bullish
The Mountains are high….
SUMMARY
- There is a tendency in the west to see China as an authoritarian monolith – in contrast to the supposedly highly accountable democratic west, albeit only those with the shortest of memories can look at the current protests against Covid taking place in China and think them somehow unique*.
- The reality is, of course, different, for while over the course of his first two terms Xi has certainly moved to consolidate more power to the centre, the reality is still that, in the words of the old Chinese proverb, “The mountains are high and the Emperor is far away”, ie the relative autonomy of the regions remains strong and thus the Covid restrictions – and by extension the protests – reflect a tapestry of different regional interpretations of central government policies.
- Right now, it seems that the centre is asking the regions to ease back on Covid restrictions, which is why, despite the headlines, the markets believe this is more about opening up than closing down again.
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