By any conventional economic measure, China has enjoyed significant success over the past forty-plus years. Since Deng Xiaoping initiated China’s move to market economics, the country has generated the highest sustained economic growth in the world, at least for a major economy. For the first time in history, China has enjoyed widespread prosperity and more-or-less in the span of a single generation, hundreds of millions of Chinese have entered the middle class. All of this makes some of the recent pronouncements from China all the more puzzling. A few notable developments:— in 2020 Chinese regulators blocked the planned NYSE listing of Ant Group, the financing arm of Alibaba;— The Chinese government required the major app platforms to take down the app for Didi, the most popular ride-hailing service in China;— The government has limited video games to three hours a week for people under 18 during the school week;— The government has called for limiting for-profit educational technology, such as on-line tutoring;— Perhaps most significantly, China President Xi Jinping has promulgated a “Common Prosperity” philosophy, lest you think these above decisions are isolated or unrelated actions. What is going on? Regardless of the merits of the concern over these issues, do these new interventions represent some sort of government overreach? Why tamper or modify the policies that led to economic growth? There are several factors at work:The socio-political issues China is now grappling with are the consequences of success. Greater social stratification; urban-rural divides; the role of tech in households are all issues Americans and societies around the world grapple with. China’s concern over educational technology, for example, is said to stem from concerns over hyper-competition among school children as well as from concerns over giving more affluent families unfair advantages. Unitary system. In the U. S. and other countries, many of these regulations are left to the market-place, to local governments, or even to NGOs, such as parent-teacher associations. China has a unitary, top-down system in which regulations are promulgated from Beijing. CCP Primacy. The Chinese Communist Party assumes ultimate responsibility for societal success, and in their definition, this entails more than maximizing economic output. There must be an inclusive dimension to this economic growth as well (I daresay this view also has currency in the U. S.). If the CCP endorsed a pure laissez-faire approach to the economy, then why would it need to play a central role? To deny the need for an active government would be to make the Communist Party less relevant. Xi Jinping’s view of the office. Similar to the CCP’s view of itself is President Xi’s view of his role. President Xi has never seen himself merely as a steward, merely the head manager of a system. He has tended to see himself as a leader, someone who is helping transform China.
All data is taken from the source: http://forbes.com
Article Link: https://www.forbes.com/sites/franklavin/2021/10/07/is-beijing-at-risk-of-overreaching-and-curtailing-future-growth/
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