China BriefingHong Kong is defiant, the Chinese economy is slowing. But Xi’s long game is for certain

The most certain thing in 2020 is uncertainty, but one thing is for sure: China’s political stability will endure with Xi to remain in power for life

China and the US are likely to compromise on issues like trade and investment but clash on technology and geopolitics

4-MIN READ4-MIN

A defiant Hong Kong is not the only uncertainty facing China. Photo: AP

Published: 9:30am, 4 Jan 2020Updated: 8:47pm, 17 Feb 2020

As we ring in 2020 and the start of a new decade, it is hard to be optimistic after a tumultuous 2019 which was plagued by global uncertainties and worsened by the trade war between the United States and China and mounting unrest everywhere from Chile to Hong Kong.

Making predictions about China’s future trajectory would therefore be foolhardy as the only certainty for 2020 and beyond is that uncertainty is set to intensify.

For instance, the rivalry between the world’s largest and second-largest economies will become more complicated and intense, despite the tantalising prospect that Beijing and Washington will sign the Phase One agreement to ease trade tensions in mid January. How both sides manage their volatile relationship will be heavily influenced by the political developments in the run-up to the US presidential election in November and its outcome.

Protesters raise their hands to symbolise the five demands of the pro-democracy movement in Hong Kong during a rally on New Year’s Day 2020. Photo: AP

Meanwhile, the Chinese government will have to contend with a defiant Hong Kong, where the anti-government and anti-Beijing protests which started in April have shown little sign of easing and are set to continue in the foreseeable future. Beijing’s headache will get bigger if the upcoming presidential election in Taiwan next Saturday returns incumbent pro-independence leader Tsai Ing-wen, whose chances have increased over the past six months, thanks to the Hong Kong and Central Government’s clumsy handling of the Hong Kong protests.

At home, Beijing will have an even harder job of wrestling with a slowing economy, underlined by the central bank’s New Year’s Day announcement that it was cutting commercial banks’ reserve ratio to release 800 billion yuan (US$115 billion) in funds to spur the economy.