Dialogue China BriefingTalking About China NowIssue 126 – March 1, 2023Subscribe for Free? Click to Join!In This IssueThe articles shared here do not necessarily reflect views of Dialogue China.I. From Director1. The Blind Spot of Western Observers’ Optimism about China’s Economy in 2023  II. Dialogue China Opinions2. A Shoestring Led Crisis of Confidence  III. Policy (Inside The Great Firewall)3. A China Aging Research Report  IV. Politics (Inside The Great Firewall)4. On the Eve of the “Microchip Iron Curtain,” China is in a Dangerous “Sanctioned Person’s Dilemma”5. The Biggest Loophole in “Wandering Earth 2” Calls China Directly into Account  V. Finance and Business (Inside The Great Firewall)6. The Gap between the Economies of the North and South of China is Fundamentally One in the Degree of Marketization7. Who is Forcibly Cutting off the Retreat of Chinese Migrant Workers, Fearing that the World Is Not in Chaos?  From Director1. The Blind Spot of Western Observers’ Optimism about China’s Economy in 2023Wang Dan – UP Media – January 27, 2023Looking ahead to the overall development trends of China in 2023, I think the most important indicator to observe is whether economic development can recover. If the economy resumes growth, the Communist Party’s monopoly on political power will be relatively secure. If the economy continues to decline, the social conflicts accumulated in the three-year pandemic may be further exacerbated.   Regarding this issue, the analysis we have seen so far is basically divided into two schools of thought. One school of thought believes that China’s pandemic prevention and control measures have been lifted, that a strong rebound is bound to occur, and that the outlook for China’s economy is positive. The other school of thought is more pessimistic, believing that China’s economic indicators may rebound to a certain extent, but in 2023 overall a recession is inevitable. Interestingly, the more optimistic are mostly Western observers, while the more pessimistic are mostly local Chinese observers. I am certainly in the latter group, and I think China’s economic growth will continue to decline in 2023, rather than sustainably rebounding from this low point.   The reason for this disagreement is largely due to the fact that most Western observers analyze China’s economic trends according to traditional methods, using economic statistics based upon empirical analysis models. In other words, they only look at economic development from an economic perspective. I believe this is one of the many misconceptions that the West has about China. In fact, there are no purely economic issues in China. China does not have standard economics, only political economics. In China’s economic development, political factors play too much, too big, and too deep a role. Government intervention in the economy also exists in the West, but not nearly to the same extent in quantity or quality as in China. In China, economic development and the political environment are inextricably intertwined. I am not optimistic about China’s economic development in 2023 because of my judgment that the political environment will not improve in 2023.   If we only look at economic figures, we will soon see all kinds of evidence of China’s economic recovery. But this starts with a problem: How accurate are these statistics? The accuracy of economic statistics is already not exclusively an economic issue. Even if we put aside the question of accuracy, does increasing growth represent the good or bad development of China’s economy? What indicators should we use to judge China’s economic performance? In my opinion, the confidence index of Chinese entrepreneurs and foreign investors in China’s prospects may be more meaningful than specific economic figures such as Gross Domestic Product [GDP], export trade or other metrics. Because it more accurately reflects the political nature of China’s economy.   In this regard, one of the more noteworthy recent surveys may be relatively more revealing. According to a survey conducted by the European Union Chamber of Commerce in China last year among its members, as many as 60 percent of European companies in China believe that doing business in the PRC is becoming increasingly difficult, mainly because of opaque laws and regulations and the frequent politicization of business activities. Both of these reasons are in fact closely related to the political environment. Joerg Wuttke, president of the association, noted that foreign companies doing business in China increasingly perceive the policies of the Xi Jinping government to be inscrutable. He says frankly that what European companies thought was a well-planned and well-organized Chinese government has been turned upside down by the pandemic, “destroying much of the trust we had in the Chinese government.” I think that is a good point, and the poll results are very telling.   As we all know, business community confidence is very important to the economy. Without confidence, there can be no long-term investment plans. Lack of confidence is what is causing the present outflow of capital, supply and industrial chains from China today. In Western countries, lack of confidence may be due to analysis of the economic outlook. In China, as the European Union Chamber of Commerce survey demonstrates, it is entirely due to judgment of the political environment. Recent signals from Communist Party leaders such as Xi Jinping, Liu He, et al. to improve the business environment may be the basis for some analysts’ renewed optimism on China’s economy. But they forget the most fundamental factor: the political environment in China is unlikely to improve under Xi Jinping’s leadership. In other words, the increasingly corrupt political environment in China today makes it impossible for both local and foreign companies to develop confidence in the future. Under such circumstances, how can there be a sustainable economic recovery?Dialogue China Opinions2. A Shoestring Led Crisis of ConfidenceDC Briefing Editorial Board – Dialogue China Briefing – March 1, 2023In Shangrao City, Jiangxi Province, a 15-year-old boy named Hu Xinyu was found hanged to death a few dozen meters from his school on the 106th day after his disappearance. Five days later, the authorities held a press conference announcing that Hu had committed suicide because he was bored with school, and that the case was closed.   The authorities have not only failed to win the trust of society, but also triggered a public outcry over the painstakingly-written death report. The public has pointed out a number of suspicious aspects: the inconsistency of details between the location where the body was found and the person who found it in the police report, the length of the shoelace that was used for the hanging does not match the height of the tree trunk reported by the officials, the shoelace could not withstand the gravity generated by the deceased jumping from the tree, the body was dressed differently from the last time Hu Xinyu appeared in surveillance video, and there are many illogical points in the autopsy report, etc.   The Chinese Communist Party is not a first-time offender when it comes to official explanations that defy common sense and turn a deaf ear to public concerns.   In the 2022 Xuzhou chained woman incident*, four public notices were issued by various levels of government, which were full of loopholes and contradictions. In response to escalating public skepticism and anger, the authorities chose to lock down the village and block and censor the Internet. * The Xuzhou chained woman incident (徐州铁链女事件), also known as the Xuzhou eight-child mother incident (徐州八孩母亲事件), is a case of human trafficking, false imprisonment, sexual assault, severe mistreatment, and subsequent events that came to light in late January 2022 in Feng County, Xuzhou City, Jiangsu Province. The video of a mentally disturbed and unlawfully imprisoned woman who was chained to a wall and who gave birth to eight children went viral on China’s internet and sparked a huge public outcry.   The torrential rainstorms in Henan Province in 2021 left 15 million people devastated and unclaimed cars piled up in highway tunnels after the waters receded. However, the authorities kept the storm forecast and evacuation plan secret and eventually banned people from discussing the death toll and holding memorial services.   The absurdity of this trend began more than a decade ago. In the 2011 Wenzhou high speed rail rear-end accident, two trains collided on a bridge in the deep of night and the railways carriages fell off the bridge. Early the next morning the authorities stopped the search and rescue work and started burying the carriage cars. The Ministry of Railways spokesman Wang Yongping said that the rescue site was a quagmire, and in the rush to facilitate the rescue the carriages were pushed down under the mud. In response to the public’s and the media’s suspicions, Wang Yongping threw out the age-old saying: “Regardless of whether you believe it or not, I believe it.”   “Regardless of whether you believe it or not, I believe it.” These few simple words show the arrogance and disdain of those in power to the fullest. Behind the anger and despair, another mystery is revealed: the Chinese Communist Party has fallen into a crisis of faith and is sinking deeper and deeper into the Tacitus trap.* * Tacitus Trap is a political theory named after Roman historian Tacitus, which describes a situation where an unpopular government is hated no matter what it does and whether it is right or wrong. The theory was brought up in a 2007 book by Professor Pan Zhichang from the School of Journalism and Communication at Nanjing University. In the book, he quoted Tacitus’ remark on Galba, an unpopular emperor of Rome, to explain the recurrent declines of Chinese dynasties throughout history: ‘When a government is unpopular, both good policies and bad policies highlight the government’s shortcomings.” Since China’s paramount leader and General Secretary of the Chinese Communist Party Xi Jinping’s use of the term in 2014, it has become increasingly popular in journalism and academia in China. State-run media in China, such as People’s Daily online, summarized that since the 18th National Congress of the Chinese Communist Party, Party General Secretary Xi Jinping has described three traps that China might fall into, that is, the Tacitus Trap, the Thucydides Trap and the middle-income trap.   In some cases, the Communist Party fabricates lies in order to shield certain officials or powerful interest groups. For example, in the case of the heavy rain storms in Zhengzhou and the high-speed train collision, the local government manufactured lies to protect itself, so as to cover up the mistakes of the ruling party and to protect the rule of the Communist Party.   Wang Juntao, Co-Chair of the National Committee of the Democracy Party of China, believes there is a more universal factor involved: The Communist Party’s quality of governance is so low that in many cases it is incapable of discerning the truth. Under such circumstances, lies become the lowest cost “truth.”   For example, in the case of last year’s Xuzhou chained woman incident, the Communist Party did not want to protect any specific official in Jiangsu Province. It is not that the government did not want to find out the name of the woman who was trafficked, it simply could not find out the truth. In the vast hinterland of the inland Yunnan, Guizhou and Sichuan Provinces – and even in the rural areas of the coastal provinces – girls are born without documentation, and many of them remain invisible and without official IDs for their entire lives. Of course, the Communist Party cannot admit that under its glorious leadership, it is impossible to find a girl’s household registration, because once it admits this weakness, more lies will disappear like dust in the wind – such as Xi Jinping’s comprehensive poverty eradication and “moderately prosperous society,” which will undoubtedly become a big joke around the world in the absence of reliable, plausible population statistics. Therefore, once the first lie is told, lies must continue to be fabricated one after another. In the end, when you cannot make a tenable defense of it, you can only adopt an arrogant and overbearing attitude and say: “I believe it anyway!”   From historical experience, the longer a political party stays in power the more negative substance it accumulates, and the more favorable it is to its political opponents. The People’s Daily Online Forum published an article by Beijing University professor Zheng Yefu in 2016, in which the author pointed out that a serious crisis of faith has emerged in China. After so many years in power, the Communist Party – especially Xi Jinping’s regime – has produced a trust crisis that is progressively deepening. The White Paper Revolt at the end of 2022 was a breakthrough, as more and more young people began to doubt the Communist Party and take the road to waking up to this reality.   In conclusion, the Dialogue China think tank suggests that in light of China’s strict and harsh media censorship, a database or digital museum of public events in China should be established overseas as soon as possible to objectively document the infuriating, outrageous truth. China has a large number of excellent investigative journalists who have done specialized, high-quality, professional investigations in many of the above-mentioned public crises and have pushed for the revelation of these truths. However, due to systemic constraints, most of their findings have remained unpublished and / or blocked, and even their personal safety has been threatened. Chairman Wang Juntao added that the above measures should be complemented by interactive multi-media exhibitions, so that all Chinese and people around the world can understand and participate in them.Policy (Inside The Great Firewall)3. A China Aging Research ReportRen Zeping – Zeping Macroview – February 6, 2023Why Read This? Population aging has become a common phenomenon worldwide, but China’s population is aging at a large scale, deep and fast. China’s baby boomers from 1962-1976 will enter the aging population in the next 5-10 years. It is expected to enter a super-aging society with more than 20 percent of the population in 2033, and then continue to rise rapidly to 35 percent in 2060. In the face of the aging situation, we should build a multi layered elderly protection system, and coordinate the top-level design, departmental coordination, regional coordination, and motivation of the main market. It is believed that through a series of reform measures, China will be able to successfully cope with the large scale and rapid aging.（Read The Original Text）Politics (Inside The Great Firewall)4. On the Eve of the “Microchip Iron Curtain,” China is in a Dangerous “Sanctioned Person’s Dilemma”Ye Yan – Diplomatic Review (Journal of the Foreign Affairs Institute), February 2, 2023Why Read This? Recently, the United States government intends to completely cut off the supply of products to China Huawei, and will join Japan and the Netherlands in imposing more sanctions on China in the field of semiconductors, further expanding the scope of export controls on China. Some commentators believe that this move will not only harm China’s development interests, but will also adversely affect enterprises in the related industrial chain both domestically and internationally. In this regard, this paper proposes to build a “network of enterprises against economic sanctions” as the goal, and to develop international cooperation against economic sanctions. Through this action, China can reduce the impact of United States and Western sanctions on China’s economy and avoid a full-scale “decoupling” of the United States and Chinese economies in the short term to the greatest extent possible.（Read The Original Text）Politics (Inside The Great Firewall)5. The Biggest Loophole in “Wandering Earth 2” Calls China Directly into AccountYan Peng – Beijing Cultural Review – January 25, 2023Why Read This? “Wandering Earth 2” is really a hot topic at the beginning of the new year, and the focus is still on the “Chinese values” in it. The biggest flaw in the “Wandering Earth” series is the setting of coordination and international relations among the big countries in the crisis. So, how do you think about the discussion triggered by the “Wandering Earth” series? And how to imagine a future world without hegemony? This paper discusses the significance of the “Chinese moment” in the dramatic changes of the world system from the perspective of a long period of five hundred years, and provides a new perspective for us to understand the above controversies.（Read The Original Text）Finance and Business (Inside The Great Firewall)6. The Gap between the Economies of the North and South of China is Fundamentally One in the Degree of MarketizationRen Zeping – Zeping Macroview – January 25, 2023Why Read This? The gap between the north and the south of China has widened significantly. 2010-2021 GDP per capita gap from 0.97 to 1.25. This is the triumph of market economy, proving the necessity and urgency of market-oriented reforms in the north. The report points out that the marketization level should constitute a unified national market, deepen the reform of factor marketization, and build a high-standard market system. In this paper, we believe that to solve the gap between the North and the South, we need to speed up market-oriented reforms targeting the shortcomings of the North, and at the same time coordinate and promote coordinated regional development based on market rules at the national level. It is believed that if we can promote a new round of international market-oriented reform and opening, promote new infrastructure, new energy, stimulate entrepreneurial spirit, and mobilize local initiatives, the confidence in China’s economic outlook will continue to grow.（Read The Original Text）Finance and Business (Inside The Great Firewall)7. Who is Forcibly Cutting off the Retreat of Chinese Migrant Workers, Fearing that the World Is Not in Chaos?Xia Zhuzhi – Beijing Cultural Review – January 26, 2023Why Read This? Every Spring Festival, the most mobile group in China – urban migrant farmers – becomes the focus of public opinion. The author points out that experience has shown that large-scale population movements and urbanization have led to sharp structural divisions in society, which can easily bring about social unrest. However, the wave of urban migrant workers in China has not created political and social stability problems because their demands are mainly economic and social rather than political in nature. In the context of rapid urbanization, urban migrant farmers are becoming increasingly vulnerable to unemployment, and some local people are trying to block the retreat of farmers to their hometowns, and it will be very difficult for the government to cover their losses, so tens of millions of unemployed and landless farmers may become the basis of social unrest, which will be the mourning of China’s modernization.（Read The Original Text）

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