Xi says China's prospects are bright but challenges severe

BEIJING: Chinese President Xi Jinping proclaimed his nation's prospects as bright but made a rare acknowledgement of severe economic challenges as he opened the ruling Communist Party's twice-a-decade national congress on Wednesday.

Other Chinese leaders have regularly warned since the 2008 financial crisis that China's economic growth faces "downward pressure" due to weak global demand that threatens export industries in the world's second-largest economy. But Xi's comments in the massive Great Hall of the People near Tiananmen Square were unusual in a keynote speech meant to highlight the party's confidence and long-range vision.

Among the grave issues Xi said were insufficiently addressed are a widening income gap and problems in employment, education, medical care and other areas.

"The great rejuvenation of the Chinese nation is no walk in the park or mere drum-beating and gong-clanging. The whole party must be prepared to make ever more difficult and harder efforts," Xi said. "To achieve great dreams there must be a great struggle."

He added that the party would have to take big risks and overcome "major resistance."

Xi wields undisputed power and is expected to get a second five-year term as party leader at the gathering. Analysts say to consolidate his power he has sidelined his competitors in other intra-party cliques, including those surrounding his immediate predecessor Hu Jintao and former leader Jiang Zemin.

The Communist Party meetings will largely be behind closed doors and are accompanied by extraordinary security measures, such as restrictions on knife sales and greater monitoring of dissidents. But the congress will see powerful players emerge publicly in new roles and is a chance for Xi to publicly lay out his political and economic vision over the next five years.

In a speech before hundreds of delegates, mostly men in dark suits who applauded regularly as they read copies of his prepared remarks, Xi hailed China's island-building efforts in the disputed South China Sea as well as his signature foreign-policy initiative, the "One Belt, One Road" infrastructure investment project aimed at improving connections between China, Europe and Africa.

He also praised the party's tightened grip over domestic security, saying that social stability had been maintained and national security strengthened.

Xi pledged that the party would have "zero tolerance" for corruption and said it would "continue to purify, improve and reform itself" — an indication that it would not allow outside checks on graft.

But observers will be watching the congress for signs of whether Xi, 64, may be looking to appoint a successor to take over after his traditional second five-year term in office.

Xi, in his address, exhorted party members to resist "pleasure seeking, inaction, sloth and problem avoidance." He drew a hard line on sovereignty, saying that the party must "staunchly oppose all efforts to split China" or to undermine ethnic relations.

Xi affirmed economic plans that call for developing state-owned companies that dominate industries including finance, energy and telecoms while also giving the market the "decisive role" in allocating resources.

The party declared for the first time in 2013 it would give market forces the "decisive role," a step business groups welcomed as a commitment to freer markets. But the same declaration also said the party would play a bigger role in managing state industry, a step that could blunt the impact of competitive forces.

Xi announced no new initiatives but emphasized that Beijing "must develop the public sector," a goal that reform advocates complain is a waste of public money and a drag on slowing economic growth.

To achieve a "moderately well-off society" by 2021 — the 100th anniversary of the party's founding — and even greater national power and prosperity by 2049 — the centenary of the founding of the communist state — China needs continued economic growth and the lifting of millions out of poverty. The country is also rapidly expanding its military and political power, including its growing ability to dominate the Asia-Pacific region.

The most tangible results of the congress will be personnel appointments.

China is run by the party's Politburo Standing Committee, currently a seven-member body led by Xi, with Premier Li Keqiang his No. 2. While Xi and Li are expected to stay on, the fates of others are determined by loosely defined precedents governing retirement age. Four of the others are expected to step down, although the fate of a fifth, party discipline boss and close Xi ally Wang Qishan, appears to remain in flux.

The 2,287 carefully hand-picked delegates to the congress are drawn from 40 constituencies, including the 31 provincial-level administrative districts, the government, the military, state industries and grass-roots organizations representing most of the party's 89 million members.

In a secret process, they will select a roughly 200-member central committee, along with more than 150 alternates, from a pool of around 400 candidates. The committee will then pick a 25-member politburo and the elite Politburo Standing Committee, led by the general secretary. The makeup of the top body will only be known at the close of the meeting when its members reveal themselves on stage in front of journalists, according to past practice.