Investors should be cautious about Xi’s new era

There was just one official outcome from the Sixth Plenary Session of the 19th Central Committee of the Chinese Communist Party earlier this month. More than 300 top members of the party met for the last time before next year’s national congress to approve a resolution on the party’s history and achievements – essentially a document that talks at great length about how hard the party has worked, how much it has done for the people and how it will keep up its efforts in future.

That may seem a scant return for a four-day closed-door meeting, but it has symbolic significance. This is the third time that a Chinese leader has issued a resolution on the party’s history: Mao Zedong did so in 1945 and Deng Xiaoping in 1981. By doing the same, Xi Jinping elevates himself alongside them in the pantheon of leaders, ahead of his predecessors Jiang Zemin and Hu Jintao. Xi is mentioned 17 times in the resolution, compared to seven for Mao, five for Deng and one passing mention each for Jiang and Hu.

The signal is clear. Not only will Xi continue as leader next year (there was no real doubt about this), but he represents a new era for the country, shaped solely according to his vision. The