Xi's Power Vacuum Rumors and the Fifth Plenum

The health condition and public schedule of China's top leader are classified as state secrets, and disclosure to the outside world is tightly restricted.

When Xi Jinping suddenly disappears from official appearances, his personal risk tends to be read as a national risk.

Rumors are amplified by the absence of a succession arrangement and by the moves of forces hoping for a power vacuum. His absence from major international events, such as the BRICS summit in India or a US-China summit, tends to fuel political uncertainty more than it reflects an actual health problem.

The Fifth Plenum, a full session of the Central Committee held after the Party Congress, is a key meeting that decides major matters such as the replacement of national leadership.

At the 20th Central Committee's Fifth Plenum, about 30% of Central Committee members could be replaced, a level of personnel renewal expected to be among the largest on record.

The key points to watch are the reconstitution of the Central Military Commission following the stripping of party and military ranks from Zhang Youxia and Liu Zhenli, and whether loyalists are placed in those posts. Whether officials born in the 1970s enter leadership, a signal of the next power structure, is expected to shape China's political direction.

Former Premier Zhu Rongji was highly regarded as a pragmatic, frugal, and clean economic leader.

He pushed reforms of state-owned enterprises and efforts to revitalize private firms, and carried out a strong anti-corruption campaign. He showed his determination against graft with the anecdote: 'I prepare 100 coffins; 99 are for corrupt officials I will root out, and the 100th is for me.'

Xi's 'new era' emphasizes 'common prosperity' and 'the state advances while the private sector retreats,' reflecting a governing approach different from the earlier reform-and-opening era.

Controls on public mourning when former Premier Li Keqiang died stemmed from concern over comparisons with the current system and damage to trust. Scholars characterize Xi's system as 'repressive authoritarianism,' in contrast to the 'open authoritarianism' of the Jiang Zemin and Hu Jintao eras.

The property development model that once sustained about 40% of local government finances has collapsed amid weak sales, weakening a major pillar of China's economy.

Xi's 'the state advances while the private sector retreats' policy and his line that 'housing is for living in' have dampened private investment.

US and European protectionism and tariff pressure have limited the traditional export-led growth model. China is now sustaining growth through 'dumping' exports of excess production, but there are lingering concerns that prolonged deflation is being felt in everyday life.

Most Chinese household wealth is tied up in real estate, so the property slump translates directly into weaker domestic demand.

Local governments covered about 40% of their finances through land-use rights sales and sales surpluses from housing, but after the COVID-19 pandemic, weak property sales deepened and led to fiscal strain for local governments.

Investment and export-led methods that once drove China's economy have hit limits due to external factors, and population aging and slower productivity growth are also weighing on growth.

With private investment still weak, China's economy depends on 'dumping' exports of manufactured excess production.

The government insists on high growth rates, but analysts argue that the economy as felt on the ground has entered deflation.

Efforts to shift the economy through AI and science and technology remain, but the challenge persists that such advances are not translating into job creation.