By H+K China Government and Public Affairs Team

On Sunday, China’s Communist Party unveiled a proposal that would remove the constitutional restriction on presidential term limits in the country, sending the strongest signal yet that President Xi Jinping intends to stay in office well beyond the end of his second term in 2023.

The announcement came just four months after the president emerged as the most authoritative Chinese leader in decades at the 19th Party Congress in October. After the leadership refrained from designating a clear successor to Xi last autumn, speculation intensified that the president would remain in power past the customary two five-year terms. However, few anticipated the speed with which the leadership would move to lay the official groundwork for such an extension.

The constitutional change will still need to receive official approval from the National People’s Congress (NPC), China’s legislature, when it convenes for its annual session in early March, but the green light is virtually assured given the endorsement of the Central Committee, the largest elite decision-making body in China. In particular, the amendment indicates a dramatic rethink of succession practices in Chinese politics and further underscores Xi’s powerful political stature, especially his sway over the policymaking apparatus. There is clearly consensus within the leadership that it is necessary for Xi to stay at the helm past 2023 not only to weather any economic headwinds that may arise but also in order to achieve his administration’s bold, multi-decade grand plan for China’s reemergence as a prosperous, modern society by mid-century.

3rd Plenum kicks off earlier than expected

Companies should also be aware that the Central Committee is now holding its third plenary session from February 26th to the 28th. The three-day meeting of the Party’s top officials will discuss the deepening of economic and political reform as well as finalize key personnel decisions ahead of the government reshuffle at the NPC. Third plenums are typically convened in the autumn of the first year of a president’s half-decade term, and the decision to hold this year’s Third Plenum so early may signal the Xi administration’s resolve on pushing ahead with economic and political reforms at an accelerated pace. The People’s Daily, the flagship newspaper for the Party, emphasized on its WeChat account that third plenums have traditionally focused on deepening reform and urged everyone to “pay close attention” to what messages on reform emerge from the elite conclave later this week. Other key changes to look out for include the establishment of the National Supervisory Commission and the consolidation of the financial regulatory system – other state agency reshuffles are not to be excluded – and businesses will need to follow such changes carefully and consider how they are impacting their government stakeholders.

For further H+K insights on China’s 2018 “Two Sessions,” please visit our analysis hub.

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