President Trump’s two-day visit to Beijing last week was, as expected, high on pomp but low on substantive deliveries.
- The business community was hoping for specific agreements from the Chinese that would open their service sector, for example, to U.S. banking and insurance firms; or agreements that would reduce the stifling constraints on U.S. technology firms. That didn't happen; instead, the public statements stressed the warmth of the Trump-Xi interpersonal relationship, with the expected announcements – a staple of every high-level visit to east Asia – of Chinese purchases of U.S. products, e.g., soybeans, aircraft engines, helicopters.
Despite the business disappointment, the visit did afford the president the opportunity to interact not just with PRC president Xi Jingping, but also with members of the new Chinese "Politburo Standing Committee (PSC)," the country's highest decision-making body. These new Chinese leaders, announced two weeks ago at the end of what was by any measure a historic 19th Communist Party Congress, will set the stage for Chinese domestic and foreign policy through at least 2022. But except for President Xi Jingping himself and his #2, premier Li Keqiang (a holdover from five years ago), very little is known about the other members of the seven-member PSC who will play a decisive role in shaping this policy. Who are the key personalities on this new team? And what will their naming mean, not just for China, but for the U.S. business community?
- First, regarding the most important personality, the Party Congress anointed Xi Jingping to virtual sainthood – not just returning him to the PSC but also cementing his influence beyond even the nominal end of Xi’s leadership term five years from now. “Xi Thought,” for example, is now constitutionally enshrined! Nobody since Deng Xiaoping 30 years ago has come even close to the control Xi now exerts; it's reflected in all Chinese Party and governmental leadership posts.
- Second, on other members besides premier Li Keqiang, the most intriguing to watch is Zhao Leji -- the youngest new PSC member at age 60 and entrusted with the anti-corruption fight, a signature initiative of president Xi. Zhao will head the Orwellian-titled "the Central Commission for Discipline Inspection;" as such, he’ll be vetting all new leadership appointees and overseeing the "discipline" of tens of thousands of Communist Party members in the years ahead, responsibilities belying his relative youth and lack of seniority. Bottom Line: watch Zhao carefully
- Speculation on other PSC members is rife; because of his business influence, only one other probably merits attention at this point: Wang Yang, who will serve as one of four Vice Premiers. Wang was the PRC's principal trade contact during the U.S.-PRC “Strategic and Economic Dialogue” during the Obama administration.
- Earlier in his career, Wang Yang was the party chief in business-friendly Guangdong province; press credits him for pushing a pro-market development model in a region key for foreign investors. Like Zhao Leji, Wang Yang is someone worthy of tracking; his public favoring of market-driven commerce would be an important voice in the PSC, if true.
One final point: given ages of the new PSC and party tradition about stepping aside after age 68, there's no obvious successor in this group to Xi Jingping; this, of course, has fueled speculation about Xi extending his leadership past 2022. No one outside the PSC has any idea what may happen. BUT: "Xi thought" won't disappear, even if Xi retires in five years. AND: he could go out "on top" as the president shortly after the PRC celebrates the 100th anniversary of the Party's founding in 2021. Going out on top, though, is not how autocrats transition; they tend to die in office.
- All tea leaves currently point to Xi extending his reign well into the next decade. This, and a hope that Xi will further squeeze Pyongyang, probably explains why Trump has handled his Chinese counterpart with enormous deference. Over the near term, this makes sense; but eventually, the obvious conflicts over China's structural impediments to U.S. firms doing business on the mainland -- and the growing security threats in the South China Sea -- will once again elevate the U.S.-China relationship to the #1 strategic challenge facing this White House.
