The Anxieties Of Investors Regarding Xi’s New Leadership Team May Be Misguided

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Last Updated on October 25, 2022 by Bitfinsider

According to the consulting firm Teneo, concerns regarding China’s new leadership team “may be mistaken” as a result of Monday’s drop in Chinese market prices.

On the first trading day after Chinese President Xi Jinping consolidated his firm grasp on power by appointing a new core leadership team filled with his loyalists, Chinese stocks in Hong Kong and New York fell, particularly internet tech titans such as Alibaba.

During the course of the past few years, Xi has demonstrated a strong predilection for increased participation of the state in the economy.

Li Qiang, Li Xi, and Cai Qi all enter the Politburo standing committee after heading up rich provinces where economic growth is still the top priority, Teneo Managing Director Gabriel Wildau and a team said in a note. “Despite their close relationships with Xi, Li Qiang, Li Xi, and Cai Qi all enter the Politburo standing committee,”

Cai Qi served as the party secretary for the nation’s capital city of Beijing, while Li Xi was in charge of the province of Guangdong, which is known for its extensive export industry.

As the party secretary for the city of Shanghai this year, Li Qiang, who is highly likely to become the next premier, was in charge of enforcing draconian COVID lockdowns in the city.

Analysts, such as Ting Lu, Chief China Economist at Nomura, have noted that Li Qiang “has considerable experience in managing some of China’s richest and greatest provincial economies.” These provinces include Zhejiang, Jiangsu, and Shanghai.

According to the research published by Nomura, “Mr. Li has been universally recognized as a capable politician who is pro-market and pro-growth.”

“During the Omicron wave that occurred in the spring of this year, Mr. Li experienced a few difficulties. At that time, the entire city of Shanghai was placed under a tight full lockdown. Nevertheless, during the better part of the years 2020 and 2021, Shanghai under Mr. Li’s governorship was seen as an example for striking a reasonable balance between Covid control and economic growth.

Analysts also drew attention to the promotions of He Lifeng, who currently serves as the head of the National Development and Reform Commission, and Yi Huiman, who currently serves as the head of the securities regulator.

Teneo experts predict that He Lifeng will most likely “succeed the retiring Liu He as vice premier and director of the party’s Central Financial and Economic Affairs Commission.”

According to the research, even if He does not have Liu’s level of technical skill, He’s record implies that he has a strong focus on economic growth. “He stated in an article that he had written the previous year that the ‘number one task’ and the basis and key to solving all of our country’s problems was the development of our economy.”

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