China Prepares to Decouple, Sets Up State-Run Supply Chains and Canteens: Experts

Alipay and WeChat QR codes for online payment are displayed as a vendor (L) bags up vegetables for a customer at a market in Nantong city, Jiangsu Province, China, on Sept. 10, 2018. STR/AFP via Getty Images

China is building numerous supply and marketing co-ops and community services, such as, canteens, throughout the nation. Experts believe that Beijing is preparing to decouple from the world economy by firming up  control of its food and supplies, and some see the campaign as a sign of preparing for a war economy.

After the 20th Party congress in October, the director of the Co-ops Council, Liang Huiling, was promoted to the 20th central committee of the Chinese Communist Party (CCP). This was followed by the Chinese media widely reporting on the establishment of various types of Co-ops nationwide.

State-run canteens have also become a task of the local officials in recent years. Canteens provide affordable hot meals to the local residents.

These moves suggest that Beijing’s new strategy for the domestic economy puts great importance on the establishment of local Co-ops and food kitchens.

Community-Based Supply Chains

China recently issued a two-year pilot plan, that started in October, for building comprehensive community service facilities that provide stores, canteens, pharmacies, housekeeping service networks, and other services, and aims for an average of three to five pilot projects in each city and district.

The Chinese media reports emphasized that the facilities will incorporate online platforms and apps for service speed and scope.

According to a state-media report, community based canteens have occurred in major cities such as Shanghai, Hangzhou, and Tianjin.

Local government efforts to accomplish the task can be seen in multiple Chinese media and official reports.

Take Hebei, a northern province of China, as an example. The authorities issued an order in June requiring each city to build at least 50 canteens this year, and no less than 5,000 in the entire province by 2025.

Hubei, as another example, is “reviving” the use of various types of Co-ops, including marketing co-ops for farmers, since 2015, according to a China News report in October there are currently 1,300 Co-ops, with 450,000 members. This landlocked province in central China anticipates it will expand local facilities and have 1.5 million members by 2025.

A Chinese couple wearing plastic coats and protective masks shop for groceries at a supermarket in Beijing, China, on Feb. 11, 2020. Kevin Frayer/Getty Images

Experts: A Controlled Economy

Zhao Yuanming, an expert in law and China affairs, believes the CCP will manipulate the Chinese economy through the state Co-ops and canteens.

In an interview on Nov. 6, he told the Chinese language edition of The Epoch Times that the regime is prepared for China’s escalating isolation and decoupling from the world.

“To have full control of the distribution channels, markets, production, raw materials, procurement, etc., the regime will be able to handle state emergencies, for example, in a confrontation with the United States,” he said.

Commentator Heng He also believes that Beijing is getting ready to decouple from the Western economy.

He emphasized that it looks like the CCP is preparing for a war.

In his commentary program on Nov. 3, Heng explained that Beijing is heading towards a wartime economy, and the state monopolies in raw materials and production, unified procurement and distribution by quotas, and Co-ops, will help to fulfill its needs.

“Once the CCP invades Taiwan, the international sanctions will surely follow, … that’s why it’s strengthening the Co-ops now,” he said.

According to the Chinese finance media’s reports, in the first half of 2022, the total national sales of the supply and marketing co-operatives reached 2.9 trillion yuan (about $400 billion), nearly equivalent to the combined revenue of the state-owned enterprises China Petrochemical Corporation and China National Petroleum Corporation.

Xia Dunhou and Yi Ru contributed to this report.