Xi Jinping's 3rd term, Ohio Senate race, Liz Cheney's remarks: Top political stories this week

Kevin Cirilli

As the November midterm elections creep closer and U.S.-China tensions remain high, political uncertainty could rattle markets further.

On Monday, for instance, markets reacted swiftly to the conclusion of the Chinese Communist Party (CCP) congress, with Chinese stocks in Hong Kong opening at their lowest level since the 2008 financial crisis.

With that in mind, here are the top political stories this week with implications for investors:

Xi Jinping consolidates power in Communist China

Xi Jinping has secured a third five-year term as general secretary of the Chinese Communist Party (CCP), making him the most powerful Chinese leader in decades.

In both his remarks as well as amendments to his party's platform, Xi has signaled that he intends to tighten his grip on the world's second-largest economy by consolidating power economically, militarily, and technologically, analysts have suggested. And Xi, who is 69, has yet to indicate who might eventually succeed him as the next leader.

FILE - Chinese President Xi Jinping waves at an event to introduce new members of the Politburo Standing Committee at the Great Hall of the People in Beijing on Oct. 23, 2022. The world faces the prospect of more tension with China over trade, security and human rights after Xi Jinping awarded himself a third five-year term on Oct. 23, 2022 as leader of the ruling Communist Party. (AP Photo/Andy Wong, File)
Chinese President Xi Jinping waves at an event to introduce new members of the Politburo Standing Committee at the Great Hall of the People in Beijing on Oct. 23, 2022. (AP Photo/Andy Wong, File) (ASSOCIATED PRESS)

During the party meeting, the CCP voted to add an amendment to the constitution promising to "firmly oppose and contain Taiwanese independence," according to Bloomberg.

That is the strongest language Xi's CCP has used regarding Taiwan. It drew a swift rebuke from Taipei leaders, who are vowing not to be coerced by CCP officials should they try to deploy the economic tactics used in Hong Kong or follow through on military threats China issued in recent months, including during House Speaker Nancy Pelosi's (D-CA) visit to the island.

Just as there is strong bipartisan support for Ukraine in Washington, there also remains strong support for Taiwan. According to Defense News, Washington plans to double the amount of assistance to Taiwan's military to $10 billion during the next five years.

In a joint statement released earlier this month, Senate Foreign Relations Committee Chairman Robert Menendez (D-NJ) and the committee's top Republican Jack Risch (R-ID) underscored that support.

“A country truly committed to ‘addressing the world’s security challenges’ does not threaten war, as Xi is doing to Taiwan," Menendez and Risch stated. "China is also providing metals and energy to prop up Russia’s grotesque war in Ukraine. Xi securing a third term will only continue this path of repression, economic coercion, and regional instability."

Xi is also focused on codifying digital authoritarianism and said that the CCP will "win the battle in key core technologies."

Xi's rhetoric regarding Taiwan is all the more sobering given that half the world's global supply of microchips is owned by Taiwan-headquartered TSMC (TSM). For that reason, there has been a sprint from Washington policymakers to address the need for a long-term policy playbook for chip supply chains.

FILE - This combination of photos shows Ohio Democratic Senate candidate Rep. Tim Ryan, D-Ohio, on March 28, 2022, in Wilberforce, Ohio, left, and Republican candidate JD Vance on Sept. 17, 2022, in Youngstown, Ohio. Ryan and Vance deflected accusations of being political lapdogs to their parties Monday, as they met in a heated second debate for Ohio's open U.S. Senate seat. (AP Photo/Paul Vernon)
This combination of photos shows Ohio Democratic Senate candidate Rep. Tim Ryan, D-Ohio, on March 28, 2022, in Wilberforce, Ohio, left, and Republican candidate JD Vance on Sept. 17, 2022, in Youngstown, Ohio. (AP Photo/Paul Vernon) (ASSOCIATED PRESS)

Midterm elections

The midterm elections are two weeks away, and Republicans and Democrats are seeking to distance themselves from Xi's Communist chokehold.

In some cases, the political attacks on leaders may foreshadow headline risks that companies could ultimately face, such as the criticism Hilary Clinton and Donald Trump faced regarding their relationships with Russia long before companies scrambled to leave Russia after Putin escalated its invasion of Ukraine.

That may be the case in the Ohio Senate race, where centrist Democrat Rep. Tim Ryan is looking to link his MAGA-backed competitor J.D. Vance to China.

On Friday, Ryan slammed Vance in a primetime interview with Jake Tapper on CNN, saying: "In Ohio, there's a clear contrast — a guy like me, who wants to take that issue on, take on the corporate interest, take on China and move the manufacturing back. [Then] you got a guy like J.D. Vance, who's actually investing into China, making money off it, and shipping the products back here."

It's unclear whether the line of attack will work. Vance leads Ryan 47% to 45%, with 7% of voters still undecided or voting for other candidates, according to a Suffolk poll released last week.

FILE - Vice Chair Liz Cheney, R-Wyo., speaks as the House select committee investigating the Jan. 6 attack on the U.S. Capitol, holds a hearing on Capitol Hill in Washington, Oct. 13, 2022. (AP Photo/J. Scott Applewhite, File)
Vice Chair Liz Cheney, R-Wyo., speaks as the House select committee investigating the Jan. 6 attack on the U.S. Capitol, holds a hearing on Capitol Hill in Washington, Oct. 13, 2022. (AP Photo/J. Scott Applewhite, File) (ASSOCIATED PRESS)

Liz Cheney's comments on the GOP

Whether she runs or not, Liz Cheney is influencing the 2024 primary.

Cheney continues to position herself as the de facto leader of never-Trumpers, granting her access to conservative-minded Republicans who were left out of Trump's MAGA-branding of the GOP.

In a stoic interview with NBC's Meet The Press, Cheney declared that the Republican Party "will shatter" if Trump becomes the 2024 nominee. She could get a chance to confront Trump directly in mid-November should Trump cooperate with the Jan. 6 Committee's subpoena.

"This isn't going to be [like] his first debate against Joe Biden and the circus and the food fight that that became," Cheney said on Meet The Press about Trump potentially testifying to the committee. "This is a far too serious set of issues."

- Kevin Cirilli is a visiting media fellow at the Atlantic Council's Global China Hub and the Krach Institute for Tech Diplomacy at Purdue. Follow him on LinkedIn.

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