The Xi Era?: EI Weekend 3314
Is the Xi Presidency coming to an end? An intriguing dichotomy of opinion ranging from status quo to all change in China.
Today marks a year to the day since I rang the bell at the New York Stock Exchange — what a special day, thank you Jeff Sprecher, Lynn Martin and all the ICE team for organising what has to count as a journey into “best day ever!” territory. ICYMI, here’s the video.
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On this day in 2018, it was reported that Mozambique has emerged as one of the world’s key heroin trading hubs, with the drug now the country’s second largest export as it is smuggled from Afghanistan to Europe.
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MACRO THOUGHTS
“2024 was disastrous for Chinese President Xi Jinping. For all of his rhetoric about “the great rejuvenation of the Chinese nation,” his regime faced staggering setbacks. Military purges intended to root out corruption instead revealed systemic turmoil that continues to undermine readiness. Economic growth cratered as unemployment, bankruptcies, and capital outflows soared. Meanwhile, key partners in Moscow and Damascus stumbled or fell, undermining Beijing’s geostrategic ambitions. Together, these and other crises have revealed a China that looks increasingly fragile, not formidable.”
Last year the Heritage Foundation had dismissed Xi’s problems (China’s Economy Is in Trouble: Is Xi Jinping? | The Heritage Foundation) in large part BUT the economy’s relative fester throughout the past year has seemingly resulted in a subtle shift of power, according to some Sino-experts.
Foreign Policy (quoted above) ran a sitrep in January 2025 headlined Xi Jinping’s Terrible, Horrible, No Good Year but still as Asia Society noted in February, Xi Jinping’s Purges Have Escalated. Here’s Why They Are Unlikely to Stop which was the prevailing view of Xi’s seemingly unstoppable regime.
And yet here we are with a considerable amount of commentary (being shot down by some official sources e.g. below) with a Chinese economy stagnant in its own terms (aka growing at less than 5% and huge overhangs in property and other industries as well as worries about how Trump tariffs may yet play out.
It all seems like a long time since 20 years ago I commented on CNBC that clearly China would come to dominate headlines within a decade, but on that day, the presenters just laughed at me. They didn’t invite me back either, lol. Never mind, #clickbait isn’t my thing…
Anyway, right now China could be at a crossroads, and the outlook is intriguing. President Xi was perceived to have a stranglehold on government only weeks ago, and yet… if he were to be replaced by — as some have suggested — more pro-trade / less hawkish individuals, then that would truly transform the outlook for US-China relations and indeed could see a turnaround of the Chinese economy.
The prospect alone of the Taiwan invasion threat cooling down several notches could have an enormous impact on the global economy and confidence…
FYI, the folks who line up ‘against’ Xi within China have been outlined here by Jamestown: The Four Main Groups Challenging Xi Jinping. Then again that article from earlier this year noted:
“Xi is unlikely to be overthrown or face a coup, but his ability to force through his agenda may be reduced.
Indicators that Xi is embattled include his absence from chairing two recent high-level meetings, references to “collective leadership” the PLA Daily newspaper, and an adjustment to PRC diplomacy to a more conciliatory approach, especially toward the United States.”
Interesting times, let’s dig in a bit more:
IN BIGWORLD
One impact of the performative retaliation by Iran against the Al Udeid US base in Qatar during the 12 day war between Iran and Israel was significant commercial flight impacts on June 14th. Qatari airspace and its busy airport hub were closed — understandably — for several hours, resulting in the diversion of over 160 flights.
Perhaps the most dramatic flight plan was QANTAS’ non-stop QF33 which departed Perth and halfway through the flight turned around as it could no longer reach Paris, landing back in Perth 15 hours after it took off.
Still on the Qatar flight closure June 14th as Iran made a ‘for domestic consumption’ performative revenge attack (with little damage) on the Al Udeid US military base, the net ‘winner’ on the day was the tiny island state of Malta whose central position in the Mediterranean resulted in the busiest day ever for its Airspace. Malta breaks record for air traffic goes the official government news release, with some 650 aircraft movements in Maltese airspace over the day and indeed subsequent days, with 600 or more movements in Maltese airspace as flights continued to take a long route around Iran / Iraq.
Then again, Malta is not quite the US,A which averages 45,000 flights in its airspace daily, albeit the territory is a bit larger at 5.3 million square miles of domestic airspace and 24.1 million square miles of oceanic airspace. Malta’s landmass amounts to about 122 square miles…
PLY: Market Movers On Fintech TV
Catch me on Market Movers On Fintech TV every Monday at 0920 AM for the latest insights in finance, technology, impact investing, and market trends. Fintech TV is on the web (Fintech.TV), in a multitude of airports across the USA and other channels.
Bitcarnage
Crypto Mortgages?
As a Trump appointee in an age of government crypto buy in this may not be such a surprise, although it gives me cause for concern as US Housing Chief Orders Fannie Mae, Freddie Mac To Prepare For Crypto Assessment In Mortgages (Decrypt) / Mortgage Rule Change Adds Crypto. What Homebuyers Should Know (Forbes).
If you enjoyed this excerpt you may be interested to know that you can read Bitcarnage every day in Exchange Invest.
Alternatively, if you want to follow Bitcarnage — the daily update on happenings in the world of crypto and digital assets, then you can find Bitcarnage as a standalone on Substack.
EXCHANGE INVEST WEEKLY PODCAST
Hong Kong Exchanges celebrate a glorious first quarter century,
ASIC’s panel lacks exchange expertise,
Xavier expresses LSE frustration,
& CME proposes its own consolidated tape.
OF INTEREST
As always, a review of interesting reading to provoke thoughts and consideration… Not sure we agree with much of it….but it’s thought-provoking!
Xi Jinping’s Moment Of Truth
Jonathan Fenby Engelsberg Ideas
“China is at a crossroads. The spectacular growth of its economy, which has propelled the People’s Republic to superpower status and buoyed global growth, is slowing significantly.”
PLY: Thus begins Jonathan Fenby’s excellent portrait of where we were in China in early March… What a difference a quarter makes!
Is Xi Jinping’s Time Up?
The Spectator
Is Chinese President Xi Jinping On His Way Out?
NY Post
PLY: The Spectator article rather caught me out June 14th as I simply had not been paying attention to what looks like a plausible Kremlinological analysis. Then this article appeared in the NY Post June 28th which further sparked my interest in assembling this Weekend edition. I am not saying this is happening but merely assembling some interesting reading to help us all be better informed and indeed prepared if change is afoot!
This line of speculation has continued specifically in the Indian media…
End Of Xi Jinping’s Regime? How Aging ‘ousted’ Rival Hu Jintao May Be Staging A Silent Coup Against China’s Mightiest Leader
The Economic Times
PLY: …Albeit India being the major competitor power to China at the emerging superpower table, it’s fair to say that this could just be cognitive dissonance to make a negative impression on a competitor state, as indeed this official review of July 1st suggests:
PLY: Where this goes next will clearly be fascinating…
Books worth reading:
Finance Book Of The Week
“The Risk Controllers: Central Counterparty Clearing in Globalised Financial Markets” by Peter Norman describes how CCPs operate, how they handled the Lehman default, and the challenges they now face. Peter Norman examines turning points, such as the 1987 stock market crash, that set clearing on a new path and the impact of long running trends, including the exponential growth of computer power and the ebb and flow of globalisation.
Get the book here.
*Paid link, as an Amazon Associate, Exchange Invest earns from qualifying purchases.
Suggestions welcome if you would like to nominate a book for us to cover!
Our next Book of the week will be unveiled Saturday in the EI Weekend Edition.
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Capital Market Revolution
First published in 1999, “Capital Market Revolution!” offered a clear, concise roadmap for navigating the financial revolution fueled by technology. And 25 years later, as the world of fintech continues to evolve, the core principles laid out in the book remain surprisingly sharp
This new edition was produced to celebrate PLY ringing the NYSE Closing Bell July 5th, 2024. There are several new sections of PLY pith to add 10,000 more words of context and the original book which is remarkably prescient and elegantly dated all at once! It’s only $9.99 on Kindle, a fraction of the original price in 1999 to encourage revolutionaries with any budget!
Get the book here.
*Paid link, as an Amazon Associate, Exchange Invest earns from qualifying purchases.
LAST WORD
The future continues in the water cooler of the bourse business.
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