Chinese leader Xi Jinping’s top-down attempt to revive the nation’s struggling economy hasn’t taken into account the destruction caused by his zero-COVID policy, Radio Free Asia reported.
Citing Beijing’s effective responses to the Asian financial crisis of 1998 and the global financial crisis of 2008–following which the government funded massive infrastructure projects, including hydropower, motorways, and high-speed rail links to boost domestic demand–Xi wrote that “insufficient aggregate demand is a prominent contradiction currently facing the economy.”
According to Radio Free Asia, the article, penned by Xi Jinping, suggested loosening consumer credit to encourage consumer spending, saying that it was necessary to increase the income of urban and rural residents “through multiple channels, especially the consumption capacity of low- and middle-income residents who have a high propensity to consume but who have been greatly affected by the pandemic.”
But, Xi also urged for tighter oversight of local government debt, saying that mergers and such oversight may “defuse danger” in that area.
Professor of finance at Taiwan’s Yunlin University of Science and Technology, Cheng Ping Cheng, claimed that zero-COVID had scared away international investors as well as discouraged individuals from going out and making purchases.
Xi’s insistence on depending solely on the domestic economy and abandoning the export-led institutions of the previous four decades made the situation even worse.
By establishing Communist Party branches in those businesses, they meddled with the ownership structures of [private tech titans] Alibaba and Tencent, according to Cheng.
He claimed that some time ago, while Guizhou province was under lockdown, a number of officials were moved in to take control of private businesses, greatly harming those businesses.
Since Deng Xiaoping’s economic reforms opened up in China in the 1980s, Cheng claimed that the Shanghai lockdown in the spring of last year has alarmed international investors more than anything else.
The Chinese Communist Party has come under fire most for emphasising the development of the state sector at the expense of the private sector, according to Cheng. An enormous shift to the left has occurred.
Cheng said that if Xi maintained his current level of military ambition, mainly if he chose to follow out his threat to invade democratic Taiwan, it would be considerably harder to stimulate the economy, a report in Radio Free Asia read.
If [Beijing’s] military expansionist objectives aren’t curbed, Cheng said, “The international backlash will intensify, making it even more difficult to achieve economic reforms in China.”(MILAP NEWS NETWORK)
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