Following the Beidaihe meetings, Chinese Premier Li Qiang has continued his public appearances, while President Xi Jinping's absence from public view is fueling widespread speculation about political uncertainties.

On August 18, Li Qiang chaired a State Council meeting, mentioning the leadership of the "Party Central Committee with Xi Jinping at its core." Prior to this, on August 15, Li attended the opening ceremony of the National Ecology Day events, emphasizing the implementation of "Xi Jinping Thought on Ecological Civilization." Li's resumption of public appearances indicates that the Beidaihe meeting has concluded, an event believed to gather top officials and elder statesmen.

As of August 19, none of the other top leaders, including Xi Jinping, had appeared publicly. Xi's last documented public appearance was on July 24. Throughout August, Xi's appearances have been limited to text-based reports, including phone calls with the leaders of Russia and Brazil and signing appointment and removal orders. During this period, official propaganda for Xi has continued, with new volumes published on his reforms and military strength. However, rumors about his health have resurfaced overseas, intensifying the uncertainty.

Market Signals

Sector Impacts: High-tech manufacturing, semiconductors, and infrastructure sectors, especially those linked to the Belt and Road Initiative, could be affected by potential disruptions.
Price Movements: Political uncertainty in China could lead to fluctuations in stock markets, commodity prices, and exchange rates.
Competitor Positioning: More agile companies, less dependent on Chinese market stability, may gain a relative advantage.

Winners & Losers

Multinational corporations operating in China, particularly in strategic sectors like technology and infrastructure, face increasing risks. Companies with significant exposure to the Chinese market, such as Apple, General Motors, and Tesla, could be impacted. Internal political instability in China may disrupt global supply chains.

Action Timeline

Immediate: Investors and businesses should consider hedging strategies against currency and market volatility.
Short-term: Companies with flexible and diversified supply chains should reassess and strengthen their supply chain resilience.
Long-term: Understanding and catering to evolving consumer values, especially among younger generations, remains important for long-term strategy.

Risk Assessment

Regulatory Risks: Exit bans and expanded regulatory measures are increasing risks for foreign businesses.
Market Volatility: Political uncertainty, coupled with economic challenges like sluggish growth and a property sector crisis, contributes to market volatility.
Geopolitical Tensions: Rising tensions between China and the US are exacerbating the risk environment for foreign businesses.

Key Indicators

Signals for Market/Industry: The current political climate indicates a complex and uncertain business environment.
Leading Data Points: Official media narratives, as well as upcoming political events like the Fourth Plenum of the Central Committee, should be closely monitored.

Regional Perspective

The continued public appearances of Premier Li Qiang while President Xi Jinping remains out of public view following the Beidaihe meeting intensifies speculation surrounding Chinese leadership dynamics.

Immediate Implications

What Next: Financial markets may experience volatility, and companies should prepare for potential supply chain disruptions.
Time-Sensitive Opportunities or Risks: Companies should assess their supply chain resilience and carefully manage their exposure to the Chinese market.

What to Watch

Leading Indicators: Monitor changes in the portrayal of leadership in official media.
Expected Developments: Pay attention to any announcements or developments leading up to the Fourth Plenum of the Central Committee.
Key Decision Points: Any further public appearances by Xi Jinping and the context in which they occur.

Analysis

The uncertainty surrounding leadership dynamics suggests that China's political situation remains opaque, necessitating a cautious approach that emphasizes risk mitigation through diversification, agile operations, and continuous monitoring of political and economic indicators.