On Anniversary of China’s Reforms, Xi Doubles Down on Party Power

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President Xi Jinping of China, center, speaking on Tuesday at the Great Hall of the People in Beijing. Some investors had hoped for signals that Mr. Xi would take further steps to liberalize the economy or ease tensions with Washington.CreditCreditWu Hong/EPA, via Shutterstock

By Chris Buckley and Steven Lee Myers

Dec. 18, 2018

BEIJING — Facing deepening tensions abroad and anxieties at home, China’s leader, Xi Jinping, delivered an unabashed defense of his policies on Tuesday, using a key anniversary to argue that his recipe of guided growth under strong Communist Party control must not waver.

Mr. Xi made his case to some 3,000 officials and guests gathered in the imposing Great Hall of the People to commemorate 40 years since China embarked on far-reaching economic changes after decades of upheaval and malaise under Mao Zedong.

The resonant date had inspired expectations among some analysts and investors that Mr. Xi would give clearer priorities to counter economic headwinds and trade tensions that have flared with the United States. But he offered none, referring only obliquely to the economic and diplomatic challenges confronting China.

Instead, he used the meeting, broadcast live on Chinese television, to stress that only the party’s dominance would allow China to continue its stunning transformation into the decades ahead. The first lesson from 40 years of reform, he said, was the need to maintain party leadership “over all tasks.”

“It was precisely because we’ve adhered to the centralized and united leadership of the party that we were able to achieve this great historic transition,” Mr. Xi said.

Mr. Xi’s speech, lasting nearly one and half hours, came at a pivotal, potentially fraught moment in the country when all the contradictions in its governance appeared in stark relief. Mr. Xi’s political power is as great as that of any leader in decades, yet his party’s tightening of controls over the economy and ever more aspects of society suggest a deep-seated insecurity at the highest levels.

Mr. Xi’s government has been forced to make some compromises with the United States as President Trump’s trade demands have escalated. But Beijing has also intensified corporate espionage and reacted with unbridled fury when American prosecutors sought to extradite an executive of Huawei, the Chinese telecommunications giant, who was arrested in Canada. China quickly arrested two Canadians in apparent retaliation.

Mr. Xi said that a country of China’s size and influence was right to hold “lofty aspirations.”

“China will never develop itself by sacrificing the interests of other countries,” Xi said, but added that neither would China “abandon its own legitimate rights and interests.”

Throughout his speech, Mr. Xi performed similar rhetorical swerves, promising both greater openness and assertiveness, both strong state companies and prospering private business.

Mr. Xi’s speech marked 40 years since China began to open up its economy. He said the first lesson from those decades of reform was the need to maintain Communist Party leadership “over all tasks.”CreditWang Zhao/Agence France-Presse — Getty Images

The government’s intensifying repression of Muslims in Xinjiang, crackdown on Christians and secretive detention of the Chinese chief of Interpol have all clouded its global standing at a time when it aspires to play a larger international role.

Mr. Xi’s speech risked leaving Chinese officials no clearer about his policy agenda at a time when relations with the United States in particular have deteriorated badly.

“When everything is a priority, nothing is a priority,” Yuen Yuen Ang, a professor of political science at the University of Michigan, Ann Arbor, who studies China’s reforms, said by email after watching the speech. “Today many policy goals in China are in tension with one another. Which ones take precedence? This is what officials will need to know to carry out their work on a practical level.”

Even as Mr. Xi spoke, stock markets dropped in Asia. Though such speeches are not China’s usual venue for announcing specific policy measures, some investors had been hoping for signals that Beijing would take further steps to liberalize the economy or ease tensions with Washington.

Mr. Xi warned that the future contained “all kinds of risks and challenges,” but he said repeatedly that the party had expertly guided the country thus far and must continue to do so. He emphasized twice that the party had been “completely correct” in its embrace of economic reforms, a remark that brushed over the many internal debates, as well as ups and downs, that accompanied those changes.

Mr. Xi called for revitalizing Marxist-Leninist doctrine, a reflection of the party’s fears that it could lose its grip over a younger, increasingly wired and well-traveled generation. “Let contemporary Chinese Marxism shine even more brilliant rays of truth,” Mr. Xi said.

“This was a speech about the party more than anything else,” said Julian B. Gewirtz, a scholar at the Weatherhead Center for International Affairs at Harvard, who watched the speech while visiting Beijing.

It remains to be seen whether Mr. Xi’s remarks will reassure Chinese private companies, as he has tried in recent weeks to do. Business leaders and economists have complained about meddlesome officials, heavy and capricious tax burdens, restrictions on investment and banks that prefer to channel loans to big state companies that enjoy the patronage of party leaders. They have welcomed Mr. Xi’s promises, but also warned that the economy remains troubled by risks.

“Of all the anniversaries related to the reforms — 20 years, 25 years, 35 years — this 40th anniversary is perhaps the least optimistic I have seen,” said Ding Xueliang, a professor emeritus at the Hong Kong University of Science and Technology who has long studied China’s reforms.

“People in very senior positions also have no clear idea of the direction,” he added. “Not a single person in the past half year who I talked with in China, not a single person, said he or she is clear about the next stage.”

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A billboard in the southern Chinese city of Shenzhen this week featured Deng Xiaoping, the late Chinese leader who presided over economic reforms in the 1980s.CreditNicolas Asfouri/Agence France-Presse — Getty Images

In his speech, Mr. Xi repeatedly touted the huge advances the country has made since the “reform and opening” was launched in 1978, rattling off detailed statistics on personal incomes, education and life expectancy. Gone are the days when food and clothing were rationed, he said.

“Hunger, food shortages and poverty that plagued the Chinese people for thousands of years have been generally left behind,” he said.

Mr. Xi paid tribute to Deng Xiaoping, the former leader who presided over the reforms in the 1980s. In past anniversaries of the reform era, Deng has stood out in tributes and displays, but Mr. Xi has shifted the spotlight to his own achievements since he became party leader in 2012.

Mr. Xi has repeatedly promised to ensure that China offers businesses and foreign investors an open, fair market, but many have become skeptical that he will follow through. Instead, many say, Mr. Xi’s drive to extend party control, stifle public debate and defend the state sector have stymied economic liberalization.

“Pledges to reform are sincere, but simultaneous pledges to prevent all instability too often nullify progress,” said Daniel H. Rosen, a founding partner of Rhodium Group, an economic analysis firm that keeps a running scorecard on China’s promised changes. “Reform necessarily means some instability, and trying to have it both ways will not work.”

The occasion of Tuesday’s speech was the anniversary of a party meeting in 1978, when Deng and other veteran leaders who had fallen during Mao’s Cultural Revolution began to reassert their power and lay out ideas for restoring the economy after decades of strife.

The meeting now features in the party’s heavily mythologized history of that time as a watershed, although it was only years afterward that “reform and opening up” became an official party formula.

Before Mr. Xi’s speech, Chinese economists who favor market reforms had openly voiced frustration with what they said was the slow, muddled pace of change. They appear likely to be disappointed, and even worried.

“We’re sincerely hoping that this big meeting will be able to sound a clarion call for deepening reform,” Xiang Songzuo, a senior economist at Renmin University in Beijing, said at a forum in Shanghai over the weekend.

“If there isn’t, my final conclusion will be that China’s economy is headed for a plight that will last for a considerable time and be very, very difficult,” said Professor Xiang, who did not respond to emails or messages after Mr. Xi’s speech.