There was a joke in the old Soviet Union: the future is fixed (and bright), it is the past that keeps changing. The Communist Party today issued a summary of a resolution passed by the 6th plenary session of the 19th Party Congress, addressing the last 100 years and the future in an unprecedented and comprehensive way. It is only the third such resolution that the Party has ever released, and it is aimed at addressing 1. The balance of significance of all the party leaders along the way, and 2. The role of the Party in the modern history and future of the nation, and indeed the world. On point 1, it will come as no surprise to readers to hear the Mao is given a categorical thumbs-up—no mention of the 70-30 assessment which was part of Deng Xiaoping’s re-assessment of history in the early 1980s. Then several party leaders are ignored, including Mao’s successor Hua Guofeng, but Deng, Jiang Zemin and Hu Jintao all get basically one mention each. Then on to Mr Xi, whose standing is clearly above all the rest except for Mao. It is preparation for the solidification of his position and the leadership team he heads ahead of the 20th Congress next October. But point 2, in the end, seems more significant to us. That is, the adamant declaration of the party’s crucial and unquestionable role and position in the past, present and future at the center and in all corners of China’s existence. This is the key contribution of the current leadership led by Mr Xi, not the three terms as opposed to two terms. And that is also the difference, it seems to us, between, say, Putin and Xi. The China system is not necessarily dependent on the leader. What Those in Command want the people of China to do more than anything else is accept their assessment that the best option for the country now and in the future is complete control by the Party. And having a strong, organized, focused organization which is working towards an agreed goal in an efficient way – there are unarguably advantages to that. In a way, they were saved by COVID. That shifted attitudes more than anything else. Anyway, welcome to the future.
In other news, the China-US relationship shifted to somewhat less than frosty with an announcement of cooperation on climate control, and there are rumors Biden will be invited by Mr Xi to the Beijing Olympics. One of the largest private education companies, New Oriental, officially closed down 1,500 after-school tutoring establishments across China, the property developer Kaisa is teetering on the edge, just like Evergrande, but indications are that they will both be somehow assisted through the crisis in a way that doesn’t cause explosions. Amazing what you can do with total control of a financial system. And lastly—inflation. Factory gate inflation in October at a 26-year high. Hmm. Careful there.
Have a great weekend.