It's a tentative sign of relief, but a sign of relief nonetheless.
Xi Jinping, the man tipped to take over the top post in China in the country's leadership transition in October, has returned to public view. Until China Central Television showed footage of Xi visiting an exhibit at the China Agricultural University on Friday, Xi hadn't been seen in public for two weeks. That had lead to rumors that Xi, 59, had suffered a heart attack or stroke or that he might be suffering from cancer.
By this time of year, the government has usually released a date for once-in-a-decade hand over of power, but not this year. That has raised worries that the transition won’t be as smooth as the Communist Party had hoped and that the nation’s powerbrokers were still fighting over who would be on the seven-person Politburo that effectively rules the country (and indeed whether or not membership would be reduced from nine to seven in an effort to solidify Xi’s control.) It certainly hasn't helped nerves any that Xi has cancelled meetings in the last two weeks with Singapore Prime Minister Lee Hsien Loong and U.S. Secretary of State Hillary Clinton.
It will take more than one chat with agricultural experts and schoolchildren to put doubts to rest about Xi’s position and the transition. But the public outing is certainly a calming event. In recent days in-country and overseas press have gradually escalated the tone of worry in stories that focused on the perceived drift in China’s policies. Authorities were sufficiently worried to block the term "Xi Jinping" on Weibo, China’s version of Twitter.
Now, if the Oct. 18 party congress can get an official and announced date, and if Xi Jinping can make a few more appearances, China’s financial markets can focus on reacting to moves by central banks and the direction of the global economy with one less distraction.
At the time of this writing, Jim Jubak didn't own shares of any companies mentioned in this post in personal portfolios. The mutual fund he manages, Jubak Global Equity Fund (JUBAX), may or may not own positions in any stock mentioned. For a full list of the stocks in the fund as of the end of the most recent quarter, see the fund's portfolio here.