"During the civilisation and development process of more than 5,000 years, the Chinese nation has made an indelible contribution to the civilisation and advancement of mankind."
- Xi Jinping, General Secretary of the Central Committee of the Communist Party of China (since Nov '12); Chairman of the Central Military Commission (since Nov '12); Leader of the Central Leading Group for Foreign Affairs (since Nov '12); Leader of the Central Leading Group for Taiwan Affairs (since Nov '12); President of the People's Republic of China (since Mar '13); Leader of the Central Leading Group for Comprehensively Deepening Reforms (since Nov '13); Chairman of the Central National Security Commission (since Nov '13); Leader of the Central Leading Group for Internet Security and Informatization ( since Feb '14); Leader of the Central Leading Group for National Defence and Military Reform of the Central Military Commission (since Mar '14); Leader of the Central Leading Group for Financial and Economic Affairs (since Jun '14); Commander-in-Chief of the Joint Battle Command of the People's Liberation Army (since Apr '16); Chairman of the Central Commission for Integrated Military and Civilian Development (since Jan '17)
Beijing has been in lockdown mode with the highest security measures in place ?no drones, Airbnb bookings in city centre or WeChat profile changes allowed ?all to ensure a smooth 19th Party Congress, including engineering blue skies for the week.
Why was this such a significant event? The National Congress is held every five years, and its purpose is to the elect the political leaders who will be calling the shots for the next five years, as well as announcing the party's vision and policies.
Some very interesting things have happened:
1) For the first time since Mao Zedong, a Chinese leader's political philosophy has been officially enshrined in the Party's constitution. This cements Xi Jinping's status as China's most powerful ruler since Mao.
2) Xi appointed five men to join himself and Premier Li Keqiang on the Politburo Standing Committee, the party's highest organ. Noticeable is the lack of sub-60-year-olds and no clear successor, raising speculation that he will remain in power well into the next decade.
For those that had no time to listen to his 205 minute speech (even Hu Jintao pointed at his watch when Xi finished!), here are some takeaways:
1) The Chinese Dream: Xi said China had entered a 'new era' under his leadership, and he has a development plan that will make China a "great modern socialist country" and leading global power by 2050. China's political model of "socialism with Chinese characteristics" is a new choice for other developing nations to follow.
2) Economic reform: Xi promised to put China on sounder economic footing by containing financial risks and encouraging innovation. Even as he expressed support for private firms, he also called for stronger, bigger state-owned enterprises.
3) Foreign Policy: There was no let up in Xi's more assertive foreign policy and his desire for China to play an increasingly important role in the world stage. He also emphasized military modernization, and how China's military will be "first-class" in every way.
This is Xi's moment. He is now the most powerful leader China has seen in 50 years, leading a country that has become an undisputed superpower, with an economy that will soon eclipse the US' in size. However, the road ahead is tough, and the world will watch with bated breath to see if Xi can successfully use his considerable political might to execute the difficult economic and financial reforms that China needs.
One could take a position, and go all in on China, or perhaps on a single stock - Alibaba, anyone? But for us at Endowus, we prefer to stay disciplined, stick to our globally diversified portfolios, and believe that we will be rewarded by the markets in the long-run without taking undue risk.
Set your plan. Do not speculate. Anticipate.