All Hail Chinese Emperor Xi Jinping: Will He Make China Great Again?

At the nineteenth Communist Party meeting, Chinese president Xi Jinping consolidated his hold on power. But can he make China great again? What would it take?

New Yorker columnist Jiayang Fan notes At the Communist Party Congress, Xi Jinping Plays the Emperor.

Perhaps no event embodies the unyielding abstruseness and the unforgiving hierarchy of China’s ruling Communist Party as much as its Party Congress, the government’s most important leadership conference. Attended by some twenty-three hundred delegates from across the country, it is held every five years in Beijing’s Great Hall of the People—and when the weeklong meeting finally begins, one can be certain that the crucial politicking has already concluded. What proceeds is a choreographed spectacle bearing fastidiously scripted speeches, pro-forma elections of what has heretofore been determined (a leadership reshuffle in the seven-member Politburo, the highest echelon of power), and, in the case of the 19th Communist Party Congress, which opened today, high-spirited, propagandistic posters reminding the masses that “Life in China Is Good! Everyday Is Like a Holiday!”This is a message that Xi Jinping, who was appointed President at the previous Party Congress, in 2012, is eager to instill in a country that continues to grapple with a vertiginous pace of change and the outsize influence of politics in everyday life. Xi is almost certainly guaranteed another five-year term, if not longer. Since taking office, he has sought to launch the greatest ideological campaign since the days of Mao.Xi has made clear from the outset, he is intent on both defining a new world order and restoring to Chinese culture its former esteem. Yet Xi’s mission should be regarded in the context of a collective and profound post-traumatic stress disorder, the result of almost two centuries of cataclysmic events in China. For every Tang Taizong, who ushered in the golden years of the Tang Dynasty, there were many others like Empress Dowager Cixi, who usurped the throne, crippled the path of progress, and contributed to the downfall of the Qing Dynasty.As Xi made clear today, during his three-hour address to the Party Congress, he sees this moment as “a new historic juncture in China’s development”—and himself as the man to seize it. He seems to believe that the more power he amasses, the easier it will be for him to enact the kind of monumental changes necessary to transform China into the world’s leading superpower. In this sense, he is positioning himself as a savior with a cause noble enough to justify his autocratic turn. The logic is akin to that which animated the ambition of many of the Middle Kingdom’s five-hundred-odd emperors. Sure, Xi has rerouted all tributaries of power to run upstream to him, but isn’t it in the service of rejuvenation?Xi has also used his growing power to curb that of his citizens. Under his rule, China has become increasingly repressive. The media is censored and civil society has been muted. Activists have been silenced and human-rights lawyers arrested. More than a million officials have been disciplined. Despite paying lip service to the constitution—the Party devoted an entire plenary session during the 18th Congress to a discussion of “judicial independence”—Xi is steering the country away from the rule of law and toward the rule of the Party.Xi’s vision for China’s future suggests a great leap backward, in which old lessons remain unlearned.

Bravo!

A paradigm change is indeed underway, but it will be led by cars (autonomous driving and electrification), demographics (aging boomers), the demise of pension plans, a revolt by millennials, and a squashing of the current political class.

A currency crisis is inevitable but it's too soon to say that gold will be back in the picture. Some suggest SDRs, but I dismiss that idea.

King dollar is certainly not dead yet, and contrary to popular belief, having the reserve currency is more of a curse than a blessing.

Why Dollar is King

  • The dollar is king because the US has open capital markets, property rights, and the world's biggest bond markets.
  • The US also has a Bill of Rights granting freedom of speech and protection from unwarranted searches. China imprisons people for speaking their mind.
  • China is a long way from competing with the US on those important issues. In addition, China repeatedly resorts to capital controls to stop monetary flight.

China will not supplant the US for at least two decades and may not ever.

I expounded on the topic in Marc Faber Banned from CNBC. Here are a few snips.

What Made the US Great?

The Constitution's Bill of Rights is what makes the US great. There is nothing else like it in the world. It's a unique constitution put together by a unique set of educated lawyers and other scholars.

The First Amendment grants freedom of speech and freedom of the press.

That's what enables Faber to say what he did. And that's a good thing, whether you agree with him or not! China imprisons or kills people for saying something the state disagrees with. Numerous countries in Europe would fine Faber for such remarks.

The First Amendment prohibits state-sponsored religion. Many Republicans who allegedly want a strict constitution, ought to take a closer look. School prayer does not fit in.

Democrats might wish to consider the Second Amendment.

Everyone should appreciate the right to be secure in their home. That's the Fourth Amendment.

The Sixth Amendment grants a speedy trial.

Reader Comments

The subject came up a third time today. In response to the above articles, reader Brindu had this to say:

Hello MishIn your section "What Makes the US Great", you used the points made earlier in " King Dollar". This will be very educational for readers who normally don't dwell on constitutional issues.I have another point worth adding: "A credible, independent and impartial court system accessible to all.". To illustrate how the Constitution and the Bill of Rights worked real time, I reflected back to Nixon and the Watergate era (1972-74). Many of your readers were too young to remember or not even born. Here is a summary of relevant events showing how the points you listed under "What makes the US Great?" worked in actual practice.Daniel Ellsberg leaked the Pentagon Papers to the NYT. Nixon went to court to stop publication, but the judge ruled against Nixon, saying there was no threat to national security. The NYT published the Pentagon papers in its entirety, This is a classic example of the first amendment at work. Many foreign leaders asked why Nixon did not shut down the press. (The UK has something called the Official Secrets Act and can shut down newspapers).Nixon's aides broke into Ellsberg's psychiatrist's office looking for dirt. They went to jail. This is a classic example of the Fourth Amendment at work. Judge John Sirica systematically sent a dozen or more Nixon's aides (Haldeman, Erlichman, Dean etc.) to jail as Nixon watched helplessly. Again, foreigners, unfamiliar with the US separation of powers asked why Nixon just did not throw Judge Sirica in jail. Imagine a judge acting independently in China or in Erdogan's Turkey? This is a classic example of an independent judiciary at work.The parliamentary systems in Europe and Canada are inferior in protecting individual rights like our Bill of Rights. Under parliamentary law, the UK can shut down newspapers. They can wiretap, open mail without a warrant. There is no double jeopardy- in some places, they can try you again and again on the same charge even if you are acquitted. At one time, Australia did not allow its citizens to own foreign accounts. The UK, in the 1960's has capital outflow due to 90%+ marginal taxes. Folks were mailing British pounds abroad and the Government scanned outgoing mail to intercept this.Like you said, "The Constitution's Bill of Rights is what makes the US great. There is nothing else like it in the world."

US Dollar Not Dead Yet

Chinese history speaks for itself. Absolute power in the hands of a man whose actions are rubber-stamped by a mock-up Congress will not make China great.

Wake me up when China has a Bill of Rights granting freedom of speech and protection from unwarranted searches. Add an independent judiciary, a free-floating currency, and the world's largest bond market to the list of China needs.

Mike "Mish" Shedlock

Comments (15)
No. 1-15
Casual_Observer
Casual_Observer

The question is will the SDRs be based on a basket of currencies or primarily based on the dollar. I would guess the latter as the World Bank and IMF want to keep control of the systems for the forseeable future. The US is still the most stable government anywhere on the planet for now with the most open markets and China is subordinate economy to the US b/c of American consumption.

Medex_Man
Medex_Man

That photo at the top of the post is telling in an unintended way. How many of those suit wearing CCCP delegates have ever picked up a hammer or a sickle? And how many Chinese peasants have actually been allowed inside the great hall of "the people"?

Medex_Man
Medex_Man

How many common US citizens would have avoided trial (and jail time) if we had committed the numerous crimes that Hillary Clinton has committed? How many of us are allowed to bribe members of Congress using money that doesn't belong to us -- as Nancy Pelosi did? How many of us can force a cr2ppy health insurance scam on others, then skip to the front of the line and get top doctor care for zero co-pay like John McCain did? Its the same number as Chinese peasants who have visited the great hall of the people. Congress can relate to the lifestyle of the average US voter about as well as a CCCP member can relate to the lifestyle of a Chinese peasant... not at all

Blacklisted
Blacklisted

You misunderstand this move from west to east in the same way you did not understand Trump and the rise of stocks over the last several 7+ yrs. It is a non-linear global economy where capital flows drive markets, and the socialism/Marxist cancer has progressed to Stage 4 in the periphery, and it's only in Stage 3 in the US. While it is true that the US is still the healthiest horse in the glue factory, it will not be as difficult or as long as you think for the financial capital of the world to move East. The timing will likely be in the 15-20 year range, but make no mistake, the change is coming.

Our Rights are being increasingly trampled, and it will get much worse the further in debt we get, requiring the govt to become more oppressive in their methods to fund their perks and power. Yet, you sound like we are in the 20th century, instead of the 21st. Have you not seen what has happened to free speech on campuses, the unconstitutional invasion of privacy with the stealing of all our digital information by govt, or civil asset forfeitures, the non prosecution of well documented frauds, and you know the establishment would rescind the 2nd Amendment if they could.

China is far from being Communist, as they have proven over the last few decades. Unlike Russia, that has much more natural resources, China allows it's people to be capitalist, as long as they keep their head down.

China is in the process of developing capital markets to compete with the US, and they will establish the rule of law, which won't take much to surpass our increasing corrupt system, that enables the Fed's to win 98% of their cases in NYC.

China has prospered quite nicely with the dollar as the reserve, and they don't need to rush its collapse. They know their time is coming and they have the patience and understanding of cycles to know how to ride the wave instead of fighting it.

The driver behind the change in financial markets will be the rising dollar, which drove previous changes, and this time it will be a bigger crisis due to how many countries hold way too much dollar-based debt. The change may be like the SDR, but it can't be run by the overly corrupt IMF. Expect the crisis to be obvious by 2020, with the painful transition taking until 2032.

It won't be so much China grabbing the torch, as much as being ready to catch it when the US, Europe, and Japan trip over their hubris and choke on their debt. Instead of wasting their money on foreign entanglements, and malinvestment, China has been building first class infrastructure and solidifing business relationships with countries along the new Silk Roads. They own 90% of the essential rare earth minerals, and have strategic relations with countries rich in energy sources.

It should be obvious that the establishment/Deep State has no intention of loosening their grip that has so enriched them at the expense of everything that once made this country great. Unless people get off the couch and demand the swamp be drained, there is no chance the financial reset will be cushioned. Sadly, I just don't see people desperate enough, yet.

joelg5
joelg5

Channeling Pollyanna at length on the constitution is pretty lame. Having to go back over 50 years to kick around the late Dick Nixon to find constitutional positives is quite a commentary. Like the dog that didn’t bark, the missing most recent 50 years speaks volumes about the USA today. Like nothing about Kenneth Starr’s false imprisonments of innocent Clinton associates (e.g. Susan McDougall), Bush II, Obama, the jailing of NYT journalist Judith Miller for a year and a half, wiretapping Trump Tower in 2016, the Patriot Act with its secret FISA court, project PRISM intercepting and storing every phone conversation and email in the USA, James Comey’s FBI shenanigans, etc. Enjoy your celebration of the banishment of public school prayers. Students may not have a prayer, but the failing public schools have guns and drugs aplenty.