In my last post, "The Other Election," I wrote that "the election that may have an equal or even greater impact on the toy industry is happening right now, behind closed doors in China." In this posting, let's take a look at the likely new leaders and what their asencion might mean.
The man who is expected to become the new General Secretary of the Communist Party is Xi Jinping. This will make him the most powerful (but not the only powerful) person in China. It appears that he has a great deal of experience in dealing with and supporting private enterprise. He has, however, also been a supporter of the big government owned businesses which have tended to be less economically viable then the private sector. It would appear, therefore, that there will not be a lot of change in the current economic system. He does not, however, seem to be particularly open to the idea of the
It appears that Li Keqiang will become the new Premier. He seems to be attuned to the need to create a softer environment for the Chinese people and therefore has championed, according to the Brookings Institute “…affordable housing, providing basic health care, balancing regional development, and promoting innovation in clean energy technology.”
The Wall Street Journal put the challenge for China and these new leaders this way:
Economists inside and outside China warn that to continue growing, the country needs to rely more on private enterprise and consumer spending. That means clipping the power of state-owned firms, curbing land grabs by corrupt local officials and creating tens of millions of new consumers in the cities by giving migrant families better access to welfare.
It appears, at least at this point, that there will probably be a continuation of the opening of the private sector, some softening of living conditions for the people and an attempt to get corruption under control. The Communist Party will do no power sharing and state owned enterprises will continue to get government support. As to how far that effort succeeds may well have an impact on what kind of a place China will be for those of us in the toy industry and world that depend upon it.