In 2023, the People’s Republic of China witnessed two major significant developments. Firstly, the Chinese Communist Party demonstrated a clear intention to increase Party ideological rectification through important political gatherings, institutional reforms, and the introduction of new laws. This reflected an effort by the Xi Jinping leadership to fortify the linkage between ideology, politics, and the legal system. Emphasis was also placed on cadre training, indicative of the Party’s commitment to reinforce patriotic education, by ensuring the alignment of its members with the Party’s objectives. Secondly, in the aftermath of the post-pandemic recovery, the Chinese leadership actively worked to reshape the domestic perception of the Chinese economy by projecting an image of resilience and strength, deflecting attention from potential difficulties. These two significant developments underscored the Party’s strategic manoeuvres to consolidate ideological unity and legitimacy, enhance cadre capabilities, and shape a positive narrative surrounding the country’s economic trajectory.

Keywords – economic recovery; patriotic education; cadres training; ideological unity.

1. Introduction

One of the most significant issues of 2023 in the People’s Republic of China (PRC) was the recovery after almost three years of rigid COVID-19 restrictions. It is estimated that China’s abandonment of COVID-19 measures between late 2022 and the beginning of the year 2023 reinvigorated a US$ 18 trillion economy that had recorded one of its lowest growth rates in nearly half a century [Reuters 2023, 15 March]. According to data released by the Chinese government, China witnessed a consistent economic resurgence with a 5.5% year-over-year GDP growth. The production across various sectors, including agriculture, industry, services, and energy, exhibited rapid expansion [The State Council of the People’s Republic of China 2023]. In summary, according to government sources, China’s economic performance demonstrated a positive trend during the first half of the year. However, despite initial signs of recovery, the Chinese economy slowed down significantly in the second quarter of 2023. There are several explanations for China’s flawed economic recovery. Prime among these, there is the Party’s priority to defend Xi Jinping’s authority, prioritize security challenges, and implement a communication campaign aimed at promoting Xi’s new ideological formulation of Chinese-style modernization, rather than introducing new measures to stimulate internal demand and confidence among Chinese consumers [Pei 2023]. In 2023, the term «Chinese-style modernization» (zhongguo shi xiandaihua – 中国式现代化) evolved into a key concept characterizing the legitimacy of both the Chinese Communist Party and Xi Jinping’s development agenda [People’s Daily 2023, 20 February]. This catchphrase prominently featured at the commencement of Xi’s third term during the opening of the National People’s Congress on 4 March 2023 [China Media Project 2023, 12 May]. One month before, on 7 February 2023, during a speech at a study session of the CPC Central Committee, Xi Jinping had remarked that «it is Party leadership that determines the fundamental path of Chinese modernization» [Qiushi 2023, 31 May]. To this extent, the relevance of the catchphrase is key to understanding the way the Chinese leadership reflects and shapes narratives about China’s modernization path. More precisely, from a Chinese leadership point of view, China’s development follows a unique path towards modernization, characterized by its huge population size and the desire to improve living conditions equally throughout the country. This uniqueness began in the late 1970s, and within a few decades, the PRC was able to achieve an industrialization path that took Western countries centuries to accomplish [Qiushi 2023, 14 November].

Likewise, technological innovation represents a key aspect of China’s modernization. Amidst growing challenges related to the abandonment of COVID-19 restrictions and anti-corruption campaigns, another important event for the year under review concerned the 2023 World Internet Conference (WIC) held in Wuzhen from 8 to 10 November. During the Summit, President Xi Jinping delivered an online message emphasizing how China focuses on developing «a Global Strategy on Artificial Intelligence and how Wuzhen has become over the years a platform for global digital exchanges and cooperation through dialogue and sharing of practices and technologies» [Bonaglia and Frisoli 2023]. Despite the limited coverage received by the event in the West, compared to other (political) events occurred in China over the course of the year, the Wuzhen Summit stands as a fundamental example of China’s ambitious goal of promoting «indigenous innovation» (zizhu chuangxin – 自主创新). The term, which draws on the CCP long history, has become a central strategic concept in Chinese government rhetoric during the Xi Jinping era, building on a long-standing tradition of emphasizing self-reliance in industry and technology [Waldie 2022]. In 2023, China’s quest for greater technological self-reliance also sparked a debate about issues related to technological sovereignty in key areas such as microchip production. By fostering a domestic microchip industry, China sought to mitigate vulnerabilities associated with external dependencies [Economic Daily 2023, 6 September]. The importance of self-reliance in industry and technology was also evident in the recruitment strategies of the leadership. Although the Politburo has long been dominated by economic technocrats, the appointment of five prominent scientists to the 24-member Politburo at the 20th National Congress of the CCP in October 2022 reflected President Xi Jinping’s willingness to ensure the country’s economic, scientific, and technological self-reliance while boosting resilience to external shocks [Jie 2023: 2]. Unsurprisingly, since the mid-2000s, China has graduated more STEM (Science, Technology, Engineering and Mathematics) PhDs than the United States, and it is estimated that by 2025 Chinese universities will produce more than 77,000 STEM PhD graduates per year compared to approximately 40,000 in the United States [Zwetsloot et al. 2021].

This essay is structured into five different sections each delving into critical aspects that illustrates China’s major issues and events characterizing its domestic politics for the year under review. By focusing on Party’s ideological rectification, legal reforms and China’s economic recovery, this study discusses the CCP’s strategic efforts to strengthen ideological cohesion and legitimacy with the intent to construct a favorable narrative about the country’s development path. Accordingly, there is a widespread interpretation by scholars of the relevance of the various levels of legitimacy in non-democratic countries, among which the linkage between economic growth and nationalism rests key to understand the main sources of legitimacy in China [Holbig and Gilley 2010]. Likewise, despite it is correct to affirm that each CCP leadership generation relies on different forms of legitimacy, after Mao’s death the following leadership generation derived «instrumentally semi-legal-rational legitimacy by good governance, despite their attempts to earn traditional legitimacy through highlighting both leftist communist ideology and rightist Chinese culture» [Huang and Pang ٢٠٢٢: 984]. As a matter of fact, it is precisely within such process that since the 1980s the leadership in power also promoted the idea that greater prosperity has strengthened rather than weakened under the CCP’s rule [Doyon and Froissart 2024]. However, as confirmed for the year under review, what has changed with the current administration is that this process has clearly intensified, becoming a priority from the perspective of the CCP and Xi’s agenda. In a nutshell, the link between economic growth and Chinese-style modernization remains central to the Xi Jinping administration. More precisely, in the view of party leaders and cadres, legitimacy and ideological unity must be strengthened through patriotic education, economic resurgence, and technological innovation.

Following this introduction, the section titled «Party and Politics» discusses the Chinese Communist Party’s influence on major political trends. It offers a concise overview of key events shaping the government’s agenda, coupled with an informed analysis of Politburo study sessions. The section titled «Chinese Economy» analyses crucial economic data from the reviewed year. It discusses disparities between Chinese and non-Chinese sources and highlights the role of State-Owned Enterprises (SOEs) in China’s economic resurgence. The section titled «Key Developments in Law and Regulations» provides a concise overview of major legal framework updates in China. Lastly, the concluding section summarizes insights from each preceding part. It will reflect on the interconnectedness of political, economic, and legal dimensions, emphasizing the fundamental role of the CCP.

2. Party and Politics

Remarkably, for the year under review the number of senior-level investigations jumped by 40% compared with 2022, when the Central Commission for Discipline Inspection (CCDI) recorded 32 investigations into high-ranking officials. According to a report released by the South China Morning Post, prior to 2023 the single year characterized by the highest number of senior officials investigated by the CCDI was 2014, with 38 investigations [South China Morning Post 2024, 6 January]. Since assuming the presidency in 2013, Xi Jinping has in fact spearheaded an extensive and high-profile anti-corruption campaign within China. This initiative marked a significant departure from the previous leadership style and aimed to tackle corruption at various level of the government, the Party, and State-Owned Enterprises (SOEs). While corruption is not a new phenomenon in China, nor are anti-corruption efforts conducted by the Chinese Communist Party (CCP), the latest anti-corruption drive – which occurred in China for the year under review – calls into question that Xi Jinping’s power is solid or uncontested as many believe [Young 2023]. With regards to China’s firing of top-level officials, two important names stood out in the course of 2023: Qin Gang, China’s former foreign minister, and Li Shangfu, China’s former defence minister. According to international media outlets, the military and defence apparatus was the most problematic, with nine military officials additionally expelled from the National People’s Congress in late December [Bloomberg 2023, 29 December]. As a matter of fact, the anti-corruption crusade in the Xi Era is arguably «the largest and most powerful crackdown on corruption in the entire history of the CCP» [Gong and Tu 2022: 7]. The main features that distinguished it from the previous generations are the extensive prosecution and harsh punishment of corrupt officials in parallel with strong institution-building efforts to promulgate a series of party and state regulations, as well as the reorganization of anti-corruption agencies [Gong and Tu 2022: 8]. At the government level, China’s preeminent supervisory and anti-corruption authority is the National Supervisory Commission (NSC), established in 2018 through a constitutional amendment, as part of the CCP’s reform efforts initiated in 2016. The NSC operates under the direct oversight of the National People’s Congress (NPC) and its Standing Committee. The authority operates also in parallel with the Central Commission for Discipline Inspection (CCDI), the highest supervisory organ of the CCP. More recently, both institutions prioritized Xi’s status and security over anti-corruption efforts [The Diplomat, 2019, 23 February].

2.1. Significant updates on the government’s agenda

China’s most relevant political event for the year under review, the Two Sessions (lianghui 两会), was held in Beijing from 4 to 13 March 2023. The meeting comprised the 14th National People’s Congress (NPC) and the National Committee of the Chinese People’s Consultative Conference (CPPCC). During this event, the discussion focused on prioritizing economic stability, the recovery and expansion of consumer spending, and the promotion of high-quality economic development. The key topics covered and discussed at the meeting were the following: 1) stability growth as a top priority; 2) boosting domestic demand as a key driver for economic growth; 3) strengthening the modernization of the industrial system; 4) boosting market confidence and stimulating the vitality of the private sector; 5) pursuing a new round of SOEs reform; 6) facilitating high-level opening up to stabilize foreign trade and investments; 7) enhancing fundamental research to boost self-reliance and strength in science and technology; 8) promoting green development to reach the dual carbon goals; 9) advancing the comprehensive registration-based system to improve the modern capital market with Chinese characteristics; 10) preventing and mitigating major financial risks; 11) facilitating coordinated regional development; 12) improving people’s well-being; 13) implementing a new round of institutional reform of the State Council.

Interestingly, although dozens of topics were discussed during China’s Two Sessions, on Chinese social media the most commented themes were not fully aligned with the ones discussed by the leadership in power. More precisely, they were: 1) the Taiwan issue; 2) China’s military advancement; 3) technological self-reliance; 4) the figure of Xi Jinping as a powerful leader; 5) Chinese media in the new era [Koetse 2023].

The Work Report presented by outgoing Chinese Premier Li Keqiang proposed ten main projected targets for development for the year under review: 1) a GDP growth of around 5%; 2) 12 million new urban jobs; 3) a decrease in urban unemployment rate of around 5.5%; 4) a CPI increase of around 3%; 5) growth in personal income in line with the country’s economic growth; 6) a steady increase in both the volume and quality of imports and exports; 7) a basic equilibrium in the balance of payments; 8) grain output of over 650 million metric tons; 9) continued reductions in energy consumption per unit of GDP and in the discharge of major pollutants, with priority on controlling fossil fuel consumption; and 10) steady improvements in the quality of the eco-environment [State Council Information Office 2023a].1 Beyond the targets, it is relevant to also analyze the Work Report delivered by Prime Minister Li to assess the emphasis on major relevant topics.

A study conducted by the Bruegel Institute by using Artificial Intelligence (AI) and semantic classification techniques monitored the 2022 and 2023 Work Reports to discover that the five most mentioned topics were GDP growth, the private sector, debt, innovation and ‘other’. With reference to the year 2023, the two most-mentioned topics were GDP growth and innovation [Garcia-Herrero et al. 2023]. Additionally, the authors focused on the top five sentiments expressed repeatedly throughout the reports: neutrality, approval, optimism, caring and admiration. For the year under review, neutrality and approval were the top two sentiments [Garcia-Herrero et al. 2023]. Although GDP growth and innovation remain at the cornerstone of China’s economic policy, it is worth discussing the political implications of such findings. For instance, the fact that at the opening of the CCP’s National People’s Congress, Li’s speech heavily focused on promoting China’s «full economic recovery» shows that, after being battered for several years by the pandemic, China’s economic policymaking is still guided by a certain level of economic pragmatism, rather than geopolitics or ideology only. Indeed, in the initial months of 2023, Xi Jinping and his administration prioritized China’s economic resurgence. In pursuit of this goal, the government implemented diverse measures aimed at preserving political stability to the greatest extent possible [Piao and Cui 2024]. KPMG, a multinational services company and among the top four accounting organizations worldwide, provided a reality check of the figures and policies presented by the Chinese government through the Work Reports for the last two years. The KPMG report highlights technical innovation and green transformation as the two main channels driving investments in the manufacturing industry. Likewise, the slowdown in the tightening of monetary policies in overseas markets provided more space for China’s monetary policy to reform while stabilizing the RMB exchange rate [KPMG 2023: 4].

The year 2023 also saw the release of a very important document for the Chinese government, which was issued by the Central Committee together with the State Council on 16 March 2023, and titled «Party and State Institutional Reform Plan» (hereafter the Plan). The objective of the Plan was to reinforce Party control, improve resource allocation, and accelerate progress towards self-reliance in science and technology. In this regard, two major decisions appeared of paramount importance: the establishment of the «Central Science and Technological Commission» and the reorganization of the Ministry of Science and Technology (MOST). Concerning the former, the Commission was structured as a decision-making body in charge of: (1) strengthening the leadership of the CCP’s Central Committee in science and technology; (2) formulating major strategies and policies for science and technology development; (3) coordinating military and civilian science and technology development. With regards to the China’s Science and Tech Ministry, the major change was that the Ministry would no longer oversee specific scientific research project evaluations and management; instead, it would guide and supervise the operation and management of professional institutions for scientific research management and exercise a strengthened supervision and evaluation of the implementation of scientific research projects and their results [Zhang 2023]. To this extent, the MOST is expected to function as a sort of administrative body on behalf of the Central Science and Technological Commission. In addition, the Plan deliberated to establish the «National Data Administration», an agency directly under the National Development and Reform Commission (NDRC).

From the government’s point of view, another important event, occurred in the course of 2023, was the restructuring of the State Council, which takes place every five years after the start of the new NPC. The eight-and-an-half-day-long meeting was of paramount importance for the Chinese government as it concluded with the announcement of the new President and Vice-President of the People’s Republic of China. They were, respectively, Xi Jinping, elected for a third term, and Han Zheng, former Vice-Prime Minister from 2018 to 2023. The NPC also nominated the new appointees to the State Council: Li Qiang, Ding Xuexiang, He Lifeng, Zhang Guoqing, Liu Guozhong, Wu Zhenglong, Chen Yiqin, Qin Gang, Li Shangfu, Wang Xiaohong [Li 2023].2

It is worth remembering that China’s watchers, in analysing the personnel brought to the fore at the beginning of Xi Jinping’s third term, appeared to be concerned by the fact that Xi’s inner circle was essentially made by «yes man». In their opinion, this demonstrated that state security and social stability had the precedence over economic issues. Again, on the basis of the analysis of the personnel brought to the fore, Western analysts argued that the policy priorities of the new Xi’s administration focussed on the development of state owned enterprises at the expenses of the private sector [Li 2023].

2.2. Political gatherings and cadre training in 2023

In the People’s Republic of China, the official delineation of the governance structure separates the state, represented by the government, from the ruling party, the CCP. For the year under review, it is crucial to analyze major political occurrences also from the perspective of the party system, identifying for instance, which Party events played a key-role. In particular, the analysis must be focussed on specific organizations deserving to be mentioned given their relevance for cadre training: the Politburo and its Standing Committee, the Central Committee of the CCP, the Politburo Study Sessions, the Central Commission for Comprehensively Deepening Reforms, the Central Commission for Financial and Economic Affairs, the Central Commission for National Security, the Central Commission for Political and Legal Affairs, the Central Economic and Work Conference, and the Central Party. Among these, the study sessions of the Politburo provide unique insights into the interests and priorities of the CCP’s elites [Hart 2021].

Politburo Study sessions are monthly meetings attended by top party members concerning events of strategic importance in different fields: economics, foreign policy, governance, and military affairs. Although the CCP Politburo has convened group study sessions since the start of the Hu Jintao administration in 2002, as showed in Table 1 in the Xi’s era there was a distinctive change in the topics covered, and the study sessions came to be dominated by a focus on Party affairs, foreign affairs, military, and security affairs [Hart 2021]. Otherwise, as also stated in a policy brief published in 2007, under Hu’s administration for the most part Politburo Study sessions covered topics concerned with the international situation and domestic issues such as agricultural development, employment, education, health care, etc. [Lu 2007].

Table 1: Description of CCP Politburo Group Study Sessions in 2023
Date	Category	Major topics – Description
31 January 2023	Economics and Finance; Development	China’s economic development (dual circulation, economic security and self-reliance, and rural-urban divides; self-reliance and critical technologies).
21 February 2023	Economics & Finance	China’s bid for technological self-reliance; the strengthening of basic scientific research.
31March 2023	Party Affairs	The study of “Xi Jinping Thought on Socialism with Chinese Characteristics for the New Era” in all fields of China’s development.
29 May 2023	Party Affairs	The quality and coverage of China’s education ecosystem; science and technology; self-sufficiency.
30 June 2023	Party Affairs	Marxist teachings adapted to China’s national context.
24 July 2023	Security and Military Affairs	Military governance, military-civilian relations
27 September 2023	Economics & Finance	China and WTO reform; foreign investments and global value chains.
28 October 2023	Party Affairs	Ethnic minorities and party history
28 November 2023	Economics & Finance	Rule of Law; foreign business in China
Source: Compiled by the author based on data from CSIS 2023a; CSIS 2023b.

Aside from the Politburo, another key institution responsible for Party training in China is the Central Party School (CPS).3 Traditional scholarship has focused mostly on the ideological function served by party schools and there exists less knowledge on the larger system of cadre training institutions anchored by the CPS [Lee 2015].

The Party school system traces its origin to the pre-1949 period when the Chinese communists were fighting against the nationalists to gain power [Shambaugh 2008: 829]. At the national level, the CPS remains the most prestigious institution and, in addition to training and teaching curricula, it also performs the function of a think tank in charge for Party reform policies [Shambaugh 2008: 840]. On 16 October 2023, the CCP Central Committee issued a new document titled «National Cadre Education and Training Plan (2023-2027)» [全国干部教育培训规划 (٢٠٢٣-٢٠٢٧年)], which demonstrates the paramount relevance played by the CPS for ideological study still at present times [People’s Government of China 2023]. The document also remarked the leading role of the CPS in the cadre political training process and highlighted its joint work with the CCP Central Organization Department in putting together the studying material to be utilized for Xi Jinping Thought courses [Dotson 2024].

On 7 February 2023, Xi Jinping delivered an important speech at the opening ceremony of the CPS Study session. The topic of the seminar was «Studying and implementing the spirit of the 20th Party Congress of the CCP and correctly understand and promote Chinese-style modernization». Xi Jinping exemplified the historical significance of realizing the «great rejuvenation» of the Chinese nation, a collective aspiration dating back to modern times, by also acknowledging the CCP’s pivotal role in exploring China’s modernization path. Xi Jinping also highlighted the need to adhere to the party’s leadership for the prosperity of Chinese-style modernization and warned against deviations that may compromise its success [State Council Information Office, 07 February 2023]. Since Xi Jinping has taken office in 2012, Party cadres’ training has become an integral and prioritized aspect of the CCP’s agenda. Likewise, since the 18th National Congress of the CCP, held in November 2022, the Party school system has been subject to several reforms [Otterwik et al. 2023].

3. The Economy

Regarding China’s overall economic performance in the reviewed year, it is essential to examine two primary interconnected issues: the validity of China’s own data about the performances of its economic sector and to what extent economists in the world differ in their estimates of China’s economic trends. As a matter of fact, in recent years an increasing number of economists begun to consider Beijing’s official data to be only a reference point, as trust in China’s economic data deteriorated as a consequence of a growing lack of transparency [Financial Times 2024, 17 January]. In fact, the validity of China’s national economic data is questioned because national numbers are based on data collected by local governments, which have an incentive to skew local statistics in order to obtain rewards for meeting economic targets. The Chinese government through the National Bureau of Statistics (NBS) tries to correct biases through administrative resources, yet the accuracy of the final numbers of aggregate GDP still remains questionable [Chen et al. 2019].

The Economist Intelligence Unit (EIU) describes the year 2023 as «a year of change and challenges for China». The report identified three main trends defining the leadership’s priorities for the Chinese economy during 2023; 1) the remodelling of the property sector; 2) a careful management of fiscal arrangements and public finances; 3) China’s strategy vis-à-vis Europe in green energy equipment and energy-intensive industries [EIU 2023].

The American research institute Rhodium Group has also monitored the ups and downs of the Chinese economy in 2023 with regards to four different sectors; 1) business investments; 2) government spending; 3) net exports; and 4) housing consumption. To what it concerns business investments, the Rhodium Group assessed them as rather negative: in addition to the contraction of the property sector, disinvestment in foreign direct investment showed a consistent trend of firms moving foreign capital outside China. With reference to government expenditure, the Rhodium Group report denied China’s official data – which claimed a 4.3% contribution from combined household and government consumption in 2023 – estimating instead government expenditure to be closer to zero percentage point through Q3 [Rosen et al. 2023]. Furthermore, there was a contraction in net exports, and housing consumption trends exhibited a negative trajectory. This was due to Chinese households opting for deleveraging in 2023 instead of increasing consumption [Rosen et al. 2023].

The China Economic Update, published by the World Bank in 2023, states that «economic activity in China has picked up in 2023, driven by increased demand for services, resilient manufacturing investment, and public infrastructure stimulus» even though «the economic performance has been marked by volatility, ongoing deflationary pressures, and still weak consumer confidence» [World Bank Group 2023a]. In a nutshell, major international institutions depicted an image of the Chinese economy in a state of dynamic evolution, although not without evident difficulties [World Bank Group 2023b]. According to China’s own numbers, figures for 2023 were all above 5%. Given China’s extraordinary performances in the third quarter of the year, many international institutions upgraded China’s economic growth forecasts, even by predicting a higher growth for the 2024 [Xinhua 2023, 24 December].

3.1. SASAC and State-Owned Enterprises

In 2023 China’s economic recovery was significantly influenced by the pivotal role played by state-owned enterprises (SOEs). As the country grappled with global challenges, including the aftermath of the pandemic and economic uncertainties, SOEs were envisioned by the government as key drivers of resilience and growth. Over the decades, these state-controlled enterprises, spanning various sectors, played a crucial role in stabilizing the economy and fostering recovery. In the year 2023, their role was highlighted through the Government Work Report and the numerous meetings held by the State-owned Assets Supervision and Administration Commission of the State Council (SASAC) [China Daily 2023, 10 April].

SASAC is China’s ad-hoc ministerial level organization subordinated to the State Council, and it is responsible for managing SOEs in China. SOEs have always been key assets in China’s critical economic sectors. Currently, there are listed a total of 93 enterprises under the Data Directory of SASAC [State-owned Asset Supervision and Administration Commission, 2023]. Since its establishment in 2003, SASAC has overseen improving the corporate governance of enterprises in China and restructuring SOEs for key economic sectors. In short, China’s SOEs can be divided into three different macro-categories: 1) strategic, capital-intensive comparative-advantage defying (CAD) industries, such as aviation, aerospace, warship, core chip manufacturing, new materials; 2) natural monopoly industries with a major bearing on the national economy, such as telecommunication, highways, railways, and ports; 3) competitive industries that are consistent with China’s comparative advantages, such as steel, cement and equipment manufacturing industries [Lin 2021]. To what it concerns firms directly under SASAC, first there are top-level companies, often the successor organizations of a former industrial ministry. These are followed by listed firms, businesses, and subsidiaries enterprises often recalcitrant to abandon bureaucratic edifice of state ownership [Naughton 2015: 53].

Over the years, SASAC encountered various challenges in its endeavours to corporatize and marketize state-owned enterprises, primarily due to the reluctance of these enterprises and increased intervention by the Central Organization Department. The latter, expressing growing apprehension about diminishing Party authority, became therefore more involved in the process. On top of that, the Xi administration’s recentralization of authority enhanced four governance mechanisms and techniques to assert control over China’s SOEs sector: central leading small groups, the cadre management system, Party committees and campaigns. They’re growing influence resulted in the weakening of the authority of other actors engaged with SOEs reform, that is, SASAC and the NDRC [Leutert 2018]. Despite the positive results proclaimed by government-led institutions – with revenues reaching 39.8 trillion yuan ($5.62 trillion) for the year 2023, according to SASAC – China’s SOEs reform stalled out in the course of 2023. Chinese leaders were still more concerned about domestic instability and potential unrest rather than implementing substantial reforms within the state sector. Hence there was no real prospect for the restructuring of a category that clearly struggled with privatization [Goldberg 2023, 18 November].

4. Key developments in the Law and Regulations

Aside from the CCP’s involvement in reinforcing patriotic education and shaping the narrative surrounding economic performances, the enactment of new laws and multiple amendments played a crucial role in China in the year under review. Indeed, 2023 was in the People’s Republic of China also a year in which numerous new laws were drafted and previous laws were amended. In particular, the introduction of the «Patriotic Education Law» marked a notable emphasis on fostering nationalistic sentiments among the younger generations. This law aimed to strengthen ideological control and promote a sense of loyalty to the Communist party through educational curricula. However, nationalistic education in China is also putting a squeeze on international schools. As the Party intensified its endeavours to strengthen control over the content taught in the classrooms, more and more international schools decided to close and leave the country, as happened in the case of Elite British schools [The Guardian 2023, 31 December].

Secondly, the enactment of the «Foreign State Immunity Law» underscored China’s commitment to protecting its sovereignty and legal autonomy both domestically and on the international stage. This legislation clarified the legal framework governing cases involving foreign states, aligning with China’s more assertive approach in the global arena. Under the law (article 7), a foreign state «shall not enjoy immunity from the jurisdiction of the courts of the People’s Republic of China in any proceedings arising out of a commercial activity between the foreign state and an organization or an individual of another state including the People’s Republic of China» [Ministry of Justice of the People’s Republic of China 2023, 15 December].

Thirdly, amendments to the «Charity Law» signalled a concerted effort to further regulate charitable and no-profit activities within the country. These amendments aimed to enhance transparency, curb potential misuse of funds, and ensure that charitable organizations align with the government’s developmental objectives. Additionally, the revised «Counterespionage Law» demonstrated once again China’s priority on national security. The amendments aimed to address emerging threats by broadening the scope of counterespionage definitions while enhancing the government’s capacity to safeguard sensitive information. Collectively, these legislative changes illustrated China’s commitment to strengthening ideological unity, protecting its legal interests in international relations, ensuring the efficient functioning of charitable organizations, and fortifying national security measures in response to evolving geopolitical challenges, among which the China-United States competition remained the underlying priority. As China continues to navigate its role in the global arena, these laws play a crucial role in shaping the country’s domestic landscape and influencing its interactions with the international community.4 Against this backdrop, this paragraph analyses into details the new laws drafted and amended for the year under review.

On 24 October 2023, the Standing Committee of the National People’s Congress (NPC) promulgated the «Patriotic Education Law» (Zhonghua renmin gongheguo aiguo zhuyi jiaoyu fa 中华人民共和国爱国注意教育法). The promulgation followed a draft first introduced by the Standing Committee of the NPC in July 2023. The law, which took effect on 1 January 2024, comprises a total of 40 articles and it outlines the responsibilities for central and local government departments as well as in schools and for families to strengthen patriotic education [Reuters 2023, 25 October]. The law not only formalizes current practices about patriotic education but, significantly, broadens its application to encompass Hong Kong, Macau, Taiwan, overseas Chinese, and the Internet. In essence, it reveals the Chinese Communist Party’s perception of its most substantial vulnerabilities in maintaining China’s control on the youth, cyberspace, and Chinese communities beyond the mainland [Huang and Zou 2023, 1 August]. As noticed by Suisheng Zhao, since assuming office Xi Jinping has heightened his efforts in the patriotic education campaign, aiming to reinforce the CCP’s authoritarian governance. Under his leadership, a new generation of nationalists has been cultivated, displaying a lack of tolerance for any criticism directed at the CCP regime. Additionally, this emerging cohort exhibits a robust hostility towards Western powers and the values they represent. After all, the CCP has maintained its legitimacy primarily based on two pillars since the end of the Cold War: economic performance and nationalism. [Zhao 2023]. Likewise, patriotic education has a long history in China. As a matter of fact, a crucial insight learned by party leaders, whether reformers or conservatives, from the «Tiananmen Incident» was precisely the imperative need for political indoctrination of the younger generation [Zhao 1998]. Consequently, Deng Xiaoping and his successor, Jiang Zemin, strategically embraced nationalism as a unifying force. Recognizing it as the sole bedrock of political belief still shared by most Chinese people, they employed this approach despite the swift erosion of Communist official ideology [Zhao 1998].

A second relevant news with regards to law and regulation implementation for the year under review concerned the amendment to the «Charity Law» (cishan fa 慈善法) passed on 29 December 2023, at a session of the National People’s Congress Standing Committee. The amendment will take effect on 5 September 2024 [China Daily 2023, 29 December]. In 2016, Chinese legislators had introduced the first statute dedicated to the Chinese non-profit sector—the Charity Law of the People’s Republic of China, indeed, the first law to regulate charitable organizations and their activities. The Charity Law was a landmark step toward breaking down the old system for regulating social organizations in China. However, it also made the legal environment far more complex, given that it did not equalize the rules for all Chinese non-profit organizations (NPOs), and crucially, it did not provide a basic social organization law applicable to all types of non-profit entities [Snape and Simon 2017]. This being the situation, the amendment updates of the Charity Law promulgated in 2023 aimed at solving the several identified problems hindering the development and regulation of philanthropy in China. They primarily focussed on; 1) the regulations of charitable organizations; 2) the regulation of charitable trust; 3) the regulation of public fundraising; 4) the emergency public fundraising; and 5) crowdfunding [NPC Observer 2023, 19 January]. However, it is useful to stress that the «Law of the People’s Republic of China on Administration of Activities of Overseas Nongovernmental Organizations in the Mainland of China» was also adopted in 2016 by the National People’s Congress Standing Committee, which came into effect January 1, 2017. Additionally, even though in the PRC repression of NGOs intensified since the rule of Hu Jintao, it is believed that under the Xi Jinping’s administration the mode of repression intensified precisely through law-based implementation [Zhu and Jun 2021].

On 26 April 2023, the revised «Counterespionage Law of the People’s Republic of China» (zhonggua renmin gongheguo fan jiandie fa 中华人民共和国饭间谍法) was passed by the Standing Committee of the National People’s Congress. The newly revised Counter-Espionage law came into force on 1 July 2023, after it was initially proposed in December 2022 and then introduced in April 2023. The Ministry of State Security, as reported in its WeChat account, stated that «the revised Counterespionage Law implements Xi Jinping’s thoughts on the rule of law and the overall national security concept, insisting that national security is all for the people and relies on the people, and based on the current complex counterintelligence struggle situation, with a strong sense of national security for the people to build a strong counterintelligence and anti-espionage situation» [Ministry of State Security 2023]. Over the past few years, China has apprehended numerous Chinese and foreign individuals on espionage charges, among them, a businessman from a Japanese pharmaceutical company, Astellas Pharma, arrested in March 2023 and accused of divulging state secrets to another country, in detention since September 2020 [Asahi Shimbun 2023, 20 October]. There were also some details in the amendments that worried the international community, prime among them, the definition of «espionage», envisioned as not only as the theft of state secrets but also any other documents related to «national security». According to some commentators, such amendments are a sword of Damocles on anyone engaging in information exchange with foreign individuals or entities, as they must exercise utmost caution and undertake a challenging preliminary evaluation to firstly determine the potential risk of inadvertently engaging in espionage [Brussee and von Carnap 2023]. On a similar vein, China’s revised Counterespionage law creates new risks for a wide category of sectors: foreign companies, business travellers, academics, journalists, and researchers, considering that the updated legislation would grant unparalleled enforcement authority to the Ministry of State Security and its regional counterparts, enabling them to enter, interrogate, and scrutinize the electronic devices and business facilities of individuals [Forbes 2023, 3 July].

Finally, among the many legal drafts reviewed and adopted at the sessions of the Standing Committee of the NPC for the year under review it is worth mentioning China’s first «Foreign State Immunity Law» (zhonghua renmin gongheguo waiguo guojia huomian fa 中华人民共和国外国国家豁免法), which took effect on 1 January 2024. The law has 23 provisions and stipulates that China will move away from the absolute theory of foreign state immunity, adopting instead the restrictive theory of foreign state immunity [State Council Information Office 2023b]. The consequence is that foreign states will no longer be granted immunity from suit and judicial enforcement in mainland China and Hong Kong in relation to, no-sovereign acts, such as commercial activities. According to some experts, unexpected geopolitical shifts and deteriorating relationships between authoritarian powers and foreign countries can have disastrous consequences for foreign businesses operating in those countries [Qiu and Goodman 2023]. Additionally, the 23-Article law provided a legal basis for Chinese courts to take jurisdiction over civil cases involving foreign states, therefore increasing the channels for Chinese citizens and companies to obtain relief [Caixin Global 2023, 5 September].

Remarkably, the new law has important political implications beyond international law. Since the 18th National Congress of the Communist Party of China, the Party Central Committee has prioritized the development of legal frameworks pertaining to foreign affairs. Additionally, it has consistently advocated for the simultaneous advancement of both domestic and foreign-related legal systems, utilizing the rule of law to facilitate external engagement while safeguarding China’s national interests. This commitment has led to in the establishment of the Foreign State Immunity Law [Chinareform.org.cn 2023, 4 September]. More generally, international commentators tried to understand why China moved away from absolute to restrictive immunity.5 At the same time, it seems relevant to mention the actors affected by the new law. For instance, the law does not grant automatic foreign state immunity to State-Owned Enterprises (SOEs) and international organizations. Reading the law literally indicates that the immunity status of these entities depends on their authority to wield sovereign powers on behalf of the foreign state. Given this context, in line with the prevailing position in both the People’s Republic of China (PRC) and Hong Kong law, State-Owned Enterprises (SOEs) that do not engage in sovereign functions are not protected from legal actions or enforcement proceedings [‘The implications of the Foreign State’ 2023].

5. Conclusion

An examination of China’s domestic politics in the year under review reveals the significant role played by the current leadership in strengthening ideological party-building, which is expected to leave an indelible mark on China’s political and ideological trajectory. To this extent, this article has analyzed three pivotal dimensions – Party and Politics, Chinese Economy, Law and regulations – each defining the contemporary political landscape of contemporary China.

The section «Party and Politics» stresses the undeniable influence of the Chinese Communist Party in shaping China’s patriotic education and political discourse. Understanding the CCP’s centrality is crucial for deciphering China’s governance structures, as it permeates every aspect of the country’s political life. As shown in this article, the Party’s commitment on cadre training and patriotic education also highlights its role as the sole architect of China’s political trajectory. In addition, the relationship between the CCP and the SOEs is unquestionably intricate, exemplifying the unique blend of party-state governance that characterizes China’s political system. The reason, according to Gore, descends from the fact that, in the Xi Jinping’s era, the resurrection of ideology has been accompanied by a large-scale institution-building of the Party, through an ideological turn that is re-enacting Leninism for a population of 1.4 billion in the context of a vibrant market economy [Gore 2023]. Likewise, as stated elsewhere, in the Xi Jinping’s era, ideological education has been dramatically transformed into a tool in the hands of the leadership to cement support and Party’s legitimacy [Menegazzi 2020].

Moving to the economic dimension, the examination of the «Chinese Economy» reveals China’s economic resilience amidst growing national challenges. Following a period of robust economic activity in early 2023, China’s economy has encountered a notable downturn marked by a decline in exports, reduced consumption, and production. Notwithstanding these challenges, certain sectors, including technology platforms, electric vehicles, green energy, and electronics, remain vibrant sources of innovation and growth. Likewise, there are indications that the economy is gradually recovering, particularly after experiencing significant declines in July and August 2023 [Huang 2023]. At the same time, the intricate interplay between state-owned enterprises and market forces underscores the dynamic nature of China’s economic rise. As the country grapples with challenges such as technological competition, the resilience of its economic model based on the idea of a «Chinese-style modernization» becomes a focal point for the narrative used by Chinese decisionmakers.

Lastly, the section titled «Key developments in the Law and regulations» discusses the complex relationship between China’s legal framework and politics. Legal reforms and amendments implemented by the Chinese government in the year under review further shaped the contours of China’s legal governance and influence legal norms in China, domestically and internationally. The brief analysis of China’s legal landscape in the course of 2023 appears therefore indispensable for comprehending the relevance of the CCP is shaping China’s legal system in line with the Party’s interests.

In conclusion, the centrality of the Communist Party, its influence on the economy, and the intricate relationship between law and politics shape the Party’s narrative over China’s political developments. The interplay between these dimensions underscores the synergies and tensions that define China’s political realm, the major domestic actors involved and, its future path. Within such context, it becomes evident that the Communist Party’s enduring influence, the patriotic education carried on by the different Party’s actors, and the evolving dynamics of China’s legal context are all dimensions defining China’s contemporary political narrative.

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