On the Margin: China’s Scariest Fragility

An outpouring of headlines the last week shows civil unrest and political repression in China rising. We think this is the most salient pressure-point in the what the Trump administration is increasingly seeing, as we have, as a game to see who can endure the most pain, with markets acting as the score-keeper. Xi is nominally “president for life,” but he won’t live long if social pressures in China break out as the economy weakens further. Repression helps Trump isolate China from US allies, and drives Xi to make a deal before the mid-terms, when success would be most valuable to Trump.