Xi says: who will succeed him?

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1:19Hello and welcome to The Intelligence from The Economist. I'm Jason Palmer.

1:22Rosie Blau:And I'm Rosie Bloor. Every weekday, we provide a fresh perspective on the events shaping your world.

1:34When the big countries and regions for high tech are mentioned, Europe doesn't often get a look in. But our correspondent says that is changing, in part because Europe's few early tech winners are now spinning out more and more new ones.

1:49Rosie Blau:And Michel Rolland spent his school holidays riding a tractor and helping with the harvest. For him, there was no question of doing anything other than spending his life among vineyards. We remember the life of a master wine connoisseur.

2:11Rosie Blau:But first...

2:21Rosie Blau:In China, a five-yearly churn of leadership posts is underway. Hundreds of thousands of jobs will change hands in this giant reshuffle, moves that will affect every level except one. Xi Jinping, China's ruler, is almost certain to hold on to his position, which will be confirmed at next year's Pivotal Party Congress. All of which means some people are already wondering what might happen a further five years on, by which time Xi Jinping will be 79.

2:56Xi Jinping ripped up the succession rules in 2018 when he revised them to allow himself to be president for life.

3:08Rosie Blau:James Miles is our Global China writer. So coming up to next year's party congress, the 21st, we'll be looking for signs as to whether he might actually, in spite of that, be lining up a successor. James, for a number of decades, you've been a professional tea leaf reader of the Chinese Communist Party. What sorts of things are we looking for? And just talk us through the process. Well, we're just at the early stages now of a five-yearly churn of the Chinese leadership. And this is always a very stressful part of the Chinese political process. A couple of years are spent changing jobs at every level of the Communist Party and the state apparatus from bottom to top.

4:01and we saw this getting underway at the end of last year with elections in hundreds of thousands of villages across the country. That's a process that actually involves people casting a vote but of course it's a sham. The winners are decided in advance and the winners are almost always local Communist Party bosses and that then works up through the system this year with local party chiefs, government officials chosen. Eventually, it will reach the provincial level. And ultimately, this will lead to a Communist Party Congress late next year, which will see the party's ruling elite reshuffled massively.

4:49And only one job will remain for sure at the end of it in the same hands, and that will be Xi Jinping's.

4:57Rosie Blau:So tell me what we know about what happens at the top, the reshuffle of the ruling elite. Who fills those positions? Well, those positions are going to be filled by Xi Jinping's loyalists. We saw at the last Communist Party Congress in 2022 that he had filled the ruling Politburo with people who had worked closely with him, who were closely identified with him, and were clearly his yes men. So anyone who is not of that ilk, I think, is extremely unlikely to be in the frame for those very top slots. But I think what we won't see is the injection into it, crucially, of younger officials who are being groomed to take over from Xi Jinping at the Congress after that in 2032.

5:54I think that would go against what we've seen so far, which is Xi Jinping wanting to concentrate power in his own hands and wanting really nothing to do with the traditional kind of succession arrangements that his predecessors have been involved in.

6:10Rosie Blau:Xi Jinping was originally supposed to step down in 2022. He obviously abolished term limits. Are there any signs that he's preparing a successor now for in five years' time? None whatsoever. A key indication of succession arrangements being made would be the placing into the Central Military Commission, that's the armed forces' supreme body, of a civilian leader in addition to Xi Jinping. At the moment, Xi Jinping is the only civilian in that body. and another civilian is normally put into it in preparation for that person taking over as the supreme commander. We saw that in 2010 when Xi Jinping was placed in the Central Military Commission.

6:56Two years later, he took over as general secretary and commander-in-chief of the armed forces and then as president. That hasn't happened yet and is highly unlikely to happen before the next Congress in 2032. I think the last position that Xi would want to surrender is that of commander of the armed forces. That is the one that confers the most power of all of the three big jobs he's got. We would be possibly looking for those younger officials, not only in the Politburo, but also in the wider Central Committee. That's a body of the ruling elite that consists of more than 300 people. Those people might ultimately become candidates for membership of the Politburo or even to take over as General Secretary.

7:41But we see even at the level of the Central Committee, fewer and fewer younger people are getting jobs and even at the provincial level. So what we're seeing gradually is the formation of a new kind of gerontocracy in China, with Xi Jinping at the head of it, who is reluctant not only to take on people who are not his yes-men, but also reluctant to take on people who are yes-men of yes-men, because they are one step removed.

8:14Rosie Blau:James, there's no shortage of younger Communist Party members, so why isn't he injecting younger blood into the Politburo and beyond? Well, I think it's a problem that is hardwired into the system. It is extremely difficult to arrange a succession that doesn't prove turbulent. His predecessors tried and those succession arrangements fell apart. So you're kind of damned if you do and damned if you don't in China. Appoint a successor and things start getting tense between that person who has been identified as successor and the actual leader. Don't appoint a successor and the chance then of huge fighting once the leader has left the scene is enormous.

9:05And I think Xi Jinping may well have decided, why should I bother?

9:10Rosie Blau:Xi Jinping can't live forever. So what does happen next? Well, assuming that he remains in good health until the 22nd Party Congress in 2032, I think we're going to see more and more questioning among the elite as to what should happen. It may be that Xi Jinping himself doesn't really want to face up to this question. And don't forget that this reshuffle is taking place against a backdrop of huge stress already as a result of the purges particularly that have happened since the last Congress in 2022. About a fifth of the Central Committee has been purged since then. Maybe about a half of the top leaders of the armed forces, the People's Liberation Army.

9:56I mean, all of this, a huge upheaval within the elites. Of course, many officials who have been purged under Xi Jinping, who are resentful of that and are certainly eager to know whether they might have futures after Xi Jinping is gone. So you've got all this stress, all this tension, these questions being asked. And I think the possibility for more unexpected things to happen in Chinese politics over the next five years is really quite considerable.

10:29Rosie Blau:James, thank you very much. Thank you.

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11:51If you take the world's top 100 tech companies divided up into regions, what you'll notice is that European companies account for only six of that 100. American companies make up about 56 and Chinese companies about 16. Guy Scriven is our global business writer. What this tells you is something that's been well known for a long time. Europe is a laggard when it comes to creating tech giants. But more recently, we've seen that Europe now has a chance to close that gap. Well, let's start with why that gap exists in the first place. There's plenty of people, plenty of money, plenty of talent. Yeah, that's exactly right.

12:35In a sense, Europe is a bigger consumer market than America. If you add in the EU, Norway and Britain, there's over 500 million people there. Its problem is that it's divided up by different languages, different cultures, different sets of rules and laws. And that makes it really hard for companies to scale in the same way that they can in America or China. Another problem related to the fragmentation is that Europe has rather shallow capital markets. And that means if you're a tech company trying to grow fast, it's harder to get the cash that you need to invest. But you hinted that something's changing.

13:14There's hope to close the gap. Talk me through it. Yeah, there's hope on the horizon. So probably two really big things are happening. The first thing is that China and America have been making quite big mistakes when it comes to nurturing their smaller tech companies in the last few years. And the second thing that's happening is that the few tech successes that Europe has had in the past decade or so are starting to help to nurture new companies and invest in them. And that's creating a kind of ecosystem and helping what techies like to call the flywheel get spinning. So coming back to the decision making in America and China, what do you mean by that?

13:56So start with America. One of the big problems that Europe's realized in the past few years is that the Trump administration has basically become quite an unreliable ally. And that's meant that lots of European governments and to some extent European businesses are more worried about using American technology for everything they do. I heard this from a lot of European startup founders, that they were getting more business from European companies and to some extent from European governments that were worried about being overly reliant on American tech. So that's one way in which American missteps are helping European tech companies.

14:37Another way has to do with the flows of talent. There's long been a brain drain on European tech talent traveling to America to go to Silicon Valley because the opportunities were better there. That brain drain seems to have started to reverse itself. And so if you speak to European tech companies, they say it's become easier to hire top American talent into Europe. If you look east from Europe, the mistake that China has made is that the government is getting really very involved in the tech ecosystem. It's handing out subsidies to industries that it thinks are particularly strategic on a much bigger scale than the subsidies in the West.

15:21It's putting its thumb on the scales in lots of different ways. This is driving out private capital. And as a result, China's share of venture capital investment has actually fallen in the past five years or so. And some of that capital we think is flowing to Europe instead. So broadly, a lot of talent from America, a lot of money that might have otherwise gone into China coming to Europe. How are European techies responding to that opportunity that they're presented with? Well, one thing that's happened in Europe, I think, is that the European tech ecosystem has just become a bit older. And one of the things that's meant is that past European success stories, companies like Klarna and Spotify and Revolut, their founders, who are now millionaires and billionaires, have been able to invest their money back into the European tech ecosystem.

16:19And that is helping with a kind of flywheel to get spinning. So that's one thing which is happening. Another thing which is happening is that these kind of successful tech companies are also creating more startups as well. I read a statistic that former employees of Klarna have created something like 60 different startups. And so this is something you see all the time in Silicon Valley. It's been happening for decades in the Valley. But in Europe, it's a reasonably new thing that's happening. And it's a new phenomenon. And it gives people a hope that Europe could grasp this opportunity in terms of becoming a tech power.

16:58So what's the outcome of all of this, do you think? Does Europe rise to the level of America or China in the tech stakes? No, probably not at any time soon, right? We said at the beginning, Europe has far fewer big tech companies. If you look at new exciting technologies like AI, it also seems way behind in a lot of the important parts of that, right? So I think it only produced two of the really exciting frontier models out of about 100 in 2025. So in areas like AI model making, it seems to be falling behind. But there are particular bright spots in Europe. and we looked at three. So one is climate tech, another is defence tech and another is deep tech.

17:44And these are areas which seem to be particularly promising for Europe in various ways. So if you look at the climate tech spending in Europe, the total amount of venture investment a few years ago was about a quarter of what was happening in America and Europe is catching up there. So now it's about half. So there's promising opportunities there, for instance. And what about deep tech and defense tech? Also, what's deep tech? The best definition is that it's a kind of business where the majority of the risk is scientific rather than in the business model. So you're actually trying to invent something new rather than making a business-to-business software platform the right product to sell to HR departments.

18:29So like quantum computing, that kind of thing? Yeah, quantum computing, fusion energy, that kind of thing, where the kind of science is somewhat unproven at this point. So deep tech and defense tech are two of the other kind of big opportunity areas. Defense tech has really got a boost again from America as Trump seems like less and less of a reliable ally to NATO. European governments have been increasing their spending. So that's jumped about 40 % between 2023 and 2025. and that's created a whole load of opportunities for these new defense tech startups. And these are companies like Helsing, which make drones, Quantum Systems, which is another drone maker, and there's a whole bunch of them that are trying to benefit from the increase in European defense budgets.

19:19So not trying to take on America directly, but definitely Europe seems to be more likely than before to find its deeply techie niches. Yeah, that's right. This all could go wrong. There's plenty of investors I spoke to who've been investing in European tech for decades, and they say that every few years, there's a new European horizon in tech. So everything could fall apart. But with that caveat, it does look much more promising for European tech than it did just a few years ago. And particularly with the state of America and China at the moment, there are plenty of reasons to be optimistic about where European tech might be in five, ten years from now.

19:56Thanks very much for your time, Guy. Thank you, Jason.

20:09Wine is a simple product. Yeast converts the sugar and grape juice into alcohol and carbon dioxide through fermentation.

20:17Rosie Blau:John Fasman, our senior culture correspondent, is standing in for our obituaries editor.

20:25People have been making it, or for much of human history, allowing it to be made by nature, for more than 8 ,000 years. After the flood, Noah planted a vineyard. Jesus' first miracle was turning water into wine. Nearly a millennium ago, Omar Khayyam, a Persian mathematician, astronomer, and poet, asserted that wilderness would be paradise, with just a jug of wine, a loaf of bread, and thou beside me singing. And yet most of it, probably most of the wine ever drunk from most of human history, was not very good. Nature takes a long time to turn juice into wine. Sometimes what it makes is delicious, but sometimes it's undrinkable, or at best generously called complex.

21:09Some consider this part of wine's romance. It is, after all, a living thing, as people are. Michel Roland had little patience for such starry-eyed babble. Wine is an agricultural product made by human hands, and like anything else people make, it could be improved. Which is not to say that he scorned the romance and lineage of wine, especially French wine. He was, after all, born into a family of vintners in Pomerol, on Bordeaux's right bank. His grandparents founded Chateau Le Bon Pasteur, which still produces velvety, elegant reds, and he spent his school holidays riding the tractor and helping with the harvest.