China banking woes mount as growth slows and more lockdowns loom
Xi Jinping wants a smooth path to his re-appointment as president in November. But his zero-Covid policy, slowing growth and bank runs in central China mean that path is looking increasingly bumpy.
“For the rest of the year, everything will be carefully managed and manicured. The 20th Congress is just too important.”
George Magnus – referring here to an upcoming November 2022 meeting of the Chinese Communist Party, where president Xi Jinping should be anointed president for an unprecedented third term in office – knows China better than most.
A former chief economist for UBS Investment Bank, Magnus is also an associate at Oxford University’s China Centre and author of ‘Red flags: Why Xi’s China is in jeopardy’.
In normal conditions, Magnus’s assessment would be a dead cert.
Xi is setting himself up as president-for-life, Magnus says, which means there must be no nasty surprises in the months ahead. So no pandemic spikes in big rich cities or the poor hinterland; no growth fears or bank runs; no social instability; and absolutely no flirting with recession.
Oh, hang on a minute.
Actually, China faces all those issues in capital letters – and more besides.
Amid the myriad problems facing developed nations – from slow growth to high prices to supply-chain bottlenecks – China’s economic woes have largely gone unnoticed.