Should China Be Concerned About Slowing Economic Growth?
How worried should China be about slowing economic growth?
To which my answer is, quite a lot. Communist Party credibility hangs on China being able to sustain growth in and around 6%. And these growth numbers, at least from the state statistical bureau bring us down to 6% in the most recent quarter. So, what China will now be seeking to do is to change its domestic economic policy settings to encourage the private sector back into investing for the future. That's critical, because in the last 18 months they've been sitting on their cash.
How worried should Xi Jinping be about Hong Kong?
The answer to that is from his perspective, the best play is simply to allow this to play itself out over time. The alternative strategy is for China to militarily intervene or use paramilitaries. There are so many arguments against that. One, the logistics of simply doing it - Seven million people, complex geography. Number two, massive loss of life. You've already seen two million protesters in the streets. Three, the risk of financial and economic sanctions. And four, so long as China stays removed, then it's Carrie Lam's problem and not Xi Jinping's.