The secret meeting to decide China's leaders for the next decade
Comment of the Day

October 22 2012

Commentary by David Fuller

The secret meeting to decide China's leaders for the next decade

This is an informative article by Leo Lewis for The Times (UK) (requires subscription registration, PDF also provided in Subscriber's Area). Here is the opening:
Late on a chilly afternoon in mid-November, a small group of Chinese Communist Party mandarins - probably all men, probably all wearing red ties and almost certainly led by Xi Jinping - will file on to a red carpet in Beijing's Great Hall of the People.

They will be the leaders who will govern China for the next decade. But such is the secrecy of the party that, with less than a month to go, no one outside the top echelons knows how many will be in the group, or who they will be. The only certainty is that its composition will affect not only China, but the entire world.

The line-up to be unveiled at next month's 18th National Congress of the Communist Party is the Politburo Standing Committee - China's all-powerful leadership collective.

The tiny cabal will run the world's most populous country, its most ravenous consumer of energy, its second-biggest economy and its most rapidly expanding military.

The world may be baffled by the mystery surrounding the high-walled leadership compound of Zhongnanhai in central Beijing, but it can no longer afford not to care. Over the next decade, strategic and political decisions from Washington to Windhoek will increasingly be taken in light of what China does. Economists already look to China for a sense of where markets are heading. Planning over resources such as oil, water and raw materials already takes future Chinese demand into account.

Set to start on November 8, the congress is a purely party event expected to last about a week. Being internal - not government - business, almost nothing of what goes on inside the Great Hall will be communicated to the outside world.

Of the little that is known, it is virtually certain that Mr Xi, the current Vice-President, and Vice-Premier Li Keqiang will emerge on the dais as numbers one and two in the Standing Committe rankings and thus take over the roles of President and Premier when the rubber-stamp parliament meets in March.

David Fuller's view Interestingly, political leadership for the world's two largest economies could change next month. We will probably know the US Presidential Election result before China's Politburo Standing Committee reveals its next decennial generation of rulers.

However, China's newly appointed leaders will be in a strong position to lever their economy into a higher rate of GDP growth. They will inherit an enviable trade surplus, a rate of inflation which has declined recently, and by their standards, a historically inexpensive stock market (see also Eoin's Comments below).

In the US, a president elect Romney would have over two months to form his cabinet and establish his government's priorities before inauguration day on Monday 21st January. A Romney Administration which retained control of the House of Representatives would be in a strong position when negotiating terms for avoiding a slide over the 'fiscal cliff'.

In contrast, there would be no delay in the handover of power to a re-elected Obama Administration. However, without control of the House of Representatives, as would seem likely, it would face a more difficult negotiation in order to avoid the 'fiscal cliff'.

Back to top