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On June 28, the Propaganda Department of the Chinese Communist Party (CCP) stated at its “China Decade” press conference that since 2012, the party had realized “historic achievements” in building a prosperous society in China. This by lifting 100 million people in rural areas out of poverty and achieving “relative” full employment.
A day after that CCP conference on the “China Decade,” Chinese Premier Li Keqiang officially declared the opposite. In his statements, Li confirmed that the number of Chinese citizens suffering severe economic problems had increased exponentially because China’s economy “has been derailed” by the policies adopted to combat the pandemic.
Li’s criticism is not new. Bloomberg reported how in late May, in a teleconference with hundreds of officials, representatives of state-owned enterprises, and financial firms from across the country, Li warned that China was facing a significant economic crisis. In his teleconference, the Chinese Premier pointed to the fragility of the Chinese economy and the impact on government fiscal revenues, explaining that national budget revenues were down 5.9% in April and local budget revenues were down as much as 6.6%.
He also revealed that some provinces requested approval for the issuance of emergency bonds to overcome their difficulties but clarified that the central government had only one emergency fund, so local authorities would have to rely on themselves.
Li, at that conference, pointed to anti-COVID measures as one of the leading causes of China’s economic hardships and called on officials to reasonably balance anti-pandemic actions with the urgent need to resume economic growth. But after the call to prioritize the recovery of economic activity and growth, Xi Jinping responded indirectly by repeatedly calling on local officials to “push for no COVID cases to appear” in their regions.
In mid-March, Lingling Wei, chief China correspondent for the Wall Street Journal (WSJ), had already revealed that according to Chinese government officials and advisors close to Li, the prime minister had been pressuring Xi Jinping to abandon measures that moved China away from Western-style capitalism because they were causing a dangerous economic slowdown.
In September 2021, the same journalist pointed out that Xi Jinping aimed to curb Chinese capitalism to return too much of Mao’s socialist vision. According to the WSJ correspondent, Xi will go beyond reining in the tech giants, aiming to have the Communist Party direct money flows, and setting strict limits on the profit-making of Chinese “private” companies.
China would be entering a recession that will be worse if it insists on the COVID 0 strategy to which Xi Jinping clings. But perhaps Xi cares more about strengthening the party’s totalitarian control over China’s “private” sector than restoring economic growth. There is no reason to think that Li wants to weaken Beijing’s totalitarianism. The differences between Li Keqiang and Xi Jinping are significant; however, they are about means, not ends.
The prime minister with the least power in the history of the People’s Republic of China is warning the Beijing leadership that the limited capitalist mechanisms of the model initiated by Deng Xiaoping did not weaken but instead strengthened both the CCP’s totalitarian control over the Chinese population and contemporary China as a world power. Achievements that Xi would put at risk for unclear ideological and impractical reasons.
We are facing an ideological battle at the top in Beijing, i.e., a limited conflict between pragmatism and dogmatism within totalitarianism. Li is expected to step down in less than a year and try to leave a successor who will uphold his pragmatic line. On the other hand, Xi will be hoping that in November, the 2,300 delegates to the CCP Congress will confirm him for a third term.
Guillermo Rodríguez is a professor of Political Economy in the extension area of the Faculty of Economic and Administrative Sciences at Universidad Monteávila, in Caracas. A researcher at the Juan de Mariana Center and author of several books // Guillermo es profesor de Economía Política en el área de extensión de la Facultad de Ciencias Económicas y Administrativas de la Universidad Monteávila, en Caracas, investigador en el Centro Juan de Mariana y autor de varios libros