It may appear at first glance that the most important time in China’s political season falls in the last three months of the year, when the country’s ruling elites gather in Beijing for a series of top decision-making meetings, culminating in the plenary session of the ruling Communist Party’s Central Committee. In fact, China’s political temperature is at its highest during the dog days of August, when current and retired leaders gather in the popular northern beach resort of Beidaihe to escape the heat of the national capital, and to talk. The resort, located some 300km (186 miles) east of Beijing, provides a relaxed environment for party leaders – particularly the retired ones who still have influence – to exchange their views on major policies. Those views are often absorbed into the formal policymaking meetings that commence in October in Beijing when the weather has cooled. Traditionally, there is no official announcement of the Beidaihe gathering. Instead, observers will note the sudden absence of President Xi Jinping and other senior leaders from state television’s daily news bulletins as a sign that the summer conclave has begun. In recent years, the start of the conclave has also been suggested by reports of senior leaders greeting scientists and academics who have been invited to the resort. It was the Qing government which first used Beidaihe as a summer resort, to entertain diplomats in the late 19th century. Under Nationalist rule, between 1911 and 1949, Beidaihe and Lushan, in southern China, were earmarked as the two major summer resorts for government officials. But Beidaihe only became an important political venue when late chairman Mao Zedong, a keen swimmer, decided to set up a “summer office” there for officials, away from the heat of Beijing. Since then, the resort town has been the birthplace of some historic decisions, including the launch of Mao’s Great Leap Forward and his decision to shell Quemoy island, the closest Kuomintang outpost to the mainland, in 1958. The significance of the summer gathering has diminished under strongman leader Xi. Since his elevation to a status equal to Mao, and superior to all post-Mao leaders – including paramount leaders Deng Xiaoping, Jiang Zemin and Hu Jintao – Xi has dominated policymaking. Under his leadership, it is widely believed that the influence of retired leaders has also weakened significantly. But most analysts believe Beidaihe still plays a significant role in Chinese politics, giving Xi an opportunity to review and adjust his policies, even though there is little sign of any major challenge to his dominance. This is why the Beidaihe gathering is still keenly watched. Besides spending their leisure time in the sunshine at the beach, China’s leaders also meet frequently at Beidaihe, where they continue to hold the regular weekly gatherings of the innermost Politburo Standing Committee, the monthly Politburo meetings, as well as the discussions of other top party, government and military organs, such as the State Council executive body. Officials from some important central bodies also move into town, ready to be called on to report to, or be consulted by, the top leadership. Representatives from Communist Party departments stay in villas on the western side of an exclusive beach, while State Council cadres stay on the eastern side. “Beidaihe is where and when senior leaders can get together in informal meetings to exchange their views on major policies, and therefore, it still plays a very significant role in policymaking in Chinese politics,” said Alfred Wu, associate professor of the Lee Kuan Yew School of Public Policy with National University of Singapore. This year’s meeting will be watched particularly closely, with a host of unprecedented challenges facing the leadership. These include deteriorating China-US relations amid a potentially full-blown trade war; the mass protests in Hong Kong, which communist leaders in Beijing may see as a challenge to Chinese sovereignty; rising pro-independence sentiment in Taiwan; and the sagging economy, which saw growth falling to a record low in the last quarter. Kerry Brown, professor of Chinese studies with King’s College, London, said he believed the focus of this year’s meeting would be on the general deterioration of the international environment, in particular China-US relations. “I imagine that this meeting will be more focused on external issues than ever before because – to be honest – neither Xi, nor anyone else for that matter, knows what to do about a US under such divided, divisive leadership, where its position at the moment is both a source of opportunity but also a very real danger,” said Brown, who is also director of the college’s Lau China Institute. The gathering comes after more than a year of tit-for-tat tariffs and escalating confrontation between the world’s two major rival powers in almost every area, ranging from technology, ideology and Taiwan to regional and global security. Washington has imposed 25 per cent tariffs on about half of China’s exports to the US and threatened to extend them to all Chinese goods, if the trade talks fail. The US has also launched a technology war, blacklisting several Chinese companies, including the telecoms giant Huawei Technologies. China has retaliated with similar, but more restrained, measures. US trade war has cost China ‘almost 2 million industrial jobs’, CICC says Despite an agreement to resume negotiations – reached between Xi and his US counterpart Donald Trump at the Group of 20 summit in Osaka, Japan – the prospect for an agreement still seems far from certain. In Osaka, both leaders agreed to refrain from imposing new or higher tariffs on each other’s goods, in a similar outcome to their previous meeting at the G20 summit in Argentina in December. But the tariff and technology wars have already damaged both economies and hurt the credibility of the two leaders. A full-blown trade war would be catastrophic, potentially leading to the decoupling of the world’s two largest economies. While there are no clear signs of a challenge to Xi’s authority, there is growing dissent within the establishment over some of his policies. For instance, some officials have made covert complaints about the leadership’s misjudgment of the US administration’s China policy. There has also been some criticism voiced of the party’s inflated propaganda about Chinese achievements on the world stage, its high-profile foreign policy and increasingly assertive defence posture. All of these recent policies, some officials believe, have played a role in the fast-deteriorating relationship between China and the US in recent years. The US-China trade and technology wars have also exposed several unpalatable truths about China’s overinflated sense of national strength, including its weakness in scientific and technological capabilities, its economic vulnerability, and China’s real place on the international stage. Brown predicted that, with no clear answers to the question of how to deal with the challenges of the Trump administration, Xi was likely to spend his summer at Beidaihe listening. As it happened: how Beijing expressed ‘resolute support’ for Hong Kong’s government “He can’t imagine that the meetings will be about giving instruction, but more about sensing how serious the issues they are facing with the US are, and exactly how to politically respond – just continue to be watchful and respond defensively, or to push forward even more assertively.” Wu said Hong Kong’s ongoing mass protests would also top the leadership’s agenda at Beidaihe, either in formal or informal meetings. For several weeks, the continued mass protests against an extradition bill have evolved into a wider movement with elements against the central government’s control over the former British colony. The demonstrations were originally triggered by a now-suspended bill that would have allowed extradition of criminal suspects to mainland China. But they have turned on the central government in Beijing, with some pro-democracy protesters defacing the facade of the central government’s liaison office building in Hong Kong, throwing eggs and splashing black paint on the national emblem of China. The crisis has caught the attention of the global media and triggered widespread criticism in the West, particularly in the US and Britain, over Beijing’s handling of Hong Kong affairs. But China’s leaders may see the protests as the most severe challenge to Chinese rule since the city’s return to its sovereignty in 1997. Beijing is also worried the continuing unrest in the territory may hurt China’s national interest in economics, politics and diplomacy. The leaders are expected to discuss and determine policy measures to deal with the situation during their stay at Beidaihe. As cross-strait ties have plunged to their lowest ebb since Tsai Ing-wen of the independence-leaning Democratic Progressive Party (DPP) came to power in 2016, Beijing sees hope for improved relations in a possible changing of the guard in Taiwan’s upcoming presidential elections. The presidential race will not only be a showdown between the self-ruled island’s independence-leaning and Beijing-friendly camps, but also in the rivalry between Washington and Beijing. The Trump administration apparently sees incumbent Tsai and her party as crucial allies in America’s “Indo-Pacific” strategy. Beijing favours Kuomintang (KMT) candidate Han Kuo-yu, the popular mayor of Kaohsiung, who supports the one-China principle, seeing a victory for him as an opportunity for progress in cross-strait relations. Despite the DPP’s crushing defeat to the Beijing-friendly KMT in last year’s local elections, Tsai’s prospects for re-election – and also the prospects for her DPP in the legislative elections – have improved significantly recently due to the party’s standing up to threats from Beijing, as well as its support of the protesters in Hong Kong. With the polls just six months away, Beijing needs to come up with some countermeasures, in an effort to help its favoured party make a turnaround ahead of the crucial elections. China’s policymakers must also discuss measures to overhaul and revive the Chinese economy, not only because the world’s once-fastest-growing main economy registered record low growth in the last quarter, but also because there is no sign of a halt to a 12-year-long downward trend. Growth in the Chinese economy slowed to just 6.2 per cent in the April-June period – the lowest quarterly figure since records began in March 1992. But the world’s second largest economy has been steadily slowing over the past decade, from 14.23 per cent growth in 2007 to 9.5 per cent in 2011, 7.3 per cent in 2014 and 6.6 per cent last year. That downward trend has accelerated quarter by quarter since last year and the latest figures have raised the serious question of when growth may come to a halt, requiring a fundamental overhaul of the state-led economic system, and forceful action by the government. Analysts believe Xi will use the Beidaihe meetings to try and forge consensus among China’s leadership on how to handle the political fallout from the US trade war, Hong Kong protests and other urgent issues. All of these matters are of strategic significance to China’s core national interest and development, related as they are to whether the world’s most populous nation – and last major state under communist rule – can achieve Xi’s most prized accomplishment of the “two centenary goals” – that is, to realise a “moderately prosperous society” by 2021, and to make China a “rich, powerful, democratic, civilised and harmonious” country by 2049.