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A 'perfect storm' for Chinese President Xi Jinping

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The yuan, China's market, and global confidence in Beijing are all dropping. It's not an easy time to be the leader of the world's second-biggest economy.

President Xi Jinping has consolidated more power within his country than any other Chinese leader since the early '90s, just in time for a major economic slowdown and financial markets turmoil. Now, Chinese leadership is under "immense" pressure from within and without, John Minnich, East Asia analyst at geopolitical intelligence firm Stratfor, told CNBC.

102955692-GettyImages-480372830.530x298.jpg

Getty Images
Xi Jinping, president of the People's Republic of China
"It's kind of a perfect storm where a lot of these things are hitting," he said. "None of these issues by themselves would be enough to apply pressure, but together...."

A deadly industrial explosion in Tianjin earlier this month cast further doubt on Xi's capability to control local officials, a politically inopportune event during a key moment in his campaign to reform China's economy and environmental practices at the same time.

"We're approaching a moment where, in the next couple months, if there is going to be resistance from within the leadership against Xi, we're going to see (it) emerging more strongly," Minnich said.

And as this moment has approached, Beijing's handling of the stock market crash—which saw everything from liquidity interventions to arrests for allegedly malicious selling—represented the first big stumble for the Xi administration, said Nicholas Consonery, Asia director for the Eurasia Group.

But even with this "perfect storm" of resistance forming, Xi appears to have already consolidated sufficient power to achieve his reform goals, experts told CNBC.


Weak yuan hits these Chinese businesseshardest

While Eurasia Group's Consonery said the equity market interventions were "definitely" counterproductive, he's still optimistic about Xi's plans to manage broader economic headwinds.

"I'm not overly panicked about their ability to manage through these problems," he said, adding that it's unlikely there will be any changes at the top of the country's leadership.

Minnich agreed that Xi and his close allies won't lose control of the situation—especially given his continuing popularity with the regular citizenry—but his capacity to institute reforms may be limited by political resistance.

"Xi is not all-powerful," Minnich said.

In fact, it appears that Beijing is even trying to warn off would-be resistance from within. Chinese state media carried an editorial earlier this month warning retired officials not to undermine the Communist Party by agitating against its current leadership. Additionally, anotherstate commentary reportedly warned that Xi's reforms encountered "unimaginably fierce resistance" from different interest groups.

China's 10 fastest-growing cities

PETER PARKS | AFP | Getty Images
Even the media—normally considered a mouthpiece of Beijing's power—may have angered the Xi administration.

This week, authorities arrested Liao Hong, CEO and editor-in-chief ofPeople's Daily Online, allegedly on suspicion of taking bribes. Many have suggested that the move is punishment for not following a governmental edict.

People's Daily did not respond to a CNBC request for comment.

"Leadership is moving into a time when it needs to be sure it can be effective at shaping domestic perceptions of its actions," Minnich explained, so Xi may be attempting to redouble his control over the media.

Still, as with many aspects of China analysis, the country's political inner workings remain largely opaque, so the exact nature of the situation is difficult to ascertain.

A 'perfect storm' for Chinese President Xi Jinping
 
Let our greatest leader Modi to manage China.
We will make China the same rich as India.
You mean downgrade from USD 11 trillion economy to 2.2 trillion? No, please!

The yuan, China's market, and global confidence in Beijing are all dropping. It's not an easy time to be the leader of the world's second-biggest economy.

President Xi Jinping has consolidated more power within his country than any other Chinese leader since the early '90s, just in time for a major economic slowdown and financial markets turmoil. Now, Chinese leadership is under "immense" pressure from within and without, John Minnich, East Asia analyst at geopolitical intelligence firm Stratfor, told CNBC.

102955692-GettyImages-480372830.530x298.jpg

Getty Images
Xi Jinping, president of the People's Republic of China
"It's kind of a perfect storm where a lot of these things are hitting," he said. "None of these issues by themselves would be enough to apply pressure, but together...."

A deadly industrial explosion in Tianjin earlier this month cast further doubt on Xi's capability to control local officials, a politically inopportune event during a key moment in his campaign to reform China's economy and environmental practices at the same time.

"We're approaching a moment where, in the next couple months, if there is going to be resistance from within the leadership against Xi, we're going to see (it) emerging more strongly," Minnich said.

And as this moment has approached, Beijing's handling of the stock market crash—which saw everything from liquidity interventions to arrests for allegedly malicious selling—represented the first big stumble for the Xi administration, said Nicholas Consonery, Asia director for the Eurasia Group.

But even with this "perfect storm" of resistance forming, Xi appears to have already consolidated sufficient power to achieve his reform goals, experts told CNBC.


Weak yuan hits these Chinese businesseshardest

While Eurasia Group's Consonery said the equity market interventions were "definitely" counterproductive, he's still optimistic about Xi's plans to manage broader economic headwinds.

"I'm not overly panicked about their ability to manage through these problems," he said, adding that it's unlikely there will be any changes at the top of the country's leadership.

Minnich agreed that Xi and his close allies won't lose control of the situation—especially given his continuing popularity with the regular citizenry—but his capacity to institute reforms may be limited by political resistance.

"Xi is not all-powerful," Minnich said.

In fact, it appears that Beijing is even trying to warn off would-be resistance from within. Chinese state media carried an editorial earlier this month warning retired officials not to undermine the Communist Party by agitating against its current leadership. Additionally, anotherstate commentary reportedly warned that Xi's reforms encountered "unimaginably fierce resistance" from different interest groups.

China's 10 fastest-growing cities

PETER PARKS | AFP | Getty Images
Even the media—normally considered a mouthpiece of Beijing's power—may have angered the Xi administration.

This week, authorities arrested Liao Hong, CEO and editor-in-chief ofPeople's Daily Online, allegedly on suspicion of taking bribes. Many have suggested that the move is punishment for not following a governmental edict.

People's Daily did not respond to a CNBC request for comment.

"Leadership is moving into a time when it needs to be sure it can be effective at shaping domestic perceptions of its actions," Minnich explained, so Xi may be attempting to redouble his control over the media.

Still, as with many aspects of China analysis, the country's political inner workings remain largely opaque, so the exact nature of the situation is difficult to ascertain.

A 'perfect storm' for Chinese President Xi Jinping

Full of rubbish report by the american media. Chinese Business panick becos of yuan devaluation? The american must be some moron who do not understand the Chinese businessman export product will be more price competitive with devaluation. Yes, becos american say so, so Chinese business man must panicked? They couldnt be happier with the devaluation. Stupid American. Low class smearing. :lol:
 
You mean downgrade from USD 11 trillion economy to 2.2 trillion? No, please!



Full of rubbish report by the american media. Chinese Business panick becos of yuan devaluation? The american must be some moron who do not understand the Chinese businessman export product will be more price competitive with devaluation. Yes, becos american say so, so Chinese business man must panicked? They couldnt be happier with the devaluation. Stupid American. Low class smearing. :lol:
When the west medias critise or curse us,that means we are doing well,the voice lounder,the job better. If they praise us,that really means we have problems. Naive India,so easily be cheated by the west.
 
When the west medias critise or curse us,that means we are doing well,the voice lounder,the job better. If they praise us,that really means we have problems. Naive India,so easily be cheated by the west.
U are very wrong sir.
We Indians especially Hindus know the world most.
Now we own google!
 
You mean downgrade from USD 11 trillion economy to 2.2 trillion? No, please!



Full of rubbish report by the american media. Chinese Business panick becos of yuan devaluation? The american must be some moron who do not understand the Chinese businessman export product will be more price competitive with devaluation. Yes, becos american say so, so Chinese business man must panicked? They couldnt be happier with the devaluation. Stupid American. Low class smearing. :lol:

Chinese business that export product will gain but the ones who save or borrow (loan) US or Western currency will make a big lost, state bank mb suffer. That's possibly increase the debt rate
 
The yuan, China's market, and global confidence in Beijing are all dropping. It's not an easy time to be the leader of the world's second-biggest economy.

President Xi Jinping has consolidated more power within his country than any other Chinese leader since the early '90s, just in time for a major economic slowdown and financial markets turmoil. Now, Chinese leadership is under "immense" pressure from within and without, John Minnich, East Asia analyst at geopolitical intelligence firm Stratfor, told CNBC.

102955692-GettyImages-480372830.530x298.jpg

Getty Images
Xi Jinping, president of the People's Republic of China
"It's kind of a perfect storm where a lot of these things are hitting," he said. "None of these issues by themselves would be enough to apply pressure, but together...."

A deadly industrial explosion in Tianjin earlier this month cast further doubt on Xi's capability to control local officials, a politically inopportune event during a key moment in his campaign to reform China's economy and environmental practices at the same time.

"We're approaching a moment where, in the next couple months, if there is going to be resistance from within the leadership against Xi, we're going to see (it) emerging more strongly," Minnich said.

And as this moment has approached, Beijing's handling of the stock market crash—which saw everything from liquidity interventions to arrests for allegedly malicious selling—represented the first big stumble for the Xi administration, said Nicholas Consonery, Asia director for the Eurasia Group.

But even with this "perfect storm" of resistance forming, Xi appears to have already consolidated sufficient power to achieve his reform goals, experts told CNBC.


Weak yuan hits these Chinese businesseshardest

While Eurasia Group's Consonery said the equity market interventions were "definitely" counterproductive, he's still optimistic about Xi's plans to manage broader economic headwinds.

"I'm not overly panicked about their ability to manage through these problems," he said, adding that it's unlikely there will be any changes at the top of the country's leadership.

Minnich agreed that Xi and his close allies won't lose control of the situation—especially given his continuing popularity with the regular citizenry—but his capacity to institute reforms may be limited by political resistance.

"Xi is not all-powerful," Minnich said.

In fact, it appears that Beijing is even trying to warn off would-be resistance from within. Chinese state media carried an editorial earlier this month warning retired officials not to undermine the Communist Party by agitating against its current leadership. Additionally, anotherstate commentary reportedly warned that Xi's reforms encountered "unimaginably fierce resistance" from different interest groups.

China's 10 fastest-growing cities

PETER PARKS | AFP | Getty Images
Even the media—normally considered a mouthpiece of Beijing's power—may have angered the Xi administration.

This week, authorities arrested Liao Hong, CEO and editor-in-chief ofPeople's Daily Online, allegedly on suspicion of taking bribes. Many have suggested that the move is punishment for not following a governmental edict.

People's Daily did not respond to a CNBC request for comment.

"Leadership is moving into a time when it needs to be sure it can be effective at shaping domestic perceptions of its actions," Minnich explained, so Xi may be attempting to redouble his control over the media.

Still, as with many aspects of China analysis, the country's political inner workings remain largely opaque, so the exact nature of the situation is difficult to ascertain.

A 'perfect storm' for Chinese President Xi Jinping

China is dissolving very soon. We will see it being separated in parts like the provinces becomes a country soon.
 
U are very wrong sir.
We Indians especially Hindus know the world most.
Now we own google!
Impressive,keep owning other USA companies. You know the world which the west tell you most,but your India mind has been shaped by the UK deeply,you are traped in it and easily affected by the west viewpoint,if your viewpoint is west mode,that means you never pass the west and beyond it .maybe you never understand what I said,just forget it,time will prove everything.
 
The yuan, China's market, and global confidence in Beijing are all dropping. It's not an easy time to be the leader of the world's second-biggest economy.

President Xi Jinping has consolidated more power within his country than any other Chinese leader since the early '90s, just in time for a major economic slowdown and financial markets turmoil. Now, Chinese leadership is under "immense" pressure from within and without, John Minnich, East Asia analyst at geopolitical intelligence firm Stratfor, told CNBC.

102955692-GettyImages-480372830.530x298.jpg

Getty Images
Xi Jinping, president of the People's Republic of China
"It's kind of a perfect storm where a lot of these things are hitting," he said. "None of these issues by themselves would be enough to apply pressure, but together...."

A deadly industrial explosion in Tianjin earlier this month cast further doubt on Xi's capability to control local officials, a politically inopportune event during a key moment in his campaign to reform China's economy and environmental practices at the same time.

"We're approaching a moment where, in the next couple months, if there is going to be resistance from within the leadership against Xi, we're going to see (it) emerging more strongly," Minnich said.

And as this moment has approached, Beijing's handling of the stock market crash—which saw everything from liquidity interventions to arrests for allegedly malicious selling—represented the first big stumble for the Xi administration, said Nicholas Consonery, Asia director for the Eurasia Group.

But even with this "perfect storm" of resistance forming, Xi appears to have already consolidated sufficient power to achieve his reform goals, experts told CNBC.


Weak yuan hits these Chinese businesseshardest

While Eurasia Group's Consonery said the equity market interventions were "definitely" counterproductive, he's still optimistic about Xi's plans to manage broader economic headwinds.

"I'm not overly panicked about their ability to manage through these problems," he said, adding that it's unlikely there will be any changes at the top of the country's leadership.

Minnich agreed that Xi and his close allies won't lose control of the situation—especially given his continuing popularity with the regular citizenry—but his capacity to institute reforms may be limited by political resistance.

"Xi is not all-powerful," Minnich said.

In fact, it appears that Beijing is even trying to warn off would-be resistance from within. Chinese state media carried an editorial earlier this month warning retired officials not to undermine the Communist Party by agitating against its current leadership. Additionally, anotherstate commentary reportedly warned that Xi's reforms encountered "unimaginably fierce resistance" from different interest groups.

China's 10 fastest-growing cities

PETER PARKS | AFP | Getty Images
Even the media—normally considered a mouthpiece of Beijing's power—may have angered the Xi administration.

This week, authorities arrested Liao Hong, CEO and editor-in-chief ofPeople's Daily Online, allegedly on suspicion of taking bribes. Many have suggested that the move is punishment for not following a governmental edict.

People's Daily did not respond to a CNBC request for comment.

"Leadership is moving into a time when it needs to be sure it can be effective at shaping domestic perceptions of its actions," Minnich explained, so Xi may be attempting to redouble his control over the media.

Still, as with many aspects of China analysis, the country's political inner workings remain largely opaque, so the exact nature of the situation is difficult to ascertain.

A 'perfect storm' for Chinese President Xi Jinping

In 2009 -if I'm not mistaken the date- Stratfor has predicted that China won't be able to keep it's political unity and will dissolve into smaller states by 2020. Now we are in 2015 and let alone there is an indication there is no such a movement in China.

And the article provides more claims then actual evindences. I really don't think it's a valid source. 5 minutes ago I was reading another article about how China is investing 47 billion dolars to Pakistan's energy and transportation infrastructure and solve their chronic economic problems. China also moving it's low value added manufacturing to Pakistan after the completion of the projects.

I'm sorry but what I see about China is the absolute opposite. They are a stabilizing force that takes more and more global initiatives each day.

I have a prediction for Stratfor. By 2020 Your private ingelligence company will go bankruptcy because of Your absurd, out-of-touch reports based on world politics.
 

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