Xi’s Speech: Still Waiting

As expected, Xi Jinping’s speech on Sunday to open the 20^th Party Congress shed no light on changes in direction of policy for his third, five-year term. This does not mean changes are not coming, but we will have to wait for future details. For COVID policy, we can continue to look for two milestones to anticipate a return to pragmatism: rhetoric and jabs.

In the October 7 issue of Sinology, we noted that Xi might not provide a clear roadmap for a pragmatic, science-based approach to relaxing zero-COVID at the Congress. We explained that this meeting is focused on personnel issues, and usually does not go deep into policy.

We also wrote that the absence of a roadmap would not mean the Party is abandoning pragmatism. It means we have to look for specific steps that add up to a path to pragmatism.

We can continue to look for two milestones in the coming months to anticipate a return to pragmatism well in advance of an economic recovery and a rebound in sentiment. 

These milestones are a change in official rhetoric, encouraging people to get vaccinated in order to live with COVID, and an increase in jabs, especially for the 260 million older Chinese. 

Monitoring these milestones is important because the Chinese economy is weak primarily because fear of COVID lockdowns makes households and companies reluctant to spend. I’m optimistic long-term, however, because I expect Beijing to relax implementation of its zero-COVID policies after the winter flu season.

At the close of the Congress later this week, the new lineup of the Communist Party leadership will be revealed. But this too is unlikely to provide clear signals of changes in policy direction on COVID and the economy, or on Xi’s response to the recent tightening of semiconductor export controls by Washington.


Andy Rothman
Investment Strategist
Matthews Asia