon get stiffer. On March 11th the National People’s Congress (NPC), China’s rubber-stamp legislature, is due to vote on a proposed amendment to the constitution to abolish the two-term limit on a president’s tenure, paving the way for Mr Xi to stay in office indefinitely. This shift will carry implications for every aspect of policy-making, including the management of the economy.

The optimistic view is that the change might in fact help the Chinese economy, at least in the short run. “We have stability and clarity,” says Zhu Ning, an economist with Tsinghua University. Mr Xi has amassed enough clout to push through reforms that have hitherto proven tricky. He has presided, for example, over the closure of many loss-making coal mines and steel mills over the past two years, which has helped restore the remainder of those two industries to health, albeit at the cost of some 2m jobs.

The apparent certainty that Mr Xi will be the country’s leader for, at a minimum, another decade should also give officials and enterprises confidence to make longer-term plans. This, in turn, might improve the chances of success for two of his pet projects: the Belt and Road Initiative—a plan to invest vast sums in infrastructure across Asia—and Xiong’an, a new city being built near Beijing.

Others predict a much bleaker outcome. They worry that Mr Xi’s elevation will make the governance of China less, not more, efficient. Local officials might fall in line with national policy more readily than in the past, but an excess of zeal could be more damaging than a shortage, says Yanmei Xie, an analyst with Gavekal Dragonomics, a research firm. A case in point was the environmental campaign which left thousands of residents of Hebei, a northern province, without heating at the start of winter, after local officials choked off coal supplies to meet pollution targets. Over time the risks will become more severe. With Mr Xi unassailable, it will take a very brave bureaucrat to dissent from his script. And as the economy grows ever more complex, the inadequacies of the institutions that underpin it, especially the rule of law, will become more glaring.

The optimists and pessimists have been scrutinising the current session of the NPC, which began on March 5th, for clues about Mr Xi’s intentions. Alas, they have found little evidence for the idea that an empowered Mr Xi will clear the way for deep economic reform. The most important titbit so far has been the unveiling of this year’s target for economic growth. It was contained in the “work report” that Premier Li Keqiang presented to the NPC’s 2,970 members amid the cavernous pomp of the Great Hall of the People in Beijing. The government will aim for growth of “around 6.5%”, as it did last year. But Mr Li omitted last year’s pledge that it would strive for higher growth if possible. Some analysts argued that this constituted a slackening of the authorities’ push for growth at all costs. But it would have been much bolder to abandon a precise growth target altogether, as the International Monetary Fund had urged.

Still, there were plenty of positive messages. The government dropped its growth target for fixed-asset investment and lowered its projected fiscal deficit, a signal to officials to rein in excessive spending. Mr Li included a new target, for the surveyed urban unemployment rate, which he pledged to keep below 5.5%. That could help make for a sharper focus on the welfare of citizens. Mr Li also said that spending on social security, education and health care will rise, even as investment in infrastructure moderates.

Yet these various policies, welcome though they are, are tweaks to the existing economic landscape, not dramatic or difficult reforms. They are the kinds of initiatives that the Chinese civil service has proven itself more than capable of delivering in recent years, without the intervention of an overwhelmingly powerful president. It is possible that when Mr Xi’s team is fully in place, his agenda will become more ambitious. Liu He, Mr Xi’s most trusted economic adviser, is expected to be made vice premier, responsible for economic and financial affairs. He has promised that reforms will “exceed the international community’s expectations”. But the focus for now is on asserting party control. On March 17th the legislature will vote on a plan to shrink the number of state agencies and put them more firmly under party leadership, according to Bloomberg, a news agency. As part of that restructuring, the banking and insurance regulators are expected to be merged, as are the agency that oversees industrial companies and the product-quality watchdog, among others.

Mr Xi’s influence over the proceedings was felt in other, more disturbing ways. The work report mentioned his name 13 times, the most references to any living leader since Mao Zedong. When the constitutional amendment to scrap the presidential term limit was read aloud in Great Hall, the crowd greeted it with boisterous applause. The banner headline on the day of the work report on the website of Xinhua, China’s official news agency, was about Mr Xi’s meeting with delegates from Inner Mongolia, followed by four other stories about his recent speeches and his schedule. It was only the sixth article that covered the work report and the various targets for 2018. They are being overshadowed by the biggest target of all: enhancing Mr Xi’s power.

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