On Friday, March 18, 2022 at 8:34:39 AM UTC, David P. wrote:
> Rollback of Xi Jinping’s Economic Campaign Exposes Cracks in His Power
> By Lingling Wei, March 15, 2022, WSJ
>
> Mr. Xi last year rallied the whole government behind his
> campaign to clamp down on capitalist forces, from tightening
> Beijing’s grip over data accumulated by the private sector to
> restricting overseas share listings and shutting off lending
> to property firms, in a realignment with socialist principles.
>
> By the end of the year, developers’ sales were plunging more
> sharply than during the global financial crisis. Big tech firms,
> long a draw for the young and bright in China with their Silicon
> Valley vibes, were laying off droves of staffers.
>
> China’s top government body, the State Council, was startled by
> the economic assessment, according to people with knowledge of
> the council’s economic surveys of major cities.
>
> The leadership had anticipated hits on certain sectors, said an
> economic adviser in Beijing, but “the speed of the slowdown was
> a surprise.”
>
> A year-end high-level political meeting all but acknowledged that
> Mr. Xi’s economic campaign had gone too far.
>
> In recent months, China has scrambled to dial back some of last
> year’s efforts, policy announcements and interviews with people
> close to decision-making show.
>
> Financial regulators are loosening restrictions on banks to lend
> to developers and home buyers. Various government agencies are
> affirming support for tech firms. Local officials are shifting
> attention away from wealth redistribution to how to prop up businesses.
>
> The course correction, as some officials describe the recent policy
> shift, has created openings for other party figures to play a more
> visible role in what has long been a solo act.
>
> One of them is Mr. Li, the premier. Long sidelined by Mr. Xi,
> Mr. Li could leverage the economic pressure on Mr. Xi to install
> more members of his faction in key posts, party insiders said.
> They said that even though Mr. Li’s term as premier will soon end,
> he is likely to stay on in a different leadership position.
>
> Some party “elders,” or retired leaders who still have a say in
> political discourse, have recently spoken up against Mr. Xi’s
> desire to break with the established leadership-succession system,
> according to the insiders. They include former Premier Zhu Rongji,
> an elder statesman known as Boss Zhu in China and an economic
> reformer admired by the West. Mr. Zhu, who negotiated China’s
> 2001 entry into the World Trade Organization, privately has
> questioned Mr. Xi’s state-centered policy, the insiders said.
>
> That Mr. Xi’s hold on power would be in any way questioned was
> unthinkable just a few months ago, although it is too early to
> tell how serious the challenge might be. China has a history of
> mobilizing to quickly overcome economic challenges. And previous
> powerful leaders Deng and Mao weathered setbacks only to re-establish
> firm control.
>
> The Information Office of the State Council, which handles media
> inquiries for senior leaders, didn’t respond to questions.
>
> Support for companies
> ---------------------
> Since the beginning of the year, various levels of government
> have shifted away from a near-blanket crackdown on private businesses.
>
> The National Development and Reform Commission, China’s top economic-
> planning agency, led a group of government agencies in reaffirming
> support for companies forming the so-called platform economy, such
> as Alibaba Group Holding Ltd. , the e-commerce giant co-founded by
> billionaire Jack Ma ; conglomerate Tencent Holdings Ltd. ; and search-
> engine firm Baidu Inc., which all received stiff regulatory punishments
> last year for what authorities called anticompetitive behavior.
>
> The effort, people close to the commission said, reflects a tacit
> admission among the leadership that looser controls are needed to
> let these companies continue to operate, especially in areas of
> digital innovation, while at the same time continuing to limit
> tech giants’ foray into financial areas, such as lending.
>
> A buzzword Mr. Xi introduced last year, “common prosperity,” an
> aim to distribute wealth more equitably that had made business
> owners worried about being forced to hand over their fortunes,
> is barely mentioned anymore.
>
> Behind closed doors at a December conference to set the 2022
> economic agenda, Mr. Xi even appeared to acknowledge that wealth
> redistribution is hard to do when growth is slowing. Common
> prosperity, he told officials, according to people briefed on
> the remarks, was about “making the cake bigger first,” and then
> dividing it more equally.
>
> A few months later, Mr. Li mentioned Mr. Xi’s common-prosperity
> agenda exactly once when laying out the key economic goals for
> 2022 in his speech to China’s legislature.
>
> Mr. Xi isn’t done fighting for his economic revamp, and the
> pressure on entrepreneurs hasn’t entirely gone away.
>
> At home, stringent requirements on the tech sector’s data and
> investments remain in place. To adhere to those rules, Tencent
> has been divesting its vast portfolio, including by unloading
> shares in a Singaporean internet firm and in a Chinese e-commerce
> operator.
>
> For now, the party urges caution on any new and potentially
> disruptive policies. Soon after the December meeting, Han Wenxiu,
> a senior adviser to Mr. Xi, summed up Beijing’s economic agenda
> for this year in an article in a party journal: “All parties must
> actively introduce policies that are conducive to economic stability.”
> It said policies that would lead to economic contraction should be
> introduced “prudently.”
>
> Debate on ‘opening’
> ------------------
> The remarks came as concerns have grown both inside and outside
> the party that Beijing is going too far in dialing back Deng’s
> “reform and opening.”
>
> Li Yang, a senior member of the Chinese Academy of Social
> Sciences, a government think tank, noted in a January article
> that the party’s focus on building the economy brought China
> 40 years of rapid growth. That focus, he wrote, “has been rarely
> mentioned in recent years.”
>
> While millions of posts on China’s tightly monitored social media
> voice support for Russia since it invaded Ukraine, some are
> expressing concerns over Beijing’s foreign-policy shift. One
> well-known blogger, Qin Quanyao, in a March 4 post rebuked the
> notion of what some nationalist commentators call a “new world
> led by China and Russia.”
>
> “China has the unparalleled happiness brought by 40 years of
> reform and opening, and the infinite benefits brought by
> globalization,” Mr. Qin wrote, adding that the so-called new
> global order is “not suitable for China’s national conditions.”
>
> Recently, an article by the late Wu Jianmin, a prominent Chinese
> diplomat, recirculated on China’s social media. It highlighted a
> decision facing the party leadership after the Sept. 11, 2001,
> terrorist attacks in the U.S.: Should Beijing stay quiet or voice
> support for the U.S.?
>
> Then-leader Jiang Zemin, who watched the terrorist attacks unfold
> on TV, quickly convened a meeting of the top leadership. Five hours
> after the attacks, he spoke to President George W. Bush, condemning
> them and expressing deep condolences to the U.S. government and
> people. That decision, Mr. Wu argued in the article, helped bring
> U.S.-China relations to a new level and won China years of development.
>
> Beijing hasn’t condemned Russia’s war in Ukraine and has refrained
> from using the term “invasion.”
>
> Mr. Xi has stepped away from the collective decision-making model
> his predecessors have followed since the Deng era and made a
> challenge of the U.S. a centerpiece of his policies. Anyone in
> the party questioning that mission would risk being called a
> traitor, as it touches on issues Beijing considers “core.”
>
> It is relatively safer for Mr. Xi’s fellow leaders to express
> concern around economic decisions, because they hinge less on
> ideology. In addition, a healthy economy is key to the party’s
> claim to legitimacy.
>
> “The economy is one area where local officials can say, ‘I’m
> politically loyal and I support you, but some of the policies
> haven’t been going very well,’ ” says Joseph Fewsmith, a longtime
> observer of China’s elite politics at Boston University.
>
> https://www.wsj.com/articles/rollback-of-xi-jinpings-economic-campaign-exposes-cracks-in-his-power-11647354449