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The absence of Xi Jinping from several key occasions of state this month has triggered grave concerns about the well-being of China’s presumptive heir to power on the eve of the country’s decennial leadership transition.
In only the past week vice-premier Xi Jinping has missed at least three scheduled meetings with key foreign dignitaries, including US Secretary of State Hillary Clinton on Wednesday and the Prime Minister of Denmark on Monday.
The Chinese government has so far failed to provide an official explanation for Xi’s absences. Speculation is rife on the reasons for the sudden omissions of appearance, with internet forums and obscure media sources imputing them to everything from a mild heartache to a botched assassination attempt.
The spate of unexplained absences could not have arrived at a less propitious time for either Xi Jinping or China’s incumbent regime.
China’s decennial leadership succession is set to take place next month at the 18th National Congress of the Chinese Communist Party, and Xi was unanimously expected to smoothly assume the mantle of China’s paramount leader.
A bout of ill health would cast heavy doubt upon his ability to remain an effective leader throughout his presumed decade-long term at the helm of the world’s second largest economy and most populous nation-state.
China’s crucial year of leadership transition has already been fraught with adverse vicissitude and contingency.
The country’s economic growth is contracting, with second quarter GDP tapping a three year low and first world export markets in dire fiscal condition.
Popular protests against local government malfeasance and modernization’s severe environmental toll are on the rise, while relations with regional neighbors have worsened over petty territorial disputes.
China has also just weathered its most incendiary political scandal since the start of the new century with the ousting and arrest of erstwhile Chongqing party chief Bo Xilai and the conviction of his wife Gu Kailai on homicide charges.
Xi Jinping’s unaccounted for absences merely add to this list of highly inimical factors.
The ramifications for the global economy of this sudden uncertainty surrounding China’s future political helmsman are potentially immense. This is no more so than for the international resources sector, which is highly dependent upon modern China’s ravenous appetite for minerals and energy.
Commentators have already pointed out that China has temporarily mitigated its overseas investment spree in the lead up to the scheduled political transition.
State-owned enterprises are waiting for the greater certainty of a stable leadership team before resuming large-scale purchases in earnest.
Potential stimulus plans to invigorate China’s slackening growth could also be hampered by any uncertainties surrounding the vigour and health of the country’s key decision-makers.
Chinese stimulus spending on infrastructure is expected to provide a major boost to overseas miners, many of whom have been suffering from precipitous declines in commodities spot prices over the past year.
Any mitigation in the extent of Chinese stimulus spending will be keenly felt by the global resources sector.
Image courtesy of NTDTV via Youtube.
