China Scraps Presidential Term Limits

China’s parliament voted to repeal presidential term limits, allowing President Xi Jinping to keep power indefinitely in a formal break from succession rules set up after Mao Zedong’s turbulent rule.

All but five of the almost 3,000 National People’s Congress deputies present Sunday supported the measure to strike a constitutional provision barring the president from serving more than two consecutive terms. The amendment — announced by the Communist Party two weeks ago — removes the only barrier keeping Xi, 64, from staying on after his expected second term ends in 2023.

The vote — never in doubt — gives Xi more time to enact plans to centralize party control, increase global clout and curb financial and environmental risks. It also ties the world’s most populous country more closely to the fate of a single man than at any point since reformer Deng Xiaoping began establishing a system for peaceful power transitions in the aftermath of Mao’s death.

“In the long run, the change may bring some uncertainties, like ‘key man’ risk,” Yanmei Xie, a China policy analyst for Gavekel Dragonomics in Beijing, said before the vote. “Dissenting is becoming riskier. The room for debate is becoming narrower. The risk of a policy mistake could become higher and correcting a flawed policy could take longer.”

China has cracked down on online criticism of Xi’s power play, even as shares of companies with “king” or “emperor” in their names surged after the amendment was unveiled. China’s benchmark Shanghai Composite Index has declined 1 percent since then, compared with a 1.9 percent decline in the MSCI Asia-Pacific Index.

The move to repeal the 36-year-old term limits provision is part of a package of amendments to China’s constitution. They include:

  • Inserting Xi’s name alongside Mao’s and Deng’s
  • Enshrining in law his principles for a more assertive foreign policy
  • Creating a powerful new law enforcement and ethics commission to police public servants, making permanent an anti-graft campaign that has punished more than 1.5 million officials
  • Although constitutional amendments require approval from two-thirds of the NPC by paper ballot, passage was largely procedural. The body has never rejected a party proposal and recent amendments — including a 1999 change adding Deng’s name to the governing document — passed with more than 98 percent of the vote.

    Sunday’s result was even more lopsided. There were only three abstentions and two “no” votes out of 2,964 votes cast, meaning that 99.8 percent supported the measures. The dissenting lawmakers weren’t immediately identified.

    Rare Dissent

    Still, the proposal to repeal term limits prompted unusually open expressions of dissent. Li Datong, a former senior editor at the official China Youth Daily newspaper, wrote a public letter urging legislators to oppose the move, which he said made China vulnerable to repeating power struggles of the past.

    The leadership defended the move, with Xi telling a group of delegates from the southern province of Guangdong that the constitutional amendments reflected “the common will of the party and people.” Repealing presidential term limits was “an important measure for perfecting the system of the party and the state,” the party’s People Daily newspaper said in a commentary published Wednesday, citing the lesson of the Soviet Union’s collapse.

    Neither of Xi’s other two main titles — party leader and commander-in-chief of the military — come with term limits.

    Tom Rafferty, China regional manager for the Economist Intelligence Unit, said repealing the restriction on the president’s term reduced the chances that the next leadership transition would be as orderly as those in 2002 and 2012.

    “The amendment generates a level of uncertainty,” Rafferty said before the vote. “The term limit — while only applying to the lesser role of the state presidency — has also come to shape expectations for the timing of transitions in the leadership of the party and military.”


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    Dean Popplewell

    Dean Popplewell

    Vice-President of Market Analysis at MarketPulse
    Dean Popplewell has nearly two decades of experience trading currencies and fixed income instruments. He has a deep understanding of market fundamentals and the impact of global events on capital markets. He is respected among professional traders for his skilled analysis and career history as global head of trading for firms such as Scotia Capital and BMO Nesbitt Burns. Since joining OANDA in 2006, Dean has played an instrumental role in driving awareness of the forex market as an emerging asset class for retail investors, as well as providing expert counsel to a number of internal teams on how to best serve clients and industry stakeholders.
    Dean Popplewell