China’s party congress will tighten screws

As the five-yearly Communist Party Congress gets under way in Beijing, reports in the media suggest that what is in store is a set of rules that will force people in different walks of life, including businessmen and journalists, to observe “virtues of patriotism” besides remaining obedient to the party. For those who thought China would now move towards greater freedom for people at large and the media in general, there is a contrary trend in the offing with tighter control on the anvil. The party will be the sole arbiter of determining who is patriotic and who is not. For entrepreneurs their operation will be guided by virtues of ‘patriotism and frugality’ implying that profit motive would be frowned upon by the state. Under such conditions, tyranny would grow and hypocrisy will hold premium.

The government’s economic reforms policy will be reshaped to give greater importance to State-owned enterprises. President Xi Jinping, who is expected to emerge stronger from the congress has of late been showing little appetite for market-based reforms and much of his concentration has been on strengthening the State sector. Companies like Wanda and HNA which have been making substantial investments in western markets are being viewed with suspicion for fuelling flight of capital and other financial irregularities which in today’s context are seen as hurting the national economy. A re-think on some of the declared principles is indeed on the cards and there would be a more inward-looking approach in the new order of things. There is much anticipation on what the new ‘reforms agenda’ would look like and whether there would be a balance between encouraging State-run enterprises and allowing foreign capital within certain guiding principles. It would be interesting to see too whether the State would come down hard on corruption or there would be double standards and compromises with vested interests. Under the tightly-controlled regime there would be little scope for business to express dissent as most businesses would go along meekly, giving the impression that all is hunky dory. Whether much of this would be for the good of society only time will tell but there can be little measures.