Xi Jinping’s quagmire — Editor’s Note for Friday, April 29, 2022

Dear reader,

Today, news broke that the government has scheduled a symposium sometime after the Labor Day holiday ends on May 4 with China’s big internet companies.

Stock market investors in China reacted like jonesing junkies who have just been given a few opioid pills, and piled back into the markets. Alibaba and other Chinese tech stocks jumped on the news, and all the major indices in mainland China and Hong Kong went up.

I don’t think the rally will last long.

This week, I spoke to the renowned economist and former big shot for Morgan Stanley in Asia, Stephen Roach — our conversation is summarized below (or read the whole thing here). Roach is well known for his bullish views on China, but he is not feeling bullish at all right now. Neither is investor and celebrated China bull Weijian Shan (单伟建 Shàn Wěijiàn), whose views Stephen and I also discussed. Veteran China business leader and president of the EU Chamber of Commerce in China, Joerg Wuttke, has a similarly gloomy outlook in an interview with The Market.

Ten years after Xí Jìnpíng 习近平 became leader of the Communist Party and president of China, he seems to be stuck in a quagmire. With no one left who dares to go against the Chairman of Everything, the Chairman is sticking to his COVID-zero strategy as the economy tanks, and is embracing Russia tightly as it wages a globally unpopular war in Ukraine.

In other news today:

• For the latest reporting from and about China, see our China NewsBase, a curated and annotated database of all the news you need to know from Cathay.
• If you invest in China, stay on the defense despite this week’s stimulus announcements and today’s tech stock rallies, cautions Gerard DeBenedetto.

Our phrase of the week is: cute contrast (反差萌 fǎn chā méng), an internet expression that some Chinese social media users have used to describe a Taiwanese fitness coach and his wife, whose workout videos have become a Shanghai pandemic lockdown hit.