China’s Difficult 2012 Just Got Even Harder
The economy is hitting a wall. Stocks are sliding. A prominent politician's wife copped to murdering a foreigner. Warmongering over tiny islands in the sea is eliciting awful headlines. And now, there's breathless speculation about the mysterious disappearance of the next president.
It's safe to say 2012 has not been China's year. Things could get even worse as political and economic challenges come to an untimely head.
Mounting questions about the whereabouts of Chinese Vice President Xi Jinping are the latest headache for Beijing. The leading candidate to succeed President Hu Jintao in a once-in-a-decade leadership change this year hasn't been seen in public for more than a week, and it's driving the blogosphere mad.
China watchers assumed U.S.-China tensions prompted Xi to blow off U.S. Secretary of State Hillary Clinton in Beijing last week. Now, the rumor mill is spinning apace with unconfirmed talk of heart attacks, strokes, car accidents, you name it. All the world can do is watch and wait to see if the carefully-laid leadership plans of the second-biggest economy are still on.
Yet the hysteria speaks to the difficulty China is having convincing the outside world that all's well inside the Communist Party. The Bo Xilai scandal earlier this year shattered the veneer of stability and the idea that Communist Party bigwigs were firmly behind Xi. Bo, the Politburo member from the western megacity of Chongqing, coveted the job before his ouster earlier this year and his wife's conviction for killing a British businessman. And now this.
Dark news also is spreading across the economy. Investment banks are tripping over themselves to lower gross domestic product forecasts for China this year. Economists at UBS AG, ING Groep NV and Royal Bank of Scotland Group Plc forecast full-year growth of 7.5 percent, which would be the weakest since 1990. That may prove too optimistic as Europe's worsening debt crisis and the U.S.'s glacial recovery slam exports.
Will 2013 be a better year for China? We can only hope so. Another year like 2012 would wreak havoc among China's 1.3 billion people and investors betting on their economic progress.
(William Pesek is a Bloomberg View columnist. Follow him on Twitter.)
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