Newsletter 155 - March 12, 2023
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Welcome to the 155th edition of Trade War.
I will start by flagging an upcoming talk “North Korea: Threats from a Failed State,” to be hosted by the Mansfield Center this coming Thursday March 16 at 9 pm ET.
Experts Dr. Bruce E. Bechtol, Jr. and Mansfield Fellow Robert E. McCoy, each of which have years of military experience and expertise on the Korean Peninsula, will discuss Pyongyang’s weapons proliferation and China’s role in the region. Sign up in the link.
On to the news.
Xi Jinping gets a third term as president and ally Li Qiang becomes premier. Institutional reforms see creation of new bodies managing data and the financial sector and the restructuring of the science and technology ministry. And reformist PBOC chief unexpectedly stays on in a move likely to cheer investors.
The Netherlands joins the U.S. in blocking sales of semiconductor manufacturing equipment to China. Xi singles out Washington for “containment and suppression” while foreign minister Wang Yi warns of possible conflict. And Beijing brokers a diplomatic deal between Iran and Saudi Arabia which some say signals declining U.S. influence.
China sees signs of a consumption rebound in cities but it may not be matched in the countryside. Xi tells private firms they should feel “responsibility, brotherhood, and love,” and “share the fruits of growth,” but many feel pessimistic about China’s economy and their business prospects this year.
Xi gets 3rd term as president
As the National People’s Congress prepares to wrap up on Monday, Xi Jinping has been unanimously elected to an unprecedented third term as president, with close ally Li Qiang gaining the premiership. That gives more power to China’s top leader even as the country faces enormous challenges, reports DW News’ William Yang.
Also expected very shortly: institutional reforms including the restructuring of the science and technology ministry, the creation of a new national data bureau, and the establishment of a financial regulatory commission that will oversee some $57.7 trillion in insurance and banking assets; each of the bodies aims to deal with major challenges confronting China.
"The creation of the Financial Regulatory Commission points to the party continuing to be very worried about excessive leverage in the economy and the high level of debt throughout the economy," says Dexter Roberts, a senior fellow at the Atlantic Council's Indo-Pacific Security Initiative.
"The National Data Bureau reflects the Party's concern about data security. There is a very strong motivation to have a much stronger body that can regulate and manage the vast amount of information in the Chinese economy," he added.
There may be an insurmountable conflict, however, between more tightly regulating the economy while still hoping to boost its growth.
"There is a real contradiction at the heart of that and there is hubris among the top leaders, particularly Xi Jinping, that thinks he can have it both ways," Roberts told DW News. "The senior leaders haven't recognized that they can't have it both ways."
There is also a real danger in
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