When the world’s second largest economy sits down to reshuffle its leadership and map out an economic plan for the next five years it is a big deal. It is an especially big deal in Australia given China’s role as our most important trading partner.
What is the congress?
The NCCPC gathers every five years in Beijing’s Great Hall of the People with a very select guest list of around 2,300 party elite from the provinces, bureaucracy, military and industry.
It kicks off with a set-piece, televised speech from President Xi Jinping on Wednesday. It then largely disappears behind closed doors for a week when a reshuffled politburo pops up and details of the next five-year economic plan — number 13 in this case — are unveiled.
The headline grabber is always the ins-and-outs of the all powerful Politburo Standing Committee. Around half the seven-member politburo needs to be replaced as they head towards the tacit retirement age, or fall from political favour.
About the only certainties are President Xi will be there to serve a second five-year term and the replacements will also be men, given gender equality is no big deal in the upper reaches of the Communist Party.
Avid China watchers will then assess an array of largely incomprehensible party semiotics to see whether President Xi is more or less powerful than before. The betting is he will emerge more powerful.
What will we learn?
President’s Xi speech will detail the latest group-think on China’s economy, what its ambitions are and how they will be achieved by 2020 and beyond.
By the end of the week the constitution will be re-jigged with new ideological and policy positions to hit the targets. The plans generally entail some big concepts such as the “One Belt One Road” policy, supply-side reform (closing down inefficient industry) and the more recent “Made in China 2025” strategy.
Given those three policies are all closely linked to President Xi there is unlikely to be much change in economic policy in the near term. Ultimately, China’s goal is to take a much larger chunk of the global economy by whatever means are at hand.
The highlight of the week on the domestic front will be Thursday’s jobs data. They should be a strong set of numbers.
NAB’s David de Garis says based on the bank’s forward-looking business survey he is picking 25,000 new jobs, well ahead of the consensus choice of 15,000.
“Such growth would arithmetically be sufficient to push the unemployment rate lower, except that it may well come from a lift in workforce participation,” Mr de Garis said.
Solid quarter for resources exporters
The September quarter is generally pretty good for the big miners with little or no adverse weather to get in the way of their endeavours. The quarter certainly finished on a flourish looking at China’s latest trade figures.
Iron ore had a big September, with China’s customs office reporting imports jumped 16 per cent from August to hit a record monthly high 103 million tonnes. That is up more than 10 per cent on last year. Copper imports were even more impressive, up more than 26 per cent over the month, continuing the rebound of the past six months.
BHP (Wednesday) may be a bit behind schedule after maintenance work at its Port Hedland facility, while Rio Tinto is still battling to make its guidance of 330 million tonnes for the year.
The big oil and gas producers, Woodside, Oil Search, Santos and Origin Energy all trot out quarterly results and all should be buoyed by stronger prices.