China’s state-run Global Times on
Thursday strove to portray an “unprecedented national video
teleconference on stabilizing the economy” with over 100,000
participants held by the State Council as the Communist government
putting a firm hand on the economic tiller, but it looked more like a
sign of growing panic in the regime.
The Global Times complained
about Western media “badmouthing the Chinese economy” by reporting that
growth could slow to two percent in 2022, well below the projected 2.8
percent growth of the dismaying U.S. economy.
China’s growth target for the year
was 5.5 percent. The Chinese economy has not grown more slowly than the
U.S. economy since 1990.
“Pessimistic predictions from the
Western media about China have never turned out to be accurate, probably
because their views about the Chinese economy have been distorted so
much by their ideological bias and long-established political position
that they are unable to understand the world’s second-largest economy,”
the Global Times huffed.
The editorial insisted foreign investors are still eager to pour money into China – a debatable assertion the Global Times could
only try to support by citing foreign capital totals from 2021, long
before China’s manic coronavirus lockdown in Shanghai started making
overseas investors nervous.
Health workers wear protective suits as they stand outside a tent
while waiting to perform nucleic acid tests to detect COVID-19 on local
workers at a makeshift testing site in Haidian District on April 26,
2022 in Beijing, China. (Kevin Frayer/Getty Images)
“There is no denying that the
epidemic outbreak has caused some shocks to economic activities, but it
did not hurt the fundamentals of the Chinese economy. China remains to
be one of the fastest-growing major economies around the world, with a
huge potential for infrastructure upgrading, a massive domestic
consumption market, and a resilient manufacturing sector,” the Global Times insisted.
The Chinese Communist paper claimed
one of the regime’s unbeatable advantages is that “once the problem is
identified, the government can mobilize massive, national resources to
address it, and past experiences tell us that it always works out well
in the end.” The long-suffering captive population of Shanghai might beg to differ.
Workers in protective gear disinfect a pile of garbage bags on Thursday, April 21, 2022, in Shanghai. (AP Photo/Nico de Rouge)
The Western media report that made the Global Times so apoplectic was filed on Thursday by Bloomberg News, and spoke of “rising anxiety from within China’s government about the impact of its Covid Zero policy on the economy.”
Bloomberg cited “people familiar with
the matter” who said Chinese Premier Li Keqiang warned teleconference
attendees that “growth risks slipping out of a reasonable range.”
Li reportedly said
the lockdowns of March and April might have inflicted more economic
damage on China than the original outbreak in 2020. Some of the
corrective policies touted at the emergency meeting involve backing away
from lockdown restrictions without admitting the “zero Covid” policies
were a mistake.
According to the report, Shanghai residents are resentful that it has taken three weeks for them to emerge
from a seven-week lockdown, and they still are not fully open yet,
while the national capital of Beijing refuses to impose a similar
lockdown because it would inconvenience Communist Party royalty, scare
foreigners away, and embarrass China politically.
“China has fallen to second-last in
Bloomberg’s Covid Resilience Ranking of the best and worst places to be
in the pandemic, as outbreaks trigger curbs on mobility and the
functioning of business and everyday life,” the report said, a
condemnation guaranteed to raise the blood pressure of Chinese state
media editorialists.
The Economist proposed
on Thursday that coronavirus lockdowns are only one of two devastating
blows to the Chinese economy. The other is a package of economic
initiatives pushed by dictator Xi Jinping known as the “new development
concept,” and it has not been faring very well:
The goals are rational:
to tackle inequality, monopolies and debt, and to ensure that China
dominates new technologies and is fortified against Western sanctions.
Yet in all cases Mr Xi believes the party must take the lead, and
implementation has been punitive and erratic. A blizzard of fines, new
regulations and purges has caused the dynamic tech industry, which
contributes 8% of GDP, to stagnate. And a savage but incomplete
crackdown on the property sector, responsible for over a fifth of gdp,
has led to a funding crunch—one reason why housing sales fell by 47% in
April compared with a year earlier.
The Economist faulted
Xi for “expanding the scope of the least productive part of the
economy: the government-run one.” Meanwhile, private-sector investors
are facing more expensive capital and grappling with apprehension that
the Chinese Communist Party will cap their profits and wallop them with
more expensive regulatory burdens. Innovation and ambition in the
Chinese tech sector is giving way to the pursuit of government
subsidies.
A telling sign of much deeper anxiety
than Chinese state media wants to admit is that tech giant Alibaba has
not provided any financial guidance for the fiscal year, which began
last month. The company said
it was no longer able to predict the risks arising from coronavirus
outbreaks and lockdowns. Alibaba has now lost an astonishing
three-quarters of its market value since late 2020.