Meet the New (Same as the Old) Boss

In October, China’s Communist Party will unveil changes in its leadership—except at the very top. Xi Jinping is expected to receive a third five-year term as General Secretary of the Party, state President, and Chair of the Central Military Commission. That fact alone—Xi’s continuity in power—will dominate coverage of the event, and be the focus of international reaction.

Other critical questions include:
• Does the makeup of the new leadership below Xi point to greater pushback against his policies or a consolidation of his authority?
• Will political priorities continue to dominate policymaking, or will newly appointed technocrats be able to shift the system to focus more on economic performance?
• Will these technocrats be able to change China’s highly restrictive approach to COVID-19 containment?
• Will changes in China’s foreign policy approach and relations with the West emerge once the Congress comes to an end?
For investors and corporates, the media narratives surrounding the 20th Party Congress will be just as important as the leadership changes themselves, as conservatism and continuity of leadership and policy under Xi will be seen as negative signals for markets and for China’s medium-term economic trajectory.

Posted September 29, 2022
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Estimating the Impact of a US Outbound Investment Screening Mechanism

Over the past year, US lawmakers have rekindled the idea of creating a mechanism to screen outbound investment for national security and resilience purposes. This week, senators moved to include the National Critical Capabilities Defense Act, one such measure, in a must-pass defense spending bill. This note estimates the bill’s potential impact on US investment in China and outlines implications for businesses.

Posted July 22, 2022
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Transatlantic Stress Test: The TTC and China

On September 29, the first ministerial-level meeting of the US-EU Trade and Technology Council is due to take place in Pittsburgh. Agreed during President Joe Biden’s visit to Europe in June, the TTC is an ambitious effort to foster closer transatlantic cooperation on a broad range of topics. Although the forum is not specifically aimed at China, it will be a first real test of whether Washington and Brussels can channel their shared concerns about Beijing into concrete action.

Tensions over the Afghanistan pullout and Australia’s decision to drop a major submarine contract with France in favor of a deal with the US and UK have injected new uncertainty into transatlantic ties and the TTC itself: Paris is reportedly pressing the European Commission to delay the meeting in Pittsburgh. Though the diplomatic rift is real, the shared US and EU concerns that led to the creation of the TTC are not going away. When the TTC does meet, we expect to see signals that both sides are committed to working together in areas like export controls, investment screening, semiconductor supply chains, artificial intelligence, and possibly forced labor.

Posted July 22, 2022
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