Some minor stabilization crept in at the end of Monday’s session but there’s no incentiv...
One worry about China gets a bit less pressing
09/17/2012 5:38 pm EST
Xi Jinping, the man tipped to take over the top post in China in the country’s leadership transition in October, has returned to public view. Until China Central Television showed footage of Xi visiting an exhibit at the China Agricultural University on Friday, Xi hadn’t been seen in public for two weeks. That had lead to rumors that Xi, 59, had suffered a heart attack or stroke or that he might be suffering from cancer.
By this time of year, the government has usually released a date for once-in-a-decade hand over of power, but not this year. That has raised worries that the transition won’t be as smooth as the
Communist Party had hoped and that the nation’s powerbrokers were still fighting over who would be on the seven-person Politburo that effectively rules the country (and indeed whether or not membership would be reduced from nine to seven in an effort to solidify Xi’s control.) It certainly hasn't helped nerves any that Xi has cancelled meetings in the last two weeks with Singapore Prime Minister Lee Hsien Loong and U.S. Secretary of State Hillary Clinton.
It will take more than one chat with agricultural experts and school children to put doubts to rest about Xi’s position and the transition. But the public outing is certainly a calming event. In recent days in-country and overseas press have gradually escalated the tone of worry in stories that focused on the perceived drift in China’s policies. Authorities were sufficiently worried to block the term “Xi Jinping” on Weibo, China’s version of Twitter.
Now, if the October 18th party congress can get an official and announced date, and if Xi Jinping can make a few more appearances, China’s financial markets can focus on reacting to moves by central banks and the direction of the global economy with one less distraction.
Full disclosure: I don’t own shares of any of the companies mentioned in this post in my personal portfolio. The mutual fund I manage, Jubak Global Equity Fund http://jubakfund.com/ , may or may not now own positions in any stock mentioned in this post. The fund did not own shares of any stock mentioned in this post as of the end of June. For a full list of the stocks in the fund as of the end of June see the fund’s portfolio at http://jubakfund.com/about-the-fund/holdings/
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