China´s 31st Point. Its Salvation or Destruction?

We all have observed the rapid growth in China in the most important sector in the last years. Currently, China´s government pointed out the need for a 31st point Plan.

Many businesses in China don’t advocate for democracy, but they do ask for more transparency. As part of a 31-point plan, there are some promises (though not guarantees) that the government will take care of the rights and interests of private entrepreneurs.

 China´s GDP is as far as 0.8% Growth

The previous week, there was concern in Beijing when it was announced that China’s GDP had only shown a modest 0.8% improvement in the second quarter of 2023. This raised the realization that the country’s economy requires a significant push forward.

Over recent years, the Chinese Communist Party (CCP) had been actively clamping down on the private sector, particularly targeting prominent companies like Tencent and Alibaba, fearing that they had become too dominant. However, the current stance has changed, and the CCP now aims to create a more favorable environment for entrepreneurs, aspiring to make it “bigger, better, and stronger.”

This is important because China’s economic recovery has come to a halt, and the CCP’s reputation within the country relies on Xi Jinping’s government making a “Chinese dream” of a middle-class lifestyle a reality. When Covid restrictions ended eight months ago, there was a strong rebound in consumer spending as people rushed to book holidays they had been unable to take for nearly three years. 

China´s High Unemployment Rate

However, in recent months, there have been concerning signs. The unemployment rate among young people is increasing, with about one in five Chinese aged 16 to 24 being unemployed in June.

Many university graduates are forced to work as delivery drivers because there are not enough professional jobs available, and on social media, you can see pictures of their hard-earned degrees seemingly going to waste.

Survival Jobs

Actually, there are many job opportunities available, particularly in the countryside where there is a significant shortage of teachers. This lack of educators results in rural children receiving an uneven quality of education.

However, most graduates from cities are not interested in living in rural areas where basic amenities like running water are still scarce. Additionally, China’s strict “residence permit” system makes it difficult for young people who move to the countryside to return to the big cities later on.

True Analysis or Motivational Speech, in Chinese Economy?

For a long time, people have said that China will become the biggest economy in the world. But now, due to the current crisis, it might look like China’s decline is unavoidable. However, there are many things that could make China’s situation better.

China spends 2.5% of its money on research and development, which helps its technology sector. It also has a huge market, the second-largest after India, which has the most people in the world. The average money each person makes in China, called GDP, is $12,000, which is more than twice what people in India make.

China´s Self-inflicted Problems

However, China is creating problems for its own future. The word “security” has become crucial in politics, as the Chinese term “Anquan” means “safety” giving it a comforting tone. However, this term is used to address various matters, including not only military or national security but also economic and cultural concerns.

Reports in the media about the substantial debts of local governments have been censored, and journalists are being warned of legal consequences for risking financial stability.

The Nobody Cares´Mindset

Having open access to information is really important for the modern economy. However, in China, there’s a risk that economists and entrepreneurs might hesitate to speak out about inconvenient truths because they fear facing consequences from the government. This fear of taking risks and facing retribution leads to a mindset of doing nothing to avoid making mistakes.

The overall political atmosphere adds to the uncertainty. For example, China’s foreign minister, Qin Gang, has not been seen in public since late June, and this unexplained disappearance adds to the feeling that China’s political landscape is unpredictable and hard to understand. Such situations undermine confidence in the economy both within the country and internationally.

A Better Chinese Economic Rate or Leading Taiwan? 

One thing that could bring the economy to a stop is a conflict over Taiwan. If there’s any military confrontation in the region, it would disrupt supply chains, scare away investors, and lead to severe sanctions between China and its Western business partners.

The people in China, especially middle-class professionals, want financial security, affordable mortgages, a secure pension, and subsidized healthcare, including for their parents. A nationalistic war that affects their lifestyle would be very unpopular.

In general, China’s focus on its own country is similar to what other countries are doing worldwide. For example, Brexit Britain is unique in seeking new markets abroad, while the US, China, and the EU are becoming more protectionist. China has valuable assets like a well-educated urban population and a creative private sector.

However, to thrive, it needs to prioritize openness and transparency within the country and maintain peaceful and cooperative relationships with its trading partners abroad. Without these factors, simply having plans won’t be enough for success.

Read the Original Article: The Guardian.

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