There is nothing absolutely categorical, but the sum of the information and atmospherics which we have available to us suggests the economy is really not doing well at all, and that at least parts of the leadership are eagerly seeking solutions.
There is the debt crisis, property market gloom, consumer reluctance to spend, unemployment, and private enterprises uninterested in investing. The latest figures for May were not encouraging, including an actual fall in private enterprise investment. Given the fact that the numbers are compared to May 2022, one of the most disastrous months in living memory given all the lockdowns, it is sobering. Officials are doing lots of meetings to try to figure out what to do. The question is whether this mix of troubles is fundamentally any different from similar situations in 2015, 2008 etc, that is whether or not given the nature of the system, its fundamental inflexibility is finally going to face a showdown of some sort. All we can say is, it’s possible. But things are not rosy, and the balance of messaging from the Center indicates the ideological and security imperatives still trump other requirements such as economic growth. People can feel it, and it would probably take a pretty big gesture to restore the chain of trust.
In other news, the communications chief of the Asian Infrastructure Investment Bank, a Canadian named Bob Pickard, suddenly resigned and flew out of China, saying the bank was controlled by the CCP. There is something weird about this. The bank was set up by the Center as a part of the BRI push and as a competitor to the ADB, and it is based in Shanghai. How could it not be staffed by party members? There could well be further developments on this story…
Meanwhile, have a great summer weekend!
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