President Xi: Shifting Course?

Dec 2022

President Xi has been very busy since being reappointed to a historic third term less than a month ago. Xi amended the Chinese Constitution in 2018 to remove the two-term limit on the presidency (implemented by Deng Xiaoping in 1982 to prevent a return to a Mao-style cult of personality). In addition to his
reappointment, Xi consolidated power by assuring loyalists were appointed to the Chinese Communist Party’s new Politburo Standing Committee, the top political party and policy group. The reshuffle of the Standing Committee removed several market-oriented members by those favoring a more controlled and directed economy.

The President faces significant economic problems with slowing economic growth, trade tensions with the U.S. and other western nations, and
increasing food prices. Draconian covid lockdowns are also weighing on domestic demand and recently sparked very rare public protests against
the leadership.

This week President Biden and President Xi had a face-to-face meeting around the G-20 conference. Perhaps this meeting will result in toning
down the rhetoric on both sides, take discussion over Taiwan to private diplomatic meetings rather than in the press, and improve the trade
environment for both nations. Xi also meet with the Australian Prime Minister, EU leaders, and other major trading partners.

With significant headwinds facing President Xi, he must also address China’s agricultural policy of self-sufficiency. China remains the number one market driver and importer in the international meat and grain trade. Strong import demand combined with stagnant domestic output will continue to place China as the major factor in the world protein market. It also places China in a vulnerable position as hardliners may pursue aggressive policies toward its trade partners. – Richard Fritz

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