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naraburns  nihil supernum  1yr ago (text post)   36206 thread views

Culture War Roundup for the week of October 24, 2022

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The big story today: Xi Jinping secures historic third term as leader of China

The Communist Party leader broke with the traditional two-term limit, extending his authoritarian rule over the world’s second-largest economy.

HONG KONG — Xi Jinping secured a historic third term as the leader of China on Sunday, cementing his status as the country’s most powerful figure in decades and extending his authoritarian rule over the world’s second-largest economy.

Xi’s third five-year term became official when he was the first to walk out onstage at the Great Hall of the People in Beijing, where a twice-a-decade congress of the ruling Chinese Communist Party wrapped up Saturday. He was followed in descending order of rank by the six other members of the new Politburo Standing Committee, China’s top leadership body.

Chinese stocks are falling hard on this news, down 10% or more. Is the prelude to something worse, or will China recover?

Of course, the media has its priorities right:

In his speech opening the party congress on Oct. 16, Xi said he remained “committed to the fundamental national policy of gender equality.” But only 11 of the new Central Committee’s 205 members are women, and there is not a single woman in the new 24-member Politburo. (The previous Politburo’s only female member, Sun Chunlan, retired at 72.)

The second largest economy in the world may be in economic and political crisis, but are there enough women in power?

Chinese stocks are falling hard on this news, down 10% or more.

I'm not as informed on China as I ought to be, but wasn't this long priced in? It seems bizarre to me that market actors with enough skin in the game to impact stock prices expected anything else. Am I off base here?

Western PRC watchers and analysts in general didn't expect Xi to full sweep the standing comittee with loyalists, instead of allowing some (rival/CYL) reformists to stick around. They're now pricing in Xi/PRC going more autarkic than with a few reformers on board that sectors that had been targeted (big tech) will continue to be targeted), that zero-covid will stick around. Western MSM coverage of HK/SH crashing and foreign outflows overlooks that domestic strategic industries like defense increased. I think AVIC hit 10% daily limit. Just like how wages and employment in PRC hard tech and strategic sectors increased while soft / consumer tech tanked. The TLDR is Xi is going to keep boosting strategic indigenous industries, even if it means slapping others to free up talent and resources. Where "others" is frequently what's in western portfoliios.

There were things priced in, such as Xi Jinping becoming the General Secretary of CCP. However there were many other subtler signals that were genuinely surprising and shocking, one of them being Hu Jintao unceremonious removal from the CCP congress by Xi's bodyguard. Also the fact that no people from Shanghai clique or The Communist Youth clique received any significant positions inside the new administration.

The overall perception is that Xi absolutely cemented his position, removed anybody who opposed him in any - even superficial way - and most importantly he removed all economic reformers who wanted more open economy. Really disastrous news for Chinese people and The World at large in my mind.

I think you're on point. However the idea that an autocratic regime would move to tighten it's own grip on power by removing possible rivals and locking out upstarts shouldn't be surprising in any real sense given all of modern history.

I can count on maybe one finger an example of an autocrat who willingly surrendered their authority and allowed transition of power away from themselves or their allies in the modern era. I can think of like a dozen that went the other way once the opportunity arose.

I guess there was some nonzero probability that Xi stepped down and/or would allow some reforms to occur, and the market finally gave up on those when they didn't manifest.

CCP has famously opaque structure, so it was not necessarily even about Xi "voluntarily stepping down" but maybe being forced by some players to share some power or tolerate some ideas he opposes. The power struggles inside Zhongnanhai would probably fill whole spy libraries, it is insane what is going on in there. If you follow China watchers you will see lengthy analysis of things like what can be the meaning if Xi having two cups of tea in front of him when everybody else has just one. So even if to the outsiders some things like order of seats or looks of congress members may seem innocuous, it is the only signal available given that things like "voting" are well known sham.

Also it has to be said that Xi is only seventh leader of CCP after Mao Zedong and since the reign of Deng Xiaoping the CCP established the system of collective leadership exactly to prevent one dictator to amass power similar to Mao. So in fact it happened in the past that even leaders with total political authority capable of implementing superauthoritarian ideas like one child policy were sharing the power and they were willing to hand the power over to the next chairman. In exchange they had certain level of safety, respect and comfort after they transfered the power. The result of this congress shows that collective leadership is a thing of the past.

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