Stocks Slide As Xi Speech Disappoints: "China May Face Unimaginable Difficulties"

There was much anticipation ahead of tonight speech by Chinese President Xi Jinping at the 40th Reforms Anniversary Event.

Hope was high for Xi to highlight potential new reform measures, growth initiatives, and - what the markets want most - more stimulus.

He instead offered none of the above, choosing a propaganda-heavy discourse on the Communist Party's contributions to the success of China.

Main highlights include Xi pointing out that 1978 marked major turning point of far reaching significance and "China's stability makes it one of the safest nations in the world..." (except if you're a Canadian businessman)

China's had an average +9.5% growth for the past 40 years.

(Click on image to enlarge)

But warned that:

"China may face unimaginable difficulties ahead"

The speech was dominated by role of the party in developing modern China

Says the party has led China on a "soul stirring journey"

“China has demonstrated the vitality of scientific socialism with indisputable facts.”

There was no concrete message from Xi's speech either on the trade friction with the U.S. or growth prospects for 2019.

"No one is in a position to dictate to the Chinese people what should or should not be done,"

Xi likens China's current stage of development to swimming midstream in a river or climbing half way up a mountain:

"There is no turning back."

On reforms, Xi warned:

"The road of reform and opening are becoming more steep, but we must go forward with conviction, commitment and confidence."

On globalization, Xi talked about a "new form of international relations."

There should be no "bullying" and there should be respect for different development models.

China "will never seek hegemony," Xi says, but we note that China is expanding influence, however, in regions such as the South China Sea, where it has built islands and put military emplacements on them.

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