Hong kong as we await this speech from the chinese president , looking at the signals for his vision from party building, the economy, and the military. He will also signal if he will appoint a successor after 2022 or not. At stake is whether or not the president can en masse enough reforms through the economy because of the structural challenges over the next five years. He is seeking to boost chinas international clout. Looking at the one belt, one Road InitiativeInfrastructure Spending and seeking to avoid a conflict with United States. ,ooking also at Economic Growth surprising on the upside in recent data, suggesting as much as 7 growth. Economists have up to their forecast for the expansion of what is already the worlds secondlargest economy. There has been so much buildup and anticipation into this piece of political pageantry kicking off today. As of these delegates from beijing,e country in choosing leaders for the next five years. The question is once he has that consolidation, what is xi jinping going to do with it . Does he have the appetite or inclination to push through painful Structural Reforms . Lets get it over to Tom Mackenzie in tiananmen square. It has been quite tight security getting to where you are. It has been in tens and taken us well over one hour to get into the square. Pella military police around the square Paramilitary Police around the square. They are making sure there arent any security risks. Security, there was there and extra checkpoints. Security is intense, but we are leading up to one of the most important speeches and president xi jinpings career. It is a wet and dreary day. They are awaiting for that speech to kick off, running for about one hour and a half. He will address the achievements of the last five years, a tumultuous time when president xi jinping has stamped his control firmly on the party, then look ahead for the next five years, a policy framework for where the economy, society, and International Relations will head between now and 2022. President xi jinping in the great hall of people just behind me. Rishaad one of the people watching their, the premier, some suggesting he may be removed from that position and put elsewhere. We dont know what will happen. What about the International Agenda . What are we likely to get signals on here . There is a letter of issues they have to deal with, north korea, and challenges from this one belt, one Road Initiative. Yes, a large number of challenges. Domestic stage, but also the International Stage, you have the u. S. China relationship , President Trump coming for a state visit in november. We have seen a more muscular approach on the International Stage from china, so how he articulates that in his work report and in his speech something of interest. He will likely talk about hong kong, taiwan, then of course you have north korea, that seemingly intractable problem, and that is where we have pressure on china from the u. S. How china deals with north korea will be a key issue that will have to be addressed in the next five years. This is about succession as well. We have had no indication who will take over, so we will be head of the Party Corruption crackdown. On, that could signal that president xi jinping may stay on beyond 2022. Also one party chief who potentially may be led up to a leadership position. So the Succession Plan is key. Be able to put more allies in key posts. He is likely to emerge from this congress stronger than he already is. On the domestic front, it is a fine balancing act. What are some of the challenge the president faces . Clearly and this was articulated by the pboc governor, the question of debt and the deleveraging, and many would say deleveraging has not started. Possibly shadow banking and a tighter focus on some of that lending has happened, yes, but in terms of pulling down those debt levels, we saw the credit numbers a week ago, and the supply of credit has picked up. Corporate debt as highlighted by the pboc governor, and then how do you reform state owned enterprises and how do you define reform . Creating a be about larger more dominant state owned enterprise in a more powerful role for state companies, not a less powerful role, and that takes some oxygen out of major sectors were private companies could play a greater role. Been at that there has slowdown in private investment and much of the growth is dependent on Infrastructure Spending, all these things will need to be a dressed, but there are questions over how much appetite president xi jinping has for tackling these reforms, because the last five years is all about politics and getting a and alsohe party reducing the role of collective leadership. Rishaad thank you for that. Getting straight to the speech itself. Here is president xi jinping. Society and it is a crucial period in chinese history. The main thing for the congress mission,ember our raise great banner of chinese for a prosperous society. The great victory of the great Chinese Society and relies a great dream of great china. Remember the past. We will achieve the future. Yhe chinese coming as part mission is to work for the happiness of the Chinese People, serve the great china. A sense of memory is the true strength to work forward. Musthe communist party keep in their mind the happiness of the people. Status of the status courageous continue to work for the great achievement of realizing the great dream of the Chinese Society. Areently at home and abroad changing profoundly. Is still within a great situation. Our prospect is bright, but our challenge is also tough. Communists from the party must stand high, look far, and be courageous to reform. Forward,p working bringing all the peoples of the realizingach victory, the happiness of the chinese. Great victory of the chinese revolution. Historical events five years is a the 18th congress normal period in the development of party and nation. Worldwide conflicts happen in many places. Our economic ent our nation into a must meet the difficult and move forward. Achievedis and we historical achievement in socialist construction. After the conference of the about deep in our reform our reform and set up plan3th fiveyear economic and make important decision about the national development. Ince five years successfully realized that 12th fiveyear economic plan. Economic construction obtain considerable victory. Staunchly stand by our prospect of development, keepase our efficiency, the Economic Growth at the medium to high state. We are at the forefront among the nations. Economic is second worldwide. Again, we reached the secondplace worldwide. To the World Economy more than 30 . The reformation reached two different area of the society of theerent area society. Digital economy and other new airport, andors, other important structures appear. Agriculture move forward. There are more than 80 million their status. E the Economic Development is obvious. We see the Largest Development economy. W we have reached a number of technologicalomic achievements. Economy has been gradually built up. Our Foreign Trade is at the forefront worldwide. Fullscale renovation reached great results. Bulked up the barriers of our reformation in different areas. We improved our cooperation nationwide in reformation. Than 1500 more reformation steps. Main frame of the reformation has been basically established. Our social economic status has been better established. Development and Creative Development exponentially increased. Law based on the nation management based on law of the nation Party Leadership is become more and a socialist stature has well as democracy within the party have greatly developed. Are also ethnicities push forward. Lawntifically set up the and follow the law. Country, law government, and Law Development was established so the legal concept nationwide increase greatly. System reform in the legal system reformation. Eached a great result alsoultural area received great achievement. Leadership and ideology, guidingand its , chinese, chinese nese culture was greatly the level of Cultural Service by the party was greatly strengthened. We are continuing to improve the. Nternational quality past is even more obvious. Chinese culture was pushed to new height. Peopless lives are continuing being improved. The central idea of the government for the people accepted gradually. People receive widespread benefit. We eliminated the poverty status for more than 60 million people. Education were greatly improved. Countryside the were improved greatly. Hasemployment situation. Een keeping, Getting Better city and countryside income level surpassed general Economic Development level. Security system for city and countryside was basically established. The living. Nvironment social wise, the nation is stable. On a new level of security. Haidi we are going to get back to that speech. President xi jinping giving his keynote address, his work report as he kicks off the 19th Party Congress, reflecting on the achievements and policies steps of the last five years. 510 looking at up perhaps years more. More insight for into chinas Party Congress implications for the whole world is the director for the china center for economic and business. On the innerrts workings of the Chinese Communist party. In his opening remarks, he spoke about the great china dream. We have heard that great rhetoric before. Made in china 2025. We know xi jinping is not a great reformer. He is not that much of a fan of open markets or dramatic reforms. What is his vision for the great victory of china look like . Great point. The china dream has played a central role in how he has defined his first term. Most of us thought economic reform was going to be at the center of that given his background and leader of the party and early statements, but we are seeing a different policy agenda is taking shape, one about the revitalization and National Greatness and national strength. One way to think about it is that for the first three decades era, economics was at the center. We are seeing a shift from economic considerations on par with National Security concerns. There are lots of questions of whether there will be appetite or inclination for change even if he does presumably have this consolidation of his power. What does the next five years look like . Do you think he could go all the way through 22027 . Isthe operative assumption that no matter what happens at the end of his second term, xi jinping will be dumb chinese politics for the foreseeable future as general secretary or behind the scenes, but the idea he is retiring in five years is incredibly unlikely. In terms of the next five years, a good past behavior is way of understanding future behavior. We have a clear blueprint of xi jinpings political economy, a robust, strengthen state owned sector propping up growth here and its outward expansion plans for this china revitalization or this china dream. It is putting private Sector Companies in their place, indicating these are not the old days where you had free reign. This is not just foreign companies. This is domestic companies. We have seen crackdowns on some of the highflying companies by the party. The real operative word is disciplined. What the party is doing is saying its great we got rich for 3. 5 decades, but that had political knock on effects and now it is time to reassert control. We tend to think we are moving into a china inc. 2. 0, an upgraded version with markets, but all within a bird cage to economy. Birdcaged economy. He is already general secretary of the communist party. Chairman not been a for sometimes. Do they expect him to add that to his long list of titles and send out a clear message that he is the man in charge . That we haveaveat no idea what will happen. Analysts have a bad track record on chinese politics. Taking back the party of chairman is assigned to china and the world, it seems like that would be an unnecessarily aggressive move by xi jinping. About xi jinping not having power. He has that already. The newsee that when leadership is unveiled that he has strengthened control over the bureaucracy. Jinping ist xi sensitive to these criticisms as the new mao. And newsweek both have their sights blocked after they made that comparison. I give it a 10 chance that he goes with blinking his rule with the past and the cultural revolution. Rishaad will we get more concrete i suppose ideas of the reforms which may be in the pipeline . People talk about state owned enterprise reforms, but what about the shape they will be taking in the future because we also talked about many of the state owned enterprises becoming make a state owned enterprises, and i assume champions of the chinese economy in some way . What we should do moving forward his take that word reform and put that to the side. What we do at the conference boards take the word reform and swap it for change it it is not a normative direction. It is more that the party is going to be restructuring, recombining things for the good of the party state. As an Analytical Community and Business Community are caught up on this word reform. The party has been fairly clear in saying that their definition of reform is quite different from ours, so i would say dont hold your breath for liberalizing reforms, but look out for reform. Were likely to see the continuation of the party strengthening over the sme sector. In the consolidation will be at es thehes and as so dont have key strategic performance. In onewe think of reform direction, opening up, becoming more internationalized, becoming more liberalized. I want to stay with this topic of state reform. How fast do you think the reforms will happen and some private Companies Like tencent have that report saying the state potentially taking efficiency for state owned enterprises. Two issues. I would take them in reverse. Of theseeing eradication distinction between public and private under xi jinping, certain many with regards to large chinese companies. To say ificult tencent is truly a private company. The purchase of some of these golden shares makes it much more difficult. Add to this the increase in and nominally private companies for the exclusive purposes of getting the parties foot in the door, making it difficult to have that cleared the linear nation. Delineation. Are unlikely to see xi jinpings risk threshold increase after the Party Congress. One of the defining features of Economic Policy is supplyside structural reform, stemming the bleeding in the state sector. About privatizing. Its about looking at the wounds and hoping to become stronger. Where likely to see overcapacity cuts at the center of the economic agenda, especially when we see the adverse effects of this really inefficient bloated state sector. Global political economy logic still applies and local governments are reticent to see the shutdown of the state owned enterprises. They still have growth targets on mind. Weve been talking about this Deleveraging Campaign and the buy up ofhing youom assets, but essentially have this situation with the state is telling them where they can and cannot invest. What does that tell you about the risks if you are a private company and to Foreign Investors . This is an area to watch where we are seeing the economication of demand. We are seeing there is a partial closing of the door. If youre looking to get fx outcome it is important to see those greenlighted. If you looking to bring out precious reserves of the state to be put into things they think are nonessential or what their recently called irrational, we will see a continuation of that containment. Adding to increased uncertainty for the policy environment and what the private sector looks like youre moving forward. It is one of the distinct differences over the past decade or so and since xi jinping came to power, but in terms of what policy tomorrow will be uncertainty is increasing as power is moving up into the and now driving policy. I think we just dont know. Throughout the past four decades, risk containment as the core of how the party looks at the economy. Rishaad youre talking about how that consolidation may be completed in large part. What to do we see next . Do we see more social reforms . Some said it is highly doubtful xi jinping is a social reformer given the lack of evidence thus far. I would just make the comment that power consolidations dont reach a static state. Although we are focusing on this 19th Party Congress as some sort of hinge moment in power consolidation, that he has reached the top, if we look at previous authoritarian governments, we see this is an ongoing process. President xi jinping will not emerge and it mid i have total controls over the system. If we dont see a clear succession lineup coming in, i think that will spook people and we will continue to look for a continuation of his power consolidation moving forward. No matter what kerry were talking about on the reform issue, everything is possible. We have to look at it through the lens of the party. The first question when they what doreforms are woode these mean for stability in the system. There he is making a break towards issues of poverty still connecthich to the old social legacy of working for the people, but were seeing a much more of a National Security agenda emerging from the party and are likely to see emphasis being put on overseas ,ctivity, one belt, one road, consolidation in control of the south china sea. It were seeing meaningful reforms, those will be nice to have come up but not must haves. Rishaad stick around with us. We will go to tiananmen square. Flavor of the atmosphere on this cold morning there in the chinese capital. Tom damp and dreary. Security is quite unprecedented. Took us well over one hour to get into the square. You have over 2000 delegates in the great hall behind me, president xi jinping giving his speech right now. Some excellent analysis there. Interesting to see the president talk about his chinese dream. Part of that is about getting per capita income doubled by 2020 from 2010, and that cites us into the gdp target. We are not expecting any changes on that during this party does raise the question how much growth and more credit and debt will be needed to ensure you have growth around 6 over the next few that per capita gdp income increase for this chinese dream. Also interesting is the domestic challenges and challenges further afield, saying there were severe challenges ahead, that the future was bright, and asked at the party to ensure they were correctly positioned to take on some of those challenges. Thelso ran through historical achievements, the updates and reforms and the rule of law and the digital economy. It is interesting to point out that president xi jinping has overseen a clampdown of Civil Society in terms of human rights lawyers being locked up, academics afraid to speak out, so the oxygen for debate is more limited than it was prior to president xi jinping taking over. Also the control of the party not just at the state level and private level and the control of ns aremedia, that vp down over this Party Congress. Very difficult to get on blocked websites. When he talks about the digital economy, it has become more restrictive than ever. We are halfway through his speech probably. This leads to the end of the Party Congress next week likely to wrap up tuesday, then a lineup of the new leaders, a key point, a Succession Plan, if there is someone being lined up, but it looks unlikely we may get clarity on that, but president xi jinping defining himself here as core to the party and pushing the parties technicals further into society and chinas economy. Of the speechts that jumped out to me, he said you have to be courageous to reform, never stop moving saying growthlso is to be kept at that medium to high speed youd those two will come into conflict if you take the definition of reform, opening up some of these more painful reforms. There in lies the tension, and attention that will play out over the next five years. Within thebe those party who are more inclined to reform as we define it, and those who prefer stability. We are still trying to get clarity on where president xi jinping sits on this and all whether he comes out stronger after this Party Congress and allows them to push through reforms. That is probably unlikely in terms of Stateowned Enterprises and making those bigger and more powerful and not spending parts off. What we have seen in the last five years, things like the bond , stock connect between shanghai and hong kong, those moves have been taking place always up to a comfortable level. We are seeing liberalization of the yuan, taking steps back with capital controls. Curbs in allther likelihood to be put in place in the real estate sector. Reform and howof president xi jinping and the new Standing Committee powers ahead with that will be a point of interest for the next five years and how those tensions play out. Will talko doubt he about the International Side of things and say china wants to have friendly relations with all countries. Is he likely to say anything specific about the United States or be more specific when it comes to relations with pyongyang . I would be surprised if he named drops pyongyang or washington directly, but what we have had in speeches prior to this one is a section on foreign affairs. Tona was happy, content, take a smaller role on the International Stage, but under xi jinping, there has been this a more muscular approach in the south china sea, a more muscular approach in the relationship with washington, this is a president who is not afraid to give china a bigger role on the International Stage, and in terms of International Laws and norms as well setting up the Asian Infrastructure investment bank, then the controversies and questions over the belt and the Road Initiative and how that ties nations into spears of influence spheres of influence for china. Those are issues as well that possibly we will get more clarity on after the Party Congress. Unlikely he will detail these International Relations, but he may codify what we have seen in the last few years, which is a more robust and muscular china on the global stage. Rishaad thank you. Tom mackenzie in tiananmen square. President xi jinping making a speech at the 19th Party Congress. Been talking about state security, saying it is facing new situations and touching on domestic security issues, also mentioning there about keeping growth at moderate or fastpaced, medium to high speed. That is where we left things good lets tap into what he has to say now. Likelihood,e ,xistence, of 10 billion people the life greatly newized, which set a resourcest for social which required us to improve social security, National Social security, national. To push forward the fullscale theal growth, we must see main conflict of our society , we did not change how ourc idea of socialhistorical change. , we are still in the initial period of socialism development. The International Status has the largest developing country has not been changed. Must remember this , the parties basic principle and peoples lifeline lead people of the nation. The central task of economic to achieve to make our country a modernize socialist country. China entered a new area in the history of the Chinese People even in thel status also means greatly for the development of the word nation. Make it with the chinese character to show it more , the chinese parties New Historical mission in the new era. More than 100 years ago the send usrevolution marxism and leninism. Found the road based on marxism and leninism. Process of the chinese against feudalism, we use marxism and leninism combined with chinese working classes movement. , we work for the liberation of the Chinese People. Spiritually the Chinese People statusfrom backward towards a prosperous, forwardlooking status. The party contributed greatly for the people. Since the war, china sent into the situation of internal war and outside invasion. Chinese people underwent great. Ain individuals worked, event with great effort though they tried and were not able to change the general appearance of the old china. The great prospect of greatesteople is the dream of the Chinese People. PutChinese CommunistParty International common is him parties highs principles. International communism as the parties highs principles. I want to bring back our guest for the hour. You have been listening to the speech as president she continues to speak to the nation and resoundingly this theme of the 19th Party Congress seems socialism with chinese characteristics flying high for the whole world to see entering into a new era. Im thinking about the powerful ,peech he game at davos everyone saying president xi jinping is the champion of the global liberal order. How does that fit in with what you are hearing at the moment . One of the reasons the davos speech stood out for us was a question of where the United States was. What president xi jinping has been doing over the last two years is recognizing this is a strategic window for china to be moving into this space, symbolic or real, where the United States appears to be withdrawing and i think the davos speech is a good example that. One belt, one road is another great example of china stepping into the void where the United States appears to be with the drawing. One of the things which stands out and has always stood out is that while the party has been talking about global miss, openness, and reform, it has always been in the party documents, at the front or the back, and we ignored it. Economya socialist under the leadership of the party and that will never waver. Theave been hearing about Historic Mission of the party coming up on its 100th anniversary. This speech and said you cant forget the past if you want to move forward, tapping into this historic and narrative of the parties glory. This is an attempt to rectify of awas felt 10 years ago party that had no direction and no spirit. More powerful. This consolidation of power in the months leading up to this congress, what is he going to do with it . Criticism into this that we are looking at another cult of personality. Many comparisons have been drawn that he is the most powerful , andr in three decades concerns of what that leads to. Is that something to be concerned about . Absolutely, but for a slightly different way. I think the comparisons are overwrought. Many fingers have to make connections to and china in terms of personalities at the top. Say that, but most people would not know that. It does clearly indicate that this analogy has some traction. Trajectory we thought china was on politically in terms of economic integration would lead to some convergence or normalization of the political model, president xi jinping was willding us of that china travel a different road. As we talked before, as xi ownershipkes complete over the policy apparatus and policymaking apparatus, this ,ersonal making of policy supplyside structural reform, one belt, one road, that politicization of the policy process means you are taking this out of the hands of the regulators. You are moving that out and into the party, and the party i its nature is more opaque, secretive, so i think it will have some serious knock on effects. Ways to think about this was the party was the and the the restaurant government was the chef in the back kitchen. Be told you what would on the menu, but left the chef to cook. I think we can expect a much more erratic, lurching policy process moving forward, and this issue of stability and fear of risk will come to the forefront as the party sets more policy. Policy so far it is trumped by politics, and we are seeing this reaffirmation of the commitment to socialism coming through as well. Chinese socialism with character appear different to capitalism . For the purpose of understanding what xi jinping is decades,bout, for four the party has been in this a jiujitsu match with itself. Use all throughout the 1980s and 1990s this torture to call this,what socialist market economy, but at the same time we have a divergence of pierce socialism from with the party is doing. Pboc in deputy of the the 1990s said we are the communist party and we define what communism is, and that is probably a good way to understand it, so socialism playing a large role in policy . You see some hints of that. State ownership. That is wise state owned enterprises and state control has been a lightning rod. When i think about what xi jinping is doing, i think less of a resurgence of socialism and a resurgence of this leninist idea of discipline, discipline, discipline over the party and economy. This message got from the official korean news agency. North korea sending a congratulatory message for chinas Party Congress. They said the Chinese People have made great progress in the cause of building socialism with chinese characteristics under the correct guidance of the common is party of china in the past and we are greatly pleased over this. So mollify and words from pyongyang there. Perhaps they wont do anything to upset this congress. Is like getting a birthday card from your exwife. They have not had great relations over the past couple of years. They are strained as they have ever been. There is no love between these two leninist parties. President xi jinping and kim jongun have no love lost for them. President xi jinping has been trying to convince north korea to go that china route, hold ile open upwh markets and get rich, and north korea has been saying, no thank you. To see absentely from the speech today is a discussion that there is potentially a massive military conflagration on chinas backdoor. This is clearly one of the most vexing problems for china and one of the corniest problems for china. Too much into this congratulatory note from the koreans. Lets look at the International Investment community. What did they want president shenzhen ping to be saying here, and what with they get come if anything . They get, if anything . Some credibility on the promises of reform that have been laid down consistently. We heard about resolve is in the end of 2013 with a celebrated decision of the 60 point reform document were markets will play a decisive role. It is pretty clear markets play a distrusted role. Patient has been long over the past five years of looking for credibility on reform. I think what we need to see is every time the party rubs up against some sort of potential it alwayscertainty, pulled back and reverts to the old tools of the control and propping up growth to a credit growth. Ethically i think what we need to see is the credit bill push through on a meaningful economic reform. I would caution at the same unveiledna has industrial planning, whether that is made in china 2025, ch calls for essentially a in the next decade. Let us also remember the big strategic objectives of the party, which do not necessarily include foreign companies. Haidi