What captures the imagination with Bo is that his sacking took place during the transition to what China calls the "next generation." The demotion of Bo is a victory for the forces of movement and reform in China as Bo represented a rear-guard action against the modernization of China.
China joined the World Trade Organization a little more than 10 years ago. The past decade has been relatively easy for China, especially compared with what the next decade likely holds. The new challenges are not just cyclical, relating to the slowing economy, local government debt (and SPVs), strength of the banking sector and the real estate sectors, but also more structural issues, like the work force set to peak in the next couple of years, rising wages (real and nominal) changing the competitive landscape and an economy well into the point of diminishing returns for fixed asset investment.
These new challenges make the forces of movement and reform in China more vulnerable. Like in Chicago, it is not always clear whether the forces of movement or order are "winning" and often there are pyrrhic victories that are quickly reversed. Investors need to continue to monitor the political developments in China and appreciate that all Communists are not the same in China just like Democrats aren't the same in Chicago.