The Undoing of China’s Economic Miracle

 The Undoing of China’s Economic Miracle

China’s economic “miracle” wasn’t that miraculous. The country’s high-octane ascent over the past 40 years is, in reality, a triumph of basic economic principles: As the state gave way to the market, private enterprise and trade flourished, growth quickened, and incomes soared.To get more China breaking news, you can visit shine news official website.

This simple lesson appears, however, to be lost on Xi Jinping. China’s leader is rejecting decades of tried-and-true policy by reasserting the power of the Communist Party within the economy and redirecting Chinese business inward. Indeed, faced with escalating hostility in Washington, Xi’s pivot seems, if anything, to be accelerating—with potentially serious consequences for China’s economic progress, and its relations with the world.
True, Xi isn’t completely drop-kicking free enterprise and free trade. In November, he told the G20 summit that China’s new economic agenda “is by no means a closed-door policy” and “will create more opportunities for the world to benefit from China’s high-quality development.” Beijing also recently joined the Regional Comprehensive Economic Partnership, a 15-nation pact that created a trading bloc with about a third of the world’s population. Hua Chunying, the spokesperson for China’s foreign ministry, hailed it as “a reflection of the commitment to free trade & multilateral trading system.”
But the picture looks much murkier if you’re Jack Ma, China’s tech-entrepreneur grand master. Regulators squelched what would have been a record-breaking initial public offering of Ma’s fintech giant, Ant Group, a mere two days before its November debut on the Shanghai and Hong Kong Stock Exchanges. The official reason they offered was an altered regulatory environment, but there is widespread concern that Chinese authorities were punishing Ma for criticizing their oversight of the finance industry. Xi reportedly made the call himself. (Beijing subsequently launched an antitrust investigation into Ma’s other creation, the e-commerce company Alibaba Group.) Days later, another prominent entrepreneur, Sun Dawu, was detained for “provoking quarrels and disrupting production,” and the government seized his agriculture company. Sun, who has sometimes been critical of the government, may have been targeted over a land dispute with a state-owned farm.

Jerome Cohen, a longtime expert in Chinese law, has worried on his blog that these actions could signal “a new central campaign to curb the political and economic power of major private entrepreneurs who refuse to follow the central Party line in every respect.” That rings true based on Xi’s efforts to tighten his grip on private enterprise. In a document issued in September, the Communist Party said it aimed to “guide” private companies to “explore the establishment of a modern enterprise system with Chinese characteristics.” The “opinion” of the party is that its cadres ought to have more influence over the management decisions of private firms, to ensure that they adhere firmly to the correct, state-determined line.