Cabinet of the pre-war period – Newspaper Kommersant No. 209 (7410) dated 11/11/2022

The recent congress of the Communist Party of China outlined the circle of leaders who will manage the second power in the world and the largest economic partner of the Russian Federation in the next five years. The biographies of the members of Xi Jinping’s new team say one thing: China is preparing for a further deterioration in relations with the United States, and therefore intends to speed up the course towards increasing economic and technological autonomy.

The final distribution of portfolios in the new government will be known only in March, but among the 24 members of the new Politburo, a group of people stands out who, obviously, will form the backbone of the economic team. The macroeconomic bloc will be curated by He Lifen, the current head of the State Committee for Reform and Development, formerly the State Planning Committee. Comrade He, who has known Xi for many years, is known as a conductor and advocate for a greater role for the state in the economy.

Other important positions can be obtained by people with extensive experience in the aerospace industry, the defense industry, the healthcare system, and environmental oversight. If earlier, during the period of rapid growth, the PRC economy was controlled mainly by civil engineers and bankers, then the profile of the new composition is more suitable for pre-war management.

The professional competencies of this team are well within Comrade Xi’s priorities. Over the past five years, he has poured money into import substitution and innovation, including military-industrial complex and dual-use technologies, fought carbon emissions, stricter regulation of private business and set a course to redistribute income from the “fat cats” of the primitive accumulation era in favor of the poor.

But the tilt in the economic course also reflects the objectively changed external background, primarily relations with the United States. If earlier they were a key market, a source of capital and technology, now the superpowers perceive each other as rivals. Mutual sanctions, trade wars, technological restrictions are the new language of communication for the largest economies in the world.

For Russian business in the face of confrontation with the West, the new board of directors of China Inc. and his course is rather good news. A focus on green energy and a reduction in dependence on sea routes for the delivery of hydrocarbons will accelerate the laying of pipes from the Russian Federation to China, and an emphasis on its own innovations may allow China to become less dependent on the United States, which means less to tremble before secondary sanctions.

There are downsides, however. Given the scale of China’s internal problems like debt bubbles, the ability of the new team to deal with them looks like a guarantee of the health of the world’s second economy. However, it is not certain that the dirigiste recipes that Comrade Xi’s loyalists will inevitably write out will not exacerbate these problems.