China’s Congress Is Over, And So Is The Period Of “Coordinated Global Growth”

It is hardly a secret that thanks to nearly $4 trillion (at least) in credit creation in 2017 – more than the rest of the developed world combined – China has been the proverbial (and debt-funded) “growth” dynamo behind the recent period of “coordinated global growth.” Unfortunately, much if not all of this was window dressing for the just concluded 19th Communist Party Congress, which in not so many words, made Xi Jinping into a de facto emperor with no apparent or otherwise heirs.
The problem is that with the Congress now over, so is the period of coordinated global growth. Here’s why.
As Citi writes, “China’s Party Congress has concluded and Xi Jinping’s position as President has been consolidated. Given there are no standing committee members in their 50s, it suggests there are no apparent heirs for Mr. Xi, opening the door for him to stay on beyond 2022. One of the key questions in the run up to the congress was that once power was consolidated, would China accelerate its economic reforms. We think this is unlikely but do expect a moderation of growth, with data momentum perhaps set to continue to slow at its current pace. Note how China’s MCI tends to lead Citi’s macro data index for China and our MCI is still tightening.”

This post was published at Zero Hedge on Oct 27, 2017.