With China struggling economically, the CCP has taken a supposedly pro-business turn. Don’t buy it.
By: Jianli Yang & Evan Osborne – Aug 08, 2023
In recent weeks, Xi Jinping has authorized a campaign to restore the confidence of both domestic and foreign investors in their opportunities in China. Why the about-face, after he spent years aggressively reining in private business activity and trying to replace it with state-owned enterprises? Because the fruits of that policy are now manifest. Coming out of China’s unparalleled Covid-19 restrictions, the economic recovery has been anemic at best, and youth unemployment in particular is breaking records. Supposedly the opportunity to make a lot of money, so obvious in the 1990s and 2000s yet absent under Xi, is now back — or so the messaging has it.
Should businesses believe him? History suggests not. Shortly after China’s Communist revolution, the new regime sought to persuade Western businesses to remain in the country, as it needed their knowledge. But within a few years, it decided it needed Maoist madness more. The Chinese Communist Party (CCP) crushed foreign businesses through increasingly onerous taxes and employment rules. It even forbade many executives from leaving the country until they had satisfied their arbitrarily determined obligations to the CCP. By the end of this “hostage capitalism” phase, foreign businesses would pay any price to get out… [Continue Reading]