Beijing Convenes Emergency Economic Meetings, as Analyst Predicts China’s Economy Faces Dead End

A bank employee counting 100-yuan notes at a bank counter in Nantong, in China's eastern Jiangsu Province on June 13, 2023. STR/AFP via Getty Images

The latest official economic data released by the Chinese authorities shows that China’s economy has experienced an overall decline. Insiders reveal that senior Chinese officials have recently held at least six emergency economic meetings with business leaders and economists, and the tone of participants was unusually urgent.

One political and economic analyst says that China’s economy is facing a dead end and that the communist system has caused many problems that cannot be solved, rendering these emergency meetings useless.

According to state-run Xinhua News, Chinese premier Li Qiang chaired an executive meeting of the State Council on June 16. The meeting concluded that more vigorous measures must be taken to boost China’s economy and stressed that policies and measures must be introduced promptly and implemented rapidly whenever possible.

Bloomberg also reported on June 14 that high-level Chinese Communist Party (CCP) officials and business leaders recently held a series of emergency meetings, and the tone of the participants was “unusually urgent.”

Senior CCP officials were seeking advice from business leaders and economists on how to restructure the economy, the article said. According to a source, senior Chinese officials have recently held at least six consultations with these executives.

Top Chinese officials asked attendees for input on how to stimulate the economy, restore confidence in the private sector and revive the real estate sector, the source revealed.

In response, business leaders and economists called on the authorities to urgently revise their policies and adopt “a more market-driven, rather than planning-led, approach to growth.”

At a meeting around the end of May, top Chinese officials and about 10 other participants reached a consensus that “more and better-coordinated monetary and fiscal stimulus is needed,” according to one participant. Additionally, all attendees expressed shared concerns regarding the timing and content of any proposed stimulus package.

Economy Facing ‘Total Collapse’

The Chinese economy is unlikely to adjust and develop in the direction suggested by these business executives or economists, according to U.S.-based political and economic commentator Lu Tianming.

In an interview with The Epoch Times on June 18, Lu said, “These people suggest taking a market-oriented approach, which would mean loosening or even removing government controls, but now the Xi Jinping administration is facing a deadlock.”

Chinese leader Xi Jinping attends a press conference at the China-Central Asia Summit in Xian, in China's northern Shaanxi Province on May 19, 2023. Florence Lo/AFP via Getty Images

Lu said if control is lifted or relaxed, Xi’s political opponents will create problems for him in various fields, especially by using their economic power to keep him in trouble and try to weaken his position.

“For Xi Jinping, the consequences of losing power are very serious, even to the point of losing his life. That’s why he has been consolidating power,” Lu said.

“More power centralization means more control in all areas, so it’s impossible to follow the market-oriented route. On the other hand, a planned development route cannot lead to sound economic development. Therefore, it is inevitable that China’s economy will be tightly controlled and come to a total collapse in the end,” he said.

“Therefore, Xi Jinping is facing a dilemma: if he continues to centralize power, China’s economy will continue to decline; if he loosens control, the economy may recover, but political turmoil may cause him to lose power or even his life. For the CCP regime, this has become an unsolvable dilemma.”

Data Points to Overall Downturn

On June 15, the CCP’s National Bureau of Statistics released economic data for May, showing a collective weakening of key economic indicators.

In May, the added value of China’s industrial enterprises above designated size increased by 3.5 percent year-on-year, a decrease of 2.1 percentage points from the previous month; the total retail sales of consumer goods increased by 12.7 percent year-on-year, a decrease of 5.7 percentage points from the previous month; the national industrial producer prices fell by 4.6 percent year-on-year and 0.9 percent from the previous month.

People wait to cross a street in Beijing on June 20, 2023. Greg Baker/AFP via Getty Images

The national surveyed urban unemployment rate was 5.2 percent, unchanged from the previous month. The youth unemployment rate reached a new high of 20.8 percent, the highest since the regular release of this data in January 2018.

In addition, private fixed asset investment experienced negative growth for the first time this year from January to May, falling 0.1 percent year-on-year. The last time private investment showed negative growth was in 2020.

Lu said that the CCP has always falsified its data, and the actual situation should be much more serious. As the gloomy situation can no longer be covered up, the regime has to admit this situation to a certain extent.

As for whether some stimulus measures by the CCP will be effective, he said: “To a certain extent, it may work a little bit, and bring some rebound and growth in the short term. But it is not a fundamental solution, and in the long run, it is just a way of drinking poison to quench thirst, which will lead to more serious consequences.”

“So, this is also a dilemma,” Lu said. “If no stimulus measures are taken, and the currency is not injected into the market, the economy will continue to decline, and all aspects will go downhill. However, monetary easing will only bring short-term effects far from its desired result. In the long run, the consequences will only be more serious, and the economy will get worse. Therefore, the CCP is facing a doomsday situation, and these problems are already insurmountable under its rule.”

Lu points out that many of the problems are caused by the CCP’s dictatorial system, which by its very nature would inevitably restrict and suppress all areas. If the system does not change, any problem will become an unsolvable problem.

Therefore, the series of economic meetings are just a rescue effort in pretense, he said.