Constitutional shifts and more

Early March is usually about the lead-up and anticipation of what might happen at the mighty double-headed meeting – the annual CPPCC and NPC meetings – later in the month. But this year, there’s lots going on even beforehand.

The top news is the announcement of an intention to change the state constitution to eliminate the limit of two terms on the state presidency. The presidency itself has little significance, of course, but the man who has held it for the last couple of decades and more has also been the party chief, and that signals an end to the Deng-instituted arrangements aimed at effecting a smooth handover of power from one generation of party leaders to another each decade. That is now over.

This is unquestionably the most significant event in terms of China’s political structure since 1978, when Deng regained power. We will ignore for now the political implications of this and ask instead what the economic consequences might be. There are two lines of analysis. The first is that this strengthens the hand of Those in Command to pursue a reformist agenda, while the second is that this will lead to further calcification of the economic system, which would not be a positive. We’ll have to wait and see, but our guess is more on the second line. Brittleness is the danger.

Meanwhile, in Washington, Chinese senior envoy Liu He has been having a series of what have to be difficult meetings. While it is reasonable to assume that Trump is completely absorbed mentally with Russia and witch hunts and peripherally with guns, the people in his orbit with China interests have been pushing a hard line.

This is a fast-moving story, and it again is not possible to predict with confidence how it will play out, but this is probably going to make the China-US relationship more confrontational, emotional and difficult. Putin is helping Beijing enormously by projecting antagonism towards the US, but the mood about China is swinging throughout the Western world.

Efforts by Beijing to offset the shift are being ramped up and will have an impact. Australia particularly is under pressure right now. The book of the moment, amazingly, was published more than a decade ago – James Mann’s China Fantasy. Your reading assignment for the weekend.