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Leaked Lunch with Diana Choyleva

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In the latest Leaked Lunch podcast, I am joined by Diana Choyleva, the founder of Enodo Economics — a research house specialising in China coverage.

We discuss the headwinds facing the Chinese economy, the difference between being taught economics under a communist regime versus in the West, plus, the importance of independent financial analysis. Diana was formerly the chief economist at Lombard Street Research, where she made a name for herself as a contrarian bearish voice on China. She also coined the term “the great decoupling” long before the current reshoring back from China trend began.

Our conversation took place on Sept 16 at La Famiglia restaurant in Chelsea, a month before the October Chinese Communist Party congress occurred.

Since then, Diana has published her assessment of the conference, which is available here.

Among her key takeaways is the fact that the new Politburo Standing Committee – the seven-member body at the top of the party – is now stacked almost entirely with Xi’s men.

On the matter of Hu Jintao being escorted out of the Party congress, Diana notes:

Gossip in China-watching circles claims that Hu – who state media later claimed had fallen ill – was evicted from the party podium because he had openly expressed his dissatisfaction with the complete removal of his China Youth League faction from the new party listings. But if anything, the spectacle of the confused old man being led off the stage was evidence of a faction that has lost its patron, and can’t oppose anything.

Also retiring are central bank governor Yi Gang, who once taught economics at an American University; and top banking regulator Guo Shuqing. Both are closely associated with vice president Wang Qishan, who helped Xi consolidate power only to be squeezed out himself.

She adds that the consolidation of Xi’s power now allows for five more years of his statist and repressive policies at home, and for an unrestrained mandate for his international goals of conquering Taiwan and placing China at the centre of an Asia free of US interference.

Diana warns multinationals that new investment in China will now require a bold commitment.

Show notes for the podcast are available to subscribers.

 

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