The most powerful man just became more powerful - October 29, 2017

The most powerful man just became more powerful

Xi Jinping became the most powerful man on Earth, at least according to The Economist. The well-known journal made the Chinese president and general secretary its cover story just before the Communist Party’s congress. At the Congress, he got elected to lead the party and the country for another 5 years.

At the Chinese Communist Party’s congress Xi Jinping was elected as the general secretary of the party for another five years, making him the leader of the country, too. This was expected to say the least, but still, it has serious consequences globally. What’s more, the new Politburo Standing Committee doesn’t include anyone younger than 60, which means that the succession of Xi is in question. This may mean that even after 2022 Xi would hold onto power, which is unusual but in accordance with what the Western world expects from him.

Strong leader at home

Many believe that Xi Jinping is the strongest leader China has had ever since Mao Zedong, maybe even stronger. The aforementioned results of the congress make this even more obvious. Xi came to power in an unexpected way, from under the radar, but ever since then, he holds onto it firmly. He cut back corruption a great deal, which was a serious problem at the Communist Party. He even dared to touch high profile leaders when he felt it important. (Although mostly to keep up his own power, not only to fight corruption.) Therefore, many believe, that he remained the one to lead the country.

However, according to The Economist, Xi Jinping did something different, too. He learned from the precedent of the Soviet Union and aims for better control to keep the country together. The journal writes about how firmly Xi Jinping tries to control “fast-growing, smartphone-wielding middle class” and the internet it uses. The country also enhances their power of surveillance: they are planning to create a system that can identify 1.3 billion Chinese from their faces in seconds. They are also controlling the economy tightly.

Strong leader globally

The Economist also writes about how Chinese influence grows globally. They mention how Xi Jinping promised at Davos that they are willing to lead globalisation and the fight against climate change. He also has billions of dollars to invest abroad and he uses it wisely. The “Belt and Road Initiative” is also there to build infrastructure anywhere where they are open to Chinese investments.

All this is in contrast with Donald Trump’s America. The new president of the US is planning to take a step back from being a global leader. He also left the Paris Accordance, and planning to create an America that is looking inwards. The Economist writes that all this creates a power vacuum, that Chine is more than happy to fill.

Strong country

All this of course, couldn’t happen without a strong country. Though the USA is still the biggest economy, China is closing on it slowly. But it’s not only about the GDPs, there are some stats in which China already took the lead. It has the biggest middle class for example, and it produces billionaires faster than any other country does.

In the meanwhile, China still has a great growth potential, although most analysts see serious problems with the country as well, like a banking system full of problems, a stock market that needs serious regulations and others. But still, China is becoming more and more a leading power and its leader, Xi Jinping just strengthened its lead for another five years.

Disclaimer: This analysis is for general information and is not a recommendation to sell or buy any instrument. Since every investment holds some risk, our main business policy is based on diversification to minimize threats and maximize profits. Innovative Securities’ Profit Max has a diversified portfolio, which contains liquid instruments. This way, our clients can maintain liquidity, while achieving their personal investment goals on the long term.