Hello Eoin. I wonder if you have seen this article on China's vaccine scandal? Your take would be of interest to the Collective, I'm sure.
Thank you for this article which may be of interest to subscribers. If you remember a couple of years ago there was the melamine in the infant formula scandal and there have also been numerous scandals about corruption of the food supply chain. I thought this was the most important section of the article:
Now if I were a billionaire businesswoman, ‘meeting fees’ would certainly be my euphemism of choice for ‘phone a government friend’. There are also rumours that the corruption goes higher than local authorities. Some papers are reporting that Gao had the support of the ‘Jilin Gang’, which runs to the very heart of government. Formed out of the friendship between People’s Dailyeditor and former party secretary of Jilin, Gao Di, and the then-president Jiang Zemin, the Jilin Gang has been the breeding ground for promising politicians since the 1990s. With Gao Di’s leadership and president Jiang’s blessing, members of the faction could be assured of high office.
In China things are seldom as they seem. Xi Jinping’s anti-corruption campaign has effectively been a purge of people connected to the Jiang Zemin wing of the Party. That is why we are hearing about this vaccine scandal now rather than about scandals in other companies. An alternative interpretation is that these kinds of stories as well as public disorder events have increased since Xi grabbed the leader for life moniker. They could be orchestrated to ensure maximum embarrassment.
In the broader scheme of things this scandal will pass and it will further highlight for Chinese parents the benefit of moving children overseas for schooling if they can afford it. I’m not at all sure this will put pressure on Xi’s position.
Meanwhile the banking index is continuing to hold its July lows which is at least a tentative sign of government support for the market.