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Xi Tightens the Reins in China: the Market Becomes Subservient to Communist Goals

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One private sector after another in China is being restricted. Chinese communism has entered a new phase under President Xi Jinping, experts say. In this, the market must conform to the Party.


It started at the end of last year with the boycotted IPO of the Chinese billion-dollar company Ant Group, the fintech subsidiary of internet tycoon Jack Ma’s Alibaba. At the time, that still seemed an exception, a personal reckoning with an overly flamboyant entrepreneur who had stepped on the toes of the Chinese leaders.

In the months that followed, more and more Chinese private companies came under fire, with huge fines in the tech and platform economy and an ideological cleanup in the tutoring and entertainment sectors. However, that too could still be interpreted as something temporary, as a correction to capitalism’s excesses that were too wild.

Recently, something more seems to be going on in China: every day, a new sector is paralyzed with measures and restrictions, framed by party president Xi Jinping as a campaign for ‘common prosperity, a term from the old Maoist box. A widely circulated essay recently put it even more sharply: what is happening in China is nothing short of a “revolution.”

More and more China experts are convinced that this is no longer an adjustment but a complete change of course: China has started a new chapter in its history. The free-market thinking of the past forty years is subordinated to higher communist goals. The New Era of Xi Jinping has taken shape, and the changes are a lot more radical than many expected.

In fact, the change of direction began as early as 2017, when the “Xi Jinping Thinking for Socialism with Chinese Characteristics for a New Era” was incorporated into the Communist Party’s charter. The Chinese constitution followed a year later. Xi’s doctrine – a re-evaluation of Marxist ideology – was thus equated with that of Mao Zedong and Deng Xiaoping, the two progenitors of present-day China. Xi clearly intended to make an equally big mark.

China’s far-Xi’ing has been insidious for years — in the form of ideological education, political censorship, party cells in corporations — but has intensified and accelerated tremendously in recent weeks. With a deluge of measures, Xi put an end to monopolies, IPOs, video games, commercial tutoring, excessive overtime, “vulgar” (read: Western) entertainment and real estate speculation. The common thread: ending inequality and foreign influence.

Since then, there has been fierce debate among China watchers about the true nature of Xi’s new course. Is this a fight against inequality in China, the byproduct of the unbridled growth of recent decades? A correction of capitalist excesses, from which the West could learn? Or is it a return to communist times, where the government deliberates and decides the fate of investors and entrepreneurs? A ‘red reset’ that decouples China from the rest of the world?

In late August, an essay by journalist Li Guangman seemed to provide the answer. He described the reforms as “a profound change” in China, a “revolution in the economic, financial, cultural and political spheres”. Typically such a radical essay, in the language of the Cultural Revolution, would receive little attention, but remarkable: this time, it was copied on the websites of all Chinese state media. That is a clear stamp of approval by the Chinese government.

The widespread publication seemed evidence of a Maoist revival in China, but that was toned down a day later when Li’s essay came under fierce criticism from Hu Xijin, editor-in-chief of the nationalist state newspaper Global Times. Deputy Prime Minister Liu He also emphasized China’s continued commitment to the free market, as did comment on the front page of the People’s Daily party newspaper. Nevertheless, in the absence of political transparency, China watchers depend on such texts’ analysis.

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