Chinese President Xi Jinping formally won an unprecedented third term opening the possibility for him to be among the country’s most powerful leaders since Mao Zedong. Xi has started his third term at a time when the world is in flux and new economic, political, and strategic alignments are in the works.

China, as it prepares to fulfill its second centennial goal of national rejuvenation by 2049 is also facing rising tensions with Washington over Taiwan, the war in Ukraine, and espionage claims after the U.S. shot down a Chinese weather balloon.

Domestically Chinese economy faces major difficulties, from slowing growth and a troubled real estate sector to a declining birthrate. As the parliament opened, China announced an economic growth target for the year at “around 5%.” This follows a 3% expansion in 2022, one of the country’s slowest growth rates since the 1970s and well below the official target of 5.5%. Xi will have to address these issues immediately and firmly to ensure a steady and robust economic recovery after three years of grueling lockdowns as part of the zero-COVID policy of China.

With the Chinese economy struggling, infusing a sense of optimism would be one of the president’s biggest challenges. It is, therefore, evident that China’s new cabinet will have no time to lose as economic and diplomatic challenges will test the incoming State Council. Reviving China’s stalled economy, blazing a new path for technological self-reliance, preparing for heightened tensions in the Taiwan Strait, and strengthening China’s national security would, therefore, be the top priorities for Xi’s third term.

China’s new cabinet will have no time to lose as economic and diplomatic challenges will test the incoming State Council.

In the Chinese system of governance, the functions of the president are largely ceremonial. President Xi’s power comes from him being General Secretary of the Communist Party and Chairman of the Central Military Commission, positions which were earlier confirmed by the Communist Party at its 20th National congress in October 2022. The National Congress had also removed the condition of term limit term limits clearing the way for Xi to potentially rule for life and overtake China’s founding fathers Mao and Deng Xiaoping.

Li Qiang was elected premier or Xi’s second-in-command. He was the former party boss of Shanghai who oversaw the financial capital’s grueling two-month lockdown last year. Li is among a number of fresh faces in the powerful Politburo Standing Committee headed by Xi. The former vice-premier Han Zheng was elected as vice-president, and Zhao Leji, the former chief of the party’s top anti-corruption commission, as parliamentary chair. Both are members of China’s highest political decision-making body, the politburo standing committee.

The Two Sessions of the National People’s Congress (NPC) and the Chinese People’s Political Consultative Conference (CPPCC) are closely monitored both at home and abroad as they provide a deep insight into China’s direction in the coming five years. This year the NPC approved a sweeping set of reforms including Setting up a new financial sector watchdog and national data agency that may herald tighter restrictions on key sectors. A revamp of the Science and Technology Ministry was also approved which includes the creation of a science and technology commission to better coordinate efforts to tackle China’s hi-tech bottlenecks after Xi called for China to boost its capabilities in the face of rising tensions with Washington, which has moved to restrict China’s access to key chip technologies

The composition of the incoming cabinet is being viewed as an indication that Beijing will emphasize economic and scientific self-reliance for the next five years and more immediately on re-inflating China’s economy for post-COVID recovery. China’s incoming premier faces the daunting challenge of restoring growth and market confidence. Premier Li Qiang’s work is cut out as he tries to improve the economy by jacking up stimulus spending and putting President Xi Jinping’s slogan of “high-quality development” into practice. Efforts to shift the Chinese economy towards a more innovative, high-tech, and service-oriented model are underway. This will involve promoting research and development, investing in education and training, and encouraging entrepreneurship and innovation.

The property sector and local governments continue to struggle with debt, and efforts to rebalance the economy away from investment and towards consumption have yet to materialize and will need time to be successful.

Before Shanghai, Li Qiang also ran two of the country’s other economic powerhouses, the provinces of Fujian and Zhejiang. His experiences included welcoming Tesla to set up its first overseas factory and working with Alibaba Group Holding. It is expected that Li Qiang will lead in shaping and implementing macroeconomic policy in line with Xi’s emphasis on pursuing an integrated national strategy that reinforces both economic and scientific self-reliance.

Since the late 2010s, Beijing has taken steps to safeguard the domestic economy by enhancing resilience and technological self-reliance. It is, therefore, interesting to see that many of the new members of the Politburo have scientific backgrounds and solid track records running strategically critical state-owned enterprises and they have now taken top positions in the State Council. This is a clear signal that the new generation of Politburo technocrats will emphasize indigenous innovation to prepare for potential external shocks. This may trigger further aggressive technological competition with the U.S. Whether China will be successful in enhancing resilience and technological self-reliance remains to be seen as the policy orientation of the new cabinet crystalizes.

In a speech to delegates at the Chinese People’s Political Consultative Conference, which runs alongside the NPC this week, Xi criticized Washington’s “containment, encirclement and suppression of China”. He said China must “have the courage to fight as the country faces profound and complex changes in both the domestic and international landscape”. Xi has also made it clear that he considers reunification with Taiwan a priority for his legacy, and has not ruled out the use of force.

Relations with the United States are at their lowest in decades with Washington imposing export controls on semiconductors and criticizing China for its close relations with Russia and China’s policy on the Ukraine war. So far China’s support for Russia has been political, but US officials have said they believe China is considering sending arms to Russia. The geopolitical environment is, therefore, an important factor that will affect China’s self-reliance initiative. A diplomatic reset with the U.S. and the European Union may be required to effectively deal with the domestic economic difficulties effectively. Some Western analysts believe that China will try to reassure the EU that Beijing will leverage its ties with Russia to restrain President Putin from the deployment of nuclear weapons in Ukraine. But fending off speculation about military support for Moscow’s war campaign, china’s attempt at peacemaking will be a challenge for the new diplomatic team.

Xi Jinping has been the leader of China since 2013, and during his first two terms, he consolidated his power and pursued an ambitious agenda to transform China’s economy and society.

Under his leadership, China has become a major player in international affairs, challenging the dominance of the United States and other Western powers. Xi Jinping’s third term will likely be characterized by continued efforts to strengthen China’s position globally and promote the CCP’s vision of a “new era” of socialism with Chinese characteristics. This will involve both domestic and foreign policy initiatives.

Xi’s third term as president marks a significant moment in the country’s history. As China continues to rise as a global power, Xi’s leadership is considered critical in determining China’s future orientation and its relationship with the rest of the world. As China moves towards its first centennial anniversary, Xi will focus on strengthening China’s military and strategic position. Under his leadership, China has expanded its military capabilities and asserted its territorial claims in the South China Sea. Xi is now seeking to modernize further and expand China’s armed forces while also pursuing a more assertive foreign policy that seeks to promote China’s strategic interests. This is achievable but certainly not easy as Xi himself has warned many times that China will sail on a stormy sea in the coming years.

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