As Sun Tzu once said (or was it Bud Fox?), "The supreme art of war is to subdue the enemy without fighting," and so it is that we suspect President Xi Jinping's marauding destruction of Zhou Yongkang, among the most powerful and feared officials in China, and his army of corrupt politicians, businessmen, family, and military personnel has won Xi's war before the real fight begins. What fight are we talking about? Why have we been so focused on Zhou and Xi recently? One glance at last night's non-manufacturing PMI for China, or the jobs component of manufacturing PMI, or any of the hard data... in the face of a record-breaking credit impulse (and subsequent hangover) [3] leaves Xi wide open for rebellion and revolt among the ruling powers of China should his non-reform create social unrest. By removing Zhou - the most powerful of contenders - Xi has won without fighting, no matter how hard the economic landing becomes.
Here is Bloomberg's excellent illustration of Xi's "victory" over Zhou... [4]
