He talked about “miracles that will impress the world” in the next decade. But during President Xi Jinping’s back-slapping speech to celebrate the 40th anniversary of China’s economic awakening, the devil was in the lack of detail.
Short on specifics, the general secretary of the Communist Party praised the people’s “hard work, wisdom and courage” in fulfilling late Paramount Leader Deng Xiaoping’s cherished dream in 1978 of “reform and opening up.”
As he sat down after the 90-minute address on Tuesday, the applause from the party faithful echoed around the Great Hall of the People. So did the deafening silence when it came to Xi’s vision of the next great leap forward.
“In the decades following China’s 1978 decision to reform and open, its growth was driven by demographics and structural adjustment – letting market logic reshape the economic landscape,” a report released by the Asia Society Policy Institute and the Rhodium Group stated.
“But in recent years, as the easier phase of development gave way to middle-income challenges, Beijing has attempted to reassert control over investment and markets. This was not the first choice. President Xi’s inaugural 2013 Third Plenum economic plan – while still couched in Communist Party nomenclature – was distinctly geared toward a decisive role for markets. Implementation of those goals, rather than aspiration, has been most lacking,” it added.
One crucial area which has suffered in Xi’s new phase of “opening up and reforms” is the private sector, the study pointed out.
Ballooning debt
During his first term in office, plans were rolled out to shake up the colossal state-owned sector, curb ballooning debt and promote policies to stimulate small- and medium-size businesses.
Opening up again was the mantra. But five years on, very little has changed. In fact, the situation has deteriorated, the Asia Society Policy Institute and the Rhodium Group pointed out.
“China’s private sector is shrinking for the first time in two decades – an extraordinary development contrary to the hopes seeded by the 2013 economic reform objectives and decades of talk about withdrawing the state from the marketplace,” the report revealed.
How this squares with Xi’s rallying call this week, when he highlighted the role of the “state economy” while promising to increase development of the “private sector,” is debatable.
But what came over crystal clear was that the CCP will still remain at the heart of “everything,” including the country’s centralized economic model.
Indeed, this approach is in stark contrast to voices inside the Party demanding reforms to be accelerated, particularly in the “private sector.”
“What we learned from the past 40 years is that we must insist on a market-oriented and law-based direction of reform,” Wu Jinglian, the influential pro-market economist, told the recent Chinese Economists 50 Forum.
Uncertain times
For Beijing, these are uncertain times as it grapples with a slowing economy while trying to hammer out a deal with the United States to end the trade war, which has dragged on since the Spring.
A clearer picture is likely to emerge by the weekend after the Central Economic Work Conference maps out the road ahead for 2019.
“I expect [it] will face the reality of an ‘intensifying economic slowdown,’” Shen Jianguang, the chief economist at JD Finance, said. “Officials could lower the growth target for next year to 6%, to make room for stepping up reform efforts and dealing with external risks.”
Data released by the National Bureau of Statistics has painted a harrowing picture in the past month with manufacturing activity declining and consumer spending shrinking, along with stalling new car sales and a cooling property market squeezed by tighter credit restrictions.
Analysts and economist are even predicting that the economy will continue to weaken next year which will hit GDP growth.
“[What we need is] to sound a clarion call for deepening [economic] reform,” Xiang Songzuo, a senior economist at Renmin University in Beijing, said.
Instead, the only sound you can hear from the corridors of power are alarm bells.
Dying aspirations. Watch for 2019.
Chinese debt bomb that has been a long time in the making is finally getting ready to explode. The economy is slowing, debt is exploding and the trade war with Trump has hurt China’s exports needed to earn dollars to pay the debts.
The defaults are beginning to pile up. Several large corporations and regional governments have defaulted recently.
China’s leaders have panicked at the slowdown and have started the credit flow again with lower interest rates, higher bank leverage and more debt-financed, government-directed infrastructure spending.
Of course, this solution is strictly temporary. All it does is postpone the day of reckoning and make the debt crisis worse when it does arrive.
With every passing day, a Chinese financial collapse draws closer.
http://www.crusoeresearch.com/article/jim-rickards-debt-bomb-ready-to-explode/
https://beta.scmp.com/economy/china-economy/article/2174541/china-data-shows-economic-growth-slowing-impact-trade-war-us
Dying aspirations. Watch for 2019.
Chinese debt bomb that has been a long time in the making is finally getting ready to explode. The economy is slowing, debt is exploding and the trade war with Trump has hurt China’s exports needed to earn dollars to pay the debts.
The defaults are beginning to pile up. Several large corporations and regional governments have defaulted recently.
China’s leaders have panicked at the slowdown and have started the credit flow again with lower interest rates, higher bank leverage and more debt-financed, government-directed infrastructure spending.
Of course, this solution is strictly temporary. All it does is postpone the day of reckoning and make the debt crisis worse when it does arrive.
With every passing day, a Chinese financial collapse draws closer.
http://www.crusoeresearch.com/article/jim-rickards-debt-bomb-ready-to-explode/
https://beta.scmp.com/economy/china-economy/article/2174541/china-data-shows-economic-growth-slowing-impact-trade-war-us
Time to buy into the fears and to increase appetite for State controlled sector stocks.
Time to buy into the fears and to increase appetite for State controlled sector stocks.
China is not going to become more capitalistic by opening up (reforming) it’s markets to the US. President Xi Jinping has made it quite clear numerous times that China is a socialist (Marxist) economic system with (Chinese characteristics). The western belief that all eocnomic systems (read China) would gravitate toward "free-market capitalism" is not going to happen in any forseeable future.
Whatever China does in response to the US Trade War (now considered a Technology War in which the US is willing to tear down the existing order in it’s attempt to resurrect it’s recent hegmonic position) is going to be done on China’s terms and no reason to believe it won’t be successful.
China is not going to become more capitalistic by opening up (reforming) it’s markets to the US. President Xi Jinping has made it quite clear numerous times that China is a socialist (Marxist) economic system with (Chinese characteristics). The western belief that all eocnomic systems (read China) would gravitate toward "free-market capitalism" is not going to happen in any forseeable future.
Whatever China does in response to the US Trade War (now considered a Technology War in which the US is willing to tear down the existing order in it’s attempt to resurrect it’s recent hegmonic position) is going to be done on China’s terms and no reason to believe it won’t be successful.
The key sentence in Xi’s speech is this: we will reform what needs to be reformed, and not reform what needs no reform. While a reasonable argument in most cultures, it is typically used in Chinese as a refusal to do something hard-pushed by someone else. It’s almost like a game-hooked kid, when harshly scorned by parents for failing school due to too much gaming, responed: I’ll do what is needed but nothing else! So the key here is what is it that Xi has deemed not necessary to change or reform? His answers could be found throughout the speech, which is the communist leadership owned by himself. It is also important to know who is pushing for things that Xi does not want to reform and what are those? Obviously these are not political reformed advocated by dissidents or academics and establishment related reformers. Instead, these are powerful people within the upper echlongs of the CCP, people Xi can not brush aside, and who are obviously not happy about Xi’s performance before, during and after the 19th CCP Congress, espcially since the trade war between China and US. Xi is destined to have a rocky ride in the next 1-2 years.
The key sentence in Xi’s speech is this: we will reform what needs to be reformed, and not reform what needs no reform. While a reasonable argument in most cultures, it is typically used in Chinese as a refusal to do something hard-pushed by someone else. It’s almost like a game-hooked kid, when harshly scorned by parents for failing school due to too much gaming, responed: I’ll do what is needed but nothing else! So the key here is what is it that Xi has deemed not necessary to change or reform? His answers could be found throughout the speech, which is the communist leadership owned by himself. It is also important to know who is pushing for things that Xi does not want to reform and what are those? Obviously these are not political reformed advocated by dissidents or academics and establishment related reformers. Instead, these are powerful people within the upper echlongs of the CCP, people Xi can not brush aside, and who are obviously not happy about Xi’s performance before, during and after the 19th CCP Congress, espcially since the trade war between China and US. Xi is destined to have a rocky ride in the next 1-2 years.
A speech by a renowned Chinese econonmist, Xiang Song-Zuo, revealed that an internal report predicted that China’s economy will grow only 1.67% in 2018, much less than the 6.5% advertised by official media. Another report even predicted a negative growth for 2017. Xiang’s speech went viral online for a few hours and was promptly deleted by net police.
A speech by a renowned Chinese econonmist, Xiang Song-Zuo, revealed that an internal report predicted that China’s economy will grow only 1.67% in 2018, much less than the 6.5% advertised by official media. Another report even predicted a negative growth for 2017. Xiang’s speech went viral online for a few hours and was promptly deleted by net police.
Whatever!
Whatever!
This is the reality of Communist China’s economy as voiced by its senior economist. China can run but it can’t hide the stench and status of its true economy. Where’s the 50 cent army ?
Xiang challenged the figure given by the National Bureau of Statistics, which claims that China’s rate of GDP growth is at 6.5 percent. According to some researches, Xiang said, the real growth rate could be just 1.67 percent, while more dismal estimates say that China’s economy is actually shrinking.
https://www.theepochtimes.com/china-may-be-experiencing-negative-gdp-growth-says-senior-economist_2744261.html
This is the reality of Communist China’s economy as voiced by its senior economist. China can run but it can’t hide the stench and status of its true economy. Where’s the 50 cent army ?
Xiang challenged the figure given by the National Bureau of Statistics, which claims that China’s rate of GDP growth is at 6.5 percent. According to some researches, Xiang said, the real growth rate could be just 1.67 percent, while more dismal estimates say that China’s economy is actually shrinking.
https://www.theepochtimes.com/china-may-be-experiencing-negative-gdp-growth-says-senior-economist_2744261.html