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China’s Xi Jinping tightens his grip

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In most years, the annual gathering of China’s two largest parliamentary bodies is elaborately scripted political theater.

The conclave is known as the lianghui, or Two Sessions, because it convenes delegates from the Chinese People’s Consultative Conference and the National People’s Congress. Neither assembly has much real power. To outside observers, it can appear that the main point of the proceedings is to furnish an audience to applaud party leaders as they extoll past achievements and outline grand goals to come.

But this year’s event, which commenced in Beijing on Thursday, offers genuine drama.

First came a surprise announcement Thursday that members of NPC’s powerful standing committee are drafting a new national security law for Hong Kong. That revelation suggests Chinese President Xi Jinping has lost patience with increasingly violent anti-government protests in the former British colony, and isn’t concerned about global condemnation for overriding the city’s system of self-governance.

Then on Friday, Chinese premier Li Keqiang declared that Beijing would dispense with a formal economic growth target for 2020, citing “great uncertainty” caused by the coronavirus pandemic. That decision departs from nearly a quarter-century of Chinese tradition and tacitly acknowledges the party may not achieve a high-profile poverty alleviation target meant to burnish Xi’s image ahead of next year’s centenary of the founding of the Chinese Communist Party.

Both moves are a measure of Xi’s determination to tighten his hold on power in the wake of the pandemic. The virus, which originated in the Chinese city of Wuhan, brought China’s economy to a temporary standstill, and continues to wreak havoc in the rest of the world.

As Xi takes center stage in the Great Hall of the People this week, he confronts enormous domestic and global challenges. China’s economy, which expanded 6% in 2019, shrank 6.8% in the first quarter of this year. Full-year growth will slump to 1.8%, according to a Bloomberg survey of economists.

Xi faces global criticism for his early handling of the outbreak. China is sparring with Australia over that nation’s call for an international probe of origins of the virus, squabbling with Europe over the quality of medical products sent by China to fight the first, and its relationship with the United States is in freefall.

This isn’t the narrative Xi intended, and yet it may still play to his advantage. He can blame the virus for the sluggish economy. And whatever the failings of his initial response to the outbreak, he can tout his decisive steps to contain it in late January, ordering an almost total lockdown of an area encompassing more than 100 million people. The subsequent failure of governments in Western Europe and especially the United States to do likewise have bolstered Xi’s stature by comparison, and enabled China to restart its economy more quickly and with more confidence than the West.

In this week’s Eastworld Spotlight conversation, Matthews Asia investment strategist Andy Rothman, argues China is headed for a V-shaped recovery in the year’s second half, and unemployment rates are rapidly falling.

Xi, now midway through his second term as president, may emerge from the crisis stronger than ever, and poised to extend his reign for an unprecedented third term in 2023.

More Eastworld news below!

Clay Chandler

This edition of Eastworld was curated and produced by Grady McGregor. Reach him at

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