Xi Jinping’s crackdown on almost everything in China may be a sign of insecurity or tremendous fear of the monied business sector. Tencent and Alibaba were in the 10 topmost valuable tech companies globally in 2020 and today they are no longer on the list. 38% of the apps disappeared from the app market since 2018. China is about to ban offshore trading services, has not only cracked down on big tech but also social media, tuitions, and games.
The crackdown was rationalized in the name of common prosperity, but it is more like a vendetta against businesses –which is causing foreign investors to flee China, making Chinese markets lose 1.5 trillion dollars. The crackdown on celebrities resulted in one social media influencer being fined $210 million.
The CCP wants to dominate Chinese minds and bodies and keep money in China for the Chinese, so it is about to stop the flow of money out of the country, which was started by many Chinese businessmen preparing to flee the country. With such a large crackdown on businesses that provide many jobs, China is digging its own grave in the long run and Xi Jinping doesn’t realize it yet.
The unemployed and semi-unemployed might reach 300M+ people, newly unemployed in 7 industries such as entertainment, real estate, and education tutoring. Foreign companies are leaving China – giants like Panasonic, Samsung, Toshiba, Foxconn for a total of about 20,000 companies. Restaurants and airlines have been affected by Covid and online sales on Amazon for about 50 thousand Chinese sellers have been affected by Amazon’s crackdown on illegal selling. Medium-size enterprises are also experiencing layoffs and about half of the 2021 college graduates are unable to find jobs.
Foreign billionaires and investors are leaving the Chinese stock market due primarily to the crackdown of the CCP on businesses across the economic spectrum, and many now feel that China will never liberalize and become a safe haven for foreign investors.
A number of local governments have cut civil service salaries from 25 to 30 percent and cut all subsidies. Xi Jinping has slashed CCP members’ salaries by a third. The days of bureaucrat belt-tightening have arrived. This is a sign of desperate measures to forestall a precipitous decline. Imagine the reaction of American bureaucrats if their salaries were cut by a third!
Lack of domestic demand in China is stifling growth so China’s economy is facing the most difficult period in 40 years, which signals hard times in the country. China’s local debt is 7.84 trillion US dollars, which is 10 times more than the real estate enterprises which are going bankrupt one by one, starting with Evergrande.
Sycophancy or fake flattery is apparently the norm in government and business in China. Apparently, ass-kissing employees are the norm and Evergrande was a prime example of incompetent autocratic leadership running a company into the ground. No wonder Xi Jinping is jealous and afraid of business leaders’ power and influence in China.
China may be suffering from autocratic incompetent rule under the CCP but the World Bank still pegs Chinese 2022 GDP growth at about 5%, which seems optimistic judging by the problems that China is beset with. It is also more than just a rumor that the Chinese local governments, wanting to impress the national government, often “cook the books” or falsify economic data to make poor statistics look better than they actually are.
There is an old saying that if you want to find corruption and determine the economic health of the country then you should follow the money. Well, the corrupt tyrannical CCP is in charge of the money supply and much money is now leaving China, so it is in deep trouble.
The gravy train of foreign investment in China is fast drying up and this is just another reason why China is in deep trouble economically. ✪