Square dealing: Jiang Zemin dies

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Hello and welcome to the Intelligence from the Economist. Today from London. I'm your host, Jason Palmer. Every weekday we provide a fresh perspective on the events shaping your world. Sufferers of Alzheimer's disease and their families have had one disappointment after another for years. As candidate drugs have failed to make it to market, we look at a genuinely promising new treatment that seems at last to slow the march of Alzheimer's. And it's time for our annual cost of living index, analyzing the most expensive and the cheapest cities in the world. As you might expect, inflation has driven up costs in most places, but not all. And there's a new city at the top of the list. First up, though, Jiang Zemin, a former leader of China's Communist Party, has died, aged 96 in Tiananmen Square today. The Chinese flag was put at half mast in that Same Square in 1989. Henry had been protests that were as remarkable in their time as today's demonstrations in China are. People brazenly openly calling for the leader Deng xiaoping, to fall. Mr. Jiang came to power after those protests were put to a brutal, deadly end. For the next 13 years, he oversaw transformative reforms to China's economy, but not many to its politics. All the while, the figure he cut on the world stage seemed as unlikely as his rise to power had been.

The Tiananmen Square protests were a crucial moment in the succession struggle surrounding Deng Xiaoping.

James Miles is our China writer at large.

There was a huge rift in the leadership between reformers and conservatives, and basically this was all about who was going to command the ship once dung had faded from the scene.

Heading down the road was a hazardous business, but hundreds of people cheered as buses were set alight and army trucks caught fire, too.

And these divisions were what created the atmosphere that allowed the protests to gather steam. Leaders were bickering so much and dithering that they didn't step in quickly to prevent the demonstrations from growing. I was in the square at the time covering that unrest as a journalist. And people in China, for the first time since the Mao era, were coming out and calling for the overthrow of a serving leader, openly describing him as a dictator. But even then in Tiananmen Square, you certainly wouldn't have heard people say, well, what about Jiang Zemin? Jiang Zemin didn't really have an illustrious start as a politician. He didn't look like a man of great ambition. He was part of the nomenclature, if you like, of China, a technocrat. And shortly after the Communist Party came to power, that was the kind of role he. He played. He was sent off to Moscow, in fact, to work in the Stalin automobile factory. Later on became a government minister in charge of technology. And he was then in Shanghai, the party chief there, cracking down on dissent. He'd closed down a liberal newspaper. Maybe that's what endeared him to Deng Xiaoping. When it was all over, when the massacre had been carried out in Beijing, he looked like a tough sort of somebody who spoke English, who could deal with foreigners, and perhaps somebody who could get economic reforms back on track, but keep the lid on any dissent. A compromise figure, perhaps.

And so did he fulfil those expectations to calm things, to reform things, to be a compromise figure?

Well, he certainly fulfilled Deng Xiaoping's expectations when it came to ensuring that there were no further protests. He successfully stifled all dissent in the aftermath of Tiananmen. But as for economic reform, that was more problematic. There were hardliners in the party then who were arguing that the real cause of Tiananmen was the way in which the country's economy was liberalizing and that state control over the economy was absolutely necessary to prevent this kind of thing happening again. And it looked like Jiang Zemin was siding with that camp. But lo and behold, Jiang veered in the other direction. The boom, the extraordinary economic growth that we saw throughout the rest of that decade dated from 1992. And the rest, as they say, is history.

So that was the kind of ideological journey that he took. But what was he like as a person, as a leader?

Well, he was a very unusual figure. We had thought of him as a somewhat grey apparatchik before he took power, but it turned out he was much more colourful than that. And he was a bit of a show off. He loved having the stage, he loved to use his English. He loved to show when he met foreign leaders that he had a command of the language. And one of his Favourite tricks, if you like, in such meetings was to recite snatches of the Gettysburg Address by Abraham Lincoln. Four score and seven years ago, our fathers brought forth on this continent a new nation conceived in liberally and dedicated to proposition that all men are created equal. And it went further than reciting from American speeches. He also loved to sing, and much to the astonishment of foreign leaders who he was entertaining, he would burst into song. And there was an example in November 1996 when he joined the president of the the Philippines, Fidel Ramos, at that time in a rendering of Love Me Tender. And he followed up his singing by dancing a waltz.

This does seem to stand in pretty sharp contrast with the Chinese leader we know now, Xi Jinping.

Well, yes, and in one very conspicuous way, and that was his willingness not only to entertain foreign leaders in this way, but also to engage them head on in public discussion about some of those issues that were constantly on Westerners minds. I would like to speak a few words in addition, this question. He famously debated with President Clinton at the White House in front of the press about human rights. The United States recognizes that on so.

Many issues.

China is on the right side of history and we welcome it.

But on this issue, we believe the.

Policy of the government is on the.

Wrong side of history.

And Jiang Zemin was not afraid either to show an emotional side, which you rarely see in public from Chinese leaders. In 2000, there was a famous occasion when he was being peppered with questions by journalists from Hong Kong and he turned on them, got up, he was on his feet, remonstrating with them and clearly showing his anger, calling the journalist naive. Too simple, sometimes naive. So he was a leader quite unlike Xi Jinping, who is remote, never receives interviews from foreign journalists. Chinese people have very little understanding of his character and what he's like behind closed doors.

And Mr. Zhang's death comes at a time that's obviously very tricky for Xi Jinping. Do you think this death plays into it at all? Does there's anything about his legacy figure in today?

Well, this is a hugely sensitive moment. The protests we've been seeing in several cities in China have been the biggest display of discontent over such a wide area since the Tiananmen Square protests of 1989. And you have to bear in mind that those protests 33 years ago were triggered by the death of a former General secretary, Hu Yaobang, because students saw Hu Yaobang as a reformist leader and used mourning for him initially as a cover for their bigger political movement. I think this time we are highly Unlikely to see a similar dynamic. Jiang Zemin is a figure of fun, I think among many Chinese. They don't perhaps think of him in a particularly negative way, but I doubt that there is going to be a huge outpouring of public sympathy for him this time. I think what we're likely to see is jokes being made online about Jiang Zemin. I think those who've been involved in the recent protests in China will relish a chance to poke at at another Chinese leader as well as Xi Jinping. But I doubt that this will be a huge catalyst for the unrest. And given the way that the authorities have been stepping up pressure on protesters, deterring unrest with a massive police presence in major cities, I think this is a difficult moment for China's leadership, certainly, but also a very, very difficult moment for anyone planning to stage demonstrations.

So you don't think his death will make much of a difference for the protesters then? What about for Mr. Xi himself? How will he reflect on Jiang's life and legacy?

Well, I don't think he will be greatly saddened by Jiang Zemin's passing. For much of the past 10 years of Xi Jinping's rule, what he's actually been trying to do is push back against the influence of elders. As Xi Jinping saw it, the China that he took over in 2012 was a country that was really at risk of following the same path as the the Soviet Union. It was that serious. And Jiang Zemin's rule and the rule of the next leader, Hu Jintao, had been characterized by a kind of laxity, widespread corruption, a lack of discipline within the Communist Party. And that's what Xi Jinping has been trying to change, ensure that the party is an efficient fighting machine that can quickly respond to the will of the supreme leader.

Leader.

A number of those who have been purged during Xi Jinping's anti corruption campaign have been close to Jiang Zemin. And so I think this is a moment when Xi Jinping will be thinking, at long last, I'm the one who is completely in charge. The elders have gone.

Thanks very much for joining us, James.

Thank you, Jason.

We hope you enjoy listening to the intelligence as much as we enjoy making it. We're always thinking of ways to improve and to do that. We'd like to know more about you. Do us a little favor and fill out a short questionnaire@examiner.com intelligencesurvey the link is in the show Notes. Thanks a lot. Broadly, life expectancy is on the up globally, which means the diseases of old age will be too. Between now and 2050, the World Health Organization estimates there will be huge increases in the number of people with dementia, from 55 million to 139 million. The biggest cause of dementia is Alzheimer's disease, and the pharmaceutical push against that has been littered with failures. But the latest candidate treatment might just break that trend.

So what we've just heard is that a drug called lecanemab has shown some promising results in a trial of whether or not it can hold back the ravages of Alzheimer's disease.

Natasha Loder is the Economist's Health Policy editor.

The makers of the drug conducted a trial on about 1700 participants, and they were, crucially in the early stages of Alzheimer's. And the results have just been published showing that after taking this drug for 18 months, it had slowed the progression of acute group of symptoms by about a quarter.

And I feel as if there have been many studies in the past, and some, in fact, that we've talked about, that showed promising results of this sort in early clinical trials. Why are people excited about this one?

Well, you're right, actually, Jason. We have heard this story before, but this time it's real. Alzheimer's has been a really difficult disease to tackle. Between about 1998 and 2017, I think about $40 billion has been spent on developing more than 100 Alzheimer' drugs. They've been looking at all sorts of mechanisms, including what are known as anti amyloid drugs such as lecanumab, for years, and broadly speaking, nothing much has happened. We did have a trial of a drug recently that did look like it had an effect, but there was an argument about whether that effect was real. So roll forward to today and the results are fairly conclusive. The drug has shown to two things. One is a modest but measurable slowing of progression of Alzheimer's. And then the other is that it's really starting to indicate that actually this idea that we had called the amyloid hypothesis may indeed be correct, because that's what this drug is aimed at targeting.

Okay, hold on. Tell me about the hypothesis.

The amyloid hypothesis is the idea that these sticky plaques called amyloid, are, are actually causing the dementia in Alzheimer's. And the lecanemab drug is a drug that attaches itself to these plaques and attracts the attention of the immune system, which then clear the protein away. This drug measurably does a good job of removing these plaques. And so what we're learning is then that this mechanism in the brain is a useful one to target, even though nothing we've tried before has worked.

And so the other thing about early clinical trial results is the question of how then that translates into a drug you can pull off a shelf. What does that look like for this drug?

Well, it's really not clear at all yet. We shouldn't all expect that this drug is going to arrive on the market and be really widely distributed. One thing we need to get a handle on is the side effects. There were quite a few people who had swelling and bleeding of the brain on this drug. The other thing is that although reducing the symptoms of Alzheimer's by quarter may sound like a lot, what they're measuring is a sort of composite measure of different aspects of a person's life that has been changed. And, you know, some experts are questioning how clinically meaningful this drug will be in the real world. And then lastly, one of the things that is necessary for this drug, and potentially for many Alzheimer's drugs, is going to be to give it early, because that's what was seen as effective in this trial. But Alzheimer's is actually very hard to diagnose early. You can use something called positron emission tomography, you can take a sample of cerebrospinal fluid, but it's not an easy thing to diagnose just by doctors routinely. So, I mean, there's quite a few questions about how this will translate into use. And then on top of that, the drug company is likely to want quite, quite a lot of money for it. And it will remain to be seen whether the amount of money they want for it is commensurate with the clinical results that we actually see in practice.

But surely confirming at least, or appearing to confirm the mechanism, is a positive step that might even lead to other therapies?

Yeah, it will. And this opens the door on Alzheimer's just a crack, but I would caution that there is really a long journey ahead. And while it's really useful to know that the amyloid hypothesis is may be correct, we also now suspect there are actually many other factors at play in Alzheimer's and dementia more broadly. There could be blood vessels that fail, inflammation in the brain can be an issue. So all those factors are being explored with new drugs. And I think what we can look forward to is quite a period of innovation. I think you'll see the success of this drugs will stimulate more investment, and five years from now, I think the number of treatment options available will be quite different to today. So that brings hope for many people with family members who may be at risk from Alzheimer's.

Natasha, thanks very much. For joining us.

Thank you, Jason.

That rampant inflation we keep talking about on the show is leading to crippling changes in the cost of living all over the world.

The cost of living in the UK.

Is rising and it's changing people's lives. Australia faces rising inflation and interest rates.

Dozens of people in Italy burn their gas and electricity bills in protest of skyrocketing costs that they say they simply cannot afford.

The typical American household is now spending nearly $500 more every month on the same goods and services.

But not everywhere is feeling the same sharp squeeze. There are even places where it's got cheaper to live this year. Figuring out which is which is the annual job of our sister organization, the Economist Intelligence Unit, or eiu, which which has just come out with its ranking of the world's most expensive and cheapest places to live.

So the EIU's world's cost of Living Survey tracks the prices of about 200 goods and services in 172 cities worldwide. And on average this year, we found that the cost of living prices have risen by 8.1% year on year in local currency terms.

Anna Nichols is a managing editor at the of Age.

And that's actually the highest inflation rate that we've ever recorded. So we have about 20 years of digital data, and the survey itself has been going for about 30 years. We've also seen some really significant movements in our rankings of all of those 172 cities in terms of where is the most expensive place to live. And that's mainly not actually because of the inflation rate, but mainly because of the strong dollar. So to compare all these cities, we have to convert everything into a common currency. And so we compare all of the prices to those in New York, and.

That 8.1% is the sort of the headline number. Where, though, has that rise in inflation, that rise in cost of living, been felt the most?

Well, first of all, I just want to mention that Kiev in Ukraine we had to actually cut out from this year's survey because we couldn't hold the survey there because of the war. So the highest inflation rate, again is in Venezuela, so Caracas. But that's kind of habitual thing. It's had hyperinflation for years. And in fact, this year it was slightly slower in terms of the cities that are moving up the rankings, though, the biggest movers were in Russia, so Moscow and St. Petersburg. St. Petersburg shot up the ranking by 88 and 70 places, respectively. And that's largely because of the strength of the ruble. It collapsed, obviously, after Russia invaded Ukraine and the Western sanctions were imposed. But then there were capital controls imposed, import suppression and the conversion of European gas payments into rubles. And all of that meant that the ruble got stronger and therefore those cities shot up our rankings. Outside Russia, that strong dollar came into play. So actually, U.S. cities, by and large, went up the rankings quite strongly. In fact, six of the top 10 global movers up the rankings were in the U.S. so cities like Atlanta, San Diego, Boston all went up.

So do all of these conditions and the rampant inflation change the sort of top most expensive cities in the world in this year's list?

So the usual suspects have basically kind of moved around a little bit, and the really big news is that New York is actually at the top of the rankings for the very first time. So it's up from fifth place last year to first is actually tying with Singapore, which is a habitual city at the top of the rankings. So it's back in pole position for the eighth time in 10 years. The inflation rates in those cities are not terribly high in comparison to other places, so they're just over 5%, though that is definitely high by historic standards. But the key point is that their currencies are strong, including the dollar, obviously. And those two cities have therefore pushed Tel Aviv in Israel, which was top in the rankings last year, down into third place.

And so, picking apart that headline inflation number that's driving so much of what's going on here, what exactly is it that's got so much more expensive?

Well, that's been quite interesting because actually there's really different inflation rates for different goods this time round. So the biggest increase by far was the price of a liter of petrol, which has risen by 22% on average across all of those cities. And obviously that's partly because oil prices are priced in dollars and therefore it gets the dollar boost. But it's also because of all the blockages that we've heard about, related partly to the war in Ukraine and the sanctions on Russia. By the same token, we've seen prices for gas and electricity go up quite a lot worldwide, but particularly in Western Europe. So those were up by 29% on average in European cities, as the region tries to wean itself off Russian energy. And then the other area where we saw quite strong inflation is for food and household goods. So again, hit by some of those trade restrictions, particularly the blockages on wheat exports from Ukraine and the higher commodity prices. But also, and this is quite interesting, the prices for recreational goods and services were quite subdued in comparison so that suggested to us that consumers, because they were worried about the cost of living crisis, were focusing their spending on essentials like food and energy.

And so did any cities buck the trend actually get cheaper to live in?

There was only one city that actually got cheaper, which was Osaka in Japan. And that's partly because Japan has managed to maintain relatively strong currency while keeping its interest rates relatively low. The cheapest cities in our rankings, though, are actually Damascus, Tripoli and Tehran. And that hasn't changed very much. They're habitually towards the bottom of our rankings because they have weak economies, weak currencies, and not much local purchasing power.

And in looking through the lists and the data, do you have some reading of the tea leaves in terms of what's going to happen when all this come next year?

Well, EIU overall, we always compare our W coal inflation rates with the national inflation rates, and normally they correspond relatively closely, though obviously cities have different trajectories as well. But overall, EIU is forecasting that global consumer price inflation is going to fall from an average of 9.4% year 2022 to 6.5% in 2023. So that's still really high in historic terms. But we'll definitely expect some of that kind of easing of prices to be reflected in next year's survey. So that should be a little bit of relief for households.

Anna, thanks very much for your time.

Well, thank you very much for having me on.

That's all for this episode of the Intelligence. Don't forget to let us know what you think of the show by taking our listener survey@economist.com intelligencesurvey we'll see you back here tomorrow. Sam.