While the world focuses on the U.S. engaging in its third freedom of navigation operation in the last year, this time around near the Fiery Cross Reef in the Spratly Islands, our attention is focused on an article that appeared yesterday in the People’s Daily, the official paper of the Chinese Communist Party. The article is important for two reasons. The first is that it may indicate a large shift in China’s economic policies. The second is that it is the most tangible indicator yet of an emerging split between Chinese President Xi Jinping and Premier of the State Council Li Keqiang. They occupy the top two positions in China’s most powerful decision-making body, the Politburo Standing Committee.
In February, writing about the second collapse of the Chinese stock market in the last 12 months, fluctuations in the value of the yuan and the looming specter of shrinking foreign reserves and capital flight, we described China as living in a “new normal.” Yesterday’s People