China gang of three Square

Can the ‘Marxist-Leninist-Maoist’ dragon change its spots?

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THE CHINESE Communist Party (CCP) has been getting a great deal of positive press lately on the organisation’s 100th anniversary.  The coverage of President for Life Xi Jiping and the Chinese Communist Party has been “70% good; 30% bad”.

The “Good” is widely seen as China’s re-emergence on the World Stage, after four decades of growth. This is the result of “the biggest and longest-run economic boom in history” according to a July 2021 Financial Times editorial

The view is that, since Den Xiaoping’s assent to power in the late 1970’s, 800 million people were raised from poverty. The country was transformed from an agricultural backwater to a high-tech behemoth.

The “Bad” has more to do with details and technicalities, internal to the Middle Kingdom, with some spill-over into international affairs. The finger wagging focused on a leadership that is too keen to centralise power along with some notable unpleasantness in particular in the North-Western Province.

Xi spoke on behalf of 1.4 billion people. Not one of them, however, was asked for his or her opinion.

Judging the Chinese Communist Party on the basis of GDP growth since 1979 seems a little callous and arbitrary, ignoring as it does 30 years of Communist rule up to then. The party has, after all, been in charge since 1949.

Further, Chinese official data is known for being untrustworthy. In moments of candour, the likes of Li Keqiang, the current Premier, remind us that GDP data is “man-made” – therefore adjustable.

To deal with the certainty of Chinese Official data unreliability, and to judge the Chinese Communist Party’s “success” over the last few decades on its own terms, it is important firstly to use independent GDP data and secondly to put China’s supposed miracle firmly in its proper context.

Using data from The Conference Board, a US-based economic research organisation, as well as revised Chinese economic growth data based on a paper by Wu (2014), we have a clearer view of China’s development since 1950. In doing so, a very different reality emerges.

Based on purchasing power parity GDP per capita, the average Chinese citizen, at $688, was half as wealthy as his South Korean counterpart and around 45% less well off than his Taiwanese cousin at the onset of the Korean War in 1950.

By 2020, the average Chinese citizen found himself around 60% poorer than his South Korean equivalent and merely a quarter as wealthy as his Taiwanese relative, a fall in relative wealth of about half, to $14000 in relative terms.

In addition, the average Chinese citizen in 2020 is 20% poorer now than his 1950’s American equal.

The price paid in lives destroyed partially or fully for this decidedly damp “Economic Miracle” has been immense.

In the 70 years of “Marxist-Leninist-Maoist”, to use Xi inelegant phraseology, hundreds of millions of Chinese people have been murdered, starved, sterilised, imprisoned, sold and brutalised. The story continues today.

In fact, every decade since Mao’s power grab, the Chinese Communist Party has experimented on its people, with ideological purity mainly trumping practical considerations.

In short, the CCP turned China into a huge Political Science laboratory – with the people playing the role of Guinea Pigs.

The 1950’s Great Leap Forward, an orgy of death and nihilistic destruction, was swiftly followed in the 1960s by an even more violent and grotesque Cultural Revolution.

Confronted by the failures of the people to make Communism work, the CCP pushed its destructive philosophy one step further by introducing its Malthusian, and by extension eugenicist, “One Child Policy” in 1979.

This led to the state control of the mother’s womb with the well-publicised and heart rendering rise in infanticide, child abandonment, abductions and the rise of coerced and often times late-terms abortions, the latter numbering in their tens of millions, Many of which were reportedly done without anaesthesia “causing what women describe as pain so unbearable it is like having one’s heart cut out.”

This led to a staggering, long lasting and potentially fatal gender imbalance as birth rate collapsed. 30 years after the implementation of the policy “10% of females” were said to be missing from the population.

The corollary was an excess of 15% of young men. They will die with no hope of ever having a family.

Further, in a paper entitled “How will History Judge China’s One Child Policy?” written in 2013, the authors write that while the Great Leap Forward and the Cultural Revolution were “grave mistakes that both cost tens of millions of lives”, the harm done was relatively short lived.

The one child policy, they add, however, “will surpass them in impact”.

In their seminal book Empty Planet published in 2020, Bricker and Ibbitson point to “fertility rates of 1.05” adding that it could be much lower. They suggest a Chinese population of “just 560 million by the end of the century” – an astonishing two thirds collapse.

The policy was in place until 2016.

The recent announcement that the CCP will allow couples to have three children should be seen for what it is: a belated admission of failure.

The changes don’t address the key problem: the womb remains the prerogative of the Communist Party and therefore government property. The greatest act of resistance to the CCP’s rule is to stop reproducing, absent other options. This the Chinese people are doing.

What is surprising is the unwillingness in the West to see the Communist Party for what it is. Our media persistently mistakes the silence of the broad Chinese population as acquiescence or support for President Xi policies.

The Chinese have come to know the CCP and their modus operandi. Behind the façade, they know that their leaders are little more than strongmen, whose only justification for power is power itself.

The party controls three things: the media, the people and access to the Chinese market. This apparent solidity, so seductive to Western Corporations and International organisations, gives it the advantage of direction and action free from scrutiny.

The downside, though, is that away from the light, the habits of increased centralism and unilateralism in internal affairs have taken root. Caution has, over the last decade, given way to Hubris.

This certainty is increasingly mirrored internationally.

The upshot is perceived as sabre-rattling by an increasing number of neighbouring countries.  This is pushing many in South East Asia to seek cooperation, creating a de-facto front against China.

Japan, Australia, India and others are increasing their defence budgets and collaborating ever more. China’s belligerence in the South China Seas and on land borders where they exist is focusing minds.

The same attitude seems to hold true in the field of investment, health and trade.

As reported in a research note, the Chinese Government recently stated that it would no longer give US market regulators the power to inspect the audits of Chinese Companies listed on the US Exchanges – these represent $2 trillion in market capitalisation.

This was a direct challenge to the United States and was rejected by the Security and Exchange Commission. But the message was clear. President Xi thinks the battle for supremacy is going his way.

In other sectors, such as health, China is refusing to comply with a second phase of an investigation into the origins of the coronavirus. This would include the increasingly plausible hypothesis that it could have escaped from a Chinese laboratory.

Further, Chinese state-owned companies have been implicated in undermining the tax-raising ability of South American countries. This came to light when a gang was arrested as it tried to smuggle nearly 423 million cigarettes through Texas into Mexico.

The investigators found the smuggler linked to China Tobacco, the world’s largest cigarette company. Further research found that China Tobacco cigarettes flooded into countries from Mexico to Peru without the proper licencing. They added that between May 2013 and October 2018 China Tobacco and partners exported over 632 metric tons of cigarettes to Belize, Canada, and the United States illegally.

The central role of China Tobacco in this smuggling ring is noteworthy. As the investigators wrote it is a way of getting “leverage to persuade governments to put in place more favourable policies”.

The illegal tobacco trade undermines national governments and the public health objectives they were elected to deliver. It is also a zero sum game as taxes not collected by legitimate governments are often diverted to fund organised crime and terrorist activities.

Overall the trade in this particular segment costs $40-50bn in lost taxes, with many countries affected being deprived of the revenue they need to stay credit-worthy.

The Chinese Communist Party is not just active in the illegal tobacco trade, of course. That they are, however, is remarkable. And if they are, what will they not do?

President Xi talks about “national rejuvenation”. Instead, as President for Life, he is more likely to witness his dreams turn to dust as China’s aging population starts to collapse. In the words of economist John Mauldin “China got old before it got rich”. Putting abstractions over life will be remembered as the CCP’s gravest mistake.

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Image of Chinese workers with smartphones selfie, poster socialist realism by studiostoks

 

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