The most important event in the world this week? Not Obama or Saville…

You have to wonder sometimes about the UK media. We've all been fixated on Jimmy Saville here (for any non-UK readers, a dead TV celebrity / DJ who it now turns out had a long history of abusing children) for what seems like months, with the US election getting a bit of a look in every now and again.  (Congratulations to everyone who won an election in that fine country by the way, and as a European, we can only marvel at a country that can both see the views of Todd Akin as fairly  mainstream and votes to legalise Marijuana in two States!)

Meanwhile, the most important event in the world this year (probably) is going on in Beijing, to the complete incomprehension and ignorance of the vast majority of the European  and US population.

Now I would not pretend to be in the upper percentile, decile or quartile of "people who understand China", but even some limited reading indicates that the current, once every ten years summit or Congress of the Chinese Communist Party is important for all of us. During this event, the next generation of leaders of the country are chosen and confirmed, and policy directions are set in key areas.

So, for instance, will we get any sense of the likely future approach to balancing growth in internal consumption against the export boom that has powered China through the last 10 years of amazing growth? How will the ageing population, the result of the one-child strategy, affect the economy? How open will the country be over the next ten years to foreign investment, to religious freedom, to political ideas or even democracy? What global role - in military, economic and social terms - does China want and hope to play? How will the relationship with neighbouring countries develop - in particular, where does the dispute with Japan over some islands  (known as Senkaku in Japan and Diaoyu in China) end up? A peaceful settlement or a new world war?

That might sound over-dramatic but it illustrates how important these issues are. China has the ability to drive global inflation significantly, by increasing export prices and ending two decades of cheaper and cheaper clothing, electronics and so on for us in the West. China could withdraw bond-buying support for western debt-reliant governments, with severe effects on the global economy. Military events might cause supply chain disruption or worse.

Now of course the probability of any one of these is small in itself. But the overall likelihood of some shock coming from China over the next few years is not so insignificant.

The early signs from the 18th Party Congress suggest change will not be dramatic, but even considering the  possibilities shows how important the event is. Whilst we worry about a dead pervert and why Obama won (let's face it, it was inevitable once Jay-Z and Springsteen turned out for him), the really significant event is going on thousands of miles away.

 

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