While Hu Jintao is not required, as George Bush is, to deliver a State of the Union address each year, his deputy Wen Jiabao fired off the modern Chinese equivalent over the weekend.
While Bush, as the president of a democracy, has to contend with the public reaction to the unpopular war in Iraq, Wen has the luxury of knowing that even though his words have influence – and he must be careful not to disturb the markets – he and his comrades are not in danger of losing power anytime soon. And so he could safely assure everyone that, yes, even though the economy is busting loose and the banks are stuffed with greenbacks, all is well.
The market certainly thought so. Traders were happy simply to have no more legislation restricting this or that kind of investment, and the Shanghai Composite nearly hit 3,000. One wonders, however, how they will interpret today’s news that preferential tax status may be stripped from foreign firms this year. My guess is they won’t be that phased if it happens.