Is Xi a Threat to Foreign Businesses in China?

On Oct. 18, 2,300 hand-picked delegates from China’s ministries, provinces, the military, and state-owned and private companies will file into Beijing’s Great Hall of the People for the start of the 19th National Congress of the Communist Party. The weeklong event is a highly choreographed, twice-in-a decade shuffling of China’s political deck. More than half of the top leadership is likely to be replaced, including as many as five of the seven members of the all-powerful Politburo Standing Committee—a subject of furious speculation in the runup to the Congress. What’s already a foregone conclusion is that President Xi Jinping will go on to serve a second five-year term and will in all likelihood emerge from the ritual even more powerful than he already is.

Foreign businesses may not find this an appealing prospect. It’s true China’s president talks a great deal about openness. One of his first acts in office was to reenact Deng Xiaoping’s “Southern Tour,” which reignited market reforms in the early 1990s. Policies announced at the Third Plenum in 2013 promised a “decisive” role for market forces. And while his U.S. counterpart, Donald Trump, has disparaged globalists, Xi embraces the label. In a speech at this year’s annual meeting of the World Economic Forum in Davos, he said choosing protectionism was akin to “locking yourself in a dark room.”