adrian: xi jinping is facing big challenges come up against the u.s. in a more polarized world. what will be the impact of his third term in china? this is "inside story." ♪ adrian: hello. welcome to the program. i'm adrian finighan. xi jinping has been appointed for an unprecedented third term as china's president.

now it may be a ceremonial position but the man who holds it is by far the most powerful person in the country. after he was reaffirmed as head of the communist party and the military last year, following the lifting of strict covid-19 measures, he appears to face little opposition at home. overseas though, relations with the u.s. continue to decline, and tensions persist with the eu over russia and ukraine. so, what impact will xi's unchallenged leadership have for china and the rest of the world? we will be discussing all of that with our guests in a few minutes, but first we report on a what xi jinping faces at home and abroad. >> eugene peng has been reelected as president and will begin his third term in office with a new leadership team behind him, but they face many challenges at home and abroad. at home, the issue of the environment is still a problem, as you can see behind me.

beijing has been blanketed with intense smog this week. but there is a bigger focus on the government and the slowing economy. they set a target of 5% for the year 2023, the lowest target we have seen in decades. that is because china is still struggling to recover from almost three years of a strict zero covid policy where consumer spending took a hit, as well as investment. have seen a rising unemployment rate among the youth and an ailing poverty sector. at home, president xi's leadership, the confidence in his leadership, took a hit as protests took place at the end of the year. also, discontent around the hasty reversal of the strict pandemic policies. yet, analysts say it does not seem to have created a significant dent in his power going forward. he seems secure but he also must

look abroad and at the growing challenges there. he said western countries led by the u.s. have encircled and suppressed china, creating unprecedented and severe challenges for china's development. he is referring to some of the sanctions placed by the u.s. targeting chinese firms, which are really hurting the technology industry here but also its access to the global market. internationally, china has problems with its public image since its continuing support of russia since its invasion of ukraine. that is also not one that -- that's also not won china extra friends into muscle work to maintain its relationship with europe and trading partners. it is doing this while trying to protect and secure its position geopolitically, its phoned global security in its own backyard and its own interests, in particular with regard to taiwan, that beijing considers its own. al jazeera for inside story in

beijing. ♪ adrian: let's bring in our guests for the discussion. andy mok is a senior research fellow at the center for china and globalization. we have shirley yu, senior fellow, ash center, harvard kennedy school. from hamburg, adrian geiges, co-author of the book xi jinping , the most powerful man in the world. adrian, the most powerful man in the world, i thought that belonged to the u.s. president. why did you give your book that title? is feed the world's most powerful man? -- is he the world's most powerful man? >> yes, he absolutely is. the events today have confirmed this because he has such power now in china, like nobody since murdered own, but more important china is economically so

powerful nowadays, which is different from the mao time, which makes it the most powerful man. also, the president of the united states, who was considered to be the most powerful person in the past, the u.s. is so divided politically that we do not know what will happen after the first term of joe biden. so, yes, i am absolutely sure that president xi is the most powerful man in the world. adrian: the confirmation of the third term was widely expected. the next few days, it has been more important with the appointment of a new cabinet and various other ministers. shirley: absolutely. this is essentially a continuing of the chinese party's direction we have seen since 2022, but more broadly since the onset of the trade war in 2018.

we have seen government reforms, we see recent allies asian of power -- re-centralization of power, and the restructuring of power from the ministerial level, up to the cabinet level and even up to xi jinping himself. in this congressional session, the next five years, we will continue to see the state sector play a pivotal role within the chinese economy. the state sector permeates throughout chinese private sectors. so, the incoming premier has a huge job on his shoulders. he will steer the chinese economy towards possibly a new direction where they will face domestic and international challenges. adrian: lee chang is widely expected to replace the outgoing premier. what is his relationship with xi jinping and how will things

differ with him in that role compared to his predecessor? andy: well, i think we can expect significant differences. one of course because there is a new person in the job, but also as shirley alluded to, there are important structural reforms going on, not only within the government -- to emphasize science, technology, intellectual property protection, data as a fact of production -- but there is also a greater integration between the party and the government. so for those two reasons, i think we can expect some meaningful changes in the role of the premiere, in the role of state council and the government. but we also have to recognize that because of the leading role of the cpc, that chang is number two on the standing

committee, which is the highest level of leadership in the parting. it so i think for these reasons, and of course is decades along close relationship, working very closely with xi, could mean that there is much greater efficiency and effectiveness going forward. adrian: adrian, would you agree with that? what is it about lee chang that will be different as far as president xi is concerned, from his predecessor? adrian g.: we have to see what was done in the past. as mentioned, he has been close to xi, and that might be an advantage for him to do something more independently. but we have to see what he has done in the past. he was party chief in shanghai during the time of the harshest lockdown in shanghai. he did not lose his good

relation to xi, to tell him this is too much. causing big problems for the people and a big problems for the economy. he did not do this, but he followed 100% the line of xi jinping, so so far i would say there is no sign that he would do something independent from xi jinping. it's quite opposite, he will follow him in everything from what we have seen. adrian: so surrounded now as he is by loyalists, is xi going to get that fearless and frank advised that a man in his position would surely need -- advice that a man in his position would surely need? adrian g.: yeah, that is the point. he's surrounded himself with a yes-sayers.

and the problem is also with the colt of personality -- cult personality in china, that it is very difficult for anybody in the party to stand up against him. he is in the constitution, he is the constitution of the country. he has shown it in propaganda. for the time being he is very much in power and surrounded by loyalists. adrian: the appointment of head of state comes at a sensitive time for china's relations with the world. what are we to make of xi's criticism of the u.s. this week? as the leader of a western effort to contain china? shirley: president xi has openly talked about an all out u.s. effort to contain and suppress

china. and i think this is the first time we have heard a deliberate aim with assisting to clarity, a chinese division of the current chinese and american relations. there is a fundamental miscalculation between the u.s. and china about the strategic rivalry between the world's two largest economies. the u.s. has talked about sanctioning chinese technology, banning chinese investments. this is out of national security reasons essentially. but the understanding of national security, it is preemptive. a chinese technology company does not have to necessarily impose an ongoing national security threat to the u.s. in order to justify that. the u.s. believes in a chinese company, either state or private, can pose a national

security threat at the command of the chinese communist party. so that is understanding of national security threats as categorical. but the chinese side is they reject that notion. according to the new chinese foreign minister, he recently stated it is not about competition that motivates the chinese policies today, it is about victory, winning the competition, that motivates these chinese policies. so from a chinese perspective, this competition continues to rise and continues to come to economic parity with the u.s. -- it's encirclement, containment and the suppression of china, according to president xi himself. adrian: talking about winning the competition, to what extent does that extend to diplomacy? iran and saudi arabia have

announced they are resuming diplomatic relations and embassies after talks in beijing. to what extent is that a slap to the face for the u.s.? shirley: i think that outside of the united states, 80% of the world, mostly the global south today, do not wish to enter into a global or geopolitical divide. so the fundamental global understanding of the north and south divides, which we as economists have been accustomed to, in the past decades -- unfortunately global countries have been forced to either stay with democracy or you support autocracy. and you either, you know, work with the u.s. or you can work with the chinese. so, when we these -- whe these

choicesn -- when become so exclusive, other countries are pulled into the divide. if you look at singapore, that is absolutely an amazing model of strategic atomic. -- autonomy. and i think that other european countries are trying to perform a roll of -- a mediating role within this global architecture as well. and countries in the middle east are obviously seeking their own interests. adrian: what are your thoughts, the fact that these talks have been broken with the help of kuwait, of course, but the deal was signed in beijing? andy: i think that certainly china is playing a much more important role on the global

stage, but i want to go back to the earlier point about president xi surrounding himself with "loyalists." first of all, i think that no leader of a large complex organization, especially a country as challenging as china, can rise up through the ranks to the apex of political leadership without accurate information and sound judgment. i think these people are loyalists. not only that they have demonstrated their loyalty, but they have also demonstrated their competence in xi. that is sometimes underappreciated in some of the narrative in the west about this. the second point that is important to mention related to china's diplomatic efforts is even though xi is seen as a powerful leader, one of the hallmarks of the chinese system is no decision without debate. no debate after decisions.

so, i think that the optics looks like xi is in charge, making all the decisions, but i think a lot of thought and debate goes into especially important decisions. as a result of that, we have seen a good track record over the last 10 years, over the last decades, where china largely has made the right decisions and implemented them effectively. and increasingly it is taking that competence and that ability to have an impact on the global stage. adrian: i will come back to you in a moment but i want adrian's thoughts on what you were saying. and on this deal to normalize relations between iran and saudi arabia. adrian g.: that shows the growing power of china in the world. and i would also agree that these people are not incompetent.

they are not idiots. they select good people. but still the point is that, um, the atmosphere we have now in china, because now i mean it was a big lesson of the mao time when reform was started to say that power should not be concentrated in the hands of one person. that is also why one person should be maximum 10 years in power. so we have seen now at the 20's party conquest and the people's conquest today that xi jinping continues in power. and that creates an atmosphere which makes it difficult to discuss with him controversial topics. because everybody has to be afraid to become a victim of the anticorruption campaign, which as we know is not only an

anticorruption campaign, but the only campaign against everybody who does not agree to xi jinping . and to the point that they always have wise decisions. i mean, in the last decade yes, but also related to the opening up and reform, which xi started. if we look at the last years, i would not say they zero covid policy, how it was implemented was a wise decision. i think it was terrible for the economy and terrible for the chinese people. adrian: russia's president congratulated xi, hailing's personal contribution to strengthening their comprehensive partnership and looking forward to further fruitful russian and chinese cooperation. how important is pressure to xi jinping right now, especially in light of their relationship with

the u.s.? andy: russia is important to china for a number of reasons. like countries in the middle east it is an important supplier of energy, so that is a very important factor to consider geopolitically. and of course, i think he also said something along the lines as long as there is turbulence in the world, the russia-china relationship will be a guarantor of global stability. i ate roughly it was that intent. so, from the chinese view, as long as there are problems, thre ats in the world, that the ability of china and russia -- and perhaps other countries as well -- to work together to ensure a prosperous and stable global environment is vital. adrian: shirley, this rivalry with the u.s. you talked about, this competition or desire to win the competition, how much is

that rivalry hurting china's economy right now? is xi actually interested in repairing or thawin a littleg the relationship between china and the u.s.? shirley: i think that the series of escalations with the u.s. sanctions, particularly on chinese technology, has me china doubled down its efforts and existing practices. and so this time in the congressional session, you heard xi jinping personally inquiring -- the private companies, where are the chips made in the machinery? so this chinese domestic economic challenge is primarily from the financial sector and technology sector. and of china has restructured, as andy alluded to, this whole new state led whole of government architecture in order

to seek technological self-reliance. but today, technology and the capital market, the financial sector, go hand in hand. we saw recent, very aggressive investigations, anticorruption investigations into the financial sector but also china recently implemented a nationwide ipo system, so once that is in place, which is very much akin to nasdaq or aus kind of capital market, then lid chinese rise in technology companies will be able to seek financing from the domestic market in order to finance sustainable rights. so the rise in finance and technology rights goes hand-in-hand. i do not think there is a day that xi will wake up and say that the u.s. ships again will supply us. adrian: why is he extending his personal oversight of the

financial sector and tech industry? he has replaced china's banking watchdog and has set up a new agency, this science commission also that he has begun. why? shirley: xi had set up many executive committees to oversee strategic sectors within the chinese economy. so, that is part of this whole chinese structural transition of power from the government to the party. and essentially back to xi himself. at the that that trend is going to continue. and now the supervisory financial committee that is newly set up is going to replace the existing functions of the banking watchdog and insurance watchdog, and some of the other functionaries within and across different ministries.

so that restructuring is also a hopeful sign because we have a lot of government entities that have cross functions of each other. and then there's various regulators, that do not bring efficiency in terms of governance or transparency, so now the new entities are likely to resolve that. adrian: let's discuss china's relations with the eu, adrian. tensions persist over china's relationship with russia and ukraine. how is it seen as a puppet of the u.s. and china, the eu? adrian g.: on the one hand, china tries to divide the new and and u.s. -- un and u.s.

they attacked the united states and said you should be more in the middle between the two sides, and not together with the u.s. on the other hand, in the context of the ukrainian war, china is working in one front with the u.s. and that brings me back to your earlier report -- i was a correspondent in moscow at the end of the soviet union. and putin and xi jinping are united because they have the same idea, they both think that they have been humiliated by the u.s. and a generally by the west and the rest of the world, as they see it. putin brings this together with a crackdown -- breakdown of the soviet union.

i witnessed the falling of the soviet union. it was because of the internal problems of the soviet union and not because of foreign interference primarily. and xi jinping sees it even in a much bigger context, the colonial time and humiliation of china during that time. and wants to make china a big power again. which is a fair aim, to make china -- it's been an important country economically and culturally and so on, so it is fair to go back to this idea to make china a great country. but i think that the confrontation for both sides not helpful to develop this. adrian: andy, what is president xi's standing with the chinese public? his reputation did suffer, at least in some sections of

chinese society, after zero covid, the rushed abandonment of zero covid. then the property crisis, the tech crackdown. there is high youth unemployment. is he admired by the public, respected, liked? does it even matter? andy: i think that is certainly matters. no country, no regime can survive without public support. um, punitive measures only work to provoke backlash eventually. so, and i would be careful maybe to distinguish. there certainly was dissatisfaction and concern, anxiety and even anger during the covid lockdown period. certainly some people did not feel the relaxation measures went well. but i think overall there is

enormous support for president xi across all sectors of society, not just xi but the communist party as well. and i think that people recognize too that things can be better. and this is one of the reasons i think that we see the institutional reform going on today. shirley made a great point that overlapping jurisdiction is inefficient, it creates cost and burdens for firms and the financial sector but also creates problems in terms of regulatory arbitrage as well, where companies, financial service companies can play off one regulator against another. so, one of the unique features of the chinese system is it is able to engage in some regular, fairly significant institutional reforms. and i think many people who have worked in bureaucracies know how difficult that can be. adrian: we are out of time.

many thanks to all of you for being with us. to all of you. as always, thank you for watching. you can see our program by going to our website. and for further discussion, go to our facebook page. and you can join the conversation on twitter @aj inside story. for the whole team, thank you for watching. ♪ tñ■aañl

samantha hawley: it's only a jump across the water from great britain to no, but some wayst's like traveling back in time. after more than 20 years of relative peace, tensions have broken out again. violence not seen for decades is back on the streets. northern ireland should be celebrating its centenary as part of the united kingdom, but people are angry.