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Dialogue China BriefingAbout China TodayMay 1st, 2023 – Issue 130In This IssueThe articles translated here do not necessarily reflect the views of Dialogue China Briefing or Dialogue China. Lead Article:Xi Jinping’s Parting Words Reveal his Greatest Ambition Think Tank Views:Will China Repeat Japan’s “Lost Thirty Years”? Policy (Public Opinion Within the Great Firewall):Reconsidering the Expansion of Government Cadres and Workers in China: An Empirical Analysis of Time Series Data from 1978 through 2019 Politics:China’s State-owned Enterprises: Instruments of Its Foreign Strategy? Politics (Public Opinion Within the Great Firewall):Behind the Sino-Russian Joint Declaration: Does this “Disorderly Era” Present New Opportunities for Horizontal and Vertical Alliances? Finance and Business (Public Opinion Within the Great Firewall):Interpreting the Annual Performance Report of the Bank of China: Serving the Real Economy Finance and Business (Public Opinion Within the Great Firewall):Why Is TikTok Indestructible? ![]() Xi Jinping’s Parting Words Reveal His Greatest AmbitionWang Dan – Radio Free Asia Commentary – March 31, 2023 ![]() These final words should really give us pause. I do not think that Xi Jinping uttered these words either casually or without prior thought. As is well-known, he had been using the phrase “changes unseen in a century” for a number of years, demonstrating that such historical positioning and sense of mission have always been on his mind. So what exactly are the “changes unseen in a century”? In the past, we tended to treat this phrase lightly, assuming that with these words Xi Jinping was addressing China’s domestic situation—that the Communist Party is in danger of losing control over the country and that a color revolution is brewing. But I am afraid that the true meaning is much more serious. It turns out that the “changes unseen in a century” represent Xi Jinping’s attempt to change the international political order and thereby fulfill Chairman Mao Zedong’s self-appointed mission to liberate all of mankind and to achieve what the Chinese Communist Party had so far failed to do in some 100 years, that is, to transform the global community of democracy into a world order governed by authoritarianism. During the past 100 years, Western civilization, led by the United States, has established a new rule-based world order, a world order that Nazi dictator Adolf Hitler as well as the former Soviet Union were unable to destroy. Before his death, Chairman Mao actually gave up on this idea and sought to establish relations with the United States. Now, however, Xi Jinping and Vladimir Putin are attempting to achieve just such a breakthrough in this century-old pattern. This, I think, is what Xi Jinping meant when he said “we together are the ones driving these changes.” How do the two countries seek to promote such changes? It is likely that China will support Russia’s attempt to seize Ukraine, and Russia, in turn, will support China’s attempt to seize Taiwan. What is new is that the Chinese Foreign Ministry statement. issued at the end of Xi’s visit, states that: “The Russian side noted that it opposes any form of ‘Taiwan independence’ and firmly supports the Chinese side’s measures to defend national sovereignty and territorial integrity.” What is meant exactly by the “Chinese side’s ‘measures’”? Measures are actions. Putin’s “special military operation” in Ukraine is one such measure. Hence, the meaning of the wording in the statement is obvious. In the event of a crisis in the Taiwan Strait, Russia will help reduce China’s vulnerability to U.S. sanctions. If maritime access to China is cut off, Russia will provide energy and food relief. In return, China is actively helping Russia in its current Ukraine predicament. In fact, the phrase “promoting future changes not seen in 100 years” was even earlier already at the forefront of Xi Jinping’s three global initiatives. But this slogan, “changes unseen in a century,” has now become offensive rather than defensive! In this one short sentence, Xi Jinping’s true ambitions are revealed—to join hands with Russia to promote changes in the world order. We thus need to ask: How will these changes be promoted? What other means can there possibly be other than to engage in war? China and Russia will join hands and engage in military actions to establish a global authoritarian framework. This is the true shocking secret of the meaning of Xi Jinping’s final words in Moscow. It is really terrifying to think that Xi envisions the world as a giant global chessboard. Once triggered, the outcome of such a mindset that goes against humanity can only be one thing, that is, a third world war. Of course, the results of the chessboard may not necessarily end up as intended. Throughout history there have been many such ambitions that have failed, and the odds are that Xi Jinping will fail as well. But regardless, any such attempt will result in a worldwide disaster, with an untold number of casualties, deaths, and material losses. Do not think that this is merely alarmist thinking. If we look carefully at the progression of Xi’s arguments, we can see how his thinking has evolved, step by step, over time I certainly hope that my predictions are wrong. But how can we really be complacent in the face of the Chinese Communist Party that was able to murder its own people in the capital? I believe that even if there is a third world war, the Western alliance is likely to win as long as it is well prepared. But my worry is that either the West is too naive to understand the true meaning and implications of Xi Jinping’s words or it is unwilling to believe that the situation is really so serious such that it will let down its guard or even continue to appease Xi Jinping. In such a case, disaster will be unavoidable.Think Tank View: Will China Repeat Japan’s “Lost Thirty Years”?Editorial Board – Dialogue China Briefing – April 1, 2023 ![]() When this news came out, there was a public outcry. It reminded many of Chairman Mao’s massive rustication experiment that swept the country more than half a century earlier during the Great Proletarian Cultural Revolution. At the time, more than 20 million educated urban youth were sent down to remote mountainous areas and the countryside to be “re-educated” by poor and lower middle peasants. One of the most important reasons for launching this movement was to relieve the pressures of urban unemployment. Half a century has passed, but the similarities between today’s policy and that fifty years ago is alarming. According to the latest statistics from the Ministry of Education, the number of college graduates in 2023 will reach a historic high of 11.58 million. With the addition of past graduates and students returning from study abroad, the number of students newly entering the workforce in 2023 will reach 16.62 million. Data from the National Bureau of Statistics show that at the end of 2022, China’s overall unemployment rate was about 5.5 percent, but there has been no official update on the unemployment rate among youth between the ages of 16 and 25 after it reached a record high of 19.9 percent in July 2022. Kevin Lin, researcher and managing editor of Asian Labour Review, has reported that now is likely to be the most challenging time within the last twenty years for young people in China to find employment. ![]() Dark Blue line: unemployment rate (age 16-25) Light Blue Line: Unemployment rate (age 25-69) Source: Ministry of Education, National Bureau of StatisticsIt is worth noting that China’s unemployment statistics are quite different from those in the West. While these are shocking figures, they do not fully reflect the real unemployment situation in Chinese society. What has caused the current employment dilemma? According to Li Hengqing, an economist at the Informatics and Strategies Institute in Washington, DC, the ¥4 trillion credit expansion by Wen Jiabao’s government in 2008 boosted economic development for the short term. But only a few years later, various problems, including production overcapacity, surplus workers, environmental pollution, and other complications, began to surface. By the time Xi Jinping came to power, China’s economy had reached an inflection point, with the economy slowing down and unemployment pressures and other problems beginning to appear in rapid succession. There are three types of economic entities in China: large state-owned enterprises, foreign-invested and large and medium-sized private enterprises, and individual households and small private enterprises. Among these, foreign-invested and large and medium-sized private enterprises play the most important role in the economy, accounting for one-half of the country’s tax revenue and 60–70 percent of employment. But after coming to power, Xi Jinping has strengthened the dominance of the state-owned sector and has promoted his “common prosperity” policy, resulting in a dramatic reduction in the amount of foreign investment and a loss of incentives for large and medium-sized private enterprises to innovate. In addition, the three years of Xi’s “zero-COVID” policy depleted China’s economic vitality. The pandemic prevention policy is indicative of the Communist Party’s omnipresent and unrestrained power, resulting in entrepreneurs not being willing to invest in business. This does not include the fact that the Internet, science and technology companies, real estate, educational training, and other enterprises—all of which were once major sources of employment opportunities for university students—have been under attack by Xi Jinping in recent years and they have all scaled back recruitment of university graduates. According to Li Hengqing, while such a large number of unemployed people will not necessarily cause immediate social unrest in China, what is actually more worrisome is the possibility that China will repeat Japan’s “lost decades”—thirty years of economic stagnation—a time of economic malaise, high unemployment, and a loss of confidence in the future among young people. As an example, in early April 2023, four young people, who originally did not know each other but who had met on the Internet, went together to Tianmen Mountain in Zhangjiajie National Forest in Hunan province to take drugs. Eventually, all four of them jumped off a cliff to their deaths. The one thing they all had in common was that they were either migrant workers, unemployed, or impoverished youths, and they had all met unforeseen life setbacks. Prior to this, within a matter of only of four days, more than one dozen students in Tianjin jumped to their deaths. Li Hengqing believes that, instead of social or political resistance, the CCP would prefer to see young people lose hope in life and give up on themselves. For the Chinese government, the only way out of the current dilemma is to deepen political reform, strengthen construction of the rule of law, return to a market economy, support the entrepreneurs, and thus stimulate economic vitality. But these are all things that Xi Jinping strongly dislikes and is not willing to do. Li Hengqing believes that the Chinese Communist Party is very cunning. Once Western governments relax a bit, the Chinese Communist Party will get a second wind and immediately counterattack and break out of the current containment imposed by the West. Therefore, Li suggests that the United States and its Western allies continue to apply pressure, enforce the agreements they have already signed to counter the Chinese Communist Party, act in accordance with the West’s national interests and human rights values, and force the Communist Party to accept the present rule-based world order and universal values instead of believing in any verbal promises made by Xi Jinping and the Communist Party. If the West continues to apply pressure, Xi Jinping’s life will become increasingly difficult, to the point that eventually he will be unable to continue implementation of his present disruptive policies.Policy (Public Opinion Within the Great Firewall): Reconsidering the Expansion of Government Cadres and Workers in China: An Empirical Analysis of Time Series Data from 1978 through 2019Zhang Guang and Yan Ning – Public Administration and Policy Review – May 2021 ![]() There have been three broad phases in the size of the Chinese government workforce during the last forty years: continuous expansion, cessation of expansion, and then another phase of continuous expansion. In this regard, changes in public finance have served to control increases in the number of employees. However, the impact of non-public finance has driven an expansion of the number of government employees. Analysis reveals that streamlining personnel must be clearly identified as the primary goal of the reforms and it should not be limited to the central government. Rather, it should also include local governments because the latter employ much of the government workforce. In short, to control expansion of the government workforce, it is necessary to control expansion of non-public finance, such as land finance. Matters that require nationwide coordination should be directly managed by the central government.(Read The Original Text)Politics: China’s State-owned Enterprises: Instruments of Its Foreign Strategy?Nie Wenjuan – Journal of Contemporary China, Vol. 31, No. 135, 2022, pp. 383-397 – September 8, 2021 ![]() This article finds that the instrumental relationship between the government and state- owned enterprises (SOEs) is the result of bargaining between the two. Some SOEs align their strategic priorities in their overseas operations with those of the government under the condition that the government provide preferential loans or project contracts. Western SOEs have greater autonomy in their overseas activities than their Chinese counterparts. The instrumental relationship between government and business in China is primarily limited to the economic sphere, with commercial products being the main institutional link between the two. SOEs have important implications for China’s political and economic institutions: overly extensive use of SOEs to serve strategic objectives will undermine their role as economic entities in the global marketplace, which will further weaken China’s economic competitiveness. But ignoring the instrumental value of SOEs will result in China’s failure to meet its strategic needs in its international interactions, which, in political terms, will have a negative impact on China’s rise.(Read The Original Text)Politics (Public Opinion Within the Great Firewall): Behind the Sino-Russian Joint Declaration: Does this “Disorderly Era” Present New Opportunities for Horizontal and Vertical Alliances?Lu Zhoulai – Beijing Cultural Review – March 23, 2023 ![]() This article analyzes the economic and financial game between the West and Russia after the Ukraine crisis, discussing the three underlying logics of the global economy and the future direction of macroeconomic policies. First, the conflict between Russia and Ukraine reminds us that peace and development are not the norm and the great powers must balance development with security. Second, the exchange rate of the ruble has remained strong in the face of the Western economic sanctions, signaling the financial and monetary system is undergoing a “de-dollarization.” Third, U.S. pressure on both China and Russia, and the European Union’s demand for independent trade, have brought China and Russia closer together. The author believes that after the crisis in Ukraine, in the face of this global “disorderly era,” the supply of primary products, the development of manufacturing industries, and high-tech innovation will determine the resilience and vitality of China’s future macroeconomy.(Read The Original Text)Finance and Business (Public Opinion Within the Great Firewall): Interpreting the Annual Performance Report of the Bank of China: Serving the Real EconomyHuai Yi – Southern Weekend – April 3, 2023 ![]() On March 30, 2023, the Bank of China released its 2022 annual performance report. The Bank of China’s annual operating income was ¥618.09 billion, an increase of 2.06 percent. Net profits were ¥237.504 billion, an increase of 4.47 percent. Returns on assets (ROA) were 0.85 percent and returns on equity (ROE) were 10.81 percent. The Bank of China adhered to its objective of serving the real economy through its financial services and gave full play to its role in promoting investment and consumption by providing more direct financial support to the real economy. For example, to promote the development of small and micro enterprises, the Bank of China has continued to promote product and service innovation and it has increased its support to the real economy. To better serve the real economy, the Bank of China has jumped on the wave of digitization in the new era and has accelerated the pace of digital transformation. In addition, it has established cooperation with the Ministry of Human Resources and Social Security under the State Council to jointly provide special loans for job stabilization and expansion. In January 2023 alone, it granted special loans of nearly 15 billion yuan to 4,534 small and micro enterprises, helping to stabilize 186,000 jobs and to create 12,000 new jobs.(Read The Original Text)Finance and Business (Public Opinion Within the Great Firewall): Why is TikTok Indestructible? Ding Gang – Chongyang Institute of Finance of People’s University of China – March 30, 2023 ![]() Online shopping has become an indispensable part of daily life for Chinese consumers. The digitization of the Chinese economy is the foundation of TikTok’s success. Regardless of what type of economic system there is, the market and data determine success. Data equal both market and money, so whoever can master, guide, and combine data with the more advanced technologies will produce more revenue. While it is no longer possible for the capital power of Western origins to expand colonies and to carve up global markets with cannons and warships as was the case during its rise some 500 years ago, the impulse to capture more markets for profit has not changed. China has the world’s largest online shopping market, the fastest and most convenient logistics, and the world’s largest manufacturing workforce. If we continue to leverage China’s strengths, more Tiktoks will surely emerge.(Read The Original Text) |
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