Why leadership problems lie at the heart of the US-China trade conflict

The removal of the provision limiting presidents to two five-year terms from the Chinese constitution came as a shock to many. For China, the institutionalisation of leadership succession was one of Deng Xiaoping’s most important legacies, signalling an end to the wrenching instability of the chaotic leadership cult of Mao Zedong. For the West, the term limit was an ideological bridge that led to a path of engagement. Could its abolition be the tipping point for an already precarious Sino-American relationship?

Start with China and what the move means for its future. To figure out what will change under a different framework for leadership succession, it is important to cut through the authorities’ opaque rhetoric – the “moderately well-off society” transitioning into the “new era” – and stress-test their basic development strategy.

Initially, China’s leadership – responding to former premier Wen Jiabao’s surprising 2007 critique of a Chinese economy that had become increasingly “unstable, unbalanced, uncoordinated and unsustainable” – made its case from an analytical perspective. Last October, in a speech to the 19th party congress, President Xi Jinping made the same point from an ideological perspective, reframing the so-called Marxian principal contradiction around the pitfalls of “unbalanced and inadequate” development.

Significantly, these two perspectives – analytical and ideological – take China to the same destination: a prosperous economy and society with a thriving middle class. To get there, China must go through a transformative rebalancing, from manufacturing to services, from export dependence to domestic consumption, from state-owned to private, and from rural to urban.