đź”’ Alec Hogg: China president-for-life doubles down on risky actions

The closer one looks at what is happening in China, the more distressing the picture. And yes, we need to pay attention. China is the world’s second largest economy, and a major buyer of South African exports. It is also the home of Tencent, a company that’s been the source of a chunk of SA retirement wealth through Naspers’ world beating investment.

Problems caused by Beijing’s central planning dogma are fast emerging. Chinese manufacturers are struggling from Eskom-like “load shedding” due to an energy crunch caused by price controls on coal-fired power. And turmoil in the property sector (29% of GDP) is growing as troubles at Evergrande (debt: $300bn) spreads to other players. Oversupply is huge, sufficient to house a staggering 90m people.

Despite this, which are of president-for-life Xi Jinping’s own making, China’s leader is doubling down. Advisers say their supreme leader sees “a window of opportunity” to drive through difficult structural reforms. Since winning a gamble to end the term limit on his presidency, Xi has grown bolder including attacks on business in pursuit of “common prosperity” and buzzing Taiwan with military aircraft.
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His SA equivalent, Cyril Ramaphosa, is often accused of not being bold enough in pursuing the country’s ,much-needed structural reforms. Next time you ponder that criticism, consider what rational Chinese are now thinking about the actions of their increasingly reckless leader. Power corrupts. Absolute power corrupts absolutely. Lest we forget.

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