The economic numbers for China continue to look good. Consumption is up as people recover their nerve, exports are up as the rest of the world is still wallowing in the virus. The party did its 5th plenum this week—the annual big meeting—and the communique at the end stressed measures aimed at offsetting what is widely expected to be a difficult external environment—the US relationship and other relationships. Self-reliance is in, dual circulation is hot, build your business in China and don’t worry so much about the world, is the message companies are being given. But the China market is saturated with margins close to zero? True, but that’s the future. Hong Kong is now very much a part of the system, of course, and in related news will be the venue for the world’s biggest-ever IPO—Ant Financial. So things are looking pretty stable and under control domestically.
Meanwhile we are now just four or five days away from the US election. The latest sense we have from Those in the Know is that Biden wins pretty big and the Senate turns blue too. The Trumpists will try to protest for a moment or two but it will pass pretty quickly. The danger, then, is how the right-wing people and groups that Trump has enabled for the past four years react—in the short and the medium term. It could get pretty messy. Or not. It will depend. Election first. The US election is a topic that will have come up at the plenum but the signals from Beijing remain muted they—like everyone—are waiting for the election result and whether or not the US is going to head into a period of chaos. If it does, there are risks on this side of the world. Would they react to the prospect of a Biden presidency with conciliatory steps? Don’t know. Overall, the tensions would be likely to ease, which is not a bad thing.
With the election finally almost here, this is a time for looking longer term, and our thoughts this week have touched on Russia and its importance in preserving a global environment that works for Those in Command. If the US under a Biden administration supported Belarus protests to the point where a change took place and if there was a flow-on impact on Russia and Putin’s position, would that open up possibilities, and in what timescale? If Russia was to become a part of Western Europe at some point, how would that impact in the global balance? We are facing the prospect of a multilateral world for sure. The US will not again be the unrivaled arbiter. But there are some interesting scenarios about how things might develop with Trump gone.
Have a great weekend.