It is rare for there to be a confluence of so many major issues in so many different parts of the world at the same time as we have today. Extraordinarily, we have big wheels in motion that have the potential to change the course of world history taking place in Europe, the United States and China simultaneously. In Europe, we have the Ukraine war, which is going to decide the future of Russia and also in many ways of Europe. In the United States, we have coming up very soon, it would appear, the indictment of the former president Donald J Trump with the future of American democracy at stake. And in China, we are in the channel for the 20th Congress of the Chinese Communist Party scheduled for next month, which will set the path for China for the next decade. Wow.
Each of these events, of course, impacts on China and its future in significant ways. The 20th Party Congress will fix the makeup of the leadership and the basic policy direction. The leaders chosen, it is safely assumed will overwhelmingly be fore-square behind the current leader Mr Xi, who will remain as party chief for an extra term beyond 10 years, the first one to do so since Mao. The choice facing China is ideological purity or economic pragmatism. Our analysis is that there is very little if any room for compromise in the middle, and it would appear that ideological purity will win out. The reformers, as the SCMP put it this week, are stepping down. This has major implications for private enterprise, foreign investment, China’s global role and position, growth rates, interaction and integration of China with the rest of the world. All will be revealed or confirmed after the Congress starts on October 16.
In the second of the three rings, the Ukraine war in Europe, China’s position on the conflict was finally made clear this week with Politburo member Li Zhanshu stating categorically that China “understands and fully supports” Russia’s actions in Ukraine. This statement has far reaching implications in terms of China’s relationship with Europe. As does the meeting this week in Kazakhstan with Putin, with references to the need to create a New World order with guidance provided by China and Russia. Some resolution to this dichotomy of realities is going to come at some point.
In the third ring is the apparent determination of the US Justice Department to go for Trump and create a clear conclusion to all that happened in his administration and particularly the events of January 6. What is at stake is nothing less than the commitment of the United States to the ideas of rule of law and constitutional government. If the conclusion is that Trump is indeed indicted and most likely found guilty, then it will send a clear message about be the strength of the American system. The Trump administration, and the chaos that Trump created both internally and around the world in the past few years provided those seeking to create an alternative to the US-based international structures with wonderful proof that the Western approach was flawed.
So keep any eye on the news. New developments are occurring in all three rings with great rapidity. History is speeding up, and there’s no telling whom it is naming.
Have a great weekend.