The big business story this weekend was a political one: Xi Jinping’s selection for a third term, in an event that tea-leaf readers say signals Xi’s ruthless consolidation of power, as well as a shift toward greater focus on national security rather than economic development.

Since February, the leaders of global companies with large exposure to China have been quietly war-gaming what they would do if Xi, rather than Vladimir Putin, turned global aggressor, while those companies without such exposure have been celebrating that absence as a virtue. The weekend’s events only will reinforce those views.

At the same time, Fareed Zakaria correctly pointed out in his column in the Washington Post on Friday that China looks substantially weaker today economically than it did just a few years ago, thanks in part to its crackdown on some of its most successful companies, and to Xi’s zero-COVID policy. 

Fortune followers will know that the number of Chinese companies in the Fortune Global 500 continues to rise and now exceeds the number of American companies—a sign of a surging economy. But many of the top Chinese companies are state-owned enterprises that achieved that stature because of near monopolies in their home market. The few companies that have world-class status—if you had asked me a few years ago, I would have named three: Alibaba, Tencent, and Huawei—now face new constraints, with the first two crimped by Xi’s policies, while the third is restricted by Western fears of Xi’s ambitions. Zakaria compares China at the end of 2022 to Japan circa 1990—as having passed the peak of its economic power. And he says predictions that China will surpass the U.S. as an economic power—which have been common since the turn of the century—now seem to be on indefinite delay.

That doesn’t change the complicated calculus for Western companies with huge exposure to China—think Qualcomm, AMD, Apple, Starbucks, FedEx, Nike, and many more. They may wonder whether China’s economic problems raise the risk of a newly empowered Xi making an aggressive move.

More news below.

Alan Murray
@alansmurray
alan.murray@fortune.com

TOP NEWS

Chinese GDP

China’s quarterly GDP data was belatedly released this morning, having been held back in the context of Xi’s power consolidation. And it doesn’t look good: 3.9% expansion year on year, ahead of analyst forecasts but far below China’s full-year target of 5.5%. Cue selloffs on China’s markets. Investors were already unhappy at a lack of positive economic signals emanating from last week’s Communist Party congress. Financial Times

Venezuelan prisoner

The WSJ has an interview with Jose Pereira, an executive at Houston-based oil refiner Citgo, who was arrested in 2017 while on a business trip to Venezuela and was recently released in a prisoner swap with the U.S. “I never thought it could happen to me. It was like living in your own movie,” he said. “The suffering of our family was so bad, I didn’t care what was the tool to release us.” Wall Street Journal

Ready for Rishi?

Rishi Sunak seems likely to become the next British prime minister after former PM Boris Johnson scrapped his own return bid. Penny Mordaunt also remains in the running until this afternoon at least; perhaps longer if she clears a key threshold of support among lawmakers. Sunak, the country’s former finance minister, is perceived by some as a stabilizing choice at a time of utter chaos. However, it remains to be seen whether he can unite the riven Conservative Party. And with a not-voted-for return to austerity now in the cards after Liz Truss’s brief and economically catastrophic premiership, opposition calls for a general election continue to mount. Reuters

AROUND THE WATERCOOLER

Red Bull’s Dietrich Mateschitz, the Austrian billionaire who transformed F1, soccer, and energy drinks, dies at 78, by the Associated Press

The White House says the U.S. is strong enough to avoid a recession, but Jeff Bezos and Elon Musk think it’s already too late, by Steve Mollman

I proudly wake up at 8:59 a.m., one minute before starting my remote work job. There are thousands like me, and we don’t care what you think, by Jane Thier

New York’s struggle with the new Omicron variant BQ is trying to tell us something, by Erin Prater

‘Black Adam’ defeats poor reviews, lands biggest opening weekend since July as Dwayne Johnson finally plays a superhero, by the Associated Press

This edition of CEO Daily was edited by David Meyer.