Editorial: Parallel universes in Xi Jinping’s new era|Apple Daily HK
Regulators on Christmas Eve have filed a case to investigate Alibaba under the Anti-Monopoly Law due to its “either me or JD” monopolistic behavior. On the same day, the CCP’s Politburo hosted a two-days “Democratic Life Meeting,” during which Xi Jinping reiterated “the two upholds” – the upholding Xi’s position as the core of the CCP’s Central Committee and the whole Party, as well as the authority of the Central Committee and its centralized, unified leadership. China seems to have two parallel universes in Xi’s new era: in the economic universe, everyone must open to competing; in the political universe, no one is allowed to challenge Xi, the core of the party. Can these two universes run in parallel?
Probably not. The advantages of an open competition are so obvious that even a child would know: competition motivates improvement, which is beneficial to people. If Alibaba really tried to squeeze JD out of the market, the consequence would be hindering competition. Apart from the consumers having to pay a higher price, the quality of products or services would also leave a lot to be desired. If it is necessary to eliminate monopolistic behavior to better consumers’ interests, how could promoting “the two upholds,” an absolute monopolistic act in the political universe, be beneficial for people?
It has not stopped Xi from emphasizing that, since he took office in 2012, the central government has put the solving prominent problems of formalism and bureaucracy as the focus to reduce the burden on the grassroots. It has achieved great results by combining its efforts with accurate policy implementation. He also said that, in the past year, the world has been ravaged by the Wuhan virus. But China, under his leadership, has strategically fought the pandemic with success. China became one of the first that has turned a negative economic growth to positive and has completed the mission of eliminating poverty as planned. What was the reason behind his use of an absolute monopoly to achieve the gratifying effect of full competition?
Xi has given the credits to “talking about politics clearly is a distinctive feature of Marxist parties, and also a consistent political advantage of our party. The most important thing for the party to lead the people and govern the country is to be persistent with its correct political direction, to maintain our political nature and go forward along the path of socialism with Chinese characteristics.” In other words, as long as the absolute power monopolization is under “the two upholds,” tomorrow will be better even without the benefits generated by competitions. In fact, the reason of creating an “anti-monopoly law” to deal with Alibaba and other enterprises is to stop competition altogether.
Former Australian Prime Minister Kevin Rudd, who understands Chinese, has met with Xi in November 2019 and pointed out to the Wall Street Journal that Xi deeply understands a prosperous free market is not good for the party’s long term dictatorship. “He (Xi) does not buy any argument, direct or indirect, about any form of a peaceful transition to something else.” That means whether it is Alibaba, Tencent, Kweichow Moutai, or Beijing Pop Mart, whoever destabilizes “the two upholds” would be punished like Alibaba and the Ant Group. How would the overall economy be affected if everyone is worried about one’s own fate?
The overall non-performing loan ratio of the Chinese banking sector is 1.96%, according to Reuters. In contrast, Hong Kong is 0.8%. Therefore it has to make a record-breaking provision for bad debts. But this has not accurately reflected the damages made by the pandemic. To replenish capital, the Chinese banking sector must increase its capital by at least 1.25 trillion yuan (US$191 million) in the coming year. Recently, some state-owned enterprise bonds have failed to repay the principal and interest as agreed, which have shown that corporate profits cannot keep up with the apparent economic revival, made it difficult for the banking sector to increase capital. At the same time, even if the pandemic control “has been strategically very successful,” the scale of national debt issuance will not decrease in the coming year but reach 7.07 trillion yuan (US$1.81 billion) as it did last year. This has doubled the figure in 2018. Coincidentally, many enterprises have been worrying about being “dealt with,” so it is unlikely that the economic growth can “turn negative to positive,” as Xi said.
The lesson has been shown not even that long ago. “The two upholds” has always been a disaster caused by people that destroys everything when it is being adhered to either politically or economically, even in Xi’s new era.
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