HONG KONG: President Xi Jinping opened the Communist Party Congress on Sunday with a speech that put more emphasis on national security than the worrisome economy.

Xi's two-hour-long speech summarizing the Party's achievements and priorities will be painstakingly studied by 96 million Party cadres across the country and become the basis for all other policy documents over the next five years.

Xi spent twice as much time as five years ago on the importance of national security, a wide-ranging concept from ramping up public health responses, to securing energy, food, and critical technology supply chains, to preventing the kind of social upheaval that rocked the streets of Hong Kong in 2019.

It's thus little surprise that he praised the glaring success of zero-Covid policies despite the economic toll, stressed the need to prioritize domestic markets, and doubled down on modernizing the military.

According to Goldman Sachs analysts, terms like "reform" and "market", which had become symbols of China's opening up since the 1990s, suffered a sharp drop in mentions in his address.

Xi did reiterate the importance of the private sector and letting the market be the decisive force, but as in the previous congress, that was undermined by pledges to ensure the state's outsized role.

That suggests there may be more heavy-handed state crackdowns like those in the past couple of years on the internet and private tutoring sectors.
A slower-growing China may still account for as much as 30% of aggregate global economic expansion next year.

Much of that is likely to come from domestic players acting in the government's favor. For example, under a mechanism that vows to pull the entire country's resources to promote technological self-sufficiency, nearly 9,000 small- and medium-size industrial companies have been identified as highly specialized "little giants" and won preferential treatment.

The trick for investors is balancing Beijing's objectives, market risks and potential sanctions amid the worst U.S.-Sino ties in decades. They will need a new playbook.