China’s Xi is more powerful than ever. What does this mean for the world?

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It was a crowning achievement for Xi Jinping as he stepped onto a red carpet stage on Sunday to begin his norm-breaking third term as China’s supreme leader.

Xi, 69, has emerged from the ruling Communist Party’s five-year congress with more power than ever, stacking his party’s upper echelon with longtime proteges and staunch allies.

The loyal inner circle has not only strengthened Xi’s grip on power – but also tightened his grip on China’s future. To an extent not seen in decades, the country’s trajectory is shaped by one man’s vision and ambition, with minimal room for dissent or recalibration at the party’s pinnacle of power.

In Xi’s eyes, China is closer than ever to achieving its dream of “national rejuvenation” and reclaiming its rightful place in the world. But the road ahead is also fraught with “strong winds, choppy waters or even dangerous storms” – a dark warning Xi issued both at the start and end of the week-long congress.

The growing challenges stem from “a bleak and complex international situation” where “external attempts to suppress and contain China” threaten to “escalate at any moment,” according to Xi’s work report to Congress.

Observers say Xi’s response to the darkening outlook is to step up fierce defense of China’s national interests and security against any perceived threat.

“Xi is likely to control and be involved in all major foreign policy decisions. His bundling of the top Chinese leadership with loyalists will allow him to better control and exert influence,” said Bonny Lin, director of the Center for Strategic and International Studies (CSIS ) China Power Project.

What he decides to do – and how he does it – will have a profound impact on the world.

Xi enters his next era in power with a markedly different landscape than his previous two terms. Relations between China and the West have changed dramatically as US-China relations fray over a trade and technology war, friction over Taiwan, Covid-19, Beijing’s human rights record and its refusal to condemn Russia’s war in Ukraine.

Xi’s work report, a five-year action plan delivered during the congress, pointed to “drastic changes” in the international landscape, including “external attempts to blackmail, contain, block and exert maximum pressure” on China – terms often used by Chinese diplomats to reject American actions.

The new members of the Politburo Standing Committee gather in the Great Hall of the People in Beijing.

“It is clear that Xi sees that China has entered a period primarily of struggle in the international arena rather than a period of opportunity,” said Andrew Small, author of “No Limits: The Inside Story of China’s War with the West.”

An expectation that ties will deteriorate further “results in a China far more openly engaged in systemic rivalry with the West—greater assertiveness, more openly ideologically hostile positions, more efforts to build its own counter-coalitions, and a greater push to strengthen China’s position in the developing world,” he said.

This pressure is also likely to affect Beijing’s close relationship with Moscow. While China has tried to portray itself as a neutral player in the war in Ukraine, it has refused to condemn Russia’s invasion and instead blamed the West for the conflict – a dynamic that is also unlikely to change.

“(Xi) already appears to have written off many of the costs of (that relationship) for China’s relationship with the West, and Europe in particular,” Small said.

At the opening of the congress on October 16, Xi won the loudest and longest standing ovation from the nearly 2,300 hand-picked delegates inside Beijing’s Great Hall of the People when he pledged to “reunify” the mainland with Taiwan – a self-governing democracy Beijing claims as its own. although it has never controlled it.

China would “strive for peaceful reunification,” Xi said, before issuing a grim warning that Beijing would “never promise to renounce the use of force.”

“The wheel of history rolls on towards the reunification of China and the rejuvenation of the Chinese nation. Complete reunification of our country must be realized,” Xi told the congress to thunderous applause.

Under Xi, Beijing has increased military pressure on Taiwan, sending warplanes and conducting military exercises near the island. After China’s tacit support for Russia’s invasion of Ukraine, concerns have only grown over Beijing’s plans for Taiwan.

Chinese warplanes conduct exercises near Taiwan in August 2022.

Lin of CSIS said Xi’s work report does not reveal any major change in Beijing’s policy toward Taiwan, but the leadership reshuffle in the Chinese military could hint at his “desire to make more ‘progress’ on unification with the island.”

He Weidong, former head of the People’s Liberation Army’s Eastern Theater Command, which oversees the Taiwan Strait, was unexpectedly promoted to vice chairman of the Central Military Commission – despite never having served on the corps before.

“This suggests that Xi takes the possibility of a military crisis or conflict very seriously and wants to ensure that the PLA is ready,” Lin said. “I don’t think Xi is prepared to use significant force against Taiwan, but he is taking steps to prepare to do so.”

Xi’s work report also outlined an ambition for China to become more adept at deploying its military forces on a regular basis and in various ways to enable it to “win local wars.”

“Xi obviously wants the PLA to be able to win a war to take control of Taiwan if he chooses to do so, regardless of whether his calculations are that this is actually a risk worth taking. It is always the top priority,” said Small, who is also a senior transatlantic fellow at the German Marshall Fund think tank.

Small pointed to a number of risk points for an escalation in the Taiwan Strait in the coming years, including the island’s next presidential election in 2024.

“However, the fact is that the PLA has not been seriously battle-tested for decades, and one of the questions in the coming period will be whether they can effectively prepare for this,” he said.

Speaking in a televised speech on Sunday after announcing his new leadership team – the party’s Politburo Standing Committee – Xi promised that China’s door to the world would “only widen” and that the country’s development itself would “create more opportunities for the world.”

“China cannot develop in isolation from the world, and the world also needs China for its development,” he said.

But China today is more physically closed than it has been in decades. Xi continues to back a costly zero-Covid policy that keeps borders tightly restricted and regularly puts its cities on lockdown — dragging down China’s economic growth.

Xi’s pledge also appears to have done little to reassure investors. On Monday, the stock market in Hong Kong – where many of China’s biggest companies are listed – had its worst day since the global financial crisis in 2008. Alibaba and Tencent, China’s two leading technology giants, both fell more than 11%, wiping out a combined $54 billion in their market values .

Much is at stake in how the world’s second-largest economy navigates these challenges, especially at a moment when the risk of global economic recession looms.

Xi’s apparent interest in integrating domestic and international security could “translate into policies like sanctions against foreign companies, (and) more red tape when there is foreign investment in Chinese technology companies,” according to Victor Shih, an expert on Chinese elite politics at the University of California San Diego.

And while Xi has said that advancing China’s “international standing and influence,” including by supporting global development, is among his main goals for the next five years, Beijing may no longer be able to rely on the same level of financial commitment to do so in a more divided world.

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