What Will Happen at the 20th Congress?

In an op-ed in the Wall Street Journal Kevin Rudd engages in a little public prognostication about the 20th National Congress of the Chinese Communist Party:

The big news from this National Congress won’t be senior personnel appointments. It will be the ideological content of Mr. Xi’s formal work report. In his regime, communist ideology is no longer a cosmetic formality draped over a de-facto system of unrestrained state capitalism. Mr. Xi is an ideological fundamentalist who has moved the Communist Party to the Leninist left, the economy to the Marxist left, and China’s foreign and security policy to the nationalist right. Throughout this process, shifts in ideological formulations by Mr. Xi have also been the best predictors of later changes in policy. Ideology, as under Mao, has become the embedded code language by which real policy change is signaled to China’s 96 million Communist Party members.

On the economy, Mr. Xi recognizes that China’s growth is faltering. Demographic pressures are a major headwind; China’s population is aging and its workforce shrinking. Mr. Xi’s decision to rebalance the relationship between the private sector and the state has been a drag on growth. His zero-Covid policy continues to shut down major cities. And an unsettled geopolitical environment is disrupting global supply chains and broader trade.

Mr. Xi needs to decide which of these four factors to target to restore growth. He can do little about demography, but he can do a lot about Covid restrictions. He might declare a “people’s victory” over the pandemic before rolling out a more limited form of medical surveillance.

Ideology is the main problem. Mr. Xi believes the private sector is a long-term challenge to the Communist Party’s power. He has deep reservations about private control of the tech sector and what he calls the “fictitious economy” of property and finance. Don’t expect any dramatic ideological recommitment to the market from his work report. Mr. Xi could well decide to move further to the ideological left, despite the predictable effect it would have on growth.

On foreign policy, party congresses have declared since 2002 that China enjoys “a period of strategic opportunity.” This was ideological code. It meant that no major wars were on the horizon so China could maintain rapid economic development as its core strategic priority. Starting in 2019, such language began to change in official documents. The Communist Party has concluded that there has been a long-term bipartisan hardening in U.S. strategy, including deep changes on Taiwan and the “one-China policy.” In China’s view, Japan, Australia, India and the North Atlantic Treaty Organization have also grown more adversarial, looking to balance Chinese power through institutional arrangements. Beijing’s “wolf warrior” approach to diplomacy has had real-world consequences.

Mr. Xi is likely to use his report to define China’s new strategic environment in a manner that gives national security priority over the economy. This may signal that China is gradually moving toward a long-term war footing. In the short term, however, Mr. Xi may still seek to stabilize (although not to normalize) U.S.-China relations. He doesn’t want an accidental conflict with the Americans in the 2020s. Under present conditions, the risk that China might lose is still too great. He hopes to change that by the 2030s.

I try to avoid offering advice to people in countries other than my own. I don’t believe I understand the context well enough to do so.

I’m more interested in the United States than I am in China. I think that, if the United States is to remain the country it is has been for the last century, we need to be considerably less dependent on China than we are at present. That’s not for China; it’s for us. It’s also not to aggravate or alienate China but to preserve the United States.