It is impossible to dismiss the idea that Xi Jinping's aggressive programme of ideological retrenchment, economic restructuring, cadre purging and political repression might work and secure the Communist Party’s rule into the indefinite future. Feng Li/Getty Images
It is impossible to dismiss the idea that Xi Jinping's aggressive programme of ideological retrenchment, economic restructuring, cadre purging and political repression might work and secure the Communist Party’s rule into the indefinite future. Feng Li/Getty Images
It is impossible to dismiss the idea that Xi Jinping's aggressive programme of ideological retrenchment, economic restructuring, cadre purging and political repression might work and secure the Communist Party’s rule into the indefinite future. Feng Li/Getty Images
It is impossible to dismiss the idea that Xi Jinping's aggressive programme of ideological retrenchment, economic restructuring, cadre purging and political repression might work and secure the Commun

Don’t write off China’s ruling party just yet


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Doomsayer Gordon Chang published a book in 2001 titled The Coming Collapse of China, an event he said would take place within five years – or 10 at the most. The anniversaries rolled round and China kept right on going. Undaunted, Mr Chang continued to prophesise. "Instead of collapsing in 2011, the mighty Communist Party of China will collapse in 2012," he wrote four years ago. "Bet on it."

Predictions of China’s collapse have usually been the province of the enthusiastic rather than the analytical among China-watchers.

That changed with a devastating Wall Street Journal article by David Shambaugh on March 6. Professor Shambaugh, who teaches at George Washington University, is no Gordon Chang. He is a Sino­logist taken seriously in policy-making circles in the West and China, one of a small group of scholars whose dry, detailed work provides much of the source code for more popular analyses of China.

So when he says that the "endgame for Chinese communist rule is here", people listen. He identified five portents of this collapse, which he said was likely to be "messy, protracted and violent". These were capital flight, intensified political repression, a general failure of will across the Communist Party, embedded corruption and economic stagnation.

It certainly sounds like a toxic mix – from a scholar who has previously praised China for its resilience and expressed confidence in its reform efforts. Indeed, China itself has rated Prof Shambaugh as the second most important expert on its affairs, an assessment now no doubt under review.

Many China-watchers began to revisit their own assumptions in response, though most rejected the idea that the party’s end is imminent. The rich may be leaving China in unprecedented numbers, for instance, but that is also true in India and France. Becoming global is part of getting rich. And while economic growth may be slowing, it’s still within the lower ends of the bounds set by the government.

While most rejected Prof Shambaugh’s prescription, many found aspects of his diagnosis persuasive, referring to ailments that he had not even raised. The government has embarked on a campaign of repression, censorship has heightened, and public rhetoric has taken an increasingly aggressive anti-western tone. Many of the corrupt have been rooted out, but corruption as a systemic problem remains. Environmental degradation casts a pall over Chinese cities in the most literal sense.

The danger for China is not so much that Prof Shambaugh’s prediction will come true, but that in making it he has fixed public attention on what appear to be intractable problems.

Even the idea of collapse becoming mainstream can have self-reinforcing effects. It becomes part of the conversation between policymakers. Companies feel compelled to at least acknowledge the possibility when planning investment. This could become a source of increased Sino-American antagonism if the US’s much heralded Asia pivot ever gets off the ground in a serious way. More generally, an atmosphere of pervasive gloom hangs over China’s soft power efforts like a bad smog over Beijing.

One problem with Prof Shambaugh’s critique rests on the fact that if he is right on this occasion, then he was wrong in his previous, more optimistic assessments. Indeed, Mr Shambaugh was wrong back in 2012 when he predicted that Xi Jinping would emerge as a weak leader.

It’s almost axiomatic that predictions about China turn out to be wrong to the extent that they are detailed and precise. For years, there was a pervasive belief among China-watchers that economic openness would force political change and that the inheritors of the system would one day decide to liquidate it in an orderly fashion. A common yardstick to measure Chinese leaders is still the question of whether they are “reformers” – with “reforms” being whatever changes the person writing wants to see.

This in turn is because so much of how the Communist Party operates is still opaque. We know what its formal structures are and how they work, but we have to guess as to how power actually operates within the system. At the bottom of it all is the fact that nobody really knows what, over the longer term, is going to happen to party rule in China. The party itself admits that much of the economic data it relies on is falsified by local officials and that it has to use spy satellites to make sure that cadres in the countryside are not operating illicit mines or golf courses.

It’s hard for China-watchers to absolutely reject predictions of collapse when they come from a credible source. But it is also impossible to dismiss the idea that Mr Xi’s aggressive programme of ideological retrenchment, economic restructuring, cadre purging and political repression might actually work and secure the party’s rule into the indefinite future.

In some respects this outcome would be just as disturbing as Mr Shambaugh’s endgame scenario, and for that reason alone it is just as important for China-watchers to watch out for.

Jamie Kenny is a UK-based journalist and writer specialising in China

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Libya's Gold

UN Panel of Experts found regime secretly sold a fifth of the country's gold reserves. 

The panel’s 2017 report followed a trail to West Africa where large sums of cash and gold were hidden by Abdullah Al Senussi, Qaddafi’s former intelligence chief, in 2011.

Cases filled with cash that was said to amount to $560m in 100 dollar notes, that was kept by a group of Libyans in Ouagadougou, Burkina Faso.

A second stash was said to have been held in Accra, Ghana, inside boxes at the local offices of an international human rights organisation based in France.

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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

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Four motivational quotes from Alicia's Dubai talk

“The only thing we need is to know that we have faith. Faith and hope in our own dreams. The belief that, when we keep going we’re going to find our way. That’s all we got.”

“Sometimes we try so hard to keep things inside. We try so hard to pretend it’s not really bothering us. In some ways, that hurts us more. You don’t realise how dishonest you are with yourself sometimes, but I realised that if I spoke it, I could let it go.”

“One good thing is to know you’re not the only one going through it. You’re not the only one trying to find your way, trying to find yourself, trying to find amazing energy, trying to find a light. Show all of yourself. Show every nuance. All of your magic. All of your colours. Be true to that. You can be unafraid.”

“It’s time to stop holding back. It’s time to do it on your terms. It’s time to shine in the most unbelievable way. It’s time to let go of negativity and find your tribe, find those people that lift you up, because everybody else is just in your way.”

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Saturday, April 20: 11am to 7pm - Abu Dhabi World Jiu-Jitsu Festival and Para jiu-jitsu.

Sunday, April 21: 11am to 6pm - Abu Dhabi World Youth (female) Jiu-Jitsu Championship.

Monday, April 22: 11am to 6pm - Abu Dhabi World Youth (male) Jiu-Jitsu Championship.

Tuesday, April 23: 11am-6pm Abu Dhabi World Masters Jiu-Jitsu Championship.

Wednesday, April 24: 11am-6pm Abu Dhabi World Professional Jiu-Jitsu Championship.

Thursday, April 25: 11am-5pm Abu Dhabi World Professional Jiu-Jitsu Championship.

Friday, April 26: 3pm to 6pm Finals of the Abu Dhabi World Professional Jiu-Jitsu Championship.

Saturday, April 27: 4pm and 8pm awards ceremony.

The Lowdown

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