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By William Bi
     BEIJING (MNI) - For months, China watchers speculated about the makeup of
the ruling Communist Party's leadership for the next five years: will a
long-standing retirement age tradition be set aside to allow Vice Premier and
anti-corruption czar Wang Qishan to remain on the Politburo Standing Committee?
Will Premier Li Keqiang, No. 2 in the current leadership, get the boot from the
committee? Will the number of Standing Committee members be cut to five from
seven? Will an obvious successor to Xi be appointed to the panel? 
     Despite the many questions about the make-up of the leadership, the
consensus was General Secretary Xi Jinping would amass the kind of power over
the world's biggest economy unseen since the days of Mao Zedong.  
     Led by Xi, who was born in 1953, the rest of the team filed out one by one
into the main stage in the East Hall of the Great Hall of the People, which has
hosted the new Chinese leadership's coming-out parties since the 1990's: Li
Keqiang, born in 1955, whose continued presence on the standing committee defied
naysayers; Wang Yang, born in 1955, a former member of the Communist Youth
League supposedly aligned with Xi's predecessor Hu Jintao; a capable vice
premier in charge of agriculture and foreign trade, Li Zhanshu, born in 1950;
the secretariat of Xi's party office, Han Zheng, born in 1954, the youngest
mayor of Shanghai; Zhao Leji, born in 1957, the head of CPC's organizing
department; and Wang Huning, 1955, director of CPC's Central Policy Research
Office and the party top ideologist.
     Wang Qishan did retire and there was no obvious successor to Xi appointed
to the top leadership. 
     The make-up of the new team was seen as confirmation that Xi is poised to
control China well beyond his next five-year term, breaking with a tradition
that a younger-generation leader -- or the post-60's in Chinese vernacular -- is
inducted into the highest echelon of power in a sitting party secretary's second
term. 
     Top party officials seen by observers as strong candidates to succeed Xi
had been pushed out of the way. Sun Zhengcai, born in 1963 and a once-rising
star, was charged with corruption earlier this year. Another would-be
leader-of-tomorrow, Hu Chunha, the 54-year-old party secretary of Guangdong
province, was spared jail but steered out of Xi's way.
     Xi's overarching power was apparent from day-one of the week-long affair,
when he laid out his expansive vision of China well into the middle of the
century in a three-and-a-half hour speech, lecturing  the nearly 90 million CPC
members and 1.4 billion Chinese citizens what they should or shouldn't do on the
road to the "great revival" of the Chinese nation, labeled "Xi Jinping Thought
on Socialism with Chinese Characteristics For a New Era." At the congress's
conclusion on Tuesday, the CPC announced that "Xi Jinping Thought" is now
enshrined in the party constitution, along side those of former supreme leaders
Mao and Deng Xiaoping. 
     To be sure, every Chinese leader from Mao left a legacy imprinted in the
party's psyche: Mao's "thoughts," Deng Xiaoping's "theory" of developing
socialism with Chinese characteristics, even Jiang Zemin and Hu Jintao had their
shares of slogans touted, though much less memorably. But critics note that Xi
is the first leader to have himself enshrined after only serving one term; other
leaders were elevated only after retirement. 
     That has led to the concern that Xi's absolute grip on power is undermining
China's system of checks and balances installed by Deng, who was a victim of the
ruthless purges of Chairman Mao. There now seems to be no one who could
challenge Xi if he were to make a major policy misstep. 
     From an economic perspective, from now until the National People's Congress
in March next year, the CPC's leadership is expected to consolidate and
stabilize. Even some of Xi's fiercest critics admit that he has put in place
well-intended policies: steering China away from the growth-at-all-costs frenzy,
providing a basic social safety net for the poor, and attempting to repair a
scarred environment depleted of resources. The 19th congress left little doubt
that these measures will continue. 
     In the medium term, there is expected to be no major shift in policy
direction. Xi's report as well as comments by his ministers and state media
during the week-long congress repeated the country's priorities: supply-side
reform; bigger and stronger state-owned enterprises, including investment by the
private sector; continued global expansion under the "One Belt, One Road"
banner; and improving social safety.
     UBS projected growth would soften slightly in the next two years, because
only 6.3% is needed to achieve China's goal of doubling its GDP by 2020 compared
to 2010. But as Xi said, "development is the foundation and key to addressing
all problems." Don't expect China to tolerate a significant slowdown that could
jeopardize employment and hence social stability. 
     "All in, we think the 19th Party Congress has effectively strengthened
President Xi's power," analysts at Mizuho said. "It allows the leadership to
turn its focus from solely the pace of China's economic growth to the quality
and sustainability of it."
     Balanced growth:
     Xi stressed that China must now pursue more balanced growth. His phrase
"the contradiction between unbalanced and inadequate development and the
people's ever-growing needs for a better life" has been repeated as a slogan by
state media and no doubt will be studied and touted by party cadres. 
     Environment and social safety net:
     Xi, in his report on the congress's opening day, subtly de-emphasized
specific growth targets. During the week-long proceeding, Xi's ministers and
state media also emphasized "quality over speed." 
     The most comprehensive discussions, or reiteration of key economic
principles, were already laid out in an editorial run by the Xinhua News Agency
newspaper and the People's Daily, both CPC mouthpieces: continued reform
measures to address the real economy's structural imbalances in supply and
demand, the deviation of speculative financing from the real economy and the
deviation of investor and home-owner demand in the housing market as well as
remove excess industrial capacity, continue property controls and deleveraging,
and support weak sectors including municipal services and environmental
protection, it said. 
     What seems to be new is the increased focus on improving the country's
drive to clean up the environment. Xi had already actively pushed his government
along that line this year, espousing an "ecological civilization" campaign. But
the once-toothless Ministry of Environmental Protection was given new authority
by Xi himself to apply the strictest measures on industry throughout the country
in the run-up to the 19th congress, sending auditors to shut down steel blast
furnaces, coal-burning cement plants and even starch producers. The
unprecedented 2+26 campaign, which will see major city centers in northern China
halting production by heavily polluting factories during the winter months, has
already caused a commodity price boom in anticipation of tighter supplies of
industrial materials, such as steel, cement and plywood.  
     These coercive measures will likely continue. At a press conference last
week, Li Ganjie, minister of Environmental Protection, vowed China will sharply
cut its pollution levels by 2020 and "fundamentally" improve its ecosystems by
2030. Moreover, Li said the government is seeking to establish laws to codify
the current ad-hoc environmental supervision.
     As many China watchers expected, the congress was largely about personnel
changes and did not give much new direction on policy. On that front, the first
decisions may come when the new Xi-led economic team presides over the annual
economic work conference in early December, which will set the country's policy
direction for next year, including giving signals about the new growth target. 
--MNI Beijing Bureau; +86 10 8532 5998; email: william.bi@mni-news.com
--MNI BEIJING Bureau; +1 202-371-2121; email: john.carter@mni-news.com
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