Asia-Pacific News

Meet the new men in charge of China. There's only one who matters

Key Points
  • Chinese President Xi Jinping unveils new top leadership with himself at the helm
  • Premier Li Keqiang stays on, while additions to the top echelon are Li Zhanshu, Wang Yang, Wang Huning, Zhao Leji and Han Zheng
  • Given the ages of those now on the top committee, there's no clear successor to Xi in the new leadership lineup
The Communist Party of China's new Politburo Standing Committee, the nation's top decision-making body (L-R) Han Zheng, Wang Huning, Li Zhanshu, Chinese President Xi Jinping, Premier Li Keqiang, Wang Yang, Zhao Leji meet the press at the Great Hall of the People in Beijing on October 25, 2017.
Wang Zhao | AFP | Getty Images

China announced its new leadership lineup on Wednesday with President Xi Jinping still at the helm of the Chinese Communist Party. Although it's a team in name, the Chinese president is now more powerful than he's ever been — especially as there's no clear successor to Xi in the new lineup. 

In the wake of the last week's Communist Party congress, Xi now stands as China's most powerful leader in years. And he's expected to use that authority to steer the country into a position of global leadership on its own terms.

"As the world's largest political party, the [Communist Party of China] must behave in a way commensurate with this status," Xi said through a translator on Wednesday after the new leadership was announced.

Even though Xi is holding an ever firmer grip on power, the make-up of the new Politburo Standing Committee is important as there is an official ranking in the system. So where each leader stands will signal his position and influence. The number of allies Xi managed to install in the committee is also a measure of his influence.

The new committee officially met for the first time earlier Wednesday, and the unveiling of the new seven-man Politburo Standing Committee saw Xi retaining his position alongside Premier Li Keqiang. Five new members were voted into the seven-man Standing Committee.

The other five members in the top leadership ranks include Shanghai party chief Han Zheng and excluded touted Xi protege Chen Miner.

What this means for investors

Some investors are hoping that a stronger Xi will now be able to push through bold economic and financial reforms that will prevent the economy from a shock. Ongoing efforts for sweeping changes have been hindered by concerns about social stability and conflicts of interest.

For investors, new appointments to key economic and financial positions over the next few months are more important than politics, but CSIS' Kennedy has this advice: Whoever is doing business with the country has "got to work with the party; collaborate, cooperate."

The "hybrid economy" Xi alluded to in his speech last week "is going to stick with China for a long time and China is not going to be focused on integrating itself in the world on the world's terms but providing leadership for the world on China's terms," Kennedy said.

China now aiming to be a bigger global leader: analyst
China now aiming to be a bigger global leader: analyst

"Everything is going to be engineered to a certain extent. They are moving in that particular direction in terms of deleveraging and reducing risk, but it's going to be managed," said Daryl Liew, head of a portfolio management at REYL Bank in Singapore

For now, it's all politics rather than economics.

Contrary to some speculation that he could stay in a position of Communist Party leadership, Chinese anti-corruption chief Wang Qishan, 69, stepped down from the new Central Committee itself, indicating he is retiring. The unofficial retirement age for senior officials is 68.

Chongqing party chief Chen Miner, 57, seen by many to be Xi's protege, did not make it into the Standing Committee.

All members in the new Standing Committee are in their 60s and therefore unlikely to stay after their current terms, indicating that Xi did not anoint any successor by handing down committee membership.

The lack of a clear successor to Xi, though, may not bother foreign investors much.

"From a foreign investor point of view, I'm not overly concerned if Xi Jinping were to stay for a third term. I'm not overly concerned that there is an absence of an obvious leader to take over," said Clive McDonnell, head of emerging market equity strategy at Standard Chartered.

In fact, Xi's policies could benefit from leadership continuity: Goals of such as improving the environment and transitioning the economy to a higher-value and serviced based economy will take years to see through.

"The absence of a clear succesor doesn't mean policies are going to change or slow down,"  McDonnell added.

Who's who

Here are the members in the Communist Party of China's new Politburo Standing Committee:

Xi Jinping, 64

Xi took office as the president of China in 2013 and is the most powerful Chinese leader in decades.

Li Keqiang, 62

Premier since 2013, Li is best known as the bearer of economic news about the country.

Li Zhanshu, 67

Li is head of the Chinese Communist Party's general office.

Wang Yang, 62

One of China's four vice premiers, and a longtime politician with deep party connections. He is also point person in in the annual U.S.-China strategic and economic dialogue.

Wang Huning, 62

Wang is director of the policy research office and the secretary of the secretariat at the CPC Central Committee from 2007 to 2012.

Zhao Leji, 60

The party personnel chief, Zhao will replace retired anti-corruption chief and top Xi ally, Wang Qishan.

Han Zheng, 63

Han is the party chief for Shanghai — a powerful position.

The power of Xi

As President Donald Trump's promotes his "America First" foreign policy, Xi has taken the opportunity to project himself as a champion for global goals. But China is definitely not building up the liberal world order.

"The contrast with the U.S. provides Xi a rhetorical opportunity to be an advocate for globalization, but it's the style of globalization with government intervention," said Scott Kennedy, a China expert at the Center for Strategic and International Studies.

Last week, Xi expressed support for market reform and private firms at the opening of the party congress, but at the same time he also called for a strong government presence in the economy.

"This is an illiberal world that China is trying to build and it doesn't look like the world that Deng tried to bring China into in the 1980s and 90s," Kennedy told CNBC on Wednesday, referring to late Chinese leader Deng Xiaoping, the architect of the country's economic reforms.

On Tuesday, the Chinese Communist Party approved an amendment to include Xi's name and his doctrine into its constitution. In effect, anyone who now challenges Xi is challenging the party itself.

Xi is only the third leader after Mao Zedong, founder of Communist China, and Deng, to have his name enshrined into the document, so the move is "enormously symbolic," said Merriden Varrall, director of East Asia Program for Lowy Institute for International Policy in Australia.

"It indicates that he has that kind of power that Mao had as the creator of the new China, that Deng Xiaoping had as the reformer, and he's the rejuvenator, so he's the symbolic entity who is going to take China to the next level," Varrall told CNBC.

Under Xi's watch in the last five years, China's global influence has expanded. The world's second-largest economy is pushing ahead with the Belt and Road Initiative, a trading network evoking the ancient Silk Road. The cross-continent project promises vast investment in infrastructure and new opportunities for countries along the route.

— Reuters contributed to this report.