A plethora of seemingly random interventions by the Chinese Communist Party (CCP) into China’s private sector has sent Wall Street into a tailspin, leaving many investors, in Taiwan and abroad, questioning whether Beijing is still committed to its post-Cultural Revolution embrace of capitalism and free markets.
The moves have included a crackdown on billionaires and homegrown technology giants, limiting video game time for people younger than 18 to three hours per week, closing private and online education enterprises, purging “morally corrupt” celebrities and the planned censorship of “unhealthy” karaoke songs.
Many observers have interpreted Chinese President Xi Jinping’s (習近平) crackdowns as a pre-emptive move to break up rival power bases, which if allowed to become too prominent could threaten the party’s grip on power or cause trouble for Xi as he next year seeks to force through a convention-busting third term as president.
Others have surmised that Xi’s measures are motivated by China’s slowing economy and demographic time bomb. They say Xi needs to strengthen the party’s control over the economy and society to head off public unrest, as the CCP’s unwritten contract with the Chinese public comes under unprecedented strain.
Another interpretation is that the initiatives are motivated by leftist ideology. Xi is a true believer in communism and is channeling his inner Mao Zedong (毛澤東), believing that after milking the Western capitalist system dry China is sufficiently powerful to forge its own socialist path. As Lenin famously put it: “The capitalists will sell us the rope with which to hang them.”
These explanations are valid, but there might be another motivation for Xi’s campaign against the private sector: He is seeking to cleanse society and stoke nationalism as he transitions the economy and society toward autarky, possibly in preparation for war.
An examination of the wording of party announcements concerning the recent measures is telling. Regarding restrictions on video games, China’s regulator has called for the removal of anything that encourages “effeminate depictions of men,” while Chinese media companies have been told to boycott “sissy” boy bands and effeminate men on television. China’s Sina Weibo social media platform earlier this month suspended dozens of fan accounts for popular K-pop acts.
Vituperative attacks in Chinese state media suggest that the CCP is also concerned over a recent “lying flat” phenomenon that encourages young Chinese to drop out from society and the workplace. The party appears worried that young people have become too soft and contaminated by what it calls the malign influence of foreign culture. The Chinese military has previously published reports fretting over the “weakness” of pampered, single-child recruits.
Xi’s closure of China’s booming private education sector also appears to have been motivated by a desire to eradicate foreign — in particular Western — influence to restore complete control to the party over “patriotic education.”
The enforced transfer of capital from China’s biggest private companies to state coffers under the guise of “common prosperity” — Alibaba and Tencent have each pledged US$15.5 billion to help “alleviate inequality” — is really about reallocation of capital toward priority national programs, or what the party calls “military-civil fusion.”
It also dovetails with the CCP’s wider campaign to revive the state sector, dubbed “guojin mintui” (國進民退, or “the state advances, the private sector retreats”). Xi appears committed to pruning China’s freewheeling private sector to harness the country’s economic resources in support of his “China dream” external expansion.
Foreign investors and Taiwanese companies — especially those involved media, entertainment and education — should take note: Under Xi, China is once again turning inward and closing its doors to the world.
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