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Economists see stability in Xi supremacy, Chinese eye exit

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A souvenir necklace with a portrait of Chinese President Xi Jinping. Reuters

BEIJING (AFP) – As Xi Jinping marches toward presidency for life, economists are lauding the stability of his continued rule but the move has caused some Chinese people to consider moving assets, or themselves, abroad.

The Communist Party’s move to scrap presidential term limits is the latest indication Xi is returning the country to strongman rule, undermining the consensus of technocrats that has governed China in recent years.

But a lengthy period of stability under Mr Xi, whose second term would normally end in 2023, will give him time to push through the much needed reforms he has championed, analysts say.

Mr Xi and his economic team have pledged to tackle China’s ballooning debt, move the economy towards sustainable consumption-based growth and taken aim at corruption endemic in the Communist Party.

The “measures are more likely to be successful with a strong and steady leadership”, said Robert Carnell, chief economist at ING Bank.

“The ability to get stuff done is something that the weak coalitions that govern, for example, most of Europe, would give their eye-teeth for,” Mr Carnell wrote in the note to investors quoted by Bloomberg News.

At Davos in January, Xi’s top economic advisor Liu He told the crowd of global elites China would get financial risk under control within three years.

“This reform agenda would last for decades,” economist Raymond Yeung at ANZ Bank wrote in a note to investors, which was largely positive on the raft of proposed constitutional changes.

Mr Liu, who analysts believe could be in line to become the next central bank chief and also hold the title of vice premier, is in the US this week dealing with the thorny trade issues rocking relations between the world’s two largest economies.

A firmer grip on the country for his patron Mr Xi may give him greater leeway to bargain with Donald Trump’s administration, analysts say, though others caution it could harden China’s positions.

The US and Europe have also complained that Beijing has repeatedly failed to keep its word on opening up its market to foreign firms, which still face many obstacles.

History shows one-man rule can hamper effective economic decision-making, though.

The horrors of Mao Zedong’s Cultural Revolution and Great Leap Forward are still remembered by many in China.

Following the disastrous policies, the Communist leadership sought to prevent further chaos by tempering presidential power through a system in which major personnel and policy decisions were hashed out by the powerful Politburo Standing Committee.

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