Will Markets Be as Patient With Xi Jinping as the Chinese People?
It will take weeks, if not months, before we get clarity on the paramount leader’s economic policies and priorities.
It is remarkable how patient Chinese people are. Consumer confidence is at a record low. Home value – the bulk of household wealth – has been in decline for more than a year. Strict Covid controls kept tens of millions at home for months at a time. And yet there’s been barely a whisper of discontent as President Xi Jinping claimed a sweeping political victory last weekend.
Now that Xi is staying on for a third term and packing China’s future leadership with his longtime aides, the burning question becomes whether financial markets have the patience to wait it out and see how Xi’s team will execute his so-called new development model, which centers on building industries with high value-added, narrowing the wealth gap and elevating the state’s role in the economy.