The BGA China Team led by Senior Advisor Haiying Yuan, wrote an update to clients on the business implications of the recently concluded Chinese 20th Party Congress.

Context

  • The Chinese Communist Party 20th national congress saw notable leadership changes in the Politburo and Politburo Standing Committee — the party’s highest organ. The standing committee’s seven members — all Xi Jinping loyalists — are the top decision-makers in China’s government, economy, military and society.

Significance

  • Security is a top priority for the party, even at the expense of economic growth and development. China is currently pressed with national security, food security, energy security, pandemic security and social stability challenges that it must overcome in the months and years ahead.
  • The government is likely to rapidly, yet strategically, open high-tech and high-end manufacturing and services to foreign direct investment. This will also advance government efforts to promote economic growth and development, which is likely to come through more intervention in markets and corporate governance.

Implications

  • Companies should be prepared for deeper economic intervention in the years ahead, which could compound business risk. As part of ongoing efforts to address China’s economic inequalities and achieve domestic-led growth, the government will continue to advance Xi’s “common prosperity” and “dual circulation” agendas.
  • To successfully conduct business in China, companies will need to show that their presence and investments in China contribute toward increasing the country’s security as defined by the party. They will also need to abide by all national security requirements. This will increase short- and long-term costs and uncertainty.

We will continue to keep you updated on developments in China as they occur. If you have any comments or questions, please contact BGA Advisor Eric Wang at ewang@bowergroupasia.com.

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Advisor

Eric has over two decades’ experience in government affairs and public relations and currently serves as firm partner and managing director of Yuan Associates. He has worked with more than 80 clients in manufacturing, agriculture and food, consumer goods and service industries. Eric joined Yuan Associates in 2005 and become a partner and managing director in 2011. As managing director, he is responsible for comprehensive government affairs service for and management of clients. As a partner his responsibilities include overseeing the firm’s daily overall operations. Prior to joining Yuan Associates, Eric worked as an account manager for Euan Barty Associates ... Read More