Decoding Xi Jinping: What two major speeches tell us about how China has changed

Tom Nagorski and Lili Pike

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Chinese President Xi Jinping’s speech to the Communist Party congress Sunday — a roughly two-hour address that is being dissected by China watchers the world over — was both Xi’s case for a third term and a State of the Union-style statement about his country.

But it was also notable for what it wasn’t.

A little over a year ago, Xi gave another speech, to the Central Financial and Economic Affairs Commission — a less significant occasion and thus less covered and analyzed by the global media. While that address, too, was billed as a roadmap for China’s future, its emphasis differed markedly from what China’s leader said Sunday. And a look at the two speeches says much about how China has changed in just a little more than a year.

In August 2021, Xi’s overriding theme was the need to find “common prosperity” for the people of China — and the speech offered a catalog of ways to do so. The phrase — “common prosperity for all” — dates to the time of former Chinese Communist Party Chairman Mao Zedong, but no Chinese leader since had seized upon the phrase as a guiding light for policy. “Common prosperity,” Xi argued, would improve education, business and social welfare; without it, income inequality would damage the country. His “common prosperity” agenda included widespread economic reforms and regulations, crackdowns on certain companies and wealthy individuals, and economic policies meant to improve quality of life. It was a doctrine that — when implemented — would touch all facets of life in China.

By the time he had finished that August 2021 speech, Xi had repeated the phrase — “common prosperity” — 26 times. It would remain a mantra for the Communist Party for months thereafter — a roadmap for domestic policy as the calendar turned to 2022.

On Sunday, in the all-important address to the party congress, Xi uttered those words just three times (as Alex Frew McMillan wrote, the Chinese leader “name-checked ‘common prosperity’”). The emphasis now was on security and economic self-sufficiency, a need to defend China from perceived threats to its economic and geopolitical power. If there was a catch phrase Sunday, it was “national security.”

Granted, the party congress is a different occasion — a once-every-five-years report to the nation and a vision for the five years to come. But it’s not often that a signature Communist Party directive, and the catch phrase that goes with it, retreat so quickly to the back burner.

What happened to “common prosperity”? The answer has a lot to do with what has happened to China itself.

A speech an American candidate might have made

The “common prosperity” speech Xi gave in 2021 was loaded with themes and pledges that sounded like fare from an American campaign trail.

“We must focus on the well-being of our people,” Xi said. “We must raise the income of urban and rural residents” and fight against “income inequality.”

If the language was Chinese Communist Party-speak, the “common prosperity” policy prescriptions might have been drafted by an American political consultant. It was necessary, Xi said, to grow “the middle-income group, increase the income of the low-income group” and “facilitate social fairness and justice.” China would need tax reform, greater innovation, more affordable housing, improved education, better care for the elderly and support for people starting small businesses.

It would be an all-encompassing and long-term fight, the Chinese leader said. “By 2035, we will make more remarkable and substantive progress toward achieving common prosperity for all.”

And for good measure, Xi took an indirect shot at the U.S. and other nations that, in his view, hadn’t understood the need for “common prosperity.”

“In some countries,” Xi said, “the wealth gap and middle-class collapse have aggravated social divisions, political polarization and populism, giving a profound lesson to the world. China must make resolute efforts to prevent polarization, advance common prosperity and realize social harmony and stability.”

While the shelf life of a U.S. campaign theme can be brief, the vision of a Communist Party boss in China tends to linger and get hammered home at every opportunity.

With “common prosperity,” you might say reality intruded.

When “common prosperity” meets uncommon problems

The problems with implementing “common prosperity” have come fast and furious.

As Grid’s Lili Pike has made clear in a series of reports, 2022 has been a rough year for the Chinese economy. The rate of urban youth unemployment has soared to 20 percent, the increasingly fragile housing market has sparked fears of a broader economic crisis, and earlier this year China reached a troubling demographic milestone: Its population has begun to shrink. Meanwhile, income inequality — a principal target of Xi’s signature plan — has only grown.

All these problems have been aggravated by Xi’s stubborn devotion to a zero-covid approach that has brought long and difficult lockdowns which have slowed productivity. China’s 2022 gross domestic product target — which had already been downgraded to a low (for China) 5.5 percent — may now struggle to hit 3 percent.

Xi acknowledged some of this on Sunday. He made mention of China’s aging population and reminded the party that government support for the housing market would be essential. And in that “name check” of “common prosperity,” Xi repeated some of the same goals he had articulated last year. “We will keep income distribution and the means of accumulating wealth well regulated [and] intensify efforts to create jobs,” he said.

But there was little in the way of specificity or plans in terms of implementation.

Some observers said that was due to the economic realities of the moment.

As Bo Zhengyuan, a partner at Plenum consultancy in Shanghai, told the Singapore Straits Times, “We have still not seen concrete measures for the common prosperity drive, [though] the recent covid-19 outbreaks and economic downturn may have stalled implementation.”

The economic malaise, in all its forms, means that putting a “common prosperity” agenda into practice — be it regulations against the wealthy, tax reform or major policies to lift lower- and middle-income Chinese — may be necessarily back-burnered now. What Xi and his party need — urgently — are mechanisms for economic growth.

Xi’s common prosperity reforms “are so important and politically very difficult,” Mary Gallagher, director of the International Institute at the University of Michigan, said via Twitter. Delaying those reforms, she added, has made them more difficult to implement — given that they now “need to be enacted when China has slower growth/higher debt.”

Orville Schell, director of the Arthur Ross Center on U.S.-China Relations, told Grid that Xi’s own priorities had shifted. “The notion of ‘common prosperity,’ namely, of seeking greater income equity in China, has now taken a back seat to the goals of technological self-sufficiency and national security, as the U.S. rallies allies, partners and friends in Asia to their own united front against China,” he said.

Say it again — and again: “national security”

Politically, the shift in priority Sunday made sense. The economy and “common prosperity” aren’t strong suits for Xi at the moment. If there was a discernible priority in Xi’s Sunday speech it was — as Schell suggested — national security.

Xi said “national security” 26 times in the Sunday speech. According to Reuters, in the full report to the party congress (from which Xi’s speech was excerpted), Xi used the terms “security” or “safety” 89 times, up from 55 times in 2017. Meanwhile, Bates Gill, director of the Asia Society’s Center for China Analysis, noted that the economy had received far less attention than in previous party congress reports. Gill counted two dozen mentions of “economy”; he told Grid there had been many times that number — sometimes more than 100 uses of the term — in previous party congress reports by the paramount leader.

Apart from the word counts, the points Xi made under the “national security” heading were what — to make another comparison with U.S. politics — one might call red meat for the base.

He called for the acceleration of an already ambitious military buildup, noting that “we must be prepared for danger in times of peace, prepare for a rainy day and be ready to withstand major tests of high winds and high waves.”

What Xi referred to as the “Taiwan question” got a lot of attention. The headline here — not new, but the emphasis was important — was that China reserved the right to use force if it felt threatened regarding Taiwan and that any outside (read: U.S.) interference would not be tolerated.

“We have resolutely waged a major struggle against separatism and interference, demonstrating our strong determination and ability to safeguard state sovereignty and territorial integrity and oppose Taiwan independence,” Xi said. And then he warned: “We will never promise to abandon using armed force and reserve the option of adopting any necessary measures.”

Xi also praised the party’s intervention in Hong Kong, a crackdown that has targeted pro-democracy advocates, political dissent and elements of civil society. He said the principle of “patriots governing Hong Kong,” as he called it, had brought stability to the territory.

Also under the “national security” heading, Xi said China would “resolutely win the battle of core technologies,” a nod to the increasingly tense U.S.-China tech competition. Last week, the Biden administration imposed fresh restrictions on Chinese chip manufacturers.

“Overall, this speech was primarily about two things,” Gill told Grid. “First, reinforcing party solidarity around the path which Xi has chosen for domestic and foreign policy; and second, steeling the party faithful for the many security challenges Xi sees ahead, both at home and abroad.”

What else was missing

Xi said little about his zero-covid policy — presumably well aware, as with the overall economy, that it’s hardly a winning issue at the moment. But what he said amounted to a doubling down. China’s “all-out people’s war on the virus” had “protected the people’s health and safety to the greatest extent possible,” Xi said. Nothing about the economic toll; and nothing to suggest he was considering abandoning the policy.

There was also nothing about the war in Ukraine.

The report to the party congress isn’t generally a moment for reflection on global events, but beyond Taiwan and Hong Kong, Xi did take note of China’s work in the global effort to fight climate change, and he cheered China’s growing presence on the world stage.

“China’s international influence, appeal and power to shape the world has significantly increased,” he said, despite surveys suggesting that China’s global popularity is waning.

So it was curious that the congress heard nothing from Xi — explicitly or otherwise — about Ukraine, about his “no-limits” friendship with Russian President Vladimir Putin and nothing about the global ripple effects of the war. This, too, may not be a winning issue for Xi at the moment, and perhaps he felt there was no need to go there, given the recent difficulties (to put it mildly) which Putin has faced on the battlefield and the world stage.

As for “common prosperity,” it’s far too early to know whether it’s headed for the scrap heap of visionary phrases. Some analysts suggested a “rebranding” may be in the works for the term. The fact is that all the problems Xi outlined in that “common prosperity” speech last year are still present in China; some are more pronounced today than they were then. And he didn’t ignore it entirely Sunday.

A close read of the August 2021 speech suggests Xi had some idea then that the path to “common prosperity” wouldn’t be easy. “As common prosperity is a goal that requires long-term efforts and cannot be achieved overnight,” he said, “its long-term nature, arduousness and complexity should be fully estimated. … Therefore, we need to be patient.”