China’s most important political event begins this week, a twice-a-decade Communist Party gathering that will likely see President Xi Jinping secure a precedent-breaking third consecutive five-year term in office.
Why it matters: Who leads China for the next five years (and their policies) will have enormous consequences for the global economy, which has come to depend on the Chinese economy as a critical manufacturing hub and consumer market.
- The main focus of the Party Congress will be on Xi’s bid for another term in office—it’s a decision that would break recent precedent of limiting the country’s ruler to two terms, but Xi has consolidated his grip on power and is likely to stay in the top job.
- Observers will also be watching to see if leaders-in-waiting emerge who could fill Xi’s position in 2027—if not, it will be a strong signal that Xi intends to hang on to power indefinitely.
Beyond questions of leadership, China is grappling with a number of other pressing issues that the Party Congress will address.
- China is undergoing several economic crises right now, including a collapsing property market and a growing number of debt-laden banks struggling to stay afloat.
- The future of China’s Zero-COVID policy will also be discussed—some expect the Congress could herald the start of a re-opening process.
- The last Party Congress took a more aggressive stance on Taiwan, and China’s position has become more hawkish since then—it’s possible Xi will strike an even tougher note this week.
Bottom line: What happens this week will set the tone for China’s relationship with the West for the next five years and shape how businesses operate in the world’s second-largest economy.