Back to that screenshot from a WSJ article…
Let’s say a government’s primary purpose is to ensure security for the society and the best conditions for the people to achieve material well-being. To China’s leadership, it seems it’s more the other way round: the population exists to build up a strong state. Hence consumption – the means to a high standard of living – is seen as ‘wasteful’. (And of course the supply-side approach serves vested interests.)
Which brings us to a Bloomberg piece on Beijing’s awkward economic strategy right now…
The risk for Xi and his team, led by Premier Li Qiang and Vice Premier He Lifeng, is that the determination to avoid excessive stimulus undermines confidence across the nation’s 1.4 billion people.
A thread by William Hurst on China’s economy.
And a Central Party School paper insists at length that investment – rather than consumption-driven growth, has priority. Somewhat dense at times, as well…
To debunk views such as “infrastructure overcapacity is wasteful,” “promoting infrastructure equates to taking the old path that’s inconsistent with high-quality development,” and “limited space,” it’s crucial to fully understand the role of infrastructure investment from a holistic perspective of national economic development. Infrastructure investment doesn’t only interact with the expansion of aggregate demand to stabilize economic operations, but also enhances macroeconomic efficiency, improves people’s living standards, and robustly supports high-quality development.
Readable (and not paywalled) Adam Tooze compares and contrasts the Adam Posen and Michael Pettis views of China’s slowdown and considers how Beijing’s initial success against Covid in 2020 led to ‘policy hubris’…
The shambles of COVID policy in the West gifted Beijing a huge propaganda victory.
With its mandate from heaven confirmed, Xi’s regime turned bold. In May 2020 Xi’s regime pivoted to address three perceived threats to its undisputed and broadly popular rule – tech oligarchs, Hong Kong, and the giant housing bubble. All of these were issues of longer standing. In what appeared to be the aftermath of the COVID crisis, the summer of 2020 seemed like a good moment to tackle them.
If unfettered political power has an “original sin” problem – it cannot bind itself to behave responsibly and not threaten the conditions of long-term general prosperity – so too does unfettered capitalism. Predatory capitalists cannot credibly commit to behaving like reasonable competitors, even if that is for the good of the economy as a whole, or staying out of politics, even if a clear demarcation between law-making and the economy benefits long-run growth.
Whereas the West lives with the capricious power of Elon Musk, the CCP decided to show Jack Ma who is boss.
The FT on China’s demographic challenges…
Xi’s own instincts are to elevate national security and political control above economic growth. His efforts to speak to the rising generation also sound increasingly out of touch. The suggestion that discouraged youngsters should “eat bitterness” is unhelpful. His nostalgia for the character-strengthening glories of the Cultural Revolution are likely to seem irrelevant to those born into an entirely different China.
Despite their problems, Japan and South Korea have remained stable and prosperous countries. China may find that its own transition to an ageing and slower growing society is considerably more difficult and turbulent.
Just downloaded Lawrence Osborne’s new novel, On Java Road, set in protest-era Hong Kong. Comparisons to Graham Green are a stretch, but his Ballad of a Small Player superbly captures the atmosphere (and layout) of Macau, and The Forgiven did a pretty decent portrayal of Morocco. Will probably get around to reading it in a few months. (Currently taking that long to get through TE Lawrence’s The Mint – my days as a voracious book reader came to an abrupt halt when broadband started.)
“My days as a voracious book reader came to an abrupt halt when broadband started.”
Ditto.
I was gifted On Java Rd … I read it hop9ng for more, as there are pockets of real HK experience in there, but overall it’s really prurient old-gweilo fantasy dreck, superimposed on the protests. The central young character is nothing like a real HK protestor, just an old gweilo’s yellow-fevered magic pixie fap-fest. Rating: four hot showers needed, even in this weather, to wash off the stink.
@Soon2Be
I agree. Lawrence Osborne – the author not the footballer – is like Graham Greene in the same way that Dolly Parton is like Kiri Te Kanawa.
@Backbiter
Dolly Parton overcame rural poverty to become a massively successful and influential singer, songwriter, actress, businesswoman and philanthropist.
She has sold more than 100 million records and has won 11 Grammy awards. She has won over 150 annual music awards spanning a 50-year career. She was nominated twice at the Academy Awards for Best Original Song.
Her private company operates theme parks & theatres throughout the South and her Dollywood Foundation has donated tens of millions of dollars to charity, especially in the fight against rural illiteracy. She is a committed Christian.
Dolly Parton’s net worth is an estimated US$650 million.
That Kiri Te Kanawa must be a remarkable person.
These revelations from the China side are worrisome.
It really does seem as though their thinking to preserve state authority is so entrenched that they are running their economy into the ground. Didn’t this happen to Cambodia during Pol Pot?
Tragedy waiting to happen.
@Sam Clemens: You should add Dolly is a committed “true” Christian. Not one of these prosperity preaching dildos jetting around in Cessna Citations and driving Rolls Royces purchased thanks to rubes they’ve bilked after a televised session of fawning all over the ex 45th US president and his promises of making America Jim Crow again and eliminating all human rights for women.
@Sam Clemens
Despite all that, Dolly still doesn’t compare to Jolene.
‘Whereas the West lives with the capricious power of Elon Musk, the CCP lives with the capricious power of Xi Jinping, who decided to show Jack Ma who is boss by disappearing him for 3 months, sinking the biggest IPO ever, fining his companies, cutting his wealth in half and hamstringing his entire economic sector.’
There. Fixed it for him.
@Sam Clemens
If you turn down Dolly Parton’s Greatest Hits for a moment and listen, that wooshing sound you hear is the point going over your head.
Exemplum Gratis:
Bill Gates is worth $115.2bn (over 177 times Dolly), and does an awful lot more for charity than Dolly (he donated $5bn in 2022 alone).
Strangely though, all this amazing success and philanthropy hasn’t given him a better singing voice than Dolly’s.
@bolshonough
“Didn’t this happen to Cambodia during Pol Pot?”
Didn’t this happen to China during Mao?
I love these Chinese economic success stories. Any more?
@Sam Clemens: I actually like listening to Dolly Parton. Yes, I am shallow. But if she was a committed Christian, she would not be sitting on her US$ 650 million. She would give it away (what would Jesus do, eh?). Eye of the needle, camel etc.
@My Tooze Sense
‘Whereas the West lives with the capricious power of Elon Musk, the CCP lives with the capricious power of Xi Jinping, who decided to show Jack Ma who is boss by disappearing him for 3 months, sinking the biggest IPO ever, fining his companies, cutting his wealth in half and hamstringing his entire economic sector.”
If the government could do this to Elmo, we’d all be a lot better off.
Here’s an idea: how about instead of abducting tech billionaires, we tax them and use the money to pay for public services? Fwoooaaaaarh!
As for the Lawrence Osborne book, I suspected from the description that it would be yet another ogling touristic drinkalogue of a mediocre white man, and it appears that I was right. Hard pass.
“If the government could do this to Elmo, we’d all be a lot better off”
No we wouldn’t as this means we all lack due process. Besides you can ignore private power from the likes of Musk by not engaging in their private kingdoms where they wield it whereas you can not ignore state power unless you leave said state.
@ Mark Bradley
Hyperbole born of frustration, what can I say. Your point is of course on target. God damn it.
Thing is, Musk’s kingdom is by no means only private. The US decided some time ago to abandon space tech to the private sector, and Elmo’s satellite operation is now a dominant communication utility. He’s been using it to meddle in Russia’s war on Ukraine, among other things. He regularly runs down mass transit and high speed rail in order to promote his electric car business. Under his management, Twitter increasingly has turned into a vehicle for various forms of hate speech. This brings up the age old question: Why should an important public communication utility be in the hands of private interests?