It really isn’t a surprise that the global markets are on high alert to the volatility that comes from Chairman Xi and President Trump. Trump will be a topic for another day, as we will focus on the issues that plague Xi and his regime. The Maoist policies enacted by Xi over the last six years have gone mostly unnoticed outside mainland China. His re-education camps, Silk Road initiatives, and other communist manifestos have gone unchallenged. And why not, he put the death knell on any thought of a hybrid economy by legislating the removal of term limits, which means Xi will be chairman until the next proletariat uprising.
The assault on Xi has come from many fronts, most recently the public protests against an extradition law in Hong Kong. Political dissent is the pebble in the shoe for Xi, as he can only let it be for so long. Public demonstrations of dissatisfaction don’t play well in Beijing. You remember Tiananmen Square. The protests in Hong Kong were met with tear gas and rubber bullets highlighting the party’s ability to assert control away from the mainland. “This is all on Xi’s shoulders,” said Trey McArver, co-founder of Beijing-based research firm Trivium China.
As we know, China’s economy is struggling, with manufacturing slipping and an 8.5% decline in imports indicating slowing domestic demand. The U.S. is problematic to China in many ways currently. Hong Kong will be in the spotlight until the extradition law is settled. A worst-case scenario, according to Jacob Kirkegaard, a senior fellow at the Peterson Institute for International Economics in Washington, would be if “He [Xi] would be seen as bowing to political pressure from President Trump, from the administration, which is very difficult for him given the standoff they’re already embroiled in over the trade relationship.”
In addition to extinguishing the Islamic faith” in its far western region of Xinjiang, the communist party must deal with Taiwan, whose President Tsai Ing-wen, has decided to run against China as she seeks a second term, and has requested advanced F-16V fighter jets. The Chinese economy lies at the crux of the problem, or solution, depending upon whose side you are on. Most macroeconomic statistics are down, including a significant decline in GDP. As the economy goes, so does the dog whose tail it is waging. China feels that the Trump administration is questioning China’s ability to govern itself in a communist fashion. As economics get worse on the mainland, the more leverage, and perhaps truth, it gives the Trump argument.
The unprecedented nature of Trump’s Twitter use to announce economic and political change is not received well in China, as Twitter is blocked from public use. Remember boys and girls of the left, your voice could be extinguished as well one day. Your stalwart positions of abortion, inclusion, diversity and equality, will quickly fade once you surrender our sovereignty to the likes of Warren, Sanders, AOC, et al.