May 24, 2012

Xi Jinping: The 2012 IA 25 Extended Profile

China's likely future president is a capable leader

Xi Jinping, Vice President, People’s Republic of China Xi Jinping, Vice President, People’s Republic of China

Not familiar with Mr. Xi? You will become so, for this fall, at the 18th National Congress of the Communist Party of China, close to two-thirds of the Chinese leadership will retire from office, and Xi Jinping is likely to become the new leader of the country with the second largest economy in the world, albeit a slowing one. As a member of the so-called “fifth generation” of Chinese leadership since Mao’s triumph after World War II, current Vice President Xi is the odds-on favorite to succeed Hu Jintao as president of the People’s Republic of China.

While predicting changes in the Chinese leadership can be difficult, we do know the leadership will change this fall. We also know that the new leadership will be steering a ship of state that has unprecedented economic might, growing military forces (including now an aircraft carrier) and is already heavily invested in the West. As of January 2012, China held $1.113 trillion of U.S. Treasuries; foreigners held 48% of the total $9.88 trillion of outstanding U.S. Treasury debt. Last year, the IMF predicted that China’s economy will pass the U.S. economy by 2016, with its GDP rising from $11.2 trillion in 2011 to $19 trillion by 2016, which would represent 18% of total world GDP.

2012 IA 25So who is this man who will be overseeing this economic giant that holds so much of our debt? Xi, 58, is the son of one of Mao’s most trusted guerrilla leaders who became deputy prime minister after China’s revolution, but was then ousted by Mao in the ‘60s before regaining some power and notoriety as a “moderate” leader. Xi himself was re-educated as a teenager during the Cultural Revolution due to his father’s “crimes” and later studied both chemical engineering and law; his daughter is currently studying at Harvard. Mostly, though, Xi is a politician with experience running all different levels of government in China, and as the “first among equals” of the nine-member Politburo, his political skills will be put to the test internally.

Externally, in his February visit to the United States, Xi said all the right things, whether in Congress or in Iowa or Hollywood, and appeared at ease, which is not surprising for someone who has visited 47 countries in his lifetime. In a Washington speech, he said China was taking steps to increase imports from the United States and that it was allowing its currency to rise, but he also called on the United States to fix its own economic house. By all measures a cautious man, it’s likely he will be a pragmatic leader who nevertheless will be tested by China’s many internal and external challenges.

Diplomatic cables leaked by WikiLeaks quoted Xi as telling the American ambassador in Beijing that he enjoyed American movies, specifically mentioning “Saving Private Ryan,” and enjoyed Hollywood’s portrayals of good triumphing over evil. But he can also be frank and plain-spoken. In a speech regarding the financial crisis to overseas Chinese in Mexico in 2009, he was quoted (in translation) as saying “Some foreigners with full bellies and nothing better to do engage in finger-pointing at us,” he said. “First, China does not export revolution; second, it does not export famine and poverty; and third, it does not mess around with you. So what else is there to say?”

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Find out who was named on the 2012 IA 25 in Investment Advisor's May issue.

Check out more extended interviews of the 2012 IA 25 at AdvisorOne.


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