President Xi extends rule indefinitely
US Non- Farm Payrolls
The US added 313,000 jobs in February, significantly above the 200,000 estimated. However, this was still not enough to pull the unemployment rate further down from the current 4.1% low as the participation rate increased sharply. Wage growth moderated somewhat, slowing to 2.6% over the year from 2.9% previously. Equity markets took the news well, although there remains some confusion over the slowdown in wage growth, as a tightening labour market should increase wage pressures. Nevertheless, slower wage growth would take some of the pressure off the Federal Reserve to raise interest rates, although they will want confirmation that a new trend has asserted itself before altering the current path.
North Korea Talks
A historic meeting of the leaders from North Korea and the US has been announced after Donald Trump accepted an invitation from Kim Jong-un. It would be the first time that any US president would meet a North Korean leader. Many have praised the meeting as a potential route to the nuclear disarmament of the rogue state, and the end to the extreme poverty of the North Korean population. However, some analysts have raised concerns that if the talks do not go well, the peace progress could be significantly set back. Given the volatile personalities and histories of those involved this is certainly a possibility.
Term Limits removed in China
China’s National People’s Congress voted on Sunday to remove the Presidential two-term limit, paving the way for President Xi to extend his rule indefinitely. This move has been widely condemned although quickly censored across social media with many phrases and images being blocked. The term limits were originally put in place to avoid a repeat of Mao Zedong’s nearly 30-year rule. The potential implications of a President Xi for life are uncertain; however, history would suggest that leaders with such unchecked power are unlikely to be positive for the wider population and the economy. As the second largest global economy and the largest contributor to growth, potential political instability in China could be a significant risk for the rest of the world.
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