Monday, February 26, 2018

What Xi's ascendancy means for China's growth

The announcement was not totally unexpected, according to the BBC, but it did come as a shock. China's Communist Party announced the Central Committee proposed that the term of the President and Vice President may serve beyond their 10-year terms:
The Communist Party of China Central Committee proposed to remove the expression that the President and Vice-President of the People's Republic of China "shall serve no more than two consecutive terms" from the country's Constitution.
The announcement prompted both bullish and bearish reactions. China bulls warmed to the prospect of stability and predictability in the Chinese leadership and highlighted this chart. China is likely to continue on its steady growth path.

China bears pointed to the rising risks in the country's growing debt load, which is already at nosebleed levels.

Virtually everyone on social media embraced this interpretation of Xi as the next emperor, or compared him to Mao Zedong.

How should investors react to this political development?

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