World Media on China: The Economy Under Policy Turmoil

Currently, major ports such as Shanghai, Ningbo, and Guangdong are filled with empty containers, indicating that China's export trade is performing poorly. (video screenshot)

[People News] Despite the Chinese Communist Party (CCP) leadership’s vow to revitalize the world’s second-largest economy, China’s economy is clearly underperforming. In September, China’s industrial profits recorded the steepest decline since the pandemic. China’s economy has been severely impacted by the CCP’s stringent “Zero-COVID” policy and other policy missteps. Furthermore, China’s birth rate continues to plummet, with the number of kindergartens decreasing by over 5% last year, reflecting the lasting impact of the CCP’s early “One-Child Policy.”

Top-Level Design and Pooling Resources for Major Tasks Backfired

According to Voice of America, the CCP has long promoted the superiority of its system in China, which includes the “top-level design” and the national system of “pooling resources for major tasks.” In early 2020, the COVID-19 outbreak spread from Wuhan to all of China and the world under the authorities’ information blockade and misguidance, after which the CCP demonstrated its claimed superiority through “top-level design” and the nation’s “pooled resources” system.

CCP leader Xi Jinping declared that he “personally planned and directed” China’s pandemic prevention policies, and he boasted about China’s “unprecedented success in pandemic control” at the United Nations. State-controlled media also hailed Xi’s China as a shining example for other nations. However, the CCP has classified the true COVID death toll in China and overall death figures during the pandemic as state secrets, making it impossible to accurately assess whether Xi’s “personally planned and directed” so-called “major power anti-pandemic effort” was indeed a success or a failure.

Meanwhile, Xi’s “personally directed” Zero-COVID policy, characterized by lockdowns of buildings, neighborhoods, cities, provinces, roads, airports, and ports, was implemented for three consecutive years and is now a taboo topic in China. Today, Chinese citizens refer to it as the “three-year mask” period.

However, despite attempts by the CCP to bury the Zero-COVID policy, the consequences of that policy continue to harm the Chinese economy and livelihood.

On October 28, CNBC reported: “According to data from (the CCP’s) National Bureau of Statistics, China’s industrial profits in September showed the biggest decline since the pandemic. China’s economy is plagued by slow growth, insufficient demand, and a real estate crisis.

“Data released by (Chinese financial data provider) Wind Information shows that industrial profits in September fell 27.1% year-over-year, following a 17.8% decline in August, marking the largest drop since March 2020, when the decrease was 34.9%.”

The Cost of “At All Costs”

During the three years of implementing the Zero-COVID policy, the CCP had a policy slogan and a strict order to carry it out “at all costs.” Now that the Zero-COVID policy has become taboo, Chinese citizens and the Chinese economy are still paying a heavy price. This situation seems to demonstrate that the intensity of the Zero-COVID policy was unparalleled and that the CCP’s “top-level design” and “pooled resources” governance inflicted equally unprecedented harm on the domestic economy.

However, the CCP’s top-level design policies did not impact every region in China equally, hitting the more economically developed provinces harder. On October 28, Bloomberg reported: “The provinces that account for one-third of China’s economy have performed worse than the national average this year. The economic slowdown may have prompted the government to introduce a series of stimulus measures last month.

“According to Bloomberg’s calculations based on official data, only five (less economically developed) inland provinces in China have a real GDP growth rate faster than last year. Among the 26 provinces that published Q3 data, 11 had growth rates below the national average.

“China’s economic problems are widespread. This year, industrial output has declined in Heilongjiang, Qinghai, and Shanxi, while retail sales have also fallen in Beijing and Shanghai, China’s two wealthiest cities.

“Beijing’s food and hotel sales have fallen by 5.1% this year, and Shanghai’s dropped by over 11%, highlighting that consumer spending has never truly rebounded since the pandemic.”

Top-Level Design and Power Have Created a Population Crisis

China’s population crisis is now often discussed alongside its economic crisis, and many observers believe it’s another example of “top-level design” and the national “pooling resources for major tasks” approach gone wrong.

The CCP once feared a population explosion crisis in China and enforced a strict “one couple, one child” family planning policy for over 30 years. Policy slogans included “abort it, kill it, let it flow, just don’t let it be born” and “if it should be aborted but isn’t, pull down the house, confiscate the ox.”

In China, where the CCP holds unquestionable, unchallengeable, and irrefutable power, the “family planning policy” was so “successful” that it led to an unprecedented population crisis, with a rapid increase in elderly and a swift decline in newborns.

On October 28, while reporting on the largest decline in industrial profits since the pandemic, global media also covered another major story about China: last year, the number of kindergartens in China saw a sharp decline.

The UK’s The Guardian reported: “Last year, the number of kindergartens in China fell by more than 5%, marking the second consecutive year of decline for preschools, reflecting a drop in China’s birth rate. According to a statistical report released by the Ministry of Education last week, in 2023, there were 274,400 kindergartens in China, down from 289,200 in 2022.

“China (CCP) is struggling to cope with a declining birth rate and an aging population. These trends are troubling policymakers, who have tried various measures to encourage people to have more children, but with limited success.

“The number of children enrolled in kindergarten has also decreased. According to government data, the number of children receiving preschool education in 2023 was 40.9 million, a decrease of over 11% from the previous year. In 2022, the number of kindergartens decreased by 1.9%, and the number of children enrolled in kindergartens fell by 3.7%.”

Faced with the population crisis it created, the CCP, which has long prided itself on being “great, glorious, and correct,” has not admitted any mistakes but seems to be implementing corrective measures without acknowledging them as such.

The UK’s The Independent reported on October 29: “Last week, reports stated that despite previous encouragement to have children, the birth rate continues to decline. China (CCP) is conducting a large-scale survey to understand public concerns about childbirth.

“The survey will involve 30,000 participants from 1,500 communities to identify the reasons behind people’s reluctance to have children and to inform future birth policies.

“This survey is part of broader efforts to address population challenges, including China’s aging population and economic pressures that prevent families from having more children.”

Japan’s major newspaper, Asahi Shimbun, reported: “On October 28, the CCP State Council announced measures to support pro-natal policies. With a sense of crisis due to the population decline, the plan includes enhancing maternity insurance, improving maternity and childcare leave systems, and supporting multi-child families in buying homes. Although these have yet to be achieved, changing young people's reluctance to marry and raise children is not easy.

“At the end of 2023, China’s population was 1.40967 billion, a decrease of 2.08 million from the end of the previous year, marking the second consecutive year of population decline. The sharp decline in birth rates and population aging have heightened concerns about a shrinking labor force.”

The Education and Training Industry Was Crushed First, Now Quietly Allowed to Revive

During the implementation of the so-called Zero-COVID policy, the CCP took various effective measures to damage the economy and livelihoods, including devastating the education and training industry, causing the collapse of a sector employing large numbers almost overnight.

With the economic crisis deepening in the post-pandemic period, the CCP has quietly withdrawn its strict measures against the education and training industry. Reuters reported on October 28: “According to industry data reviewed by Reuters, policymakers and analysts say the CCP is quietly easing regulatory pressure on private tutoring institutions to revive the weak economy, allowing the tutoring industry to recover from the blow dealt by government policies three years ago.

“The authorities have not formally acknowledged a change in policy, but eight industry insiders and two analysts familiar with the situation told Reuters that policymakers are now allowing the tutoring industry to develop. This is part of Beijing’s effort to create employment opportunities.

“Since 2021, a government crackdown known as the ‘double reduction’ policy has banned for-profit tutoring in core school subjects, aiming to reduce the educational and financial burdens on parents and students.

“This move caused the market value of providers like New Oriental Education Technology Group and TAL Education Group to plummet by billions of dollars and led to tens of thousands of layoffs. Before the crackdown, China’s for-profit tutoring industry was worth around $100 billion, with the top three companies employing over 170,000 people.”