The accompanying image shows the meeting venue, with a large painting in the background depicting a flood surging toward Xi Jinping. The floodwaters inundating the landscape symbolize great misfortune.
People News - On December 9, Xi Jinping presided over a meeting of the Politburo of the Chinese Communist Party (CCP) to analyze and discuss the economic strategy for 2025. The Xinhua News Agency's rare mention of implementing a "more proactive fiscal policy and moderately loose monetary policy" in its report on the meeting has sparked attention among industry experts and analysts. This signals that the CCP might be shifting away from the "prudent" economic strategy it has adhered to for the past 14 years.
During the 2008 global financial crisis under the leadership of Hu Jintao and Wen Jiabao, the CCP introduced a 4 trillion yuan economic stimulus package to boost domestic demand. This was regarded as the largest-scale economic stimulus policy ever implemented by the Chinese government.
The 2007–2008 global financial crisis severely impacted China’s export-driven economy, causing a sharp decline in exports and negative growth. In the first quarter of 2009, China’s exports registered double-digit negative growth, industrial production plummeted, power generation stagnated, numerous export-oriented businesses shut down, and a wave of unemployment emerged. In November 2008, then-Premier Wen Jiabao chaired a State Council executive meeting that officially launched the 4 trillion yuan fiscal investment plan. The funds were primarily allocated to affordable housing projects, urban renewal initiatives, and investment-heavy infrastructure such as railways, highways, and airports.
In 2008, the Chinese Communist Party (CCP) adopted a "prudent fiscal policy and tight monetary policy" to respond to the global financial crisis. However, as the economy faltered, the CCP made a dramatic policy shift in 2009 and 2010, implementing a "proactive fiscal policy and moderately loose monetary policy" for two consecutive years. From 2011 to 2024, the CCP continued its proactive fiscal policy but maintained a "prudent" monetary policy for 14 years.
At the December 9 Politburo meeting, the CCP announced a new direction for 2025, signaling a return to "more proactive fiscal policies and moderately loose monetary policies." This shift underscores the severe economic challenges China faces, which many analysts compare to Japan's deflationary stagnation, characterized by severe deflation and a persistent downward spiral.
The emphasis on "more proactive fiscal policy" and "moderately loose monetary policy" evokes comparisons to Wen Jiabao's economic strategy during the 2008 crisis, raising questions about whether Xi Jinping has lost control over economic policy.
Under Xi Jinping, the CCP has emphasized centralized control, with the Party overseeing all aspects of governance. This approach, coupled with a tilt toward planned economic policies and crackdowns on private enterprises, has led to significant economic declines. Widespread business closures, soaring unemployment, and increasing social discontent have been accompanied by rising reports of bureaucratic inaction and societal unrest. At the same time, internal power struggles within the CCP have intensified. Following the Third Plenum in July, rumors emerged that Xi had lost some military control, his authority weakened, and his political standing challenged by Party elders, second-generation CCP elites, and anti-Xi factions led by figures like Zhang Youxia.
On September 26, the Politburo meeting admitted "new circumstances and problems in economic execution" and introduced an unprecedented economic stimulus package. During the National Day reception on October 1, former Politburo Standing Committee members Wen Jiabao and Li Ruihuan made unexpected public appearances, sitting prominently beside Xi Jinping. Their presence sent a strong signal that political veterans are reasserting influence in CCP leadership. Coupled with the large-scale stimulus measures announced on September 26, analysts speculate that Xi’s control over economic policy may have been diminished, paving the way for a return to Wen Jiabao-style policies.
On November 8, Minister of Finance Lan Fo'an announced plans for stronger fiscal measures in 2025, including expanded deficits, increased issuance of special bonds, ultra-long-term sovereign bonds, and greater support for large-scale equipment upgrades. On the same day, the CCP unveiled a 12 trillion yuan debt reduction plan. These measures strongly echo Wen Jiabao's economic stimulus strategies. The monetary policy shift announced on December 9 further aligns with the fiscal and monetary strategies of the Hu-Wen administration 14 years ago.
The second half of 2023 saw significant shifts in both economic policy and the CCP's power structure. Xi Jinping’s trusted military allies have faced a series of purges. On November 9, CCP insiders reported that Miao Hua, a close associate of Xi and a member of the Central Military Commission (CMC), was detained. On November 27, the Financial Times reported the detention of Dong Jun, linked to Xi’s Shandong faction. On November 28, the Ministry of Defense confirmed the investigation of Miao Hua but denied Dong Jun’s detention. Former Navy Commander Yao Cheng alleged that Defense Minister Dong Jun and Rocket Force Commander Wang Houbin implicated Miao Hua, who was reportedly targeted by CMC Vice Chairman Zhang Youxia. Meanwhile, rumors circulated online about the suicide of Eastern Theater Command Commander Lin Xiangyang and the detention or death of Cai Erjin, the son of Xi ally Cai Qi, in a car accident.
On December 9, the PLA Daily published an article titled "Leading by Adhering to Collective Leadership" in its "Great Wall Watch" column, subtly challenging Xi Jinping's "Chairman Responsibility System" by advocating for the "division of responsibilities among senior leaders." On the same day, the Ministry of Defense website echoed this commentary, further signaling a shift in military sentiment.
On December 11, independent commentator Cai Shenkun revealed on the overseas platform X that Yu Jianhua, a member of the CCP’s 20th Central Committee and Director of the General Administration of Customs, committed suicide in his office on the night of December 10. Reports suggest that Yu Jianhua was a senior official carefully selected by Xi Jinping’s personnel team during the 20th Party Congress. Allegedly, he was interviewed by Central Commission for Discipline Inspection (CCDI) officials on December 9, and took his life the following day.
The situation in Zhongnanhai appears increasingly precarious, with rumors seemingly pointing to Xi Jinping’s growing challenges. On December 10, three suns unexpectedly appeared in the Beijing sky at noon, sparking heated discussions online and trending on social media. In traditional Chinese culture, celestial anomalies like "three suns" are often interpreted as omens of political upheaval, signaling the fall of rulers or military unrest. Whether these are coincidences or symbolic of deeper discord in Zhongnanhai, the year 2025 seems poised for significant change. The principle of "those who defy the heavens perish, and those who follow prosper" resonates strongly—Xi’s adherence to preserving the CCP at all costs, despite apparent resistance to reform, casts a shadow over his administration’s future.
Returning to the CCP’s unconventional counter-cyclical economic adjustment plan for next year, it’s clear that the environment today is vastly different from 2008. In terms of economic scale, growth rate, industrial structure, export prospects, foreign investment trends, leverage ratios among governments, businesses, and households, population growth, employment levels, inflation, and market confidence, the landscape has changed significantly.
In 2008, China was on a developmental upswing, with rapid economic growth culminating in becoming the world’s second-largest economy in 2010. By contrast, today’s economy is experiencing a downward spiral of moderate to low growth. Using an analogy, the economic issues of 2008 were akin to an early-stage cancer that could still be treated with intervention, while today’s challenges are more comparable to terminal cancer, beyond the reach of economic policies alone to revive.
Former Premier Wen Jiabao famously stated during the 2012 National People’s Congress press conference that without successful political reforms, economic reforms could not be fully realized. Achievements would be at risk of reversal, and new societal problems could not be fundamentally resolved. He also warned of the potential recurrence of tragedies like the Cultural Revolution. Unfortunately, Wen Jiabao’s grim prediction seems to have come true amidst today’s chaos.
According to circulating reports, Liu Yuan, a second-generation CCP elite, reportedly submitted a letter to Xi Jinping titled “Unnecessary Words,” offering three key recommendations to address the current crisis: Return to the policies of “reform and opening-up.” Adopt the principle of “hiding strength and biding time.” Gradually transition the CCP into a social democratic party. This proposal could be seen as either an attempt to salvage the CCP or an admission of the limits of its current direction.
However, the overarching trajectory of history suggests an inevitable conclusion: the CCP is destined for the dustbin of history. Tragically, no matter how high-ranking or loyal its members may be, those clinging to the Party often meet the same fate—discarded as remnants of corruption.
(Originally published by People News)
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