The continuous stringent “zero-COVID” policy and a brutal crackdown have worsened the economic downturn and prompted the Chinese communist regime to step in to save its economy.

A recent Da Ji Yuan report has pointed out that Beijing is so desperate that it has virtually used any possible strategy to save its economy from collapsing, but all seem to no avail.

The CCP signals reversing its economic policy

After announcing the exit of its stringent “zero-COVID” policy, the CCP held the Central Economic Work Conference from December 14 to December 16.

It is a high-level meeting where the economic outlook, government priorities, the current year’s performance, and next year’s roadmap are discussed.

At the meeting, Beijing acknowledged that the country’s economy would face a difficult situation and more significant pressure due to weak consumer and business confidence, constant supply disruption, and a low forecast of future economic growth.

The conference also underscored the importance of ensuring stable property market development, growth of the private economy and private enterprises, and employment of young people, especially college graduates.

At the conference, Chinese Communist Party (CCP) top leaders, including Xi Jinping, pledged to support private enterprises to boost economic growth amid a gradual easing of the zero-tolerance policy.

Regarding this affair, Xie Tian , a professor in business at the University of South Carolina Aiken in the U.S., told Da Ji Yuan that when the CCP claimed that it always assists private businesses, the whole world, including Chinese people, just laughed.

The outlet highlighted an inconsistency in the messages of the CCP during and after the meeting on December 16. 

Only a few days following the conference, the CCP immediately changed its tone. 

Liu Kun, Chinese Minister of Finance, published an article on December 19 about “common prosperity.” 

Liu said that the policy had reached the historical stage, and the CCP will continue to adjust tax, social security, transfer payment, and many others going forward.

On the contrary, this year’s conference did not mention “common prosperity,” but vowed to treat private and state-owned firms equally.

The outlet noted that the CCP has to change its attitude and support private firms because it’s currently facing a big dilemma. 

Under the CCP’s extreme COVID control measures, the country has witnessed foreign firms withdraw investments and relocate factories, import and export values weakening, property crisis deepening, record high unemployment rate, among many others.

China’s business confidence this year hits a 10-year low

Since early this month, top CCP leaders have visited private companies for research and discussion. The Chinese regime offered to support private firms in attracting investments, solving difficulties, and stabilizing the domestic economy.

Among them, the most notable one is the case of Jack Ma’s Alibaba.

Despite all of the pain caused to the Chinese mogul and his group, on December 18, the CCP still ordered the conference’s new secretary Yi Lianhong to offer Alibaba support.

But Li thinks that Alibaba would probably turn down the offer this time.

Li said that Chinese entrepreneurs are terrified of the CCP’s policy of harming enterprises.

The CCP’s ultimate goal is to eliminate private companies. Therefore, now is the chance for firms to show the aspirations of Chinese entrepreneurs.

Li Hengqing, a U.S.-based economist, told Da Ji Yuan that Beijing will likely fail to achieve its goals this time as its pledged support cannot revive business confidence like before.

As a result, Reuters, citing survey data of sales managers at 2,300 companies from World Economics on December 19, reported that China’s business confidence dropped to 48.1 this month from 51.8 last month. This indicates the lowest point since the survey started in 2013.

Real estate markets cannot recover despite regulators rolling out supportive policies

Last month, to help the debt-laden property developers, Beijing launched the “three arrows” of support for the sector, including bank credit, bond issuances, and equity financing.

In addition, China’s six mega-banks – Industrial and Commercial Bank of China, Postal Savings Bank of China, Bank of China, Bank of Communications, China Construction Bank, and Agricultural Bank of China – also promised financial support to the tune of more than $181.4 billion (1.3 trillion yuan) to 17 builders late last month.

However, China’s statistics bureau data show that the total area of commercial property sold in the first 11 months reached about 13 billion square feet (1.212 billion square meters), down 23.3% year-on-year.

Meanwhile, commercial housing sales were around $170.46 billion (11.865 trillion yuan), a drop of 26.6% from a year earlier.

The statistics show that Beijing’s efforts cannot shore up the ailing property market.

Governments strive to stabilize foreign trade as exports and imports deteriorate

Regarding foreign trade, from September through December, local authorities in Zhejiang, Sichuan, Guangdong, Jiangsu, and Fujian sent multiple business delegations abroad in a bid to help domestic firms attract investment and expand the market.

More specifically, in September, a trade delegation from Nanjing consisting of 268 foreign trade enterprises and 1,400 people participated in economic and trade activities in overseas countries, including Germany, France, Canada, Japan, South Korea, and the United Arab Emirates.

Guangdong sent over 40 foreign trade firms to the ASEAN region in late October to compete for orders.

Additionally, on November 24, a business delegation joined by the Foshan municipal government, two business associations, and 22 companies attended economic and trade negotiations in Poland, Germany, and Hungary.

Earlier this month, Zhejiang province launched an action plan to send 10,000 foreign trade enterprises overseas to attend exhibitions through charter and shared flights.

Moreover, Sichuan appointed 40 representatives from 31 foreign trade firms to travel to France, Germany, and Italy for nine days of economic and trade activities.

Despite the government’s significant efforts, China’s foreign trade performance last month still couldn’t meet expectations.

Data from Chinese customs show that November’s trade balance in dollar terms reached $522.34 billion, down 8.7% from last year. This is compared with a forecast of a 3.5% drop.

Imports last month fell to 10.6%, extending from expectations for a 6% decline.

In addition, in November, China’s exports to major countries also dropped sharply.

Among them, U.S. exports tumbled by 25% year-on-year, widening from a drop of 13% in October. This also indicates the fourth consecutive month of decline.

Meanwhile, exports to the EU plunged by 10.6% over the same period last year.

In Asia, exports to nations such as Japan, South Korea, and Taiwan shed by 5.6%, 12%, and 20% from last year, respectively.

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