Deng Xiaoping ushered in capitalism in communist China with his famous maxim, “Get rich first.” 40 Years Later, Will Xi Jinping Decide ‘The Rich Are Too Rich’?
China is gearing up for an abrupt end to years of investment- and export-stimulated growth. The slowdown is exacerbated by the controversial Corona Zero Policy, the snowballing real estate sector crisis, and the choking of access to critical technology by the Biden administration.
As growth slows, hopes are rising that President Xi Jinping will focus on redistribution and improve living standards for most of China’s 1.4 billion people.
In his opening remarks at the Chinese Communist Party’s five-year congress on Sunday, Xi accused the party’s elite of “hedonism” and “excessive spending,” calling it “a means of accumulating wealth” and “excess income.” promised to monitor
The remarks reignited a cautious debate about Xi’s economic policy wisdom and the uneasy relationship between the ruling party and the companies that underpin the growth of China, the world’s second-largest economy.
Controversial issues include not only whether China should pursue a “people-oriented economy,” that is, a state-led, self-reliant and patriotic economy, but also whether it should reduce social inequalities and reduce cultural vices. It also includes Xi Jinping’s overarching “common prosperity” vision for crackdown purposes. It’s curbing the excesses of big business and China’s ultra-rich.
“Can we solve China’s problems by relying solely on theories brought in from the West? I don’t think so. But can China’s problems be solved by Chinese theories alone? This is an even bigger mistake. ,” said Wang Xiaolu, deputy director of the National Economic Research Institute, an independent Beijing-based think tank, in a recent interview with Chinese financial media.
“People-oriented” and “people-first” appear more frequently in official statements such as those of the People’s Bank of China and the Ministry of Finance. The phrase originated among Chinese academics and party leaders in the early 1950s, and marks a different development path than the Western capitalist system.
In the weeks leading up to the Party Congress, 71-year-old Wen Tiejun, an agricultural economist at Renmin University of China, promoted the concept. Wen suggested that China’s economy is meant to serve its sovereignty, develop independently, and be driven by state-led conglomerates.
A transcript of Wen’s remarks was widely circulated through WeChat message groups, China’s largest social media platform, but censors removed the content days before Congress.
But the comments stand in for fears that market-oriented reforms will be sidelined as President Xi Jinping enters an unprecedented third term.
“Marketization is an inevitable process of human development. We should cherish, but not resist, the technological, ideological and institutional wealth shared by mankind,” said Wang. Told.
Xiang Songzuo, director of the Shenzhen-based Greater Bay Area Institute of Finance, said that Premier Wen’s promotion of a “people-centered” theory “has a great impact on other countries’ historical developments, as well as China’s reforms and reforms.” It doesn’t match my experience,” he said. Liberation in the last 40 years”.
“We are deceiving the people in the name of the people,” he said of Wen’s theory.
Xi on Sunday reaffirmed that economic development is a priority for China. But he also targeted security and the “people first” agenda.
He reiterated that both state-owned and private companies are important and that the party should show “unwavering” support for the latter, striking a more balanced tone than many analysts had expected. .
Still, his use of “people-oriented” has stoked unrest among reformers amid growing concerns about the enormous economic challenges facing the president and his economic planners.
Xiang warned that the popularity of Wen’s statement reflected a “psychosocial imbalance” between various social camps rooted in “hate of the rich.”
“The country has not yet put in place a system to respect individual rights, especially private property rights. must be used,” referring to Deng’s distinctive policies that transformed China.
Among the more important guidelines from the Party Congress are strengthening industrial policies with more financial support and subsidies, placing greater emphasis on national security, and the role of the state in the economy in order to achieve self-sufficiency. There is a plan for Xi to concentrate, Natixis said.
“This means that the role of private companies may be curtailed,” said Alicia García Herrero, chief Asia-Pacific economist at the French bank. She added that state-owned enterprises may also need to do more and earn less to fulfill their social responsibilities.
Christopher Marquis, an expert on the Chinese economy at the Cambridge Judge Business School, carefully considers the “mechanisms” for achieving wealth distribution, suggesting that “at the high end of the economy, productive and innovative We need to ensure that parts of the world are not killed by the Chinese economy,” he said. Redistribution”.
“The principle of trying to extend China’s economic successes over the last 40 years to developing cities and rural areas is a good strategy in theory,” Marquis added. “But as we’ve seen how it’s implemented, it’s very pushy on the rich.”
Additional reporting by William Langley of Hong Kong