{"id":12478,"date":"2016-04-25T13:00:33","date_gmt":"2016-04-25T06:14:29","guid":{"rendered":"http:\/\/chinaworker.info\/?p=12478"},"modified":"2016-04-29T21:50:04","modified_gmt":"2016-04-29T13:50:04","slug":"china-is-the-worst-over","status":"publish","type":"post","link":"https:\/\/chinaworker.info\/en\/2016\/04\/25\/12478\/","title":{"rendered":"China: Is the worst over?"},"content":{"rendered":"

Chinese regime cranks up stimulus spending to 2009 levels \u2013 a sign of confidence or desperation?<\/strong><\/p>\n

This article is an abridged version of the Editorial in Socialist magazine (CWI Chinese language journal\u300a\u793e\u6703\u4e3b\u7fa9\u8005\u300b) issue 37, May-June 2016<\/em><\/p>\n

In China, the CCP regime \u201cis entering dangerous territory\u201d says Professor Steve Tsang of Nottingham University. Tsang, correctly in our opinion, told the South China Morning Post that the National People\u2019s Congress (NPC) in March, \u201crevealed signs of weakness and paranoia.\u201d The strike by the mineworkers of Heilongjiang, which acted like a flash of lightning over the NPC meeting and a warning of what lies ahead, is one of the most important developments since Xi Jinping came to power.<\/p>\n

Rather than securely exercising his \u2018strong man\u2019 role as the media claims, Xi\u2019s position is not unchallenged. The economic crisis has further increased top-level tensions and sapped the credibility of Xi\u2019s policies. Witness the frenzied manhunt and crackdown after an open letter calling for Xi to step down, and signed by \u201cloyal CCP members\u201d, briefly appeared on a government-linked website. The open letter may have been the work of high-level factional opponents of the president. It is quite likely that the internal power struggle will resurface in the run up to the 19th CCP Congress next year, when five of the current seven-man Politburo Standing Committee must be replaced.<\/p>\n

Despite some less bad economic data in April and a concerted \u2018PR\u2019 campaign by the government to present first quarter GDP growth of 6.7 percent as a \u201cgood start\u201d, the real state of China\u2019s economy remains dire and Beijing’s data is less trustworthy than ever. This is not purely a Chinese problem but reflects the impasse of global capitalism, suffering potentially the worst crisis in its history. Only massive state interventions \u2013 unprecedented money printing by central banks \u2013 averted a 1930s style Great Depression in the aftermath of the global financial crisis. But this nightmare scenario cannot be ruled out in the years ahead. Between 2007 and 2015, global debt grew by US$57 trillion \u2013 the equivalent of five Chinas. Mirroring China\u2019s problems, debt levels continue to rise while global growth slows to a trickle.<\/p>\n

\"Xi's
Xi’s rule is facing economic and political headwinds.<\/figcaption><\/figure>\n

Record credit expansion<\/strong><\/p>\n

The CCP regime cannot escape from an economic dilemma of its own making. On a capitalist basis, China must swallow painful and politically explosive restructuring, or it will face a debt mountain so large that a financial crisis becomes unavoidable. It need not be this way as we explain in this issue of our magazine. But the alternative, a democratic socialist economic plan, is a closed book to the CCP regime. Instead, the government resorts to even more debt to avoid a sharper drop in GDP. This is stoking bigger problems down the road.<\/p>\n

Li Weisen, economics professor from Fudan University, compared the government\u2019s policy to \u201csmoking opium to look healthy\u201d. Banks extended a record 4.61 trillion yuan of new credit in the first quarter of 2016. This exceeds even the 4.58 trillion yuan of new loans in the first quarter of 2009, when China launched its giant stimulus programme.<\/p>\n

\u201cBeijing is buying time in a Faustian Pact that grows more dangerous every month,\u201d wrote Ambrose Evans-Pritchard, the international business editor of the Daily Telegraph (UK). \u201cNot even China is immune from a financial crisis, even though the banking system is an arm of the Communist state. My own assumption has always been that China\u2019s denouement would be a slide into stagnation, a slow virus \u00e0 la Japonaise. This may be too sanguine.\u201d<\/p>\n

Hong Kong \u2013 a time bomb for Beijing<\/strong><\/p>\n

The economic tremors from China will have a decisive impact on Hong Kong, giving a further twist to the sea change in political consciousness that has taken place. The fragmentation of Hong Kong\u2019s political map is accelerating. There is unfortunately no working class political voice to act as a rallying point for opposition.<\/p>\n

The \u2018CY\u2019 [Chief Executive Leung Chun-ying] era, which Beijing may decide to terminate in 2017, has been an unmitigated disaster for the ruling class. While the \u2018Umbrella\u2019 mass protests, due to a lack of leadership and revolutionary strategy, failed to achieve change, this frustrating experience has left a legacy of seething hostility towards the government.<\/p>\n

CY\u2019s \u2018success\u2019 has been to shatter the relatively stable two-bloc system of old, conjuring up new forces that make ruling Hong Kong \u2013 by an unelected pro-CCP clique \u2013 much more difficult. The idea of independence, and not just \u2018localism\u2019, is no longer a fringe opinion. This can become a time bomb for Beijing in the years ahead.<\/p>\n

It is to address these new challenges, and the urgent need to build a powerful socialist alternative, that we have changed the format of Socialist magazine, increasing the space for more contributors and a wider range of issues. This also reflects the growth of our organisation in the past year, with new supporters and sympathisers.<\/p>\n

Don\u2019t stand on the sidelines \u2013 you too can support our struggle with a donation to build a stronger socialist voice. Or better still, join the CWI and add your voice to our struggle.<\/p>\n

If you want more information about the CWI and its Chinese section or to order Socialist magazine (available in Chinese and English) contact: cwi.china@gmail.com<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

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