News Analysis
In 2023, China saw a substantial surge in its fiscal deficit, along with plummeting exports and a crisis in the real estate sector. Nevertheless, at the recent World Economic Forum, Chinese Premier Li Qiang said that China’s economic growth reached 5.2 percent in 2023, which exceeded the regime’s target of 5 percent.
However, China observers and experts question that figure, given the gloomy outlook of China’s economy in 2024.‘Real Situation’ in China
Cai Shenkun, a renowned commentator on China’s current affairs who now resides in the United States, said the Chinese Communist Party’s (CCP) claim of a 5.2 percent GDP growth raised doubts at home and abroad.
“I believe that scholars and entrepreneurs in China all find this figure unbelievable,” he said during an interview with NTD’s Chinese language program “Pinnacle View“ that aired on Jan. 20
Mr. Cai explained that China’s National Bureau of Statistics follows the CCP’s political propaganda to maintain the Party’s control over the country.
“The CCP has reiterated that the economic growth data is related to the regime’s stability, so any data must follow the CCP Central Committee’s rule.”
Mr. Cai explained that foreign investments, exports, and domestic demand drive China’s economy.
“So why did Li Qiang release such positive figures?” he said. “Li Qiang is trying to encourage more foreign investors to come to China at this time. Li Qiang is actually deceiving himself and others. It is simply impossible for him to make the outside world believe such an economic growth figure.”
According to Mr. Cai, regarding foreign investment, China’s fixed-asset investment fell by more than 10 percent in 2023 compared to the previous year, a decline not seen in the past few decades. In 2021, during the height of the COVID-19 pandemic, Chinese factories were operating overtime, and foreign investment reached a historic peak of more than $300 billion, Mr. Cai said. In the following year, as the global economy slowly recovered from pandemic lockdowns, foreign investment in China plummeted to $180 billion, and by 2023, the figure dropped to $15 billion, he added.
Mr. Cai cited publicly available data showing that China’s exports fell throughout last year, with no growth.
China’s youth unemployment rate among 16- to 24-year-olds, excluding students, was reported at 21.3 percent last June—a historic high that led the regime to halt releasing the statistic. In January, however, the CCP reported the number again and claimed that youth unemployment was 14.9 percent.
“Those of us who know the real situation in China know that the unemployment rate of young people is now, in my opinion, around 50 percent,” Mr. Cai said.
“I believe in 2024, China’s economy will certainly face greater difficulties than the previous year.”
China’s Economy at a ‘Critical Point’
Li Jun, an independent TV producer, told “Pinnacle View”: “There is a unique situation in China. That is, in the top leadership of the CCP, no one in Xi Jinping’s faction understands the economy ... those who understand the economy have left the Party leadership.
“China’s economy has now reached a dangerous and critical point. Under these circumstances, I would say that no one is confident that the economy will still be good in 2024.”
‘CCP’s Solution Is to Tighten Control’
Guo Jun, president of the Hong Kong edition of The Epoch Times, told “Pinnacle View” that China’s economy can’t recover suddenly, making it improbable for the country to revert to its former glory in a short time. Furthermore, she said the downward trajectory anticipated for 2024 and beyond is unlikely to reverse easily.
Ms. Guo said that China’s economic crisis directly results from the CCP’s political system. She explained that China’s economy underwent four stages in the history of the CCP’s authoritarian rule. The 1950s was an era of recovery after World War II, followed by socialist transformation in the 1960s and 1970s, which saw the economy deteriorate significantly. The third stage started in the 1980s when the CCP introduced the idea of “reform and opening up” after previous decades of a failed planned economy.“Now, we are in the fourth stage. After significant economic growth, the CCP elites gained much confidence, believing they were invincible. The CCP asserts that China’s economic growth is entirely a result of its own design, and now, it wants to control the world. This is when economic challenges began to emerge,” Ms. Guo said.
Ms. Guo pointed out that CCP leader Xi Jinping identified five areas of the Party’s “anti-corruption” campaign, which includes the financial, energy, and health sectors, state-owned enterprises, and infrastructural projects. This means that there will be further state control of China’s economy.
Fighting corruption can only be successful in a free society with an independent judiciary, Ms. Guo asserted. The CCP’s “anti-corruption” policy is aimed at controlling the regime officials, the various industries and businesses in China, and the Chinese society as a whole, she said, adding that such an agenda only creates a repressive society.
Future Challenges
Mr. Cai pointed out that although the CCP increased its efforts to stimulate domestic demand and stabilize foreign investment, so far, recovery has not materialized. Currently, China has over 1.4 billion people with very limited spending power, which shows the impact of the economic downturn, he said.
“Therefore, judging from the current situation, this year will be even more challenging. I saw the recent speech from Xi Jinping saying that this year’s financial supervision [from the state] must be stricter. They will not be allowed to make exorbitant profits through their investments,” Mr. Cai said.
“When the CCP takes action, it imposes more control, leaving the economy in shambles. Therefore, I think this year will actually be even worse for the economy.”
Michael Zhuang contributed to this report.
