The Weekly Wrap for Saturday, 21 October 2017

DEEP DIVE When Xi Jinping speaks; the world listens. This was never more true than during the opening speech of the 19th Party Congress. In a marathon three and a half hour speech to the faithful, China's president and General Secretary of the Central Committee of the Communist Party laid out his vision. Rather than expanding the focus of Chinese socialism, Xi sought to adapt it to the modern world. As would be expected from the leader of the next great superpower, he proclaimed an era of Chinese diplomatic and economic ascendancy. Cometh the hour, cometh the man. The speech was important on many levels, exemplified in the descriptor that it was awarded by state media afterwards: Xi Jinping Thought. 'Thought' is the highest possible value given to political philosophy within the party (lower ranks are 'theories' or 'views'); only Chairman Mao himself had previously had his literature described as a unified 'thought'. Some 2,300 Communist party delegates arrived in Beijing this week to crown a General Secretary and elect new members to the powerful 400-person Central Committee. Yet, with varying degrees of wryness and resignation, the international media described the event as a one-horse race: It's a foregone conclusion that Xi will be awarded another five years at the helm. One compelling reason to assume Xi will remain in power is that he has shown great diligence in sidelining or eradicating his opponents. A sweeping anti-corruption campaign has toppled dozens of Central Committee members, opening the door to a new generation of Xi loyalists. It's no great secret even within China that some were targeted by the purge for reasons of power or loyalty rather than graft or misfeasance. At the core of Xi's address was the question of how China will continue to nourish its economic might well into the middle of the century. As was reported this week, one way in which Beijing intends to own the transition into an increasingly capitalist hybrid economy is by seeking stakes in the local titans Tencent, Weibo and Alibaba. Nonetheless, recent figures show that although the country's third quarter growth is on track to meet its annualised target of 6.8%, danger lurks. The governor of China's central bank, Zhou Xiaochuan, spoke in no uncertain terms about the perils of ballooning corporate and household debt. It's now Zhou's responsibility to avert a Minsky moment: the collapse of asset values when debt-fuelled growth stalls. Xi also delivered a clear and reassuring message to investors who have been slow to make the most of the recent move to open China's bond market to foreign investment. He said, "Openness brings progress for ourselves, seclusion leaves one behind. China will not close its doors to the world, we will only become more and more open." With the all the confidence of a politician who will never face an opposition party, Xi outlined China's growth as a soft-power and technological innovator between now and 2050.  Meanwhile, Xi and his allies are working around the clock to ensure that the rise of China is inextricably linked with the rise of Xi himself. The General Secretary is referred to using the same honorifics as his two storied predecessors: Mao Zedong and Deng Xiaoping.  Outside the Great Hall, the capital remains in lockdown. Curfews and travel restrictions are in place. Open flames (such as cigarette lighters or cookers) have been banned on some major roads. In the distant, restive territory of Tibet; a total media blackout. The 19th Party Congress of the Communist Party of China will be an immaculate affair. WORLDLYWISE The shattered remains of a popular Mogadishu street. Mogadishu blast - For a brief moment this week the world's attention turned to the impoverished East-African nation of Somalia. That it required a truck bomb to extinguish 320 lives on a busy street for that attention to be garnered says a lot about the appalling number of competing crises around the world. But here we are.  When the truck bomb detonated at the busy K5 intersection it flattened office blocks, cafes, restaurants and kiosks all around it. What is now a smouldering wreckage of shattered buildings was, up until that moment, considered a safe part of the capital. Mogadishu has been the site of sporadic, at times intense, factional fighting for over a quarter of a century. The terror group al-Shabaab has fought a brutal insurgency against the de facto federal government since 2006; frustrating efforts for unity. Amongst the debris and sorrow, details of the attacker have emerged. It's believed the al-Shabaab fighter responsible, a defector from the army, struck in retaliation to a botched attack that left members of his family group dead. But it wasn't government troops who were responsible for the massacre, it was the United States special forces. From a web of military installations in the region, America fights a shadow war across the Horn of Africa. The raid in question had killed three children between the ages of 6 and 10. It's a new addition to a familiar reprise from America's 16-year-long war on terror: its military mistakes are paid for in civilian lives around the world. A short-lived independence day. The nuclear option - Mariano Rajoy's government in Madrid has announced that it will trigger Article 155 of the Spanish constitution: that's the legal instrument for stripping autonomy from a wayward region. Madrid's intention is to "restore the legality of Catalan self-government," although it is unclear who, if not the separatists, would form the parliament in Barcelona. The decision comes after Catalan leader Carles Puidemont again refused to disavow the independence movement. A series of missteps on both sides has led to this; a deeply problematic position for both Spain and Catalonia. Elsewhere in Spain - and in neighbouring Portugal - wildfires are wreaking havoc. Hundreds of thousands of hectares have been incinerated in multiple infernos and over 40 people have lost their lives. Half a million hectares have been lost in Portugal alone. When Hurricane Ophelia slammed into the United Kingdom this week it swept smoke from Iberia over London (along with a significant amount of sand all the way from the Sahara). In that rare storm, three people were killed and over 100,000 were left without power.  TRUMPETER A mixed bag of a week from the 45th. The Senate passed Trump's budget (preamble to tax reform) A federal judge in Hawaii halted the new travel ban Trump gave mixed messages on Rep. Obamacare support The Dow Jones hit an all-time high of 23,000 points Trump's pick for drug policy czar withdrew after scandal McConnell and Trump played nice after recent disputes Trump's call to an army widow turned acrimonious Sessions shifted position during Russia testimony Trump gave himself 10/10 for Puerto Rico response He returned to his old attack on James Comey THE BEST OF TIMES... This is very good. Neutron star collision - Scientists now have an answer to where the gold in your wedding ring came from: the colossal cosmic violence that occurred when two collapsing stars collided some 5 billion years ago. The result of the merger created nearly half the metals in the observable cosmos. This extraordinary discovery came about when researchers around the world measured gravitational waves from the source. Algae wound gel - A young inventor is on the brink of revolutionising trauma care with an algae-based injectable gel that clots blood in wounds in less than 12 seconds. The concept, which could have been torn straight out of a science fiction novel, is a faster and simpler clotting agent than anything else on the market. The best bit? It was invented by a 17-year-old. THE WORST OF TIMES... Raqqa has been demolished. Capital, no more - The Islamic fundamentalists of ISIS have been dealt a body blow: the loss of their Syrian capital, Raqqa. Their last stand was bloody but doomed. Without the inhibitions that the Mosul operation had demanded, US airstrikes and artillery levelled the city. For the survivors of Raqqa, it's a bitter pyrrhic victory. Maltese assassination - This week the famous Maltese journalist Daphne Caruana Galizia was murdered in a car-bombing. By all accounts Galizia was a principled and dogged journalist; it's more than likely that her pursuit of governmental figures tied to the Panama Papers investigation signed her death warrant. Let us all remember Galizia. P.S. Your weekend long read...  a masterful piece from the Financial Times on decoding cancer. Lastly, please share The Wrap with friends and family if you found it interesting.