Markets Are Right to Fear Xi’s Dream Team
By Nathaniel Taplin, ct. 24, 2022, WSJ

Chinese leader Xi Jinping delivered a show of force over the weekend—unveiling a new Chinese leadership team completely devoid of rivals. Markets delivered a harsh verdict on Monday, and unfortunately that may be justified.

Mr. Xi’s consolidation of the top leadership caught markets off guard, even after The Wall Street Journal’s report last week predicting his clean sweep of the Politburo Standing Committee, China’s top political body. The release of China’s third-
quarter economic figures Monday morning—after an unexplained delay last week—probably wasn’t the key factor driving today’s selloff, particularly since 3.9% growth actually exceeded most economists’ expectations.

The leadership reshuffle eliminated several key politicians seen as more favorable to market-friendly changes, including the current premier Li Keqiang and Wang Yang, formerly the party chief of Guangdong province. Li Qiang, the party secretary of
Shanghai and a close ally of Mr. Xi, looks poised to become China’s new premier, meaning he would control the state bureaucracy—despite his handling of the disastrous Covid lockdown of Shanghai this past spring.

Hu Chunhua, a vice premier who rose through the Communist Youth League faction (which is seen as allied with Li Keqiang and former leader Hu Jintao), was considered a potential candidate for the premiership, and his elevation might have signaled some
resistance within the party to Mr. Xi’s agenda. Yet Hu Chunhua not only failed to make the Standing Committee, he was also bumped from the larger 24-man Politburo, signaling a huge loss of standing.

What was most striking about Monday’s market reaction was how broad-based it was. Internet tech firms that were the focus of last year’s rectification campaign championed by Mr. Xi dropped as expected—Alibaba and Tencent shares both fell 11%.

But even some state-owned firms favored by Mr. Xi’s administration, like China’s leading chip making firm Semiconductor Manufacturing International Corp. and battery champion Contemporary Amperex Technology Co. Ltd fell 3.6% and 2.2% respectively. Of
the top 10 constituents of Goldman Sachs’s “Little Giants” portfolio—featuring small-and-medium cap Chinese firms in favored sectors such as semiconductors and specialty chemicals selected by the bank—only three actually managed to eke out a
gain.

One possible explanation: Mr. Xi’s uncompromising stance on relations with the West means more financial support for sectors favored by Beijing’s drive for self-reliance, but probably also more Western restrictions such as those rolled out by the
Biden administration in mid-October, designed to hobble China’s chip making companies. Another: Mr. Xi’s further concentration of power, and his favored policies, are so negative for overall future growth that even favored sectors face diminished
prospects over the long term.

On this latter point, there are basically two concerns. The first is that under Mr. Xi, China’s economy has tilted back toward state-dominance and productivity growth has weakened. From mid-2021 to mid-2022, state firms’ share of the total market
value of China’s top 100 listed firms rose by nearly 11 percentage points, according to the Peterson Institute for International Economics. Nearly all of that was due to the crash of private sector internet platform stocks like Alibaba.

The second concern is that Mr. Xi will now have even fewer counterweights when he overreaches—and fewer underlings willing to communicate frankly how much damage his initiatives cause. A charitable view of recent policy paralysis is that Mr. Xi, having
now completely cowed his opponents, will feel comfortable easing off a bit on some signature policies. Some relaxation of Covid controls and more support for China’s property sector do seem inevitable at some point—although when that might be remains
unclear.

But the uncomfortable reality is that even well before the run-up to the Party Congress, a fearful bureaucracy had already demonstrated a tendency to take Mr. Xi’s initiatives too far. As far back as late 2017, many northern Chinese found themselves
without heat in the dead of winter as local governments struggled to hit pollution targets. The crackdown on shadow banking in 2018 caused enormous collateral damage to private sector firms. And those campaigns now look tame in comparison with what
happened to the internet platform economy in 2021, or the property sector over the past year.

This weekend’s shakeout leaves no doubt that Mr. Xi is firmly in control. Markets are rightly nervous. But in Beijing, that may not carry as much weight as it used to.

https://www.wsj.com/articles/markets-are-right-to-fear-xis-dream-team-11666620054

--- SoupGate-Win32 v1.05
* Origin: fsxNet Usenet Gateway (21:1/5)

On Wednesday, November 2, 2022 at 2:25:25 PM UTC+8, David P. wrote:

Markets Are Right to Fear Xi’s Dream Team
By Nathaniel Taplin, ct. 24, 2022, WSJ

Chinese leader Xi Jinping delivered a show of force over the weekend—unveiling a new Chinese leadership team completely devoid of rivals. Markets delivered a harsh verdict on Monday, and unfortunately that may be justified.

Mr. Xi’s consolidation of the top leadership caught markets off guard, even after The Wall Street Journal’s report last week predicting his clean sweep of the Politburo Standing Committee, China’s top political body. The release of China’s

third-quarter economic figures Monday morning—after an unexplained delay last week—probably wasn’t the key factor driving today’s selloff, particularly since 3.9% growth actually exceeded most economists’ expectations.

The leadership reshuffle eliminated several key politicians seen as more favorable to market-friendly changes, including the current premier Li Keqiang and Wang Yang, formerly the party chief of Guangdong province. Li Qiang, the party secretary of

Shanghai and a close ally of Mr. Xi, looks poised to become China’s new premier, meaning he would control the state bureaucracy—despite his handling of the disastrous Covid lockdown of Shanghai this past spring.

Hu Chunhua, a vice premier who rose through the Communist Youth League faction (which is seen as allied with Li Keqiang and former leader Hu Jintao), was considered a potential candidate for the premiership, and his elevation might have signaled some

resistance within the party to Mr. Xi’s agenda. Yet Hu Chunhua not only failed to make the Standing Committee, he was also bumped from the larger 24-man Politburo, signaling a huge loss of standing.

What was most striking about Monday’s market reaction was how broad-based it was. Internet tech firms that were the focus of last year’s rectification campaign championed by Mr. Xi dropped as expected—Alibaba and Tencent shares both fell 11%.

But even some state-owned firms favored by Mr. Xi’s administration, like China’s leading chip making firm Semiconductor Manufacturing International Corp. and battery champion Contemporary Amperex Technology Co. Ltd fell 3.6% and 2.2% respectively.

Of the top 10 constituents of Goldman Sachs’s “Little Giants” portfolio—featuring small-and-medium cap Chinese firms in favored sectors such as semiconductors and specialty chemicals selected by the bank—only three actually managed to eke out a
gain.

One possible explanation: Mr. Xi’s uncompromising stance on relations with the West means more financial support for sectors favored by Beijing’s drive for self-reliance, but probably also more Western restrictions such as those rolled out by the

Biden administration in mid-October, designed to hobble China’s chip making companies. Another: Mr. Xi’s further concentration of power, and his favored policies, are so negative for overall future growth that even favored sectors face diminished
prospects over the long term.

On this latter point, there are basically two concerns. The first is that under Mr. Xi, China’s economy has tilted back toward state-dominance and productivity growth has weakened. From mid-2021 to mid-2022, state firms’ share of the total market

value of China’s top 100 listed firms rose by nearly 11 percentage points, according to the Peterson Institute for International Economics. Nearly all of that was due to the crash of private sector internet platform stocks like Alibaba.

The second concern is that Mr. Xi will now have even fewer counterweights when he overreaches—and fewer underlings willing to communicate frankly how much damage his initiatives cause. A charitable view of recent policy paralysis is that Mr. Xi,

having now completely cowed his opponents, will feel comfortable easing off a bit on some signature policies. Some relaxation of Covid controls and more support for China’s property sector do seem inevitable at some point—although when that might be
remains unclear.

But the uncomfortable reality is that even well before the run-up to the Party Congress, a fearful bureaucracy had already demonstrated a tendency to take Mr. Xi’s initiatives too far. As far back as late 2017, many northern Chinese found themselves

without heat in the dead of winter as local governments struggled to hit pollution targets. The crackdown on shadow banking in 2018 caused enormous collateral damage to private sector firms. And those campaigns now look tame in comparison with what
happened to the internet platform economy in 2021, or the property sector over the past year.

This weekend’s shakeout leaves no doubt that Mr. Xi is firmly in control. Markets are rightly nervous. But in Beijing, that may not carry as much weight as it used to.

https://www.wsj.com/articles/markets-are-right-to-fear-xis-dream-team-11666620054

Northern Chinese found without heat is nonsense.

In fact, those living in remote northern sectors were given free blankets, free electricity, and free thermal heaters, all made in China, too. Those people who lived in the central and southern side of China were jealous of them as they were not given
any benefits as their needs are not as important than them in the cold north.

--- SoupGate-Win32 v1.05
* Origin: fsxNet Usenet Gateway (21:1/5)

On Wednesday, November 2, 2022 at 2:25:25 PM UTC+8, David P. wrote:

Markets Are Right to Fear Xi’s Dream Team
By Nathaniel Taplin, ct. 24, 2022, WSJ

Chinese leader Xi Jinping delivered a show of force over the weekend—unveiling a new Chinese leadership team completely devoid of rivals. Markets delivered a harsh verdict on Monday, and unfortunately that may be justified.

Mr. Xi’s consolidation of the top leadership caught markets off guard, even after The Wall Street Journal’s report last week predicting his clean sweep of the Politburo Standing Committee, China’s top political body. The release of China’s

third-quarter economic figures Monday morning—after an unexplained delay last week—probably wasn’t the key factor driving today’s selloff, particularly since 3.9% growth actually exceeded most economists’ expectations.

The leadership reshuffle eliminated several key politicians seen as more favorable to market-friendly changes, including the current premier Li Keqiang and Wang Yang, formerly the party chief of Guangdong province. Li Qiang, the party secretary of

Shanghai and a close ally of Mr. Xi, looks poised to become China’s new premier, meaning he would control the state bureaucracy—despite his handling of the disastrous Covid lockdown of Shanghai this past spring.

Hu Chunhua, a vice premier who rose through the Communist Youth League faction (which is seen as allied with Li Keqiang and former leader Hu Jintao), was considered a potential candidate for the premiership, and his elevation might have signaled some

resistance within the party to Mr. Xi’s agenda. Yet Hu Chunhua not only failed to make the Standing Committee, he was also bumped from the larger 24-man Politburo, signaling a huge loss of standing.

What was most striking about Monday’s market reaction was how broad-based it was. Internet tech firms that were the focus of last year’s rectification campaign championed by Mr. Xi dropped as expected—Alibaba and Tencent shares both fell 11%.

But even some state-owned firms favored by Mr. Xi’s administration, like China’s leading chip making firm Semiconductor Manufacturing International Corp. and battery champion Contemporary Amperex Technology Co. Ltd fell 3.6% and 2.2% respectively.

Of the top 10 constituents of Goldman Sachs’s “Little Giants” portfolio—featuring small-and-medium cap Chinese firms in favored sectors such as semiconductors and specialty chemicals selected by the bank—only three actually managed to eke out a
gain.

One possible explanation: Mr. Xi’s uncompromising stance on relations with the West means more financial support for sectors favored by Beijing’s drive for self-reliance, but probably also more Western restrictions such as those rolled out by the

Biden administration in mid-October, designed to hobble China’s chip making companies. Another: Mr. Xi’s further concentration of power, and his favored policies, are so negative for overall future growth that even favored sectors face diminished
prospects over the long term.

On this latter point, there are basically two concerns. The first is that under Mr. Xi, China’s economy has tilted back toward state-dominance and productivity growth has weakened. From mid-2021 to mid-2022, state firms’ share of the total market

value of China’s top 100 listed firms rose by nearly 11 percentage points, according to the Peterson Institute for International Economics. Nearly all of that was due to the crash of private sector internet platform stocks like Alibaba.

The second concern is that Mr. Xi will now have even fewer counterweights when he overreaches—and fewer underlings willing to communicate frankly how much damage his initiatives cause. A charitable view of recent policy paralysis is that Mr. Xi,

having now completely cowed his opponents, will feel comfortable easing off a bit on some signature policies. Some relaxation of Covid controls and more support for China’s property sector do seem inevitable at some point—although when that might be
remains unclear.

But the uncomfortable reality is that even well before the run-up to the Party Congress, a fearful bureaucracy had already demonstrated a tendency to take Mr. Xi’s initiatives too far. As far back as late 2017, many northern Chinese found themselves

without heat in the dead of winter as local governments struggled to hit pollution targets. The crackdown on shadow banking in 2018 caused enormous collateral damage to private sector firms. And those campaigns now look tame in comparison with what
happened to the internet platform economy in 2021, or the property sector over the past year.

This weekend’s shakeout leaves no doubt that Mr. Xi is firmly in control. Markets are rightly nervous. But in Beijing, that may not carry as much weight as it used to.

https://www.wsj.com/articles/markets-are-right-to-fear-xis-dream-team-11666620054

In fact, people living in the northern side of China were well prioritized by the Chinese government taking care of their housing in outlying remote villages. Northern side refers to the horizontal line from the middle line longitude to the north west
and north and north east. The poor people living those areas were scattered all over the vast expanse of the area, and hence put them together to facilitate their people to consolidate each other, instead.

China's government consolidated them together with new villages with community facilities to support them. The old villages sparsely over the area have been retained so that new villages are far away for them to visit and remember them. Their manual
baack-breaking farming is now 95% operated by mechanized auto-insertion machines and harvesting with full set of auto-machines, too.

This means elderly folks will get to see their old homes in the remote areas. They will get all the health care, social care, housing, electricity and water are either free of charge or highly subsidized with charge to match their low farming income of
it.

Also, every poor household is connected to 5G and every poor home owner will have a free TV and internet connected computer set given to them. With heat and water in winter, and internet for online classrooms for village children, the poverty in China is
declared by China has cleared completely.

Seriously, this is how China reforms and consolidated the poor into an community villages with many facilities being built for them. Even US and UK cannot provide homes to the people. But China is not the same because China do not talk and talk, but take
action and produce affirmative results with real outcomes. Poor US and US, Australia, and NZ were as homeless as before with unauthorised people.

--- SoupGate-Win32 v1.05
* Origin: fsxNet Usenet Gateway (21:1/5)