Bloomberg reported that a Politburo meeting of the Central Committee of the Communist Party of China will be held early this month. The top leadership of the Communist Party of China will discuss economic issues. As the “zero-clearing policy” is slowly changing, more policies to stimulate economic growth are expected.
The 24-member Politburo, the party’s top decision-making body, usually meets in early December each year to set broad guidelines for economic policy for the coming year, the report said.
It was the second meeting of the Communist Party’s new Politburo and the first since Xi won a precedent-breaking third term in October to focus on the economy.
Economists expect the Politburo to adopt language that signals a more targeted approach to fighting the virus, in line with recent steps by authorities to reduce the impact of virus containment on economic activity and people’s lives.
Chinese officials have already begun preparing for more outbreaks and a possible exit from the zero-zero policy. Beijing, for example, will allow some infected people to isolate at home. Guangzhou, the manufacturing hub, replaced lockdowns in some areas with more targeted restrictions.
With Chinese economic growth expected to weaken to 3.3 percent this year, the slowest pace since the 1970s and even below the 2020 recession during the coronavirus pandemic, officials in the Communist Party are likely to signal that they will ramp up. efforts to promote economic development.
Arthur Budaghyan, chief strategist for China Investment Strategy and Emerging Markets Strategy at investment research firm BCA Research, said, “Officials will emphasize economic growth this year more than in previous years because economic conditions are deteriorating. , has touched the pain points of policymakers.”
Reuters reported on December 5, two people familiar with the matter revealed that the Chinese authorities may announce 10 new measures to relax epidemic control as early as December 7, supplementing the 20 anti-epidemic optimization measures announced in November. There was a wave of easing of epidemic prevention.
The sources, who spoke on condition of anonymity, said management of the disease could be downgraded as soon as January 2023, from the current highest level of infectious disease, Category A, to the less stringent Category B.
People familiar with the matter said that when Xi Jinping met with European Council President Michel on December 1, he said that the CCP virus variant Omicron (Omicron) variant appears to be less lethal than the earlier CCP virus variant Delta strain.
Last week, Chinese Vice Premier Sun Chunlan said China was facing a “new situation” as the pathogenicity of the Omicron virus weakened, becoming the first country to publicly acknowledge that the new variant’s pathogenicity had weakened High-ranking official.
The economy is widely affected
The New York Times reported on November 30 that over the past few months, the CCP authorities’ unwavering “zeroing” approach to epidemic prevention has had widespread impacts: youth unemployment has reached a record 20%, corporate profits have declined, and economic growth has been far below Beijing’s own Prediction.
The current CCP virus outbreak, the most widespread in 2020, has put Xi Jinping in a bind. He has been refusing to budge on the government’s strict “zeroing out” measures. If he loosens restrictions, infection rates rise sharply, risking mass deaths and overwhelmed healthcare systems. But maintaining current policies, with widespread lockdowns to limit infections, would do further damage to an already slowing economy.
Mark Williams, chief Asia economist at research firm Capital Economics, said, “The (Chinese Communist Party) government has no good options at the moment.” severely constrained, which would seriously weaken the economy.”
More than 80 Chinese cities were battling infections in November, the report said, up from 50 in the spring, when a smaller surge in infections prompted an eight-week lockdown in Shanghai and slowed economic growth to a few percent. lowest level in ten years. These cities account for half of China’s economic activity and 90 per cent of China’s exports, according to Capital Economics.
According to the official data of the CCP, China’s total import and export value in RMB grew by 6.9% year-on-year in October, falling for three consecutive months. In terms of US dollars, China’s total import and export value in October fell by 0.4% year-on-year, which was far lower than the growth rate of 3.4% in September. Among them, exports fell by 0.3% year-on-year, while the growth rate in September was 5.7%.
For small businesses, the recent outbreak has further weakened demand.
Cai Zhikang, the owner of a cake shop in Shenzhen, said corporate customers, the main source of his business, started canceling orders more often. Just on Nov. 28, a customer canceled a large corporate catering order worth more than $3,500, he said.
Cai Zhikang, 28, said his shop was also forced to close for a month when Shenzhen imposed restrictions on the parks where he opened his shop. He also said, “If there is no new crown, I can definitely make money. When there is an epidemic, I can’t do it.”
The impact is also spilling over to larger companies. According to data from the National Bureau of Statistics of China, the overall profit decline of Chinese industrial enterprises accelerated in October. Data released on Nov. 27 showed that profits in 41 of China’s industrial sectors fell by 3% from January to October this year, a steeper drop than the 2.3% drop in the January-September period.
Authorities’ initial success in containing the virus began to crumble this year as the more contagious variant of the virus, the Omicron variant, spread. The Chinese government predicted in March that the Chinese economy would grow by a modest 5.5% in 2022. Weeks later, a sharp rise in infections forced Shanghai into lockdown and the economy ground to a halt. A series of smaller outbreaks that followed continued to test the limits of China’s “clear-to-zero” strategy, and the CCP’s economic growth goals were no longer achievable.
Japanese brokerage Nomura Securities on November 28 lowered its forecast for economic growth in the fourth quarter to 2.4% from the previous 2.8% on the grounds that “the road to reopening is slow, painful and bumpy.” It also lowered its forecast for gross domestic product growth in 2023 to 4% from 4.3% previously.
Xie Jinhe, Chairman of Taiwan Caixun Media, and Writer Kuang held a symposium on the new books “The Chinese Dream of Changing Tone” and “China after the CCP” on December 4, and invited Cao Xingcheng, former chairman of UMC, and Akio Yabata, director of the Sankei Shimbun’s Taipei branch, to attend , to discuss issues such as the future direction of the CCP regime and future investment layout.
The Epoch Times reported that Xie Jinhe said that China’s economy is currently very bleak. Taking the real estate industry as an example, the listed debt of China’s leading real estate company “Evergrande Group” is as high as 1.96 trillion yuan, while Evergrande’s usury wealth management products are at least 1 trillion yuan, plus the US dollar debt with an interest rate of 8.25% to 9.25% is about 300 billion yuan. U.S. dollars, all debts add up to about 4 trillion yuan.
In addition, Sunac China has debts of RMB 1.170 billion, Vanke RMB 1.35 billion, and Country Garden RMB 2.70 billion. Most of the stocks of these companies have been suspended, which is no different from blank paper.
Xie Jinhe pointed out that this kind of high debt to real estate is like the terminal stage of cancer, but the CCP does not let it explode, nor does it take out the cancer cells. It keeps procrastinating like this, and I believe it will eventually become a very terrible and even destroy China’s economy. maximum thrust. Now that the real estate bubble is sweeping across China, local governments are short of finances and can’t even sell land. In the first half of the year, China’s fiscal revenue was more than 13.5 trillion yuan, and fiscal expenditure was more than 18.9 trillion yuan. The difference is about 5 trillion yuan. Going down the situation will become more and more serious.
The category of writers listed the CCP’s local fiscal deficit as the ultimate indicator of the “disintegration of the CCP.” He further explained that when more than 80% of China’s local finances were in deficit for two consecutive years, he defined this state as the “post-CCP China” stage, regardless of whether the CCP regime existed at that time, it represented the CCP’s Physical control is gone.
He said that the current mainland China is actually a patchwork and forcibly stitched patchwork. Except for the unification of the RMB, there is no unification at all, including language and culture. In fact, the bottom layer is very fragile. Therefore, when the CCP’s finances and cash flow have problems, it is the time for the CCP to disintegrate.