By: Benjamin Cooper and Philippe Healey

  • Last week, China’s new leadership team made a rare joint visit to some of the historical sites of the Party’s founding.
  • The politically symbolic tour reaffirmed that strengthening the Party’s centrality across virtually all aspects of Chinese society will remain a hallmark of the Xi administration’s second term.
  • All Chinese and foreign businesses need to be cognizant that the Party will almost certainly continue to widen its footprint across China Inc. and prepare accordingly.

On their first trip outside Beijing since being elected at the Central Committee’s First Plenum, President Xi recently led the other six members of the new Politburo Standing Committee (PBSC), China’s highest governing council, on a rare joint visit to some of the Party’s most important historic sites in Shanghai and the neighboring province of Zhejiang. The high-profile tour was laden with political symbolism and broadcasted an unambiguous message to China and the world: the Party is the sole steward capable of ushering the country into its “new era” and fulfilling the “Chinese Dream” of national rejuvenation.

The search for first-outing signposts

Following their inauguration or beginning of a second term in office, Chinese leaders’ maiden outings are often carefully choreographed pieces of stagecraft that provide critical viewing for those in search of signposts that point to where they may intend to steer China. For instance, soon after taking power in 2012, Xi journeyed to Shenzhen on his first trip outside the capital. His visit to the former special economic zone carried strong echoes of Deng Xiaoping’s “Southern Tour” in the early 1990s and signaled Xi’s determination to emerge as another transformative leader akin to the architect of China’s reform and opening up period.

Touring the Party’s birthplaces

Last week, the new PBSC for 2017 to 2022 began their joint tour with a visit to the building in Shanghai’s former French Concession that housed the Party’s founding National Congress in 1921. At the time, Mao and the other delegates in attendance represented just 57 Party members nationwide.[1] When the Chinese leadership convened this year’s Party Congress almost a century later, they represented the world’s largest political organization, comprised of nearly 90 million members. At the original meeting site in Shanghai, Xi and his colleagues on the PBSC reviewed the Party’s oath and again swore their allegiance.

The leaders later traveled to South Lake in Jiaxing and visited the “Red Boat,” a replica of the original vessel where Mao and the other representatives at the first ever National Congress reconvened after their meeting was interrupted by local authorities in Shanghai. Xi urged Party members to “implement the Red Boat spirit in the new era,” noting that, “The tiny Red Boat that carried the nation’s hopes 96 years ago has become a giant ship that carries the hopes of over 1.3 billion Chinese people.”[2]

All roads lead to the Party

The top-tier excursions to the Party’s birthplaces, which Xi called “the places where the CPC’s dream set sail,” reaffirmed his administration’s commitment to the founding fathers’ core principles and its overriding political imperative to continue strengthening the Party’s primacy as the absolute overseer of China’s triumphant reemergence on the world stage.[3] Party-building looks set to once again headline Xi’s national agenda for the next five years.

So what does this all mean for businesses? In short, no matter whether they are public, private, or foreign-owned, all companies will need to prepare for the Party to continue widening its footprint across China Inc. For domestic industry, the Party’s consolidation of SOEs will continue apace, especially in strategic sectors, while its inroads into privately held businesses will gather further speed. And foreign corporates will need to acclimate themselves to an environment in which the Party will push for a greater voice in the running of their local operations via more empowered internal Party units. In particular, they would be well-advised to leverage these closer official relations as a unique channel through which they can better understand policies and arrive at swifter resolutions for their business issues.

[1] Nectar Gan and Mandy Zuo, “Xi Jinping, top cadres visit birthplace of China’s Communist Party in Shanghai,” The South China Morning Post, 01 November 2017.

[2] “Top CPC leaders reaffirm mission at Party’s birthplace,” Xinhua News Agency, 01 November 2017.

[3] Ibid.

Photo: Xinhua News Agency