The week was very very quiet in China because the most important meeting of the year was in progress—the fourth plenum of the 19th Congress of the Chinese Communist Party. The communique at the end included no startling results, nothing at all reflective of various rumors. And the core message was as expected—everyone should gather round the leadership of the party with Mr Xi at its core, even more than before. The consistency and determination of the message is clear and persuasive. Regardless of whatever problems are out there, it will take much more to create the conditions for any kind of shift to the fundamental stance and structure of the party-state.
In the midst of the growing impeachment storm in Washington, it also became clear that China and the US are pretty well okay to sign an interim trade deal, which apparently involves large China agricultural purchases from the US, with some shift in IP legislation and financial market opening as the quid pro quo, if that is the correct term. What the US really wants—a change to the structure of “China Inc.” to reduce the monopolistic protection afforded to SOEs—ain’t on the table.
Economic indicators continued to be mixed, but the overall sense of medium-term slowdown is definitely there. What it means, what level of slowdown could result in what kind of new factors being inserted into the equation of China governance, is a fascinating but a completely open question.
Have a great weekend.
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