China's Next Leader Absent, but Is the Talk Overblown?

China’s leader-in-waiting, Xi Jinping, has been missing from official engagements for days, sparking speculation over possible reasons behind his absence and what it could mean ahead of a key leadership change. Still, all the hype over Xi’s disappearance may be overblown, say some China watchers.

Chinese Vice President Xi Jinping
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Chinese Vice President Xi Jinping

Over the past week, 59-year-old Xi has canceled official meetings with visiting foreign dignitaries such as U.S. Secretary of State Hilary Clinton and Singapore’s Prime Minister Lee Hsien Loong.

A scheduled photo session between Xi, China's Vice President, and Denmark’s visiting Prime Minister Helle Thorning-Schmidt on Monday in Beijing was also taken off the agenda.

Canceling meetings with foreign officials is unusual and with little official word as to Xi’s whereabouts, talk has abounded on the Internet and in the media on whether Xi’s disappearance is a sign that China’s once-a-decade leadership change, which is expected to start in mid-October, will be far from smooth.

A scandal earlier this year in which the wife of Bo Xilai, a former Communist Party higher flier tipped for top office, was given a suspended death sentencefor the murder of a British businessman, has also raised concerns about a smooth transition of power.

There have been some reports that Xi, who will officially succeed President Hu Jintao next March, is suffering from a bad back, and sources told Reuters on Tuesday that Xi is nursing an ailment. But without any clarity from Beijing the rumor mill appears to be swirling.

Still, Patrick Chovanec, Associate Professor at Tsinghua University, warns against reading too much into Xi’s absence.

“Just because Xi hasn’t turned up for a few meetings doesn’t mean the whole leadership is in crisis,” Chovanec said.

“There’s a small chance that something unusual may be going on, but at the same time we shouldn’t leap to any conclusions – we don’t know what’s going on, but it’s not usual in China to know what is going on,” he added.

China, the world’s second largest economy, is in the spotlight ahead of the leadership transition which comes at a time when economic growth is slowing faster than Beijing anticipated.

“Xi’s absence may be a minor blip but I can’t see that this will be a major stumbling block to the leadership transition,” said Justin Harper, Market Strategist at IG Markets in Singapore.

China does not like to offer too much information about its leaders and the current silence on Xi’s absence is just that, say China watchers.

“Being out for a week could be due to some innocuous reason, but as time goes on people will be keen for information on Xi’s absence,” Chovanec said.

According to IG Markets’ Harper, “This whole episode with Xi is a wake-up call that China is not as transparent as we, in the West, would like it to be.”

- By CNBC's Dhara Ranasinghe