Xi Jinping’s revamp of National People’s Congress ensures direct control over politics, military and economy

The 2,952 delegates of the national legislature endorsed Xi for a rare third term as president and there was not a single dissenting vote

Beijing: At the annual gathering of China’s People’s Congress, which concluded Monday, Xi introduced a series of sweeping changes in the country’s regulatory framework, allowing the party’s top leaders to assert more direct control over financial policy and bank regulation.

Daisuke Wakabayashi and Claire Fu writing in the Australian publication, The Age said that the revamp confirms what many in China already know: Whether it is politics, the military or the economy, all roads lead to Xi.

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Moreover, the 2,952 delegates of the national legislature endorsed Xi for a rare third term as president. There was not a single dissenting vote.

On Friday, the 2,952 delegates of the national legislature endorsed Xi for a rare third term as president. There was not a single dissenting vote, said Wakabayashi and Fu.

“It’s very consistent with what Xi Jinping has been rolling out over the past 10 years,” said Max Zenglein, chief economist at the Mercator Institute for China Studies in Berlin. “Whenever he’s confronted with a problem, the solution is greater centralisation to the party.” China is confronting an economy lacking the dynamism of the past and teetering from a real estate sector in crisis and local governments overrun with debt, reported The Age.

Xi continues to reshape China’s business climate, steering the world’s second-largest economy away from the free-market policies that underpinned its ascent.

While past Chinese leaders sought to maintain a buffer between the party and the private sector, Xi has erased those lines and made clear that businesses are there to advance the party’s agenda, said Wakabayashi and Fu.

In what appeared to be a precursor to the structural changes in the financial regulatory bureaucracy, China’s top anti-graft watchdog also published a not-so-veiled warning to bankers last month. It said it would “seriously investigate and deal with the people who neglect the party’s leadership in financial work and state-owned enterprises.” Echoing the message of “common prosperity,” one of Xi’s hallmark slogans to narrow the wealth gap in Chinese society, the watchdog said bankers should embrace the party’s values and avoid the ideologies of the “financial elite.” Notably, Bao Fan, a prominent investment banker and chief executive of China Renaissance Holdings, vanished last month.

Last month, China’s top prosecutor charged Tian Huiyu, the former president of China Merchants Bank, one of the country’s biggest commercial lenders, with abuse of power and insider trading.

The pointed rhetoric, targeted oversight and crackdowns on high-profile figures are reminiscent of China’s so-called rectification campaign of the past few years in the technology sector. This resulted in huge fines, the upending of business strategies and tycoons driven underground, reported The Age.

Meanwhile, China’s legislature, known as the National People’s Congress, approved a proposal to create a new regulatory body called the State Bureau of Financial Supervision and Administration to oversee China’s 400 trillion yuan, or USD US57 billion (USD 85.3 billion), financial system.

Analysts say this latest campaign to clean up the financial sector is also rooted in growing concern about the adequacy of the country’s financial regulation, which had been called into question in recent years by a series of missteps and scandals that tested the party’s ability to maintain order, said Wakabayashi and Fu.