Officials of the Chinese Communist Party are spending the beginning of 2022 scratching their heads over the country’s ever-ceasing economic turmoil.
The fragile economy will inevitably lead to political instability and undermine the party’s power.
On January 5th, Han Wenxiu, an official from the Central Economic and Financial Affairs Office, published an article titled “Macroeconomic stabilization is not only an economic issue, but also is a political issue” in the CCP’s “Look” magazine.
Han’s article admitted that China’s economy is facing more difficulties, more challenges, and the external environment is becoming more complicated.
A day earlier, many CCP media outlets continued to discuss the alarming situations of China’s real estate market. They all acknowledged that the sector, which has shrunk by half, is currently very fragile.
News commentator Tang Jingyuan told Voice of Hope that China’s economic slowdown was not surprising. The World Bank has forecasted that the country’s gloomy downward growth rates will persist this year, becoming the second economic decline since 1990.
Due to the CCP’s resolute application of its draconian COVID-zero policies, the local economy has been severely affected, damaging people’s confidence in the economic outlook.
Tang also reminded that the CCP’s new regulations for the high-tech, Internet, education, and entertainment industries have been the direct cause behind large-scale layoffs in many companies. A lot of those who lost their jobs were customers of the real estate market. Sequentially, the rising unemployment rate in China has indirectly cooled down the real estate market in the mainland, which is already in crisis.
Sound of Hope noted experts are afraid China’s economic growth in the fourth quarter of 2021 can hardly achieve the rate of 4%.
Nikkei Asia on January 4th published an article by Andrew Hunt, an expert in the field of financial analysis, and Ben Ashby, former chief executive officer of the investment office of JPMorgan Chase. The report points out that China’s economic growth model is reaching its last limit, so there will be more difficulties in the near future.
According to Sound of Hope, the CCP’s government at the moment is critically relying on foreign investment. It has been the main driving force behind China’s economic growth and stability. As a result, Chinese debt has accumulated faster than the economy, a trend that now appears to be unmanageable. Meanwhile, the authorities are also dealing with geopolitical concerns that have a direct impact on international trade.
Both Hunt and Ashby expected that China’s economy would come to a major halt at some point in the future, with developing countries that depend on China’s economy being dragged along.
Despite this, the CCP’s regulations and erratic activities have significantly deterred international companies from investing in the country.
According to Radio Free Asia, a Chinese financial scholar Commander believes that the Beijing government has recently been conflicting in terms of economic macro-control, which are the moves that undermine foreign confidence.