Xi Jinping Is Going To Run China Forever, So Get Onboard Or Get Run The Hell Over, And He Doesn’t Care Which

Here, on behalf of the newly elected central leadership, I wish to express our heartfelt thanks to all other members of the party for the trust they have placed in us. We will work diligently to meet our duty, fulfill our mission and be worthy of their trust.

That’s from Xi Jinping who announced the composition of the Politburo standing committee on Wednesday and, based on who’s in it, Xi is apparently not planning on not ruling China anytime soon (no typos in there).

Because everybody in it is between 60 and 67, which means no one is young enough to take over for Xi after his second term ends in 2022 and then subsequently lead for ten years. So, that kinda makes you think that Xi is going to go ahead and abandon a system that’s been in place for a quarter century. That, in turn, suggests that Xi is about to turn China into a damn personality cult, hilarious because, well, because how the fuck do you build a personality cult around a guy who only has one facial expression?

No but seriously, this is big news. It’ll be Xi and premier Li Keqiang and now: Li Zhanshu, 67, Han Zheng, 63, Zhao Leji, 60, Wang Yang, 62 and Wang Huning, 62.

 

So: 2 Li-s, 2 Wangs, a solo Han (get it?), a Zhao, and a one Mao Xi. Here’s a fun picture:

MugShots

Ladies, would you swipe left or right on Tinder?

Ok, so there they are and here’s a chart from Goldman which shows you the shakeup:

ChinaPSC

“The departure from the pre-existing succession system had not been widely anticipated before the Party Congress, although it is in line with the view of some commentators who have expected President Xi to further cement his power,” Goldman notes, before reminding you that “at the Party Congress, it was also approved that ‘Xi Jinping’s Thought’ be adopted in the party constitution (see here for the details of the content of Xi’s Thought). While not a surprise, it is an additional testament to the strength of authority that President Xi now commands within the party (only two former Chinese leaders, Mao Zedong and Deng Xiaoping, are mentioned by name in the party constitution as key architects of party ideologies; and Deng’s name was added only posthumously).”

“The norm is that a potential successor to the president (and the premier) should get a seat on the PSC in his/her fifties so that he/she can serve one five-year term on the PSC before rising to the very top,” SocGen adds, before noting that now, since no one under 60 has got into the new PSC leadership roles, “the probability of Xi retaining one or two of the three roles (party, military and government)  beyond 2022 (when he will be 69) seems to be rising.”

Yes, that probability “seems to be rising” as does China’s importance in the global economy and the country’s role in promoting global stability more generally. And frankly, there are probably worse things than Xi being in charge (in one form or another) of China for the foreseeable future (probably past 2030). America’s reliability as guardian of a stable, sane global order has been shaken to the core this year and Angela Merkel simply can’t do this on her own. Russia can’t take the reins because, well, because look who’s President over there, and the U.K. has obviously gone the isolationist route. So again, there are worse things than a strong, stable China when it comes to making sure the world doesn’t fall apart.

That said, there are dangers here. It seems likely that we’ll continue to see Beijing establishing what amounts to a kind of Sino-Monroe Doctrine in the Pacific which could further aggravate America’s allies as it becomes increasingly difficult for the U.S. to project its influence without risking an outright conflict with the PLA.

Of course with that comes responsibility and one of Beijing’s pressing concerns is North Korea. Xi wouldn’t want to fumble that handoff and honestly, it would probably be best if China just went ahead and installed a puppet regime in Pyongyang and let Kim retire to some cottage somewhere. I mean not really, but the point is: Xi should nip that situation in the bud before it has a chance to spiral out of control and dent the world’s confidence in his leadership just months after he cemented power.

And then there’s the economy and the financial system. “In our view, a longer political horizon may imply a stronger policy focus on the sustainability of the economic model,” Goldman goes on to write in their morning note on all of this. “This forms part of the backdrop for the ongoing curb of environmental and financial risks, as well as for the renewed emphasis on the quality (e.g., more consumption-based) and inclusiveness (e.g., less income disparity) of growth that was laid out in President Xi’s party congress report.”

Additionally, there’s even less room for dissent in China than there was during Xi’s first term. So you know: “don’t talk shit,” because there’s considerable debate about the extent to which Xi is really in the business of promoting more in the way of healthy “discussion.”

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5 thoughts on “Xi Jinping Is Going To Run China Forever, So Get Onboard Or Get Run The Hell Over, And He Doesn’t Care Which

  1. Question: So why is Xi smiling? (well for him, that’s a huge smile)

    Answer: Because all of them are in their 60’s with a natural full head of hair.

    Trump furious with envy.

  2. Seriously though, I think that in light of Xi’s further consolidation of power, one must give more weight to the PBOC “Minsky moment” comment a few days ago. It came from Zhou’s lips but most likely was Xi’s words as a policy point coming at the time of the 19th Plenum during which Xi cemented his power. Words that IMHO only a fool would dismiss as a gaffe.

  3. Indeed, just as I typed the above, Kevin Muir published his take on it on his global macro blog. I won’ t post the link as I’m sure that H will post it soon and I shan’t steal his thunder. Here’s just one quote from it:

    “instead of focusing on this dire warning, markets are busy trying to discount the chance of a Powell Fed or a Republican tax cut [so hedgies in uber-bullish]. Although both of these developments would be important, China is the tail that wags the dog. Full stop.
    The Chinese are telling you to be wary about a Minsky moment. Shorter term, they have been actively engaged in keeping the markets propped up, but that support is ending.”

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