The 20th National Congress of the Chinese Communist Party

October 18, 2022
Hongkong

Everything you need to know, from our colleagues in Hong Kong...

Stay up to date with primary takeaways and important commentary coming out of the National Congress of the Chinese Communist Party this week.

Updates daily

Monday 17th October

Primary takeaways

The 20th National Congress of the Chinese Communist Party (CPC) opened yesterday, Sunday 16th October 2022.

 

In the opening session, led by President Xi Jinping, the CPC unveiled its blueprint for building a modern socialist China over the next five years and beyond. The Chinese path to modernisation is one of the key takeaways from the report delivered by Xi to the opening session. To achieve modernisation, Xi said the industrial system will be reinvigorated with measures to advance new industrialization. The goal is to strengthen China’s capabilities in manufacturing, product quality, aerospace, transportation, cyberspace, and digital development.

Another key takeaway from today is that China’s tone on sovereignty continues to be resolute with the issue of sovereignty receiving more emphasis than at the 19th Congress. While stressing the importance of a peaceful approach to the reunification of Taiwan, Xi said China reserves the option of “taking all measures necessary” against “interference by outside forces.” Commenting on Hong Kong and Macau, Xi stated that the “one country, two systems” policy has proved to be the “best arrangement” and “should be adhered to in the long run.”

 

Other important commentary

  • China’s blueprint for the next five years
    Xi said that the Party’s ‘central task’ is to build a “great, modern, socialist country” by the middle of this century, realising socialist modernization by 2035.
  • Geopolitics
    On international relations, President Xi referenced a “human community with a shared future.” In describing this further, he talked about China remaining “firm in pursuing an independent foreign policy of peace.”
    Xi continued by saying China “has always decided its position and policy on issues based on the merits of those issues, and China has strived to uphold the basic norms governing international relations and to safeguard international fairness and justice.”
  • COVID-19 Policy
    A spokesperson for the congress commented on China’s “dynamic zero-COVID” strategy. The spokesperson referenced several key factors behind this strategy: China’s huge and aging population, the imbalance of development across the country, and inadequate medical resources. He emphasised bringing the epidemic “under control” with “minimum costs for society” and “in the shortest possible time.”
  • Economy
    State-owned media are interpreting President Xi’s comments on economic growth believing consumption will be the driving force and that steps should be taken to increase domestic demand.
    Over the past decade, China’s GDP has grown to RMB114 trillion (about US$15.8 trillion) from RMB54 trillion and now accounts for 18.5% of the world’s GDP.
    At the same time, China’s GDP per capita increased from RMB39,800 to RMB81,000.
  • ESG
    Xi reaffirmed his pledge to prioritize ecological protection, boost green and low-carbon industries, and eliminate serious air pollution

Tuesday 18th October

Primary takeaways

The Deputy Director of China’s National Development and Reform Commission, Zhao Chenxin, indicated the government’s desire to create a more attractive policy environment for foreign investment. At the same time, he outlined the Chinese government’s plan to reduce dependence on imports, and to achieve a more self-sufficient economy. Zhao stressed this did not imply any scaling back of China’s efforts to open internationally, or an ambition to achieve complete self-sufficiency.

The continuing importance of Hong Kong to China’s development was demonstrated by the frequent mentions the city received in the official National Congress report. This led local Hong Kong lawmakers to highlight the part the mainland should play in helping Hong Kong address issues in employment, education and housing whilst improving overall development opportunities for the city’s youth.

 

Other important commentary 

  • Economy
    In a speech to delegates, Prime Minister Li Keqiang said reform must be advanced. He stressed the importance of developing a socialist market economy, ensuring fair competition, and continuing the process of opening internationally.Zhao Chenxin said China will promote foreign investment projects, improve services for overseas organizations, and establish investment cooperation platforms to enhance collaboration between foreign enterprises and local governments.Alongside self-sufficiency, the theme of developing both internal and external markets has featured several times at the Congress. Spokespersons cited Xi Jinping’s belief that China needs to operate in a dual circulation model, open both domestically and internationally.
  • COVID-19 Policy
    Addressing media questions about China’s COVID-19 policy, a congress spokesperson indicated that China did not want to take a ‘one-size-fits-all’ approach to the pandemic. As part of this, he said that the country would end the unplanned closures of critical enterprises that have caused disruption to both supply chains and everyday life.
  • Geopolitics
    Numerous Taiwanese scholars believe the language used about Taiwan during the Congress so far shows a hardening of attitude towards Taiwanese independence. This follows statements made yesterday by President Xi about Chinese sovereignty.
  •  ESG
    China has pledged to take measures to ensure its CO2 emissions peak before 2030, allowing it to achieve carbon neutrality by 2060.

Wednesday 19th October

Primary takeaways

The continued development of private enterprise was identified as a key step in achieving President Xi’s goal of ‘common prosperity,’ with particular importance placed on businesses in the micro, small and medium-sized categories.

Zhao Chenxin, Deputy Director of China’s National Development and Reform Commission, called for increased overseas investment in high-end manufacturing and R&D centres as part of efforts to improve the security of China’s industrial supply chains.

 

Other important commentary 

  • Economy
    The theme of modernizing China’s industrial sector continues to be prominent with experts calling for an improvement in the country’s independent innovation capabilities, including accelerating the integration of digital technologies with the real economy.
    China’s six largest state-owned banks issued announcements stating their intention to increase support for the real economy, establish measures to implement monetary policy and increase efforts to stabilize the economy more effectively.
    Self-sufficiency was again a highlight, with President Xi’s comments on food security widely reported in the broader context of national security.
  • Consumer
    Wang Jun, a prominent member of China’s Chief Economist Forum, emphasized the need to optimise Chinese citizens’ consumption habits to take advantage of the continued potential for growth in the domestic market.
  • Industrials
    In praising the success of policy-linked financing initiatives in supporting key infrastructure projects, the NDRC’s Zhao Chenxin announced plans for large-scale solar and wind farms in the Gobi Desert with a total production capacity of 450 million kilowatts.

Thursday 20th October

Primary takeaways

Senior officials from the Shanghai Stock Exchange committed to expanding the role of the bourse’s Science and Technology Innovation Board as a testing ground for capital markets reform.

At the same time, there was a focus today on foreign affairs. Linking the new model of Chinese diplomacy to international development, Foreign Ministry spokesperson Wang Wenbin signaled an expansion of the Global Development Initiative, a financing program launched by President Xi to align with the UN’s 2030 Agenda for Sustainable Development.

 

Other important commentary 

  • Geopolitics
    Vice Foreign Minister Ma Zhaoxu hosted a press conference reasserting the central government’s intention to ensure Hong Kong fully enacts its National Security Law. He also discussed the South China Sea disputes, where he called for negotiations to determine a formal code of conduct.
  • Consumer
    He Rong, vice-president of China’s Supreme People’s Court, made a series of statements around the protection of intellectual property rights. Measures announced included an expanded crackdown on counterfeit goods, an increased focus on countering monopolistic practices and a renewed focus on tackling “illegal behaviour” on e-commerce platforms.
    Analysts have issued a report discussing how President Xi’s commitment at the Congress to the dynamic zero-COVID-19 policy will disrupt demand for luxury goods into the near future.
  • TMT
    China’s Ministry of Industry and Information Technology has announced new figures for the growth of the country’s AI industry to demonstrate the progress it has made to becoming a global leader in the technology by 2030. These figures state the value of the AI industry to the Chinese economy at over RMB400 billion (USD55 billion) and the number of AI-related enterprises at more than 3,000.

Friday 21st October

Primary takeaway

Hu Weiwu, founder of Chinese chip maker Loongson, and an official Congress delegate, called for China to develop its own industrial IT systems and reduce its reliance on Western technologies such as Intel, Android, and Windows.  Commentators are viewing this as an example of the “self-reliance” President Xi has spoken about frequently this week, especially in the light of continued tensions between Beijing and Washington over technology issues.

 

Other important commentary 

  • Consumer
    Common prosperity was a theme today, with some analysts noting how the expansion of this initiative will help boost growth in China’s consumer market, though others this week have warned of the ongoing adverse impact which COVID-19 is having on the sector.
    Zhu Tong, Chief Country Officer of Deutsche Bank China, also credited President Xi’s Common Prosperity initiative for the projected rise in the number of Chinese customers of foreign businesses.
  • Industrial
    Xu Zhengzhong, an official from Hubei, announced that the province is now the world’s largest manufacturer of optical fibre. Hubei will work to further develop its position as the leading location for manufacturing and researching optical technologies, alongside its existing strong position in automobiles.
  • Healthcare
    President Xi’s proposal to construct a “healthy China” received attention today, with media and analysts viewing this as a sign that healthcare is now a strategic development priority.

 

Monday 24th October

Primary takeaway

The week-long 20th National Congress of the Communist Party of China (CPC) closed over the weekend in Beijing. The congress affirmed Xi Jinping’s core position within the Party’s Central Committee, granting him his much expected third term.

President Xi introduced the Party’s new central leadership, including new members of the seven-person Politburo Standing Committee. Along with Xi, this is now formed of Li Qiang, Zhao Leji, Wang Huning, Cai Qi, Ding Xuexiang, and Li Xi.  While most posts are still to be confirmed, it is widely expected that Li Qiang will become premier, taking over from Li Keqiang.

 

Other important commentary

  • Geopolitics
    Resolutions made during the final days of the Congress also include amending the constitution to oppose anyone seeking “Taiwan independence.” Commentators have noted this is the first time China has put its opposition to Taiwan’s independence in the constitution.
  • Military
    Accelerating the development of the armed forces to world-class standards was declared by Congress to be a part of China’s strategic task to build a “modern socialist country.”
  • Economy
    Congress agreed to add basic socialist economic systems to the Party Constitution, including public ownership working alongside various other forms of ownership. It called such systems “important pillars of socialism with Chinese characteristics.”
  • Healthcare
    Medical practitioners led calls for deepening the reform of the medical and healthcare systems, strengthening the link between medical insurance, medical treatment and medicine, and promoting the development of high-quality public hospitals.
    Proposals were made to optimize population growth, including measures to develop the elderly care industry.
    Representative Liu Jingzhen, Party Committee Secretary and Chairman of China National Pharmaceutical Group, announced more research into innovative drugs, new drug delivery systems and green pharmaceutical processes, as well as modern traditional Chinese medicine.

Contact the author:

Diana Footit, Chief Executive Officer
Artemis Associates – member of H/Advisors (Hong Kong Office)
+852 2861 3488
diana.footit@artemisassociates.com