Trading China

CHINA and President XI

We know Chinese President Xi Jinping has an appointment for life.  This is good news and bad for Xi.  Who doesn’t like a life-time job?  Following Machiavelli, this puts Xi in another category as dictator or king who is quietly and covertly challenged by the nobles in China.  The nobles are the super rich and super powerful players within China who see themselves in the same position.  They covet his power.

They wait silently for Xi to make a mistake, one big enough to take him out.  And out he will come.  Xi is thus vulnerable and remains so, not having a cult-like following as did Mao, who was immune from any mistake.

Trade by China may cause a Xi mistake.  The world is now openly talking about how China has taken advantage of all countries in trade, IP theft, high interest loans to poor countries, and the like.  This wholesale exposure indicates that it seems likely that China will be forced to yield in several ways.  As to which ways and how much creates the risk.  How Xi’s internal foes interpret the results could manifest the mistake.

My guess: If Xi lasts seven more years, it will be truly remarkable.

Xi may need a war or two to save face and keep his position secure,. But not a big war. An economic crisis may work if managed well. War is better. Beware, particularly during times of tension over trade.

“What will happen?” is a top question pondered by all world leaders.