Chinese Premier Li Qiang collected suggestions from mainland Chinese economists on July 6 on how to repair the nation’s flagging economy, although analysts say the root cause of China’s economic downturn lies in its political system, which is dictated by the Xi Jinping-led communist regime.
With multiple crises currently looming over China’s economy and the regime’s ongoing divergence with the West, there is no solution for the Chinese Communist Party (CCP), the analysts say.
The symposium on the economic situation drew Mr. Li, Vice Premier Ding Xuexiang, and eight scholars from China’s finance, political economic, and banking institutions.
Under Mr. Xi’s leadership “the economy has shown a positive trend of recovery,” Mr. Li asserted during the meeting. He then blamed foreign countries for China’s economic problems, saying “the world’s political and economic situation is complicated and has brought many impacts on our country’s development,” Chinese state media reported.
Mr. Li also said that he hoped for more constructive suggestions on the Chinese economy from the experts and scholars.
Zheng Xuguang, an independent political economic scholar and host of the talk show “Xuguang Times Commentary,” told The Epoch Times on July 7 that Mr. Li is mainly seeking some pro-CCP scholars to help unify thoughts in academia.
“Xi Jinping is the one who really decides things, and he only cares about political stability,” Mr. Zheng said.
Economic Downturn Continues
Taiwanese financial expert Edward Huang told The Epoch Times on July 6 that Mr. Li hosted the economic symposium mainly because the Chinese and Hong Kong stock markets recently have been plummeting, and the yuan is also depreciating. Industry is quite pessimistic about China’s economy.Liu Yuanchun, president of Shanghai University of Finance and Economics, published the “2023 China Macroeconomic Analysis and Forecast Report” in June, which laid out ”five 20 percent” issues facing China’s economy. They are a youth unemployment rate that exceeds 20 percent, year-on-year profits of China’s industrial enterprises declining by more than 20 percent, local government land transfer revenue falling by 20 percent, new real estate construction by area falling by 20 percent, and the consumer confidence index gap being as high as 20 percent.
Liu Xiaoguang, co-author of the report and a professor at the Institute of Development and Strategy of Renmin University of China, said that these “five 20 percent” phenomena are extremely abnormal, indicating that the pressure in China’s related fields has moved past the point of self-recovery.
It’s not only difficult to expect any automatic economic recovery; furthermore, it will form a vicious circle in certain economic sectors, Mr. Liu wrote.
Mr. Li pointed out at the symposium that it is necessary for all sectors of Chinese society to pay attention to putting out policies focused on stabilizing growth, employment, and preventing risks, and to promptly introduce and implement a series of targeted, combined, and coordinated policies.
Mr. Huang said in response to the premier’s remarks, “China’s economy is not decided by policies at present. No matter how many meetings they are holding, it will be useless. Mr. Li talks about combined policies, but there are no specific things in it. So far, we haven’t seen any policy that can change status quo.”
Mr. Huang believes that Premier Li can’t make decisions that tackle the economy’s real underlying problems, such as the tensions between China and the United States, or the CCP’s state institutions advancing at a cost to China’s private sectors, which he believes are the root causes of current China’s economic downturn.
“It’s something only Xi Jinping can decide, and there is nothing others can do if Xi doesn’t do anything about it,” Mr. Huang said.
“China’s stock market this year is quite bad. The RMB (yuan) is still depreciating. The Hong Kong stock market has fallen very heavily in the past few days, showing that the entire market’s confidence in the Chinese economy is quite fragile. Li Qiang doesn’t have the ability to reverse the situation,” Huang said.
US–Sino Relations Hit Chinese Economy
Wu Jialong, a macroeconomist in Taiwan, believes that the current problem ailing China’s economy is the simultaneous outbreak of multiple crises.“I compare it to multiple organ failure,” he said.
“The root cause of China’s employment crisis is in exports and manufacturing, because orders have been pulled away from China and foreign investment has withdrawn,” Mr. Wu told The Epoch Times on July 7.
Mr. Wu agreed with Mr. Zheng that the root of China’s economic problems also lies in politics.
“If tracing further, it’s because the relationship between the United States and China has been worsening. So the root cause is politics, not in the economy. So when they seek advice from economic experts, what they can get is limited.”
“Because Xi Jinping decides the major policies, which is to challenge the United States, competing with the United States for leadership of the world or hegemony, as a result, the United States has counterattacked. Moreover, China’s domestic demand is not enough to absorb the vacated production capacity of the export sector. The current economic problems are not easy to deal with.”
He added that there’s no solution to China’s economic problems even if Xi steps down, as it’s structural to the CCP.
Mr. Wu said that the United States has taken serious measures to counter the CCP’s unfair economic practices.
“Then, they sent a ministerial official [Yellen] to visit China. This means having a dialogue while continuing the confrontation. The United States has no intention of reaching an agreement with the CCP at all. It’s just to show a consensus that we are having a dialogue and will continue the discussion next time, which is negotiation without agreement.”
