China Paves Way for Xi to Stay Longer With Repeal of Term Limits

(Bloomberg) -- China's Communist Party moved to repeal presidential term limits enshrined in the constitution, the clearest sign yet that Xi Jinping intends to stay on as leader past his second term.

The party's decision-making Central Committee proposed removing language from the document that says the head of state “shall serve no more than two consecutive terms,” the official Xinhua News Agency said Sunday. The provision is the only formal barrier keeping Xi, who also serves as party leader and commander-in-chief of the military, from ruling past 2023.

Speculation that Xi, 64, might seek to stay on has intensified since he declined to set out a clear successor at a twice-a-decade leadership reshuffle last October. Still, the formal move to amend the constitution was surprising as it represents a clear break from the succession practices set up to establish stability after the political tumult of Mao Zedong's rule.

“Even the possibly of president for life is not a good development,” said Fraser Howie, author of “Red Capitalism: The Fragile Financial Foundations of China's Extraordinary Rise.” “For the moment, nothing changes, of course. Xi is only going into his second term and a lot could still happen.”

Allowing Xi to retain all three posts into a third term would eliminate the need for some sort of power-sharing arrangement in which another official becomes head of state.

“This move is also not without risk for Xi,” Howie said. “When things go wrong -- and they always do -- there is only one person to blame.”

The announcement comes just a week before China's rubber-stamp parliament, the National People's Congress, meets with an agenda that includes confirming Xi's second term and approving a series of constitutional changes recommended by the Central Committee. The term-limit repeal was not among the amendments announced after the committee's last meeting in January.

The change underscores the extent of Xi's power after party congress in October elevated him to a status alongside the nation's most vaunted political figures. The party charter changes put Xi on par with Mao and Deng Xiaoping, and also declared him the party's “core” leader indefinitely, signaling a shift away from a party focus on collective leadership.

The seven-member Politburo Standing Committee -- the country's supreme political body -- elected after the event included no members young enough to take power after Xi's second term. That was a departure from established norms that saw Xi's own appointment to the body in 2007.

Party Conclave

After reshaping the party last year, Xi will now put his mark on the government. The Central Committee is set to begin a three-day conclave Monday in Beijing. The gathering, which Bloomberg News first reported Thursday, gives Xi an opportunity to strengthen his position by installing his favored candidates at the central bank and key regulatory bodies.

“The leaders said the current structure of the party and state institutions was not good enough to meet the requirements for various tasks of the new era,” Xinhua said, citing a Saturday meeting of the 25-member Politburo. “The party should resolve to tackle institutional obstacles,” it said, adding that details of the plan weren't disclosed.

In addition to selecting a successor to central bank governor Zhou Xiaochuan, authorities are considering a merger of the China Banking Regulatory Commission and the China Insurance Regulatory Commission, Bloomberg News reported.

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“The structural reform of financial and economic sectors will be crucial at the meeting,” said Hu Xingdou, an economics professor at the Beijing Institute of Technology. “The leaders understand a change of the financial regulatory system is a must as financial risk is increasing. It's widely expected there will be a super regulator that covers broader financial issues.” 

China is attempting to defuse a ticking time bomb of debt -- which stands at around 260 percent of output and growing -- without crashing the economy.

Politburo members mentioned by analysts in connection with the central bank governor role include Xi's top economic policy adviser, Liu He, as well as the head of the banking regulator, Guo Shuqing, and Hubei provincial party chief Jiang Chaoliang. Attention at the plenum will also likely focus on Xi's pick to lead the Financial Stability Development Committee, which was created last year to tackle China's financial sector.

David Cohen, a Beijing-based managing editor at consulting firm China Policy, said the decision to lift presidential term limits means the direction of policies will remain the same for the foreseeable future.

“China has been going for the last few years under Xi in the direction of increased party intervention in society and lower hopes for the rule of law,” Cohen said. “This move signals that those whose opinion Xi has to care about are either happy about the direction Xi is taking things or have been effectively sidelined. Either way, things aren't going to change.”

--With assistance from Peter Martin Lulu Shen and Will Davies

To contact Bloomberg News staff for this story: Keith Zhai in Singapore at qzhai4@bloomberg.net, Xiaoqing Pi in Beijing at xpi1@bloomberg.net.

To contact the editors responsible for this story: Brendan Scott at bscott66@bloomberg.net, Rosalind Mathieson

©2018 Bloomberg L.P.

With assistance from Keith Zhai, Xiaoqing Pi