Richard McGregor on China's development (Radio)

me flip this around a little bit. We we knew that Hi Jumping had amassed a lot of power in in China, and we've known that for the past many years. Is this almost more transparent? Now? What you see is what you get. All seven members of the Standing Committee the polit Bureau are she supporters, she loyalists and at least you know that's the case. Yeah, I mean that is certainly one way of looking at it. Um. You know, there's art of clarity from China in that respect. Art

of clarity also Procejumping himself. He has a very specific and detailed policy program both at home and abroad, which he wants to execute in what he thinks are now more dangerous times. So he's going to rely on people who are utter loyalists to do that, I mean I should say that. I mean, in some respects we are treating these people who have been appointed to the polit Bureau Standing Committee as mere Cipher's for She. But they're not greenhorns, you know, they've all had massive jobs in

the system for many, many years. But but they're all on the same page as well, so they're not appointed on competence alone. It's also loyalty. Is everyone really all on the same page though, I mean, there's definitely this facade of unity. But let's just take this, for example, that they had to rewrite the constitution to allow she to break term limits a unanimous vote in favor, two thousand two delegates all think it's a great idea. Really, is there really no dissent or is it just really

well hidden? Well, certainly at the moment, at a moment like that and there's voting, that's not the time to express any descent at all. Um, the look that the system is opaque. Um. You know, one of the funny things leading up to this party Congress, when we're all trying to discern what might happen, you know, one of the prime analytical tools for working, you know, following elite

politics in China, and of course it's elite politics. Was only the elite can practice it, you know, was you know, we look at people's birthdays, how old are they and the line we used to look at people's factions. Now that's gone, age retirement limits has gone, no succession planning and the like. So of course there's disagreements are within China, and there's disagreements within execution, but we don't have any insight into that because at the top it is pretty

much a black box. Now will it remain like that for the next five years? In other words, everybody marching in lockstep. I doubt that's true. There's too many pressures in the system, but it's not clear easily clear to us outside. Thus I think we have to say probably that in this next period it may not be as friendly to outside investors as what we had been led

to believe. You know, in terms of pushback, I'm not saying that Lee Ka cheongg you know, was was giving huge pushback, but both he and Leo Hubb were seemingly preaching a slightly more moderate model for investors. You remember, back in March, we saw what looked like a promise for more transparency, and and that got swept swept to the side, and in fact now it looks like it's almost a mini purge up there at the top. So is it at least safe to say the atmosphere for

investing is not so safe going forward as it was. Well, that's an interesting question because I certainly think at the local level of provincial city and even a lower level of governments, they're very keen on foreign investment, um, particularly as the other drivers of the Chinese economy are not working so well. Um. So there's two issues. Are foreign investors are less welcome I don't think so. Are there

investments less safe because of growing gear political issues. That's quite possible, I would say, but then they're on the horizon, but not right in front of us at the moment. I really think the biggest issue for everybody is COVID zero, because the policy was reaffirmed quite strongly by C. Jimping. You would expect that, but he did it anyway, and I think that's really crushing the economy in China and making it difficult for Chinese investors as much as foreign investors.

Until we can see our way clear of that, then I don't really see how it's friendly to any sort of investment at all. Yeah, and other potential risks around that too. In terms of dissent, because you know, we've got COVID zero, we saw signs of graffiti emerging and power the restrooms. I mean, it sounds trivial, but that's really the only place that people can express opinions now because there's no surveillance in a public restroom. So some

of these expressions of frustration with COVID zero. Is there any risk that this bubbles up if it continues for much longer, Well, that there has to be, but I don't want to exaggerate that, because you know, we see a lot of stuff on Twitter and the like of this sort of descent, people getting angry the latest lockdown.

Who wouldn't for example. But if you talk to other people in China, they say that there's still a lot of support for COVID zero because they buy the government line that the Chinese government policy has actually protected the health of Chinese. So many million plus Americans have died. The official figures for deaths in China below six thousand. Now, don't no doubt that's an underestimate, but maybe not by too much and people seem to have accepted the trade off.

Now I wonder how much longer that lasts actually, because if the economy does continue to perform in a really sub half fashion, that will flow onto incomes and create other pressures. So we haven't seen that the scent yet. Just finally on that point, of course, China has its own sort of mini doctor Fauci's medical professionals who have the status and standing to speak up a little bit

independently and periodically. They've been making their voices voice known on this issue as well, So I'm watching out for that as well. So we've seen a big cell down in Chinese equities, and bind flows have have kind of stabilized, but but they have been down. Are you are you thinking that maybe domestic investors will ultimately be the winners here because a lot of foreigners have backed away, but locals,

you know, may take advantage of these better prices. Well, I'm very careful about commenting on markets and stock markets in particular, really also in China, but I don't think the markets in China are really that reflective of much other than confidence in the life um And so whether the domestic investors are all going to pile in now that the foreigners were out, and they'll win on the

bounce back. Okay, tough to say. Richard out of time, unfortunately, Richard McGregor, senior fellow at the Lower Institute, with his live here