Xi’s headaches

Problems are multiplying for Chinese President Xi [View in browser]( [Bloomberg]( Welcome to Balance of Power, bringing you the latest in global politics. If you haven’t yet, sign up [here](. One year ago, President Xi Jinping was embarking on the first week of a precedent-defying third term that many analysts saw as a stability booster, as power coalesced around his loyalist team. The [abrupt ouster of Xi’s defense minister]( this week is the latest example of how, from personnel shocks to an economic slump, the Chinese leader’s extended rule hasn’t been as smooth as predicted. Li Shangfu’s removal after seven months made him the shortest-serving defense minister in China’s history — matching the unenviable record set by Qin Gang when he was ousted as foreign minister in July. Xi has also removed the top generals overseeing China’s secretive nuclear arsenal, while the military has launched a corruption probe into the hardware procurement division going back more than five years, suggesting more purges ahead. The dismissals come as Xi makes rare economic moves. China’s most powerful leader since Mao Zedong yesterday publicly visited the nation’s central bank for the first time since taking power in 2012. That was seen as a telling symbol of the attention he is paying to China’s economy, as it battles a grinding property crisis, a crunch in local government debt and the lingering threat of deflation. On the same day, China increased its headline fiscal deficit to the largest in three decades and unveiled 1 trillion yuan ($137 billion) in additional sovereign debt that marked a shift from its traditional growth model. That slowdown in growth has broader consequences: China is no longer set to eclipse the US as the world’s biggest economy anytime soon. As Xi’s rivalry with the US continues to dominate his foreign policy, that only adds to the Chinese leader’s long list of problems. — [Jenni Marsh]( WATCH: Bloomberg Originals look at why China’s slowdown could send ripples around the world. Source: Bloomberg Global Must Reads Diplomatic efforts continued to avert a [wider Middle East conflagration](, with US President Joe Biden and Saudi Arabian Crown Prince Mohammed bin Salman discussing the Israel-Hamas war and more European leaders visiting the region. At the same time, the head of the Iranian-backed Lebanese militia Hezbollah met with senior members of Hamas and Palestinian Islamic Jihad in Lebanon and focused on “what the resistance axis must do at this sensitive stage.” Ukraine’s military has formed a battalion of soldiers composed entirely of Russian citizens who want to fight against President Vladimir Putin’s invasion. As Daryna Krasnolutska reports, the 60-strong [Sibir (Siberia) battalion includes Russians]( and people from ethnic minorities including Yakuts and Buryats in eastern Siberia who said they wanted independence from Moscow and viewed a Ukrainian victory as a step toward that goal. Sibir Battalion members participate in military exercises. Photographer: Andrew Kravchenko/Bloomberg The newest candidate to be speaker of the US House is one of former President Donald Trump’s most outspoken allies in his efforts to overturn the 2020 presidential election. Republicans plan a vote today on Mike Johnson of Louisiana, whose nomination marked the latest twist in a [three-week saga]( that has prevented action on emergency aid to Israel and Ukraine, and on heading off a mid-November government shutdown. Poland’s Donald Tusk will meet European Union leaders in Brussels this week as the likely new prime minister moves to rebuild the nation’s [frayed relationship]( with the bloc and unlock more than €35 billion ($37 billion) in financial aid. While it may be weeks until Tusk forms a government, the former European Council chief will meet European Commission President Ursula von der Leyen today before EU leaders gather for a summit. President Joko Widodo’s son was named as a running mate by one of [three frontrunners vying]( to become Indonesia’s next leader in Feb. 14 elections. The winner will need to manage the world’s largest Muslim-majority nation’s resources, balance competing US and Chinese interests and decide whether to continue with the construction of a new capital in Borneo. Biden’s reelection fundraising operation has [gotten a powerful assist]( from Democratic governors, who have helped him amass a record $91 million war chest a year ahead of the presidential vote. The EU is the only region where rule of law standards [have held more or less steady]( amid a continued erosion over the past year, according to a major index tracking the issue globally. Japan’s Supreme Court ruled that the government [cannot require transgender people]( to undergo surgery in order to change their legal gender, a decision that brings the country in line with many other advanced democracies. Washington Dispatch The Senate Judiciary Committee today will continue its inquiry into the dangers facing migrant children who enter the US unaccompanied, a concern that intertwines two issues: immigration and labor shortages. Earlier this year, the US Department of Labor reported that there had been a 69% “increase in children being employed illegally by companies” since 2018. That touched off a political firestorm, with Democrats demanding more resources to police employers. Yet in some states, Republican lawmakers are trying to make it easier to hire scarce workers. Senator Dick Durbin, an Illinois Democrat and the committee’s chair, along with 11 colleagues cited a New York Times report on child labor in a letter this week to Acting Labor Secretary Julie Su. They wrote that they appreciated the Biden administration’s efforts to “eliminate this scourge.” They added, however, that “these recent reports highlight the need to take further steps to protect children from dangerous employment that could result in injury and even death.” One thing to watch today: The Senate Foreign Relations Committee plans to vote on former Treasury Secretary Jack Lew’s nomination as the US ambassador to Israel. [Sign up for the Washington Edition newsletter]( for more from the US capital and watch Balance of Power at 5pm ET weekdays on Bloomberg Television. Chart of the Day Zimbabwe lost its unenviable position of having [the world’s highest interest rate]( to Argentina, after slashing borrowing costs to help boost economic growth. Unlike Argentina, which raised rates on Oct. 12 to curb price growth that’s running at 138%, government interventions in Zimbabwe have enabled it to loosen policy. And Finally Iceland may rank at the top globally in terms of gender parity, but Prime Minister Katrin Jakobsdottir joined other women on a strike to [call attention to the remaining inequalities]( in their society. Yesterday’s protest, encouraging women to stop working for a day, was intended to highlight challenges including a gender pay gap, the uneven burden of unpaid work in the home and violence that still afflicts women disproportionately. Women gather yesterday in Reykjavik. 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