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00:00[CC may contain inaccuracies] This is of course not the first time the presidency has addressed at Davos and I always sort of hark back to that that first and most impactful speech that he gave. What's really changed between now and then. And did he sort of canvass all of the major issues that really threaten economic stability and geopolitical stability not just for China but for its major trading partners as well. Yeah good morning. Thanks for having me. Yeah it was an interesting speech. I mean as you know this is the third time he's addressed the summit starting in 2017. In each case he's made the case for himself and China being really a beacon for multilateralism and economic engagement formal globally together addressing common challenges which was notable last time you presented because that was such a counterpoint to the U.S. administration at the time. I think what's notable here is he. He is making a contrast between what he is saying China is doing internationally. Right. Vaccine diplomacy with big infrastructure investments through the ballot learn initiative et cetera versus what the U.S. is driving which is more as he said zero songs. And you know exclusive groups like Baucus in the Quad is what he's in. Fine. But I think the issue is really while he's touting China's economic growth and indeed it did have over 8 percent growth last year that growth is slowing. And the economic challenges as you know are real for China. The pandemic purchases that have driven exports out of China are slowing. They just announced yesterday statistics where growth is actually slowing down. It was only 4 percent in this past quarter. And there they have demographic challenges as well. And now they're trying to drive a zero tolerance policy. So they actually have quite a lot of challenges that he probably doesn't want to highlight too aggressively in a speech like that. Right. And because we know even though he's addressing the Davos crowd there's a political audience that he's speaking to as well. We know that his dominance is not something that can be questioned going into the party Congress and the two sessions. But beyond that do we expect to see the same level of dominance this sort of intensity of the ability to push through policymaking that we've seen in the previous year. Yeah I mean the party Congress that's coming up. Indeed there is absolutely no doubt that he's gonna get a third term. There's no doubt that he's already consolidating power. He is front and center. It's going to matter unless who is picked for the positions in terms of that changing policy. Rather that's going to reflect his dominance of his politics policy for. But I think the things to watch in this Congress coming up later in the year of course are any notice possible succession plans. Who exactly is coming up in the ranks. But I think the real big question to watch for is you know he has driven some pretty aggressive regulatory crackdowns in areas like tech real estate the education sector et cetera to move from the growth for growth's sake policy to a sustainable growth policy. He's really trying to reshape the economy. So the question is as he's been taking these short term risks and you know some would argue damaging the Chinese economy for long term gain. Is that going to continue or are we going to see through the rest of this year 2022 is really going to tell us is he going to double down on that aggressive crackdown on businesses or is it going to kind of dial it back because growth is indeed being impacted. So those are the kinds of things to watch in the run up to the party Congress later in the year and then also as an outcome of it. Also happening in November is another domestic political exercise. We're talking about the U.S. midterms of course. Is it too early to start extrapolating the scenarios for that and what that might mean also for the relationship between the two. Yeah great question. It's a little bit early to forecast to to start to strongly about what might actually happen in the U.S. midterms. It is true Biden is having a very hard time. His approval ratings are down Covid a problem. He couldn't pass a bill back that are planned. So indeed we may see a situation where Republicans take the House and Senate. We may see a mix. It's hard to imagine the Democrats would actually hold both houses. So I would think regardless. His hands are going to be a little bit more tied domestically. I do think that in the run up to the election you know while in the states it's already a very strong popular tone that we need to be tough on China. That's probably the only bipartisan issue where people agree that the U.S. needs to be tough on China. That's going to only ratchet up as we get closer to elections and candidates kind of compete to be even tougher on China. So I do think you know while we've seen the U.S. and China relationship become more cordial since the Bush administration took power. Indeed the underlying drivers have not changed and possibly they could even solidify further. And so that's going to be really an area of continued strong competition let's say their intention. We're just going to really you can really hamper China what's trying to do internationally as well. Because all eyes are on China and everything that happens including in the business community which is worried about these issues as well. Of course everything is looked at through the lens of national security on both sides. So it does keep businesses of at hand strong and trying to think about how they're going to expand and how both countries are going to grow economies because everything in business is also so fraught with these geopolitics. And the risk Angeles is in a lot of ways overshadows everything else it might also be important. Everything from elections in South Korea. North Korea we're talking Ukraine. An almost impossible question obviously. So thank you in advance. What else are you watching. What else is brewing out there. Yeah well there's. If we look at the geopolitical issues in 2022 again there are a couple of events. Again the party Congress in China later the fall. You mentioned suffering elections coming up in March which you know. All right it's a very tight race. And we'll take the country and one or two different two different John Tucker. But we will has control risks. We just published our annual risk map for 2022. The issue is less any specific event or election we're watching and more the broader issue of how our governments in Asia and globally are going to continue to manage the Covid situation climate change and energy transition and what that means for economic recovery because that is where we see potential for domestic unrest. We see potential for government popularity issues you know potentially governments changing of course economic recovery on the back of how governments are choosing to change supply chains allow movement of goods and people or not. And so it's really those kind of problematic issues of how governments are going to capably or not manage those. That's really going to drive some of the geopolitical issues as well as 2022.

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Chinese President Xi Faces a Lot of Challenges, Control Risks Says

Angela Mancini, partner and head of Asia Pacific markets at Control Risks, talks about the outlook for the Chinese economy, the government's policies, and the bilateral relations with the U.S.. President Xi Jinping said in a virtual speech delivered to the World Economic Forum that China’s economy has maintained a positive trend, with dual targets of relatively high growth and low inflation achieved in 2021, according to state broadcaster CCTV. Mancini speaks on "Bloomberg Daybreak: Asia." (Source: Bloomberg)

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