Witches Brew Starts To Bubble in Communist China, as Xi Jinping Edges Into Maoism
This article is from the archive of The New York Sun before the launch of its new website in 2022. The Sun has neither altered nor updated such articles but will seek to correct any errors, mis-categorizations or other problems introduced during transfer.
In case you missed it, the Wall Street Journal features on its front page a blockbuster scoop, written by Lingling Wei, a veteran Chinese reporter. It runs under the headline: “Xi Jinping Aims to Rein In Chinese Capitalism, Hew to Mao’s Socialist Vision.” In other words, Mr. Xi is going Mao.
The pathbreaking market reforms of 40 years ago are going to be reversed. They’d been unleashed by the daughty vice premier, Deng Xiaoping, who, up to a point, modernized Communist China’s economy and made it an economic competitor, indeed an economic adversary of the United States.
Many of us watching China have seen this trend for a good many years. Recently Mr. Xi has cracked down on business and the stock market and successful wealthy entrepreneurs in China and, of course, he rolled over the free market democracy in Hong Kong. He’s aiming at Taiwan next,
The Wall Street Journal’s dispatch is the clearest reporting of Mr. Xi’s intentions. We will cover this, this evening and in the days to come because it is a major, major story. Mr. Xi is campaigning against private enterprise. Rolling back Communist China’s evolution toward free market capitalism, indeed cutting way back on market forces in China
This has included attacks on private capital and instituting at least 100 regulatory actions over the economy — going after Alibaba, then upsetting public offerings by Tencent, Didi, Jack Ma’s Ant group, and other stock market issues. Mr. Xi has singled out the internet technology sector for being too big and powerful. All this has taken $1 trillion off the chinese market values.
Mr. Xi wants more equality, greater distribution of wealth, and a government run economy. Essentially Mr. Xi has issued a declaration of war on behalf of his working class followers against capitalism. He wants some kind of pure socialism as his goal.
This Chinese socialism would be put under the sole control of the Chinese Communist Party. Perhaps clinching the deal on July 1 during the celebration of the Chinese Communist centenary, Mr. Xi wore a Mao suit. Having said all that, somewhat tongue and cheek, but not entirely, I can’t stop myself from asking, really what are the big differences between Mr. Xi’s and Mr. Biden’s economic policy?
After all, Mr. Biden is campaigning against private enterprise. He doesn’t believe in market forces. He’s attempting to regulate every nook and cranny of the economy. He constantly talks about the need for more equality. He favors redistribution of income and wealth. Sound similar?
There’re only two major differences that I can find between the policies of Mr. Biden and those of Mr. Xi. First, Mr. Xi hasn’t raised taxes. And if Mr. Biden gets his way, the United States will have much higher business and investment taxes than the communist behemoth. and Second, Mr Biden doesn’t have a Mao suit. At least not yet.
President Biden doesn’t talk explicitly about socialism, but I’m with Newt Gingrich in describing Mr. Biden’s policies as big government socialism vs. free enterprise capitalism. Seriously, the economic similarities of the two presidents should give everyone some food for thought. Of course, the biggest difference is systemic: America is a democracy, a free country. China is certainly not.
I have no idea what Xi Jinping’s return to Maoist socialism means for the U.S.-China phase one free trade deal. I will note that the Chinese negotiator, Lieu He, a genuine market reformer, is on his way to retirement. Vice Premier Lieu, he became a friend of mine during our trade negotiations.
Yet when in June Mr. Xi pulled the DiDi $4.4 billion New York IPO, Mr. Liu was criticized for not stepping in earlier. Then he was forced to go through what the Chinese call “self-criticism” traditionally used by the Communist Party to discipline members. Self-criticism is a practice that Mao borrowed from Stalin and has come back into fashion in Mr. Xi’s China.
So that may be the biggest difference of all between Mssrs. Biden and Xi. Self-criticism is not Mr. Biden’s long suit. He never mentioned China in his speech today at the United Nations. I have no idea whether he read, or is even aware of, the Xi-becomes-Mao front-page WSJ story. Nor am I confident that his top aides will even brief him on it.
One thing’s for sure, though: China’s moving away from being a competitive adversary to an outright enemy. State-run economies under totalitarian regimes are a witches brew. And that’s my riff.