Depending on who you contact, 2023 will be either a boom year or a year of chaotic downturn into recession.
The problem, of course, is that either side can provide a solid argument for each point of view. However, there is a common thread in those schizophrenic traps: China.
If you think global expansion is about to skyrocket, you’re probably buying into the narrative of the post-zero-Covid reopening boom. global markets.
Somewhere in between? So he is arguably among those worried that the continent’s explosive demand will cause headline inflation to soar and asset values to collapse, a cycle of negative commentary that no one wants.
It would be useful if the Communist Party leader, Xi Jinping, were to communicate. In fact, that’s not the case. China’s incredibly low covid death tolls are a reminder that even the best-connected geopolitical investors and pranksters don’t know what they don’t know about the most populous nation.
It’s hard to remember the last time the entire next year trajectory of the world economy was so concentrated in the hands of one man. Although Federal Reserve Chairman Jerome Powell reached a gigantic figure in 2022, neither he nor the US chairman will be able to reach a gigantic figure. Not even Russia’s Vladimir Putin could be said to have had the strength on global affairs that Xi will exercise in the next 12 months.
In reality, all markets can do is expect Xi and his advisers to be as wise and all-powerful as they need their citizens to believe. they. They will use this moment for China’s reputation as a strong and reliable global power. They will also use it to position China as a true player in global affairs, not just a shareholder.
The most productive way to get started: Contact us. Xi and his more sensible surrogates are expected to participate in the communique circular detailing plans to balance an immediate reopening with limited risks to public health. They communicate how China plans to ensure that today’s stimulus efforts do not lead to new asset bubbles. , a more reckless habit among asset developers, or an increase in headline inflation.
Xi is expected to telegraph what he plans to do in foreign industry at a time when Biden is tightening the screws on the continent’s tech corporations. House.
Trump’s industry war doesn’t make Beijing laugh. But its scattered and chaotic nature made it easy for Xi’s team to melt the blow. As such, Trump’s price lists are likely to hurt U. S. allies. The US, Japan and South Korea, rather than Xi’s economy.
Biden’s industrial policies are more of a scalpel than a wrecking ball. And it seeks to do more damage to the long-term industries Xi hopes to master: semiconductors, supercomputing, synthetic intelligence, electric vehicles, autonomous driving technology, guided weapons systems. etc.
Indeed, there have been signs that Xi and Biden could find a non-unusual floor in the next five-year period. One example is a key concession in December on book accounting control of Chinese companies listed in the United States, thereby reducing the threat. of cancellations.
But Republicans now in the House are planning a series of investigations into China Inc. Xi’s government is preparing for congressional hearings on everything from mainland corporations stealing intellectual assets and monetary transparency to Chinese social media platforms and the origins of Covid-19. .
In fact, about the only thing Republicans and Democrats agree on in 2023 is that it’s the best time for China to be at the political center of Washington.
Xi would also be wise to communicate more with his Asian neighbors. It is smart to see that Xi’s inner circle contains combative diplomats of the “wolf warriors. “upon arrival is a reminder that Xi’s China is not in a position to have prime time worldwide.
Even the World Health Organization is calling China out for its lack of knowledge about infections as Xi opens its borders at a baffling speed. Team Xi would do more to internalize why China defiantly accepts the dangers of Covid inflection as true and blank. his act.
The same goes for Xi’s economic plans for next year. In the meantime, all investors can do is check out to navigate the schizophrenic year ahead.