Thailand would need to adapt its geopolitical game and its economic revival plans after the conclusion of the Chinese Communist Party (CCP)’s 20th National Congress, whereas widely expected, President Xi Jinping secured a 3rd term as the CCP’s general secretary.
Given its opaque politics, the party congress, which happens once every 5-years, provides an important window into understanding China and its leadership.
What were the key takeaways from the party congress, especially for Thailand, for whom China remains a top trading partner?
1. Zero-Covid is here to stay
Earlier, some observers speculated that Xi Jinping may have freer a hand in shifting away from the dynamic zero-Covid policy with which he has become closely identified. Xi has quashed such hopes.
In the lead-up to the party congress, state media ran several articles emphasizing the need to continue with zero-Covid. During his report to the congress, Xi defended zero-Covid as having “achieved significant positive results in coordinating epidemic prevention and control and social and economic development” and gave no indication that this policy will be loosened in the near future.
As recently as September, Thailand’s Tourism and Sports Minister Phiphat Ratchakitprakan had hoped that Xi would relax restrictions and allow outbound tourism in December, allowing 1.5 million Chinese travelers to visit Thailand.
Those hopes now look entirely unfounded, and Thailand will have to make do with its campaign to attract more American, European and Indian tourists.
2. Economic uncertainty
The CCP also clearly signaled that it will double down on previously announced economic policies that may see it pivoting away from pursuing rapid economic growth.
The party’s constitution was amended to include Xi Jinping’s signature “common prosperity” policy, which focuses on reducing economic inequality. However, given the tensions with Xi Jinping’s antipathy towards welfare (which he declared as encouraging “laziness”), it is still unclear how economic redistribution will be achieved.
The constitution also now refers to the ‘dual circulation,’ which refers to a reorientation towards domestic consumption while simultaneously courting foreign investment. Given that consumer spending has been sluggish, how dual circulation can become more than rhetoric also remains to be seen.
All in all, uncertainty emanating from both Xi’s economic policies and the political uncertainty resulting from the party congress has already caused shares of Chinese companies in the US stock market to tumble.
3. Political institutionalization clearly eroded
Something that Thai policymakers will have to consider as it tries to read Beijing’s tea leaves is that many of China’s old political norms, institutionalized since Deng Xiaoping’s reign, were ripped up during this party congress.
Aside from his norm-breaking 3rd term, Xi stacked the party’s Standing Committee with loyalists; all members owed their rise to Xi. This showed the clear demise of what political scientists have called the “one party, two factions” system in the CCP, whereby some members from the Communist Youth League faction were thought as counterweights to princelings such as Xi.
Indeed, former president Hu Jintao’s abrupt escorting offstage before the closing of the party congress — an unprecedented scene in highly choreographed party events — could be seen as a symbol of the complete humbling of both party elders that could have challenged Xi, and the Communist Youth League itself, of which Hu was a member.
The 67-year-old Premier Li Keqiang, who was considered an ally of Hu, was shunted off into early retirement, while this broke the informal “7-up, 8-down” rule in elite Chinese politics, where previously officials at 67 at the time of the congress were allowed to remain in politics while those 68 and above all retired.
Li is likely to be replaced by Li Qiang as premier, a longtime Xi loyalist who presided over a chaotic lockdown in Shanghai (which did not end up scuppering his chances for a promotion) but whom it has been reported is liked by businessmen.
The ascension of a team of Xi men will stir concerns about the extent to which loyalty has trumped merit or performance in China’s top leadership, while the decimation of the influence that party leaders and rivals had on Xi clears out any guardrails on his decisions. The 70-year-old Xi’s decision not to appoint any potential successor will also add to the political uncertainty.
4. Signals on foreign policy
Despite being over the retirement age, Foreign Minister Wang Yi is set to be promoted to become the head of the Central Foreign Affairs Commission, which is the real position of top diplomat in Beijing. As Nikkei Asia has noted, this proponent of “wolf-warrior diplomacy” is being “kept on board to maintain China’s hard-nosed foreign policy.”
Xi’s work report emphasized the need for “self-reliance and strength in science and technology,” a signal that global decoupling is a trend that will stay. This, of course, has implications for countries that have sought to remain friends with both the US and China, such as Thailand.
Of note is that Xi’s flagship Belt and Road initiative was barely mentioned. As Shannon Tiezi argued in The Diplomat, the BRI has seen its status downgraded in recent times, superseded instead by the Global Development Initiative and Global Security Initiative. China has already handed out over US$ 1 trillion in loans to over 150 countries in the past decade.
Thailand, indeed, was one country where the BRI ran into trouble — progress on the high speed rail project, which would help connect southern China with Singapore while running through Thailand, has been excruciatingly slow.
As China continues to re-conceptualize its engagement with the developing world, how it continues to approach Thailand under Xi’s 3rd term will be worth watching.