[Column] China’s insistence on “bright prospects” is stifling its economy

Posted on : 2023-12-21 17:09 KST Modified on : 2023-12-21 17:09 KST
The Communist Party’s interventions in every aspect of the economy are stifling employment
Illustration by Jaewoogy@chol.com
Illustration by Jaewoogy@chol.com

Chinese leaders are answering slow economic growth with calls to center the conversation around the “bright prospects” of the country’s economy.

At an annual economic work conference chaired by President Xi Jinping last week, officials were instructed to play up a bright view of the Chinese economy and step up public relations campaigns to guide public opinion and boost confidence that the country’s economy is doing well.

On Friday, the Ministry of State Security posted on its official WeChat account that “various clichés intended to undermine China’s economy” are “attempt[s] to strategically contain and suppress China.”

The Ministry of State Security is an intelligence and counterintelligence organization similar to South Korea’s National Intelligence Service or the American CIA. In its public post, the ministry essentially signaled that the spread of rhetoric that China is in an economic crisis will be considered a national security threat and be subject to crackdowns and punishment.

Since the ministry’s announcement, social media accounts of famous economic and financial experts have vanished, and economic analysis articles have been deleted one after another. A close inspection of which articles were deleted sheds light on the problems the Chinese economy faces and the concerns they arouse.

Earlier this month, the economy-focused magazine Caijing published an article titled “Ten Questions About the Private Economy,” which featured interview with four prominent Chinese economists: Huang Qifan, the former mayor of Chongqing; Liu Shijin, the former vice president of the State Council Development Research Center; Shi Jinchuan, the dean of the Academy of Financial Research of Zhejiang University; and Zhang Jun, dean of the School of Economics at Fudan University.

Each of the economists were asked the following questions: Why are many private businesses struggling right now? Why do “involution” and overcapacity affect so many different industries and professions? What are the systemic problems in the development of the private economy? What kind of relationship should the government and businesses have? How do you see the trend of foreign capital shifting away from mainland China?

The four experts gave detailed diagnoses of the problems in China’s policies that are causing enterprises to struggle and foreign capital to shift away, but the article was soon deleted.

Also earlier this month, Liu Jipeng, the dean of the Capital Finance Institute at China University of Political Science and Law, had his Weibo account shut down after criticizing the stalled reform of China’s capital market, which he said had resulted in “a market with an unfair distribution of wealth and a lack of justice.”

The Chinese economy has many strengths when taken on its own, including its ability to manufacture advanced products such as batteries and electric vehicles, and its control over key resources. But the Communist Party’s interventions in every aspect of the economy, such as by focusing investment on state-owned enterprises, punishing private entrepreneurs, and raising business concerns with anti-espionage laws, are engendering rising unemployment and deflation.

The politics of cracking down on frank discussions of these real-world problems and labeling them as security threats in order to advocate the “bright prospects” of the Chinese economy has heavy repercussions for the economy.

Monday marked the 45th anniversary of China’s economic miracle. On Dec. 18, 1978, the third plenary session of the 11th Central Committee of the Communist Party of China, led by Deng Xiaoping, decided to open up its borders and introduce a market economy. Building on the lessons of the Cultural Revolution, it also put in place measures to prevent the cult of personality and the monopolization of power by a single individual.

Reducing party and state control and intervention in the economic sphere to allow for greater private sector autonomy while still maintaining the political control of the Communist Party was at the heart of the reform and opening up, and what became the base for the country’s rapid growth.

Now, many fear that the opposite will happen. The 45th anniversary of the economic miracle has passed without notice, and only the 130th anniversary of Mao Zedong’s birth (Dec. 26) is being celebrated with fanfare.

By Park Min-hee, editorial writer

Please direct questions or comments to [english@hani.co.kr]

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