20th Party Congress; Chinese Modernization; Chip controls; UK consulate beatdown

Xi delivered an abbreviated version of the Report to the 20th National Congress of the Communist Party of China on Sunday. The full report has not been officially released online but thanks to NPC Observer there are clean scanned copies of the Chinese and English drafts, available on Google drive here for Chinese and here for English. The final versions are very unlikely to have any material changes from these drafts. The title of the report is “Hold High the Great Banner of Socialism with Chinese Characteristics and Strive in Unity to Build a Modern Socialist Country in All Respects 高举中国特色社会主义伟大旗帜为全面建设社会主义现代化国家而团结奋斗”.

I am still digesting the report and so there will be lots more to say over the next few days. The report appears very consistent with what the Party has been telling us over the last several years, and especially what it said in the third historical resolution that came out of the 6th Plenum last year. There are additional standalone sections that I believe were included in other sections in previous Party Congress reports, ones on:

Science, education and talent - “V. Invigorating China through Science and Education and Developing a Strong Workforce for the Modernization Drive”;

Law - “VII. Exercising Law-Based Governance on All Fronts and Advancing the Rule of Law in China'“;

National Security - “XI. Modernizing China's National Security System and Capacity and Safeguarding National Security and Social Stability”

The report is a mixture of triumphalism, aspiration, a sense of besiegement and global ambition. The triumph is the long list of what they have accomplished so far, the aspiration is Chinese modernization and the rejuvenation of the Chinese nation, the sense besiegement can be seen in language like “external attempts to blackmail, contain, blockade, and exert maximum pressure on China” among other things, and the global ambition can be seen in statements like “we will continue to work hard and build China into a great modern socialist country that leads the world in terms of composite national strength and international influence by the middle of the century.”

Investors looking for clues to the future direction will have to wait. The Party Congress does not enact detailed policies; those come between now and around the National People’s Congress meeting in March 2023. Based on this report, the general direction of travel of economic policies over the last several years looks unlikely to change materially, and while the importance of development is heavily emphasized so is national security, and so is Common Prosperity.

Chinese Modernization is the key theme of the report and is now the “central task” of the Party. I have excerpted several paragraphs of section three of the report “The New Journey of the New Era: Missions and Tasks of the Communist Party of China” that explain what that means. The opening paragraph of this section reminds everyone of the Party’s “central task”:

From this day forward, the central task of the Communist Party of China will be to lead the Chinese people of all ethnic groups in a concerted effort to realize the Second Centenary Goal of building China into a great modern socialist country in all respects and to advance the rejuvenation of the Chinese nation on all fronts through a Chinese path to modernization

The section then goes on to explain what it means to build to build China into a “great modern Socialist country”:

The essential requirements of Chinese modernization are as follows: upholding the leadership of the Communist Party of China and socialism with Chinese characteristics, pursuing high-quality development, developing whole-process people's democracy, enriching the people's cultural lives, achieving common prosperity for all, promoting harmony between humanity and nature, building a human community with a shared future, and creating a new form of human advancement.

To build China into a great modern socialist country in all respects, we have adopted a two-step strategic plan:

1. Basically realize socialist modernization from 2020 through 2035

2. Build China into a great modern socialist country that is prosperous, strong, democratic, culturally advanced, harmonious, and beautiful from 2035 through the middle of this century

China's overall development objectives for the year 2035 are as follows:

• Significantly increase economic strength, scientific and technological capabilities, and composite national strength; substantially grow the per capita GDP to be on par with that of a mid-level developed country

• Join the ranks of the world's most innovative countries, with great self-reliance and strength in science and technology

• Build a modernized economy; form a new pattern of development; basically achieve new industrialization, informatization, urbanization, and agricultural modernization

• Basically modernize the system and capacity for governance; improve the system for whole-process people's democracy; build a law-based country, government, and society

• Become a leading country in education, science and technology, talent, culture, sports, and health; significantly enhance national soft power

• Ensure that the people are leading better and happier lives; bring per capita disposable income to new heights; substantially grow the middle-income group as a share of the total population; guarantee equitable access to basic public services; ensure modern standards of living in rural areas; achieve long-term social stability; make more notable and substantive progress in promoting the people's well-rounded development and prosperity for all

• Broadly establish eco-friendly ways of work and life; steadily lower carbon emissions after reaching a peak; fundamentally improve the environment; largely accomplish the goal of building a Beautiful China

• Comprehensively strengthen the national security system and national security capabilities; achieve basic modernization of national defense and the armed forces

After basically realizing modernization, we will continue to work hard and build China into a great modern socialist country that leads the world in terms of composite national strength and international influence by the middle of the century.

So the Party is reminding everyone in no uncertain terms that it wants the PRC to be the world leader in national strength and global influence. [Note: I have tweaked the original comment “it wants the PRC to be the world leader in national strength and global influence”. The original： 到本世纪中叶,把我国建设成为综合国力和国际影响力领 先的社会主义现代化强国。】