For Beijing, the economic picture is not rosy and Xi might play the nationalist card to hold the system together. The new leadership lacks "economic brains" like outgoing Premier Li Keqiang. The military leaders appointed by the Chinese president are well acquainted with the Taiwan file.
Beijing (AsiaNews) – As Xi Jinping takes on the mantle of absolute leader, a good economy may no longer be the social glue to hold together China’s communist regime and population.
Surrounded by loyalists with little experience in economics, China’s president and general secretary of the Communist Party of China (CPC) could play the nationalist card to stay in power.
This means that as the country’s economy slows down, chances of an attack against Taiwan increase.
What is more, the new standing committee of the politburo that came out of the 20th Party Congress, which closed on Saturday, is made up exclusively of Xi loyalists.
The retirement from political life of Premier Li Keqiang, the exclusion of outgoing committee member Wang Yang, and the failure to promote Vice Premier Hu Chunhua leave China's real decision-making body without "economic brains".
Although China's GDP grew faster than expected in the third quarter of this year – 3.9 per cent compared to 3.4 per cent forecast by a Reuters poll, today’s published data cast doubt on future prospects.
Exports may be growing, but weakly. Retail sales fell in September compared to August while real estate prices continue to drop. Conversely, youth unemployment remains high at around 18 per cent.
Fearing more pressure on the private sector to the benefit of large public enterprises, markets reacted badly to Xi's third coronation and the absence of reformist figures on the Politburo Standing Committee.
The Hong Kong Stock Exchange lost more than 6 per cent while Shanghai and Shenzhen lost more than 2 per cent.
More importantly for investors, Xi shows no signs that he plans to ease his draconian COVID-19 policy, seen as an obstacle to economic recovery.
According to Nomura, various forms of lockdowns and health restrictions were in place in 30 Chinese cities until last week, affecting about 225 million people.
Analysts note that Xi stacked the new Central Military Commission, which he chairs, with people familiar with the Taiwan file.
More pressure from Beijing is expected in Taipei, especially since opposition to Taiwanese independence has been included in the CPC charter.
According to Admiral Michael Gilday, the US Navy’s chief of naval operations (CNO), China may be able to invade the island by 2024 and not 2027 as previously estimated by the Pentagon.