If you’re contemplating investing in a foreign country (in this case, China) then it’s a good idea to get a firm understanding of how that country operates culturally. One of the best ways to do just that is to look at the person in charge of running the country in question. Looking at the person in charge of a country gives you a good idea of what that country is like as a whole. In a way, the leader of a country acts as a microcosm of that nation as a whole.
Additionally, knowing who will be making the policies for a country can give you a good idea of where that country is heading over the next few years. You’ll want to know if this person is more liberal or conservative, as this will probably influence the legislator that they push. This is particularly valuable when that country has the potential to become the world’s #1 economy in the foreseeable future.
This is our brief biography of Xi Jinping and his relationship with the United States.
Understanding who is at the helm of the country can help you articulate an educated guess as to how that person is going to attempt to steer the country over the next couple of years.
For example, when Donald Trump was elected in the United States, it was widely known that he was a former businessman who was going to do his best to boost the stock market and cut taxes for corporations. Over his first term, he has largely done this. If you are a foreign investor who understood this 4 years ago, then you most likely have made a nice profit for yourself.
One of the reasons why understanding leadership in China is becoming more important is that China just abolished term limits. This means that Xi Jinping has the potential to stay in charge until he decides to step down.
➢ The United States – Presidential terms last for 4 years and a president can serve a maximum of 2 terms (8 years total)
➢ China – No term limits. This development is fairly recent. Since the 1990s, China has implemented a term limit of 2 terms on their presidents. However, Xi Jinping revised this so that he can stay in power indefinitely
Next, let’s take a look at Xi Jinping’s career in politics.
History of Xi Jinping’s Political Career:
➢ 1999: Governor of the Fujian province
➢ 2007: Elected as one of the 9 members of the Politburo
➢ 2008-2013: Vice president of the Socialist Republic of China
➢ 2010: Vice Chairman of the CMC (Central Military Commission)
➢ 2012-Present: General secretary of the Chinese Communist Party
➢ 2013-Present: President of China
Once he took office, one of Xi’s first initiatives was to launch a nationwide anti-corruption campaign that led to the removal of thousands of high and low-class officials. During this time, Xi also started to emphasize the “rule of law”. Through this campaign, he was quite successful at consolidating power. He continued this anti-corruption campaign throughout his first term and ended up punishing more than 1 million officials by 2017.
One way to interpret this campaign “to eliminate corruption” is that it was effectively a way to remove his political rivals and help him consolidate power when it came time for his reelection. He was obviously quite successful at this because he is now in a position to stay in power indefinitely.
Aside from purging government offices of his rivals, Xi has also led China to become increasingly assertive in international affairs. To the point where other countries are finally starting to push back against China’s “bullying tactics”.
Xi Jinping’s Accolades:
➢ Xi Jinping has been given the title of “core leader” by the CCP. This is a special title that has only been bestowed 3 times in the past (Mao Zedong, Deng Xiaoping, and Jiang Zemin)
➢ Xi’s name and thought were enshrined in the Chinese Constitution (this has only ever been done with Mao Zedong)
➢ Under Xi, the National People’s Congress unanimously voted to abolish term limits and unanimously voted for him to remain in power past 2023 (when he was due to step down)
Xi Jinping is obviously very highly regarded by other members of Chinese leadership as well as the country as a whole. The fact that they willingly abolished term limits for him means that (as an investor) you can expect Xi to be in power for the foreseeable future. Xi is China’s man who they will be backing.
Xi Jinping recently revealed his 5-year plan for the direction that he wants to take China. Here are some of the main takeaways.
➢ “Socialism with Chinese characteristics” – This is the new slogan for Xi’s China moving forward. They have a dream for national rejuvenation and want to make it clear that the Communist Party will be at the forefront of that movement. Although they have been opening markets over the past few years, they want to leave no doubt that the Party still runs the country
➢ 2050 – Xi wants to be a world-leading nation with a global influencer status by this year. He has ambitious plans for growth and for launching China to the world’s global stage
➢ Level playing field – When it comes to foreign business, Xi wants to give equal access to everyone. In good news to U.S. investors, he mentioned that “the China that opened up will not close but will open wider and wider”
These are just a few of the ways that Xi has exclaimed he wants to direct China. As an investor, it’s apparent that Xi has ambitious plans and wants to see China at the top of the global food chain (although what leaders wouldn’t want that for their country?). It’s reassuring to see that Xi is open to foreign investment and has plans to keep Chinese markets open for foreign investors.
Now let’s take a look at China’s current relationship with the United States.
Relationship with the U.S.
The first aspect to note is that the United States has an upcoming election in November. This will determine whether Donald Trump remains in office or is replaced by Joe Biden. Either way, the China-U.S. relationship has definitely been tested this past year. First, there was the very public trade war between the U.S. and China. Next, there was the coronavirus outbreak that occurred in Wuhan, China.
Donald Trump, in particular, has flip-flopped on his sentiment as it relates to these two issues and China in general. He takes great pride in being “tough on China” and this is often a focal point of his speeches or tweets.
For most of the trade war, Trump was the antagonizer to China and seemed to initiate much of the back and forth tariffs. However, since coming to an agreement on phase one of the trade deal, Trump has been vocally more favorable of China. NOTE: Phase One of the trade deal should still be happening, despite the coronavirus.
When it comes to the coronavirus, Trump has sought to attack China by deliberately calling it the “Chinese Virus” and seeking reparations from China for the damage that the virus has done to the United States. However, at other times, Trump has applauded Xi Jinping for his handling of the virus (over 15 times between January and march of 2020).
If the United States stays with Donald Trump for the next four years then we can expect these back and forth relations to continue. However, if Joe Biden gets elected then there is no telling what the new relationship will look like (although it will most likely be more steady). China has also been vocal that they don’t have a preference for who the United States elects as their leader.
Xi Jinping’s Focus for the Future
China has had growing self-confidence for years now when it comes to how they view themselves on the global stage. Their view is that the United States (and Western dominance in general) is in relative decline and China is poised to be the next country to rise. After their meeting on the “Central Conference on Work Relating to Foreign Affairs” it was concluded that “Xi is determined to defy the trend-ling of Western history, to see off Francis Fukuyama’s “end of history” culminating in the general trump of liberal democratic capitalism, and preserve a Leninist state for the long term.”
A few of the manners in which China is taking more aggressive steps when it comes to solidifying their power on a global stage are:
➢ Expanding their military position in the South China Sea
➢ Participating in the 2015 Iran Nuclear Deal
➢ Developed naval bases in Sri Lanka, Pakistan, and other countries as far away as the Mediterranean and Baltic seas
➢ Establishing their own International Development Agency
To quote Xi’s own words, “China has been in the best period of development since modern times, while the world is undergoing the most profound and unprecedented changes in a century.”
We hope that you’ve found this article valuable when it comes to understanding a little bit about the man in charge of running China, Xi Jinping. If you’re interested in reading more articles related to business and China, please follow our blog and don’t forget to also visit the “New Here?” section of ChinaFund.com.