Analysts say that the biggest stumbling block to China’s economic recovery, which is sinking into a quagmire, is President Xi Jinping (pictured). It is said that economic vitality is diminished with economic policies that deviate from pragmatism and strong anti-Western consciousness, obsessed with socialist ideology and ‘shared wealth’.
The US Wall Street Journal ( WSJ ) reported on the 28th (local time), “During the spread of the new coronavirus infection (Corona 19), Western countries such as the United States (relaxed their finances) came out of the recession tunnel through various consumption support and welfare policies, but China is still in place,” he analyzed.
“Growth seems possible if China rapidly transforms into a consumption-led economy like the United States,” he said.
In a speech on the 15th, when Biguiyuan, a large real estate developer (Country Garden), was on the verge of default, Xi said, “The West has pursued maximization of capital gains instead of serving the interests of the vast majority of the people, resulting in a gap between the rich and the poor and polarization. . China will not go down that path,” he said, revealing his anti-Western consciousness.
On the 22nd, when the real estate crisis grew, he emphasized that “the huge ship called the Chinese economy will continue to ride the wind and cut through the waves.”
However, the market expressed doubts about the Chinese government’s ability to manage the crisis. Global economic experts surveyed by the US Bloomberg News on the 29th said China’s gross domestic product ( GDP) this year) was projected to increase by 0.1 percentage point to 5.1%. Moon Heung-ho, a professor at the Graduate School of International Studies at Hanyang University, diagnosed, “The rigidity that started in politics (to strengthen the one-person rule system) is affecting the economy,” and “All of China is watching President Xi.”
“The obsession with common wealth (Let’s live well together) is the cause of the problem.”
Moon Heung-ho, a professor at the Graduate School of International Studies at Hanyang University, is diagnosing the economic crisis in China. Western media and Chinese experts, such as the Wall Street Journal ( WSJ ) in the United States, agree that Chinese President Xi Jinping’s one-man ruling system and rigidity have caused the current economic crisis. That he undermined economic vitality by focusing too much on uniform ‘zero corona’ quarantine, a common wealth policy that emphasizes distribution over growth, and competition for supremacy with the United States for his long-term rule. In particular, the dominant analysis is that strengthening real estate regulations that supported domestic demand was the biggest failure in a situation where the virtuous cycle leading to ‘industrialization → population inflow to large cities → booming consumption and real estate’ was broken. In the end, ‘Xi Jinping risk’ can be summarized into ‘three anti-consumption-led growth, anti-Western, anti-pragmatic use’.
● “The problem is Xi Jinping”When major developed countries, such as the United States, faced economic downturns caused by the global financial crisis in 2008 and the COVID-19 pandemic, they launched extensive consumption incentives to revive domestic demand. However, China has yet to come up with a ‘decisive shot’ to resolve the current crisis. The WSJ diagnosed on the 27th (local time) that this was the result of President Xi’s strong resistance to ‘Western-style consumption-led growth’ such as household cash support .
Unlike the United States, where consumption accounts for two-thirds of the economy, China is “increasing domestic demand” but is passive, concerned about polarization and dissent among the working class. The size of cash support through the social security system is less than 10% of gross domestic product ( GDP ). Lianhe Zhaobo, a Singaporean media outlet, pointed out that “the root of China’s economic crisis is politics,” and “it is impossible to develop a free market economy with the ideology of the Communist Party.”
In August 2021, President Xi put the public wealth at the forefront and severely clamped down on the real estate, big tech, and private education industries where wealth was concentrated. This has become a decisive opportunity for domestic and foreign companies to reduce their investment in China. Due to the corruption-fighting investigation aimed at eliminating political opponents, a large portion of wealthy people’s funds also flowed abroad. In the end, President Xi himself has frozen investment, an important axis of the growth engine.
● Absence of competent economic officialsThere are many analyzes that President Xi’s appearance different from past leaders who neutralized China’s unique collective leadership system and gave a significant portion of economic power to the prime minister also exacerbated the crisis. Premier Zhu Rongji under President Jiang Zemin and Premier Wen Jiabao under President Hu Jintao exercised considerable power in the economic field.
On the other hand, as the one-person ruling system accelerated after President Xi took office, the presence of the second-ranking prime minister has also faded. Former Prime Minister Li Keqiang (李克强), who has a master’s degree in economics from Peking University, showed some of his colors in the first term of Xi’s presidency, but in the second term, he served as a virtual “plant prime minister”.
In particular, former Prime Minister Li earned President Xi’s hatred by saying that “there are 600 million poor people in China” at a press conference메이저사이트 for domestic and foreign media in June 2020, when the pandemic was in full swing. It was an open refutation of the ‘Shaokang society’ (a society in which all citizens enjoy a comfortable and affluent life), which President Xi regards as his greatest achievement.
Li Chang, incumbent prime minister and former secretary of the Shanghai Communist Party, completely shut down Shanghai, a large city with a population of 25 million, in the second quarter of last year (April to June), with the negative economic impact almost invisible. As a result, it was the only one of China’s 31 provinces to record negative (-) growth at the time, and public sentiment was inflamed, but loyalty was recognized.
Professor Moon said, “The rigidity of Xi Jinping’s system is taking away China’s greatest strength, ‘pragmatism,'” and for past growth, ‘it doesn’t matter if it’s a black cat or a white cat (黑猫白猫)’ for past growth. He pointed out that the mindset of the Chinese leadership has now become rigid like a “red cat.”
The Chinese leadership’s ability to manage crises has been put to the test. Park Byung-gwang, head of the International Relations Research Department at the Institute for National Security Strategy, said, “The theory of ‘ Peak China ’ , which states that the Chinese economy will reach its peak and enter a downhill path, is true at this point. It is also difficult to develop new growth engines due to pressure from the United States.”
However, some interpret that it is a transitional situation in which China is trying to improve the fundamentals of its economy. Yang Gap-yong, Senior Research Fellow at the Institute for National Security Strategy, said, “At a time when investment and consumption are shrinking due to uncertainty about the future, how to move from manufacturing to science, technology and service-oriented economy was presented at a plenary meeting of the Central Committee of the Communist Party of China in October. This will be revealed,” he predicted.