[Epoch Times, October 15, 2022](The Epoch Times reporter Lin Yan comprehensive report) The 20th National Congress of the Communist Party of China opened on Sunday (October 16). Chinese President Xi Jinping delivered a speech, no longer emphasizing economic development as the center Task.More and more analysts are concerned about the futureChina’s economyFrustrated because they believe Xi is unlikely to start correcting the economic course after the 20th Party Congress.
According to Archyde.com, compared with the 19th National Congress, Xi Jinping’s speech at the 20th National Congress of the Communist Party of China has a notable change, deemphasizing economic development and economic reform. Chen Zhiwu, a professor of finance at the University of Hong Kong, said, “From the 14th to the 19th National Congress of the Communist Party of China, it is clearly stated that economic development is the central task of the party. This time there is no such statement, but the focus is on ‘complete’ and ‘comprehensive’ development. .”
Bloomberg columnist Matthew Brooker wrote that a lot of speculation has focused on the possibility of a correction in the economic course after the 20th Party Congress this month, but that possibility seems to be getting smaller and smaller.
In theory, after Xi has consolidated power for a third term, he will be more inclined to soften some of his signature campaigns and return to pragmatism that has been very beneficial to China, Brook said. As it turns out, that hope may be slim.
“Even if an economic liberal candidate like Vice Premier Hu Chunhua becomes prime minister, there is no reason to believe that Xi Jinping will be more restrained,” he wrote.
In the past, the economy was run by the second-in-command of the Communist Party, the Premier of the State Council, but as Xi Jinping concentrated the power to designate economic policy in his hands, the role of the prime minister has shrunk to that of executive economic policy.
Nikkei Asia columnist Katsusuji Nakazawa also quoted sources as saying that Hu Chunhua may be the new prime minister, but because Xi Jinping controls power, even if Hu Chunhua becomes prime minister,China’s economyPolicies may also become more conservative.
At the same time, Xi Jinping agreed to let Hu Chunhua be the prime minister on the premise that the new Standing Committee member who is replaced by the Politburo must be his person. In that case, Hu Chunhua can only become a prime minister with little breathing room, because he is surrounded by Xi Jinping’s cronies.
Fraser Howie, co-author of “Red Capitalism,” an exposé of top Communist Party leaders, said people like Premier Li Keqiang and Xi Jinping’s senior adviser Liu He are economically liberal, but but has no real impact.
On the possibility of a future shift in Chinese economic policy, Howie said: “I don’t see a silver lining.”
The policy path is blocked, and the senior reformist officials are about to step down
Faced with China’s economic woes, policymakers in Beijing are hoping to find a way to deal with the continued fall in house prices and lessen the damage from Xi Jinping’s COVID-19 zero policy.
But with “China’s economic recovery constrained by its balance sheet,” Nicholas Borst, a former San Francisco Fed analyst, said there are now signs that Beijing has little to do to deal with the economy. Post is now vice president of investment advisory firm Seafarer Capital Partners.
He told the Financial Times that Beijing’s current “cautious” policies were “unlikely” to significantly improve the liquidity crunch faced by private property developers, and did not expect a significant recovery in property in the medium term.
“The outlook for the team of senior officials in charge of managing the economy and finance is not good,” Roberts cautioned.
He cited that Liu He, who is seen as a reformer, will retire and may be replaced by an official who only understands the state’s planned economy. Then, PBOC Governor Yi Gang, Finance Minister Liu Kun and top banking regulator Guo Shuqing, also market-oriented policymakers, may retire. Other reformers, such as former central bank governor Zhou Xiaochuan and finance minister Lou Jiwei, have already retired early.
Barry Naughton, a professor of Chinese economics at the University of California, San Diego, wrote that advisers close to Xi Jinping like Liu He would not lose 100 percent of their influence overnight, but the overall reality is that those who succeeded them People will have less experience, less international reputation, and less influence when participating in economic policymaking.
Possible for the 20th National Congress of the Communist Party of ChinaPrime Minister CandidateAs a result, said Logan Wright, director of China market research at the research firm Rhodium Group: “If Xi favors loyalty over technocratic competence, it will be one of the strongest policy signals from the Congress. One, and it will interpret China’s economic outlook negatively over the next five years.”
Analyst: Xi Jinping has a wrong idea of how to govern
Bloomberg’s Brook questioned that Xi has a wrong idea of how to govern.
“Xi Jinping seems to have drawn completely wrong conclusions from China’s rise, attributing it to the party’s supremacy and historical correctness, rather than to the increased role of the market, which has unleashed the entrepreneurial energy of the Chinese people.” He says.
Brook said Xi reiterated the primacy of state-owned enterprises and intervened in the private economy, cracking down on tech companies, among other things.
“These interventions, combined with Xi Jinping’s rigid adherence to a zero policy, have caused clear damage to China’s growth prospects and have left China’s economic development in limbo,” Brooker wrote.
Ultimately, he said, the concern is that Xi Jinping, as “an individual who has seized so much power in a closed Leninist system,” especially as he uses the slogans of “common prosperity” and “national rejuvenation” to establish ideological legitimacy , may end up causing him to be “indifferent to the contradictory evidence, and the accumulated problems will eventually become too complex to be resolved”.
China’s economic difficulties, especially the sluggish real estate industry
Currently, nearly one-third of China’s economy is in a state of collapse.
Norton, a California economics professor, said the CCP’s COVID-19 zero-out policy is the biggest and most immediate threat to the Chinese economy, but the policy is far from the only factor contributing to China’s economic woes.
The predicament of China’s economy is manifested in various aspects. Consumer confidence has fallen to unprecedented lows after plunging in April. In addition, youth unemployment rose to an unprecedented 19.9% in July, housing prices in about half of the cities (except Beijing, Shanghai or Shenzhen) have stopped rising and started falling, and homebuyers are refusing to continue paying bank mortgages for undelivered properties.
According to China’s balance of payments data, the net loss per quarter is well over $100 billion, with capital outflows equivalent to about 3 percent of total GDP.
For investors, they are particularly concerned about China’s real estate sector, which analysts describe as a “slow-motion financial crisis” that is “spreading through the deep fabric of China’s political economy.”
The Financial Times said the shock of last year’s debt crisis at Evergrande “wiped up billions of dollars lent to the company and its peers, paralyzed construction across the country, and left swathes of unfinished building and prompting angry homebuyers to boycott mortgages.”
Responsible editor: Lin Yan #