China's National Congress: Beach Party
Online interest in the upcoming National Congress of the Chinese Communist Party fell this week, as leaders vanished from public view for a summer conclave in the beachside town of Beidaihe. The retreat's dates and agenda are kept secret. But a decline in our watch signal for the Congress -- reflecting the disappearance of senior officials from the media -- and spiking attention to the Chinese-language Wikipedia page for the Biedahae district indicated the meeting probably began first week of August.
The retreat is the last big opportunity for Party elders to spar over who will be promoted to leadership posts during the Congress, which will convene sometime this Fall. Held twice a decade, the Congress is China's most important political event and sets the country's political and policy course for the next five years. There is little doubt Xi Jinping will continue as Party general secretary and PRC president. The question is to what extent will he consolidate power — i.e. how many allies will he manage to place in top party leadership posts, and will he break with tradition and signal his intent to seek a third term in 2022? Xi's success at the Congress will determine his ability to push through reform over the next five years. China is a centralized autocracy. But just like in any government, factionalized leadership slows the agenda.
Falling Prices, Rising Production: The Oil Conundrum
Attention to oil markets gained digital attention this week as concerns about global supply-demand rebalancing arose. After rallying in July and August, crude prices fell sharply this week after U.S. domestic output hit a two-year high
and OPEC learned it had more oil in storage than estimated and would need to deepen production cuts. Still, narrowing calendar spreads
and the possibility of production-tightening U.S. sanctions against PDVSA, the Venezuelan state oil company, have left some investors bullish in the long term.
U.S. Begins NAFTA Renegotiation Head in the Sand, Canada and Mexico in the Clouds
Yesterday, U.S. negotiators came out swinging
during the first round of NAFTA renegotiations with Mexico and Canada. Both NAFTA and Protectionism gained on the Scoreboard this week. The digital traffic
surrounding the renegotiation pointed to the differing aims of the three governments. The Protectionism signal was driven by English-language sources, reflecting Washington's push to win a “fair” deal that eliminates the U.S. trade deficit with its neighbors. By contrast, Spanish- and French-language sources dominated our NAFTA signal, consistent with the Ottawa and Mexico City goal to simply modernize an agreement they are generally satisfied with.