The 20th National Congress of the Chinese Communist party has confirmed many of the worst fears of watchers of Chinese politics. The economic outcomes of the congress are more nuanced however. Xi Jinping’s clean sweep of promotions to the Standing Committee of the Politburo clearly implies his dominance of the political scene, but the concentration of power adds risk and uncertainty when it comes to specific economic policy.

Unpicking some of the details from the event allows some assumptions to be made about the impact on steel demand. The main impact however is to add downside risk to the medium-long term outlook for that demand.

The problem with making assumptions about the economic impacts of such political decisions, is that there is only one assumption that is safe: Xi Jinping is in control. The rest is largely guesswork. But as policy decisions are so crucial to the steel industry, there is little choice but to try. There are three ways we are questioning the outcome of the Congress. In the short term, zero Covid policies are key, in the medium term wider economic policy will determine steel demand, and in the big picture the risk of centralised decision making will also impact our expectations.