The Chinese stock market rebounded today, with the Shanghai Composite Index closing up 1.97 percent. But as we have pointed out previously, the crisis in China is not about the stock market. Nor is it simply a crisis of currency depreciation or capital flight, though certainly these are elements. The crisis is about whether the Communist Party can maintain its control over the country or will witness the country’s fracture into regionalism. The party and its leader, President Xi Jinping, have plans to avoid such an eventuality. These plans are embodied in an attempt to shift the economy’s focus from exports to consumption, in the anti-corruption drive purging disloyal elements of the bureaucracy, and in the military reforms initiated by Xi. But plans are abstract and theoretical, and have a tendency of breaking down when they encounter reality. Rumblings of a confrontation between Xi and the People’s Liberation Army (PLA) over planned military reforms are continuing to emanate. T
Xi, the PLA and China’s Future
Jan. 8, 2016 Signs of discord between the Chinese president and the military have been visible and whether the regime can manage the conflict will determine the future course of the country.