How Xi’s Unquestioned Grip on China Fuels Economic Unease

More than four decades ago, Deng Xiaoping opened China to trade and investment with Western capitalist countries following the death of Mao Zedong. The combination of state ownership and planning with private enterprise and markets transformed the nation into the world’s factory floor, raising the living standards of hundreds of millions of Chinese — and making lots of money for international investors. Under President Xi Jinping, the party is undergoing another shift, with vows to rein in the “disorderly expansion of capital” and promote “common prosperity.” The result has been confusion as investors try to figure out where Xi — having secured a groundbreaking third term as party chief — plans to take the country over the next five years.

At the party’s once-every-five-years congress in October, Xi installed allies in the Politburo and the even-more elite Standing Committee, while party elders played a diminished role. Li Qiang, who served as Xi’s chief of staff in the eastern province of Zhejiang about 15 years ago, was catapulted to the party’s No. 2 position, putting him in line to become premier despite a lack of any central government experience. The spectacle of Xi’s predecessor, Hu Jintao, being hustled out of the congress’ closing ceremony underscored how much Xi had put his stamp on Chinese politics. The official explanation — that Hu, at 79, had health problems — was plausible. But the official most clearly associated with Hu’s pragmatic, growth-oriented legacy, Hu Chunhua, not only didn’t make it onto the Standing Committee, but was also no longer a member of the Politburo.