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Xi as China's long-haul leader: Beware the 'key-person' risk this creates

China now accounts for a third of the MSCI Emerging Markets Index. If it so much as sneezes, the whole asset class has a cold

The Communist Party is set to repeal presidential term limits this month in a step that would allow Xi Jinping, 64, to rule beyond 2023, and perhaps for life. Optimists may expect Mr Xi to use his consolidated power to push through necessary reforms, but pessimists need to ask whether investors have priced in enough political risk.

RIOTS, drought, social instability: Emerging markets are never easy. Now investors face a potentially bigger test - they must decide whether President Xi Jinping's determination to remain in power in China is a risk-on or risk-off moment for the whole asset class.

The Communist Party is...