An unprecedented video conference with 100,000 lower level officials was held last Wednesday by the Chinese State Cabinet as the central government scrambles to address China’s crumbling economy, writes Chinese state-run newspaper Global Times.
Aiming to portray the massive conference as a rally around central government interjection in the economy and the nation’s confidence in “China’s unique institutional advantages,” the nation-wide meeting, on the contrary, could indicate a scrambling by the Chinese government to save the nation’s collapsing financial system.
Attacking “Western media badmouthing the Chinese economy,” the Global Times singled out a Bloomberg News article predicting China’s GDP to grow only 2% this year in contrast to the Chinese government’s aim for 5.5% growth.
Following the reinstatement of harsh lockdowns across China, notably the March lockdown of the nation’s financial capital, Shanghai, China’s economy has significant contracted.
The Caixin purchasing managers’ index, a popular and closely followed indicator for assessing the state of the Chinese economy dropped 5.8 points: from 42 in March to 36.2 in April. Any figure below 50 indicates contraction and anything above indicates expansion, CNN Business reports.
With China’s massive services and manufacturing sectors contracting rapidly, China’s economy is going backwards.
The Global Times CCP mouthpiece wrote off the Bloomberg News predictions as distorted by “ideological bias.”
“Pessimistic predictions from the Western media about China have never turned out to be accurate, probably because their views about the Chinese economy have been distorted so much by their ideological bias and long-established political position that they are unable to understand the world’s second-largest economy,” the Global Times wrote.
The article looked to push the stability narrative, stating that the pace of foreign investing in China hasn’t slowed since the reimposition of stringent lockdowns -policies which have crushed domestic industry in an effort to carry out CCP Chairman Xi Jinping’s “Zero Covid” policy.
However, the assertion is debatable as the article cites foreign investment figures from 2021, a period long before the central government implemented one of its most stringent lockdowns yet: the lockdown of Shanghai, China’s largest city with a population of 21 million.
In addition to the central government’s continuation of its “Zero Covid” policy, Chairman Xi has been keen to remake state-capitalism and expand the state’s role in the economy.
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A new economic initiative pushed by Chairman Xi to revive the economy known as the “new development concept has exacerbated the economic collapse.
“The goals are rational: to tackle inequality, monopolies and debt, and to ensure that China dominates new technologies and is fortified against Western sanctions. Yet in all cases Mr Xi believes the party must take the lead, and implementation has been punitive and erratic. A blizzard of fines, new regulations and purges has caused the dynamic tech industry, which contributes 8% of GDP, to stagnate. And a savage but incomplete crackdown on the property sector, responsible for over a fifth of gdp, has led to a funding crunch—one reason why housing sales fell by 47% in April compared with a year earlier,” the Economist writes.
Reverting to the ideological struggle of Chairman Mao following the first PRC leader’s death, the party’s new interjection into the economy under Dictator Xi has led to government subsidies replacing innovation and ambition in the tech industry contributing to the shrinking of the once world-class industry.
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