[Epoch Times, 4 ottobre 2022](Full report by Epoch Times reporter Zhang Ting) After the 20th National Congress, whether the CCP will change the key economic policies that affect people’s lives has attracted a lot of attention. Experts say,Xi Jinping“Promoted by the crackdown on big tech companies and the real estate sector, etc.”common prosperity”, Terrorizing companies, leading to layoffs and freezing of hiring which, instead of reaching the goal of wealth, make everyone poorer.
Shuli Ren, former Bloomberg investment banker and Asian market columnist, said in an Oct.3 article that the CCP hascommon prosperity“The push has become”common poverty“。
“Common prosperity” isXi JinpingA distinctive program promoted last year. A CCP system insider told the South China Morning Post that politics will receive a new impetus at the 20th National Congress. Han Baojiang, director of the teaching and research department of the economics department at the Party School of the Communist Party of China, told the newspaper that the Chinese government will provide a clearer and more detailed roadmap to the 20th National Congress on October 16.
Ren Shuli said that Xi Jinping’s drive for “common prosperity” aims to expand China’s middle class to include people with no university degrees, small business owners, migrant workers and farmers. China’s year-long crackdown on big tech and real estate wiped out trillions of dollars in wealth. While this may have actually reduced the Gini coefficient, which measures inequality, these policy measures have failed to achieve Xi’s ultimate goal of expanding China’s middle class.
On the contrary, Ren Shuli said that in the last year everyone has become poorer. So far, the Chinese government has remained silent on this unexpected impact.
He added that the CCP’s crackdown on big tech and real estate industries, while aimed at strengthening shared prosperity, has scared companies and investors alike.
China’s crackdown on tech companies leads to massive layoffs
Xi Jinping himself mentioned “the need to prevent the disorderly expansion and uncontrolled growth of capital”. In November 2020, the Chinese government launched a campaign to curb the internet giants, starting with the cancellation of Ant Group’s successful IPO. Over the next 18 months, the Chinese government continued to crack down on sectors ranging from technology and finance to gaming, entertainment and private education. Companies like Alibaba, Tencent and Didi have been subjected to checks and fines, causing their share prices to plummet.
After the grim quarterly earnings, the battered tech giants said they would embrace a new slower growth normal and look for ways to cut operating costs, leading to mass layoffs.
The CCP’s crackdown on edtech companies has also forced them to shut down or slash their operations. Last year, New Oriental Education, China’s largest private tutoring firm, laid off 60,000 employees while Beijing launched an industry revitalization, the Wall Street Journal said.
These unfavorable factors, combined with the severe impact of the CCP’s “zero policy” on business, made this year more difficult for graduates to find work. The youth unemployment rate hit an all-time high of 19.9% in July and 18.7% in August.
Ren Shuli said Xi wants to bring 170 million migrant workers to the middle class. About a quarter are employed in service sectors such as retail, transportation and restaurants. Many are gig economy workers, preferring food transport and delivery jobs to low-end manufacturing.
But Beijing’s massive crackdown on tech companies has disrupted the company’s stable revenue stream. For example, Didi was banned from registering new users during investigations by Chinese regulators, and many of the company’s mobile apps were removed from its online store. These restrictions impacted the company’s profitability and created a lot of uncertainty for the company.
Ren Shuli said that, as governments around the world have discovered, bridging the gap between rich and poor is an impossible task. One reason is the “waterfall economy” mechanism. When billionaires and corporations are scared, their first instinct is to fire workers and freeze hires.
The crackdown on the real estate sector triggers the crisis as the buyer’s property depreciates
The “three red lines” policy introduced by the CCP, which aims to limit the amount of loans from real estate companies and reduce the housing bubble, has damaged the ability of developers such as China Evergrande Group to sell assets to pay off debts. As a result, the pain of the real estate crackdown has spread from private developers to state developers, as well as investors and local governments, with companies like Evergrande defaulting on their debts. Calls for policy easing can be heard in many corners of Chinese society.
The real estate market is in crisis, with sales plummeting and house prices falling for 12 consecutive months. About 70% of household wealth in China is related to the real estate sector. Bloomberg said Chinese homebuyers are now watching their families ‘wealth depreciate as the housing market continues to plummet as falling home prices mean that buyers’ properties are now worth less than they agreed to pay. , leaving them in trouble to pay the mortgage. In addition, the delay in completing the condominium has bothered buyers as well.
Ren Shuli said, “The CCP’s (China) drive for ‘common prosperity’ has evolved into ‘common prosperity’ to some extent.common poverty‘. Nobody is happy now. “
Responsible editor: Lin Yan #
