Hong Kong Watch briefing note on the 20th Chinese Communist Party Congress urges Canada to reduce its economic dependency on China

In its briefing note on the 20th National Congress of the Chinese Communist Party, Hong Kong Watch examines the outcomes of the Party Congress, Hong Kong Chief Executive John Lee’s first policy address and risks they pose for Canada.

Xi Jinping has been confirmed as general secretary of the Chinese Communist Party for an unprecedented third term. This has titled China back towards one-man rule after decades of power-sharing among its elites.

A series of unexpected announcements regarding the composition of the central committee was made at the Party Congress, including removing Premier Li Keqiang and former Guangdong party boss Wang Yang from the committee. Xi’s new central committee is dominated by loyalists who have worked with him at different stages in his career.

Xi also stated in his speech that Beijing now has “comprehensive control” of Hong Kong and refused to rule out tackling so-called “Taiwanese separatism” by force.

On Monday, China reported its third quarter GDP figures growing by 3.9% between July and September of this year, below the government’s target annual goal of “around 5.5 percent.”

In response to China’s economic growth figures and the 20th Party Congress, foreign investors in Hong Kong rushed to exit from China’s domestic stock market pulling out 17.9 billion yuan, the equivalent of $2.5 billion, through the Stock Connect. The Heng Seng Index sank 1030 points to 15,180.69, reflecting a 13-year low and a level not seen since the 1997 handover of Hong Kong.

Following the Party Congress, Nasdaq’s Golden Dragon Index, which tracks US-listed shares in Chinese companies, fell 14.4% as Alibaba, JD.com, and Pinaduoduo faced heavy selling. The index is down 50 percent this year.

The outcomes of the 20th Party Congress have impacted financial markets considerably, presenting several risks for the Government of Canada, Canadian citizens, investors, and businesses.

Canada must work with democratic partners to reduce its economic dependency on Xi Jinping’s authoritarian state before it is too late.

Read the full briefing note here.