(Bloomberg) -- Xi Jinping started an unprecedented third term as China’s president with fresh vows to ensure stability and strengthen party leadership, as he faces a future of slower growth and greater confrontation with the US.
“Security is the foundation for development, and stability is the precondition for prosperity,” Xi said Monday to close out the annual National People’s Congress. He vowed to oppose foreign interference on Taiwan, a veiled reference to increasing American support for the democratically elected government in Taipei.
The remarks cap a yearlong reshuffle that has demonstrated Xi’s dominance over the nation of 1.4 billion people, overhauling the government and placing allies in key positions. On Friday, the NPC voted unanimously to give Xi another five-year term, after abolishing constitutional provisions in 2018 that would’ve prevented him from staying on.
Later Monday, Xi’s one-time personal secretary, Li Qiang, held his first annual news briefing since being installed as premier and the Communist Party’s No. 2 official. Li used that event to repeatedly stress the government’s commitment to developing the non-state sector and endorsing the positive role played by private entrepreneurs in the economy.
China stocks rose Monday morning, with the benchmark CSI 300 Index up 0.9% as of the midday break. The onshore yuan strengthened 0.58% to 6.8795 per dollar.
Xi has used the annual parliamentary gathering to hit back at the US for trying to prevent the country’s rise. Last week, he called on the private sector to help overcome “comprehensive containment and suppression by Western countries led by the US” — rare direct criticism of the US by Xi — while his foreign minister warned of the risk of “conflict and confrontation.”
Besides deepening ties with Taiwan and supporting its military, the US is increasingly using export controls, sanctions and other punitive measures to prevent China from obtaining technology that could give it an economic and military advantage, particularly in semiconductors and artificial intelligence. The Biden administration is working to tighten even further its restrictions on the export of chip manufacturing gear to China, Bloomberg News reported last week.
Read: Xi Tells Priorities as New Term Starts, Li to Speak: NPC Update
Over his decade in power, Xi has placed greater emphasis on security issues — both domestic and foreign — than his predecessors. When he delivered a report to a party congress in October, Xi mentioned “security” 91 times. “Economy” appeared just 60 times — the first time it was eclipsed by security issues in the important policy statement since the party took power in 1949.
The party is facing greater challenges at home in the coming years, from slowing growth to lingering dissatisfaction with the strict enforcement — and sudden abandonment — of Xi’s signature Covid Zero policy. Mass protests against virus curbs in November represented a rare challenge to the party’s authority, with participants in at least one gathering in Shanghai calling for Xi to step down.
On Monday, Xi pledged to guarantee that the ruling party retains its dominant position in Chinese politics. “To build a strong nation, we have to stick to the leadership of the Communist Party, and the centralized and unified leadership of the party’s Central Committee,” Xi said, referring to the roughly 200-member body from which key positions in the government, diplomatic corps and military are filled.
He also vowed to strengthen supervision of the party to make sure it “never changes its nature and color,” a sign that an anti-corruption campaign that has been another key feature of his tenure will remain in place.
Xi also called for “reasonable” growth in the economy with a focus on improving the quality of that expansion. Officials should accelerate the building of a new growth framework that prioritizes boosting domestic demand, driving innovation and self-reliance in science and technology, upgrading the industrial sector and promoting low-carbon development, he said.
“We should firmly push forward high-quality development,” Xi said. “We should strive for the effective improvement in the quality of the economy and the reasonable growth in its quantity.”
In line with that strategy, the government set a modest target for gross domestic product growth this year of around 5%, signaling there won’t be any major monetary or fiscal stimulus to spur the recovery. Authorities are shifting focus to tackling risks in the financial sector and plan to beef up oversight with a new powerful regulator for the industry.
Xi indicated his speech that he is sticking to his “common prosperity” policy, a reference to his goal of driving down inequality by spreading wealth in the country. The policy has caused top executives across China’s trillion financial system to face pay cuts.
He called for ensuring that the “accomplishments of modernization benefit the entire Chinese people in a fairer manner so we can make more visible and substantial progress in advancing common prosperity for all.”
More: Why It’s So Hard for China to Shake Uninvestable Tag: QuickTake
Xi’s speech also recounted the party’s narrative as having helped orchestrate the Asian nation’s revival after a “century of humiliation” at the hands of foreign powers — a reference to a series of 19th century conflicts with Western nations that led to the loss of territory.
China had “stood up, grown rich and become strong,” Xi said, repeating an oft-used slogan. The nation’s “great rejuvenation” was irreversible, he declared to the thousands of party members in the Great Hall of the People in Beijing who frequently applauded during Xi’s pauses.
--With assistance from Colum Murphy, Jing Li, Lin Zhu and James Mayger.
©2023 Bloomberg L.P.