Xi Jinping wants to censor his way out of another crisis, this time economic. With curated news, he hopes to blow a bubble of optimism in which the people of China will spend their way out of falling global demand, falling direct investment, falling youth employment, falling prices and falling property giants. Yet his system is built on fear, not hope.
Consumers like to feel safe when they spend. They think about how the money they pay out now could be needed for something more important tomorrow. They also consider how secure their assets are and whether they will truly be worth as much as they originally expected. Many factors play into these considerations, from the steadiness of the stock market to how granny’s health is holding up.
Coaxing them out of their fears to part with their cash is no simple task, but it can be achieved by guaranteeing either that money gone today will be here again tomorrow, or that help is at hand in a worst-case scenario. Spender-friendly atmospheres are further fostered in the comfort that no Earth-shattering events are on the horizon to require ready money for seeing the disaster through.
Thus, it is difficult to imagine a worse entity to drum up the feelgood factor than the Chinese Communist Party in 2023. Since the people it has appointed itself to rule are very far from stupid, they understand that abruptly discontinued stories tend to lead to underwhelming endings. Therefore, most are not going to celebrate the cyber-disappearance of economic analysts or the sudden absence of key unemployment data with an internet shopping splurge.
Furthermore, unlike localized catastrophes, where the reality in one part of China can be rejigged to present a different picture to viewers thousands of miles away, everybody has a direct connection to its economy. Denying that prices are falling is not convincing to a business owner whose warehouse is full of stock that cannot be shifted without a discount. Arresting would-be homeowners who paid for apartments that have not been completed may shut them up, but it does not construct the unit or sell it on for a profit. You can pretend a 20-year-old has a job, but you cannot expect them to treat their friends to a meal with the salary from it.
At the same time, funds that could otherwise be used to bolster the social safety net and make people feel freer to spend their money, even during more risky moments, are instead diverted to restricting basic freedom. In East Turkestan (Xinjiang) alone, two parallel structures of repression have been sucking exorbitant sums from the central government to hold hundreds of thousands of people in carceral conditions and effectively de-skill them. Money-draining control is also acute in Tibet, Hong Kong and South Mongolia. That is not to mention the vast apparatus required to monitor and modify what everybody, everywhere in China thinks and talks about. Even forced labor transfers come with government subsidies!
While this massive expenditure does drive nasty little economies of its own and spins off whole global industries of questionable products, it also has to be justified with a constant cast of spies, separatists, foreign agents, cross-border invaders and terrorists. Then, of course, is the unyielding Great Wall of Steel and the ever-percolating promise of a Taiwan invasion, which could trigger World War III. None of these encourage a spending spree.
Although one can imagine a lot of savvy people rolling their eyes at some of the more abstract, improbable and interminable of these threats, the same cannot be said of the wrathful economic pinball that they witness week by week, day by day. In the past few years alone, there have been crackdowns on the comedy industry, the tech industry, the consulting industry, the tutoring industry, the entertainment industry and the gaming industry, not to mention the entire city of Hong Kong, a financial hub. From a job security perspective, it can hardly be reassuring, no matter where you work.
In addition is the implosion of the real estate and shadow-banking industries, in which many people have invested on the basis of over-promised returns. And people’s memories may be short, but certainly not so short that they will forget brutal COVID lockdowns or the country-wide decimation of pork farms as a result of poorly communicated disease outbreaks, which could happen again at any time with all their associated economic fallout.
So to say, these are not conditions in which you would feel free-fingered to make big purchases or lock your money into a new business to drive the economy upwards. The logical response remains to save for whatever chaos is coming next or to get out of the country when a viable opportunity arises, provided that you still can.
Transforming that cautiousness into confidence would require leadership that is confident in itself, not one so terrified of the truth that it cannot allow it to be spoken aloud.
Image: Rick Massey, CC BY 2.0
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