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● Xi’s Purges- Military Crisis.

2024 Chinese Military Purge, Xi Jinping’s Power Reshuffle, Detailed Explanation of the Prelude to the US-China Hegemony Competition

This article provides a comprehensive overview of the recent Chinese military purge, changes in Xi Jinping's power structure, rapid growth of the Chinese navy, US-China trade and military competition, and the impact on Bitcoin and cryptocurrency movements.
In particular, we thoroughly examine why the purge is happening within the Chinese military, its impact on Xi Jinping's power, the uncertainties surrounding US-China relations and the Chinese economy, and the effects on the cryptocurrency market, organizing all the essential content chronologically by category and group.

1. Purge, Shaky Military, and Xi Jinping’s ‘Absolute Power’

– From late last year to the first half of 2024, high-ranking generals, including those in the Rocket Force and the Minister of National Defense, have been purged or removed from their posts in the Chinese military.
– The official reason for the purge is corruption. In reality, it is driven by Xi Jinping’s disappointment, betrayal, and distrust of his own appointees, as well as the reinforcement of strict political control.
– The key is that there is no faction or leader other than Xi Jinping capable of carrying out such a large-scale purge. Rumors of a military coup are unlikely.
– With the concentration of practical power within the Central Military Commission and the succession structure of national leaders turning into a ‘black box,’ there is a lack of next-generation figures or factions.

2. Rapid Growth of the Chinese Navy, the Core of the US-China Military Hegemony Competition

– After the “Rocket Force purge,” high-level personnel were abruptly replaced, and a naval officer was appointed as the Minister of National Defense.
– The Chinese navy, which was about half the size of the Japanese navy in the 2010s, has recently surpassed the US in terms of the number of vessels due to continuous investment and the introduction of new technologies such as small nuclear reactors. It is also expanding its aircraft carriers quantitatively and making qualitative leaps with catapults and other technologies.
– The US is also increasing its fleet to counter this, and investments in the Korean shipbuilding industry are expanding. The US-China maritime hegemony competition is in full swing. However, the US still has an advantage in terms of experience, quality, and tactical proficiency.

3. US-China Trade and Tariff Conflicts → Economic Deterioration, Changes in Investor Behavior

– The short-term rebound in China’s economic indicators in the first quarter of 2024 was due to the impact of US high tariffs, resulting in a push-out order effect.
– Its sustainability after the second quarter is uncertain, and concerns about a slowdown in exports and manufacturing are increasing. The outlook for data deterioration amid the prolonged US-China tariff war is high.
– Intensified trade hegemony competition is expected to impact both economies. Volatility in various economic indicators, global stock markets, and foreign exchange markets is increasing.

4. Cryptocurrency: Chinese Rich and Officials Prefer Bitcoin as a Means of Moving Assets Overseas

– The wealthy and high-ranking officials in China are increasingly using Bitcoin and other cryptocurrencies as a direct means of transferring assets and as a safety net.
– Although direct selling/escape is unlikely internally, preparations for overseas asset diversification are implicitly ongoing.
– The US CIA’s open recruitment of Chinese officials through videos is essentially a psychological warfare and public opinion campaign.
– This demand for cryptocurrencies is a direct background for the recent rebound in Bitcoin prices.

5. Possibility and Limitations of Internal Power Struggles in the Chinese System

– Although the principle of the collective leadership system in China is maintained, the succession structure for ‘Post-Xi Jinping’ is invisible, and both the second and third in command have minimal practical presence.
– Power division and coups like those in democratic countries are extremely difficult. Only organizational dynamism or political competition within the military/Communist Party remains.
– The possibility of internal power struggles is low due to the simultaneous purge of all high-ranking officials and the strengthening of surveillance systems such as the 경위국.

6. Implications for Global Investment and Economic Outlook

– Amid the uncertainty in China’s military and economic system and the continuation of the US-China trade/hegemony competition: Risk premiums are expected to increase in global stock markets, currency values, and cryptocurrencies.
– In particular, from an investor’s perspective, attention should be paid to the prolonged volatility depending on the debate over the economic ‘bottom’ and the competition between US and Chinese indicators to see who is worse off.
– Attention should be paid to medium- to long-term variables such as the US administration’s pressure and military checks on China, and whether the Chinese navy is actually growing.

< Summary >
The Chinese military purge in the first half of 2024 signals Xi Jinping's power consolidation. Coup rumors are unfounded, and military control is reconfirmed. The rapid qualitative and quantitative growth of the navy and the full-scale US-China trade/military hegemony competition. Uncertainty in economic indicators, increased Chinese demand in the cryptocurrency market. Ultra-uncertainty in the investment market, need for risk management.

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