Signal: You in Power, Party in Beijing, Crypto in C.R.E.A.M

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YOU ARE THE MOST POWERFUL PERSON ON EARTH 

The current issue of The Economist argues that President Xi Jinping is the world’s most powerful person. That got us thinking, what does it mean to be most powerful, and who else might be on the list? Some contenders, from your perspective:

You are Xi Jinping. You run the world’s second largest economy and you have amassed more power than any Chinese leader since Mao. You are using that power to expand China’s global economic clout, laying the groundwork for a global alternative to waning American power. Your constraint is that you still have to work through a sprawling and well-institutionalized bureaucracy. China is a massive, but slow-moving ship. You can’t just do what you like the way your friend Vladimir can. 

You are Vladimir Putin. You learn of the The Economist piece while stroking the ears of Verny, the puppy that Turkmenistan’s president gave you last week. The article annoys you. You still enjoy more unfettered control over the military and financial resources of a major power than any other leader on earth. Sure, the US and EU economies together are 25 times larger than yours, but you play a weak hand well. Your constraint: you obstruct and divide better than anyone, but you don’t build or inspire. The US (still, alas) has appealing values, China has tons of money to throw around – you don’t have a lot of either. Can your approach last?

You are Donald Trump. You learn of The Economist article while in a tweet-furor after a late night phonecall with Sean Hannity. You also are super annoyed. Don’t you preside over the most powerful military and largest economy in the history of human civilization? Much of the world’s current economic and geopolitical order was shaped by the country you control. But even if you were more interested than you are in US global leadership, your main constraint would be the same one all US presidents face: Checks. Balances. Congress. Courts. Failing media. Sad!

You are Mark Zuckerberg. You can control how more than a billion people communicate, read news, and make friends. The data you collect on those people might be the most valuable commodity of all in the 21st century. Your constraint: you don’t have any coercive power to make people do things – in short, you have no guns. But does that matter?

You are Batman, the Ghost of Michael Jackson, the Pope, or a Signal subscriber. You have the power to suggest your own candidate for world’s most powerful person. Your constraint: how to make your 3 sentence justification good enough that we will publish it in next Tuesday’s Signal.

PARTY (CONGRESS) IN BEIJING

While President Xi is contemplating his own submission to Signal, he’ll also be in Beijing this week to open the 19th Congress of the Communist Party, a momentous event that will determine the country’s leadership for the next decade or more. The party congress convenes every five years but this one stands out for the sheer scale of turnover in the country’s ruling bodies.

Five of the current seven members of China’s Politburo standing Committee – the highest governing council – are set to retire. Only President Xi, who begins his second five-year term this week, and Prime Minister Li Keqiang will stay on it. About half of the broader Politburo and 200-strong Central Committee will also change.

One big question is whether President Xi will anoint a successor. By convention, he should step down after the end of his second term, in 2022. Some think Xi will decide to bend the rules and stay in power indefinitely. But that seems unlikely. Refusing to retire is a sure-fire way to jeopardize the Party’s legitimacy in the eyes of the people, which Xi cares about deeply. 

Looking ahead, the people who ascend this week will be empowered at a critical turning point – over the next ten years we’ll learn three important things: Will China’s rise lead to conflict or cooperation with the US? Will China’s economy actually become the world’s largest? And, will China’s rigorously authoritarian system deftly manage the social pressures that arise from economic growth and deepening inequality?

G-ZERO WORLD WITH IAN BREMMER: TRUMP'S RACE PROBLEM

Watch the G-Zero World with Ian Bremmer and Jelani Cobb. Also on YouTube.

Want more? Check out the podcast version of this week's show and follow the FB page.

PLEASE RSVP: NORTH KOREAN NUCLEAR TESTS

North Korean leader Kim Jong Un is unpredictable, sure. But if you’re trying to guess when we might see another nuclear or missile test, here are some decent dates to keep in mind.

ELSEWHERE...

In Austria’s general elections, the far-right Freedom Party (FPO) rang up its best result in 30 years, and will likely form a government with the big young winner, 31-year old Sebastian Kurz and his center-right People’s Party (OVP). It's a reminder that the European populist wave hasn't subsided, and it shows how anti-establishment parties can pull centrist parties (like Kurz’s) towards the fringes even without taking power outright. One curious detail: the FPO isn’t anti-EU the way that France’s Front National or Denmark’s PVV are – parse your populists, they aren’t all the same! 

And to Venezuela…. Where government-backed candidates claimed victory in 18 of 23 gubernatorial elections, even though polls said the opposition would win big. If the results are to be believed, the government has actually gainedsupport since 2015, despite a political and economic crisis that has sent monthly inflation to 40% and driven the largest refugee exodus in the world right now. Maduro may have missed his last good chance to let some of the pressure out of the system before presidential elections next year, making severe unrest an ever more likely endgame for his regime.

HARD NUMBERS: DON’T SPEND IT ALL IN ONE PLACE

Facebook has revealed that Russian-linked accounts purchased roughly $100,000 in political advertising during the 2016 campaign. To put that in perspective, $100,000 buys you

11,123: Rocky IV DVDs 

10,060:  Vintage Classics editions of Dostoevsky's "The Idiot"

261: Nights in the Trump DC Hotel

1 lovely 2BD, 1 Bath house: In Moscow, Tennessee

CLOSING WITH C.R.E.A.M.

Vladimir Putin, Jamie Dimon and Ghostface Killah walk into a bar. What’s the punchline? Cryptocurrencies. Obviously. Russia’s president is clamping down, Dimon recently declared Bitcoin a “fraud,” and hip-hop legend Ghostface is launching a digital token called (what else) Cream, after the eponymous Wu-Tang track. Joking aside, what's going on?

The crypto-craze has swept up banks, governments, and startups alike, but their aims differ. Banks fear Bitcoin and its ilk, but like the underlying blockchain technology. Governments see blockchain’s potential to improve commerce and fight corruption, but want to control currency and regulate the payments system. Russia is reportedly planning a state-sanctioned CryptoRuble. China may launch something similar. Meanwhile, entrepreneurs like Ghost are rushing to capitalize on the hype as prices of Bitcoin and rival Ethereum continue to climb. Cryptocurrencies Rule Everything Around Me doesn’t have quite the same ring as the original – but for geopolitics heads, there’s a lot to watch here…

This edition of Signal was written by Alex Kliment with editorial support from Kevin Allison (@KevinAllison), Gabe Lipton (@Gflipton) and Leon Levy (@leonmlevy). 

If you like what you see, be sure to sign up to receive it in your inbox first thing every Tuesday and Friday morning: eurasiagroup.net/signal.