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Mar. 10, 2015 - Updated 04:16 UTC

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China's Xi secures grip on power

Oct. 24, 2017

The week-long 19th National Congress of the Chinese Communist Party has ended. President Xi has tightened his grip on power as he goes into his second term.

The Chinese Communist Party elevated President Xi Jinping to a status that makes him the country's most powerful leader since Mao Zedong. Delegates agreed to write Xi's name and political thought into the party's constitution.

More than 2,000 delegates voted to enshrine Xi Jinping's political theory into the charter. It's called "Xi Jinping's Thought on Socialism with Chinese Characteristics for a New Era." The fact that Xi's name is included makes it virtually impossible for others to challenge him.

The only other 2 names written in the constitution are former leaders Mao Zedong and Deng Xiaoping. The placement of Xi's thought in the constitution comes much earlier than his predecessors. Analysts say this move shows how far Xi has solidified his power base before the new members of the top leadership are selected on Wednesday.

Attention had been focused on whether a key ally of Xi would remain on the leadership body, despite a tradition of people aged 68 or older retiring. 69-year-old Wang Qishan served as Xi's right-hand man on an anti-corruption campaign. However, the congress dropped Wang from the Central Committee.


Economic Challenges

Xi Jinping faces economic challenges in his second term. For the past 5 years, China has taken a different approach in running its economy. Officials stopped aiming for high growth through massive investments and instead set their sights on achieving medium-speed growth.

Five years ago, workers' wages were still going up as China's economy grew. But the former model of attaining high growth through expanded exports and low wages is no longer working. High growth aggravated social problems including air pollution and a widening wealth gap.

Three years ago, Xi's leadership announced a plan under which the Chinese economy entered a new phase with lower but sustainable growth. China's growth rate, which stood at over 10% in 2010, has steadily declined to 6.7%.

Meanwhile, the country's financial markets have also been facing challenges. In 2015, share prices suddenly plunged. Capital outflow also increased. It's been suggested that excessive investment and debt are behind the instability.

"China has ushered in a new age. People have a growing desire for a better life. But economic development is disproportionate and insufficient," said Xi.

Last week, Xi announced a 30 year-plan, where he set the goal of improving the lives of those who've been left out of the country's development, in the next 15 years. He said he wants to focus on building a stronger nation in the second half, making China as powerful as the United States in terms of economic growth and individual wealth.


NHK World Senior Economic Correspondent Akihiro Mikoda joins Newsroom Tokyo anchors Hideki Nakayama and Aki Shibuya from Beijing.

Shibuya: It looks like President Xi has set an ambitious goal. How is he planning to make it happen?

Mikoda: President Xi wants to shift the engine of economic growth from the smokestack industries with low-added value to IT and the next-generation industries.

On Sunday, I took part in a tour for the media focused on China's economic future. Reporters were shown a research center where scientists are studying the latest robotic technologies and a facility that supports software industries, including those to foster workers for the movie industry. The tour apparently was intended to showcase Beijing's desire to grow these areas.

Nakayama: What challenges does he face?

Mikoda: There are two. One is streamlining state-run steel, cement and other manufacturing companies where production exceeds demand. The other is cutting the number of excessive loans that banks are extending to these businesses.

Nakayama: Can we expect any resistance to change at the state-owned companies in question?

Mikoda: Yes. One of the biggest obstacles will be the pushback from senior Communist Party officials with strong ties to these companies. To succeed, Xi Jinping will have to tighten his grip on power so that he'll have the political authority to bend senior Communist Party members to his will. It all depends on how much stronger President Xi's hand will be after the new leadership line-up is announced tomorrow.

Nakayama: What shape will Xi's reform of state-owned enterprises take?

Mikoda: The plan is to weed out the money-losers, consolidate the profitable ones, and inject private capital in the hope of making them more competitive at home and abroad.

The Secretary of the Party Committee Hao Peng says "We also need to look at matters from the perspective of global competition. We need to build first-class businesses that are internationally competitive." On the other hand, Xi Jinping has spoken about the need for powerful Communist Party rule. He stresses that the party must have the authority to control not only the business activities of the state, but the private sector as well. This idea appears to contradict the notion of honoring market principles.

Japan and the US have been voicing concern. They are increasingly critical of Chinese state-owned enterprises. They say the enterprises receive de facto government subsidies and export their products at unlawfully low prices.

The 2 countries believe Chinese firms must survive without government assistance, like businesses in their own countries. They're concerned Beijing is trying to reorganize state-run enterprises to make them bigger, and will continue to unfairly help them compete in the global market. People are now wondering whether the reforms will follow global standards.