Xi Jinping Aims to Rein In Chinese Capitalism, Hew to Mao’s Socialist Vision By Lingling Wei
Sept. 20, 2021
https://www.wsj.com/articles/xi-jinping-aims-to-rein-in-chinese-capitalism-hew-to-maos-socialist-vision-11632150725#
Extracts: 40 years ago Deng Xiaoping first unleashed economic reforms in China. It helped lift hundreds of millions of people out of poverty and created trillions of dollars in wealth, but also led to rampant corruption and eroded the ideological basis for continued Communist rule.
In Mr. Xi Jinping’s opinion, private capital now has been allowed to run amok, menacing the party’s legitimacy. Mr. Xi isn’t planning to eradicate market forces. But he appears to want a state in which the party does more to steer flows of money, sets tighter parameters for entrepreneurs and investors and their ability to make profits, and exercises even more control over the economy than now. Mr. Xi’s overhaul has generated more than 100 regulatory actions, government directives and policy changes since late last year
In Mr. Xi’s version, the government would have a level of control that would allow it to steer the economy and industry along a path of its choosing, and channel private resources into strengthening state power. Western companies have always had to toe the party line in China, but they are increasingly asked to do more, including sharing personal user data and accepting party members as employees. They could be pressed to sacrifice more profits to help Beijing achieve its goals.
Industries that Mr. Xi views as being led astray by a capitalist spirit, including not only tech but also after-school tutoring, digital gaming and entertainment, are bearing the immediate brunt.
State-owned companies, having already bulked up under Mr. Xi’s rule, are marching into areas that were pioneered by private firms but are increasingly seen as crucial to national security, such as management of digital data.
A ministry supervising state companies, the State-owned Assets Supervision and Administration Commission, is mapping plans to set up more government-controlled providers of cloud services for data storage, people familiar with the agency’s workings say.
Mr. Xi’s plan to reset the economic order came together at the Central Economic Work Conference last December. He singled out the internet-technology sector for having big companies that use capital markets and other resources to enrich their owners and investors—widening income gaps and diverting funds from parts of the economy important to China’s competitiveness such as high-end manufacturing.
He singled out the internet-technology sector for having big companies that use capital markets and other resources to enrich their owners and investors—widening income gaps and diverting funds from parts of the economy important to China’s competitiveness such as high-end manufacturing.
Mr. Xi and his underlings still talk about the need to develop the private sector, which accounts for 80% of China’s urban jobs. But officials say the focus now is on fostering small and midsize companies, in areas ranging from power equipment to sensors and semiconductors, that aren’t likely to become alternative power bases. These firms are expected to emphasize innovation that elevates China’s manufacturing capabilities over profits.
Underpinning Mr. Xi’s actions is an ideological preference rooted in Mao’s development theories, which call state capitalism a temporary phase that can help China’s economy catch up to the West before being replaced by socialism.
Xi may be moving China to economic system 'that doesn't exist anywhere in the world' Tim O'Donnell, September 20, 2021, https://news.yahoo.com/xi-moving-china-economic-system-171146880.html
China says crackdown on business to go on for years By Peter Hoskins https://www.bbc.com/news/business-58182658
12 August The Chinese government has unveiled a five-year plan outlining tighter regulation of much of its economy.
laws will be strengthened for "important fields" such as science and technological innovation, culture and education.
The plan also said the Chinese government aims to tackle monopolies and "foreign-related rule of law".
Regulations relating to China's digital economy, including "internet finance, artificial intelligence, big data, cloud computing etc." will also be reviewed.
China’s Radical New Vision Of Globalization https://www.noemamag.com/chinas-radical-new-vision-of-globalization/
President Xi’s vision of “dual circulation” is a darkly pessimistic economic strategy, fit for a new Cold War.
Dual circulation describes the deeply pessimistic worldview that has settled over Beijing. Once China’s leaders saw opportunity in globalization. Now, they expect the U.S. and its allies to deny China the technology it needs to build “a modern socialist country” by mid-century, meaning a wealthy superpower fit to rival the U.S.
Xi’s new theory now sits at the heart of the country’s 14th five-year plan, which covers development from 2021 to 2025, and was unveiled in draft form in October. The result will accelerate China’s decoupling from the West, while also increasing the importance of trading links forged with other parts of the world — for instance, via Xi’s signature Belt and Road Initiative.
The Dual Circulation idea splits the world into two systems. First comes external circulation, meaning China’s global trade, but also the way it invites foreigners into its domestic economy. This was the focus of Xi’s Davos remarks and the approach that powered his country’s decades of rapid growth, transforming China into an exporting powerhouse. The second component is then internal circulation, meaning domestic demand from Chinese consumers, but also domestic supply chains and “made in China” technologies.
How China Is Reshaping International Development by MATT FERCHEN JANUARY 08, 2020 https://carnegieendowment.org/2020/01/08/how-china-is-reshaping-international-development-pub-80703 some commodity-rich South American countries like Brazil have long expressed concerns about their trade and investment relations with China simply repeating historical cycles of commodity dependency (where a country leans too heavily on exporting its raw materials and agricultural products, instead of more profitable finished goods and services).
the introduction of the BRI ( Belt and Road initiative) has not fundamentally altered China’s development-themed approach to foreign economic policy. the BRI has exacerbated many of the existing flaws in China’s development policy, such as unsustainable debt and environmental damage. Before the rollout of the initiative, China was already mired in an unsustainable loans-for-oil arrangement with Venezuela.
U.S. officials are concerned about what they see as China’s predatory lending in Latin America, Africa, and Asia. And in many developing countries, civic activists, government officials, and researchers worry about the financial, environmental, social, and political sustainability of many China-led commercial projects.
China to Wall Street: regulatory crackdown not aimed at restricting private firms https://www.reuters.com/business/china-wall-street-regulatory-crackdown-not-aimed-restricting-private-firms-2021-09-20/
By Norihiko Shirouzu and Scott Murdoch China Securities Regulatory Commission (CSRC) Vice Chairman Fang Xinghai is reported to have said in a private meeting that The actions instead intend to strengthen the regulation of consumer-facing platform companies with a key role in promoting "common prosperity", or easing wealth inequality, ..China's sweeping regulatory crackdown of recent months does not aim to rein in the country's private enterprises or decouple from the United States or international financial markets
China's Liu He assures business of support, amid regulatory crackdown Reuters Septe 6 2021 https://www.reuters.com/world/china/chinas-liu-he-says-support-private-business-has-not-changed-2021-09-06/
China's Vice Premier Liu He vowed the government would keep supporting the private sector amid growing concern a regulatory crackdown on a wide range of industries was hurting businesses.
Liu said, "guidelines and policies for supporting the private economy have not changed... and will not change in the future,"
An opinion piece widely circulated in state media calling the crackdowns a "revolution" was attacked by Hu Xijin, the editor-in-chief of the Global Times, a tabloid published by the People's Daily. The reforms are about strengthening regulation and improving social governance, Hu said.
Is Evergrande financial crisis China’s Lehman moment with Xi Jinping’s hard turn to CCP dictatorship https://www.youtube.com/watch?v=GQbp2sON5cQ
Sep 21, 2021
Q&A: What does China’s 14th ‘five year plan’ mean for climate change? https://www.carbonbrief.org/qa-what-does-chinas-14th-five-year-plan-mean-for-climate-change
The lack of a formal “cap” on carbon emissions is, perhaps, one of the most confusing parts of the 14FYP outline. Even though the outline does not set a carbon cap, it does say that China will “implement a system based primarily on carbon-intensity controls, with the carbon cap as a supplement”.