Rand 2000 kilometers separate Beijing and Hong Kong. But the political bang that ended the Communist Party Congress in the Chinese capital on Sunday was still echoing in Asia’s financial center on Monday morning.
The fact that the value of the Chinese currency renminbi fell to a 14-year low and the Hang Seng index on the Hong Kong stock exchange fell by 6.4 percent by the end of the trading day was also related to the data on China’s economic output in the third quarter do, which the National Statistics Office in Beijing has now published after a week’s delay. The gross domestic product of the second largest economy grew by 3.9 percent in the months from July to September compared to the period a year earlier.
That’s a bit better than observers had expected – but still not nearly as good as for China to achieve the government’s target of 5.5 percent growth for the year as a whole. After all, the economy had almost stagnated in the previous quarter as a result of the lockdowns, which had paralyzed half of the People’s Republic in addition to the economic center of Shanghai. The World Bank estimates that the economy will grow by just 2.8 percent this year.
Above all, tech values are falling
But the fact that the prices of tech stocks such as Alibaba (minus 11.4 percent), Tencent (minus 11.4 percent) and Meituan (minus 14.8 percent) fell on Monday was mainly due to the message that was given the day before China’s state leader had sent out to the whole world: Xi Jinping has consolidated his power for the next five years – and more ruthlessly than hardly anyone would have believed him capable of. Completely surprisingly, the party leader has filled the Standing Committee of the Politburo, the highest circle of power in the country, exclusively with loyalists who have no business experience whatsoever.
Li Qiang, the new number two in the ranking, is being tipped as the future premier in charge of markets and enterprises. The former Shanghai party leader was responsible for the two-month rigid and chaotic spring lockdown there, which ruined the reputation of the economic metropolis, drove foreign and domestic professionals and entrepreneurs out of the city and caused the bankruptcy of countless companies.
Before Xi presented his new team in the Great Hall of the People, he apparently had former President Hu Jintao, who was sitting next to him on the podium, taken away by a subordinate and possibly his bodyguard in front of the cameras of foreign television stations. Hu is seen as an opponent of Xi and a promoter of Li Keqiang. The still incumbent Prime Minister, who is considered to be close to business and has studied economics, will unexpectedly not even be a member of the Central Committee, which has 205 members.
