China’s Economic Problem Is Communism

The disappointing growth numbers out of Communist China are prompting calls for more stimulus from Beijing. This overlooks the fact that the problem isn’t with the Chinese economy, it’s with communism. That’s because a thriving economy is in the long run incompatible with tyranny. Economic liberty and political liberty are the warp and woof of the fabric of freedom and it is not possible to have economic liberty without political liberty.All eyes are now on the communist party’s all-powerful Politburo, Bloomberg reports, after gross domestic product rose an anemic 0.8 percent over the prior quarter, to back a Keynesian-style spending package to boost the economy. Yet the figure who can best guide China out of its current crisis would appear to be not John Maynard Keynes, but rather the pioneer of Chinese democracy, and New York Sun correspondent, Sun Yat-sen.It was Sun, after all, the first leader of the free Chinese Republic that emerged from the fall of the Empire, who urged the adoption of “government by the people, of the people and for the people,” explaining that “I believe in this since I believe in the Chinese people.” And China’s economy thrived when state restrictions were lifted under Deng Xiaoping starting in 1979, yielding an economic miracle of some 30 years of 10 percent growth.It’s no accident that much of this growth was sparked in the “Special Economic Zones” along China’s southeastern coast, traditionally the most outward-looking provinces in the country. Sun himself was a product of this world. Born at Zhongshan, near Hong Kong, he was “a child of the coasts and the open sea and of an extended China exposed to cosmopolitan influences,” his biographer, Marie-Claire Bergère, has observed.President Xi, by contrast, is most inspired by the Marxist vision of Chairman Mao, whose fervor for state control and collectivism drove China’s economy into the ditch. As Mr. Xi moved towards securing his third term earlier this year, the reversion was clear. Under Mr. Xi, the New York Times reports, “China is returning to its roots: a state-controlled economy that demands businesses conform to the aims of the Chinese Communist Party.”The results of Mr. Xi’s stumble back toward Maoist repression have been harrowing. The nation’s free-wheeling high-tech sector, “once idolized as champions for China on the world stage,” the Times reports, “are now fenced in by government agencies.” Previously-admired moguls like Alibaba founder Jack Ma “have been driven underground or imprisoned” for daring to offer any criticism of the communist regime.Foreign capital investment into China is plummeting, too, the Wall Street Journal reports, to $20 billion in the first quarter from $100 billion the year before. The Journal sees it as the direct result of Mr. Xi’s “national-security agenda, with its focus on fending off perceived foreign threats.” Western firms operating in China, including consultants and auditors, were this year hit “with a wave of raids, investigations and detentions.” It’s no wonder that China under Mr. Xi is experiencing a “brain drain,” as the Journal puts it, as the Chinese, unable to decide their future in free elections, are instead voting with their feet. “Residents appear to be leaving at a faster clip than they have in years,” the Journal reports, “including a significant number of the wealthy and well-educated the nation needs to keep modernizing and investing.” The sputtering economy is a big reason why.Even before Covid, the Journal notes, China was grappling with “an apparently structural downtrend in Chinese growth.” Today’s GDP figure is just the latest in a series of grim economic tidings. Unemployment among those aged 16 to 24 is running at a record 21 percent. Plus, too, Bloomberg reports, “deflation is a major risk now,” as prices decline across the economy, a flashing red warning light for growth prospects.Mr. Xi likes to blame Washington for China’s economic woes, accusing America of the “containment, encirclement and suppression of China,” posing “severe challenges to our country’s development.” This ignores our support for Chinese growth since the “Open Door.” Mr. Xi fails to see that his despotism is the real enemy of prosperity. Better to take a page from Sun Yat-sen and give China’s people the freedom needed to revive the economy.

China’s Economic Problem Is Communism

China’s Economic Problem Is Communism

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