Discussion about this post

User's avatar
Gerald Yu's avatar

Thanks for the article. In general, avoiding "ultra leftist" taking over is certainly a good idea. "Ultra" anything is usually bad.

I would disagree with one of your points that "ill-timed campaign to curb excesses in the private sector has backfired big time". Curbing excesses in the private sector is never "well-timed". Pricking a bubble always causes pain, especially for the careless participants who over-expanded. The private sector is continuously trying to maximize profit and opportunity, and often overly using leverage. The Three Red Lines curbed the excesses, and led to a huge implosion in the properties development sector.

But can we imagine if that "ill-timed" curbing was not performed? The bubble would have been even bigger. If it was to implode on its own weight, it would be much, much worse. So I would say the curbing was not ill-timed; and in fact, it could have been done even earlier. But whenever it is done, it will always receive complaints. No participant will priase it, ever. We should be glad that the bubble was only huge, but not mega huge, like the 2008 bubble in the US.

In fact, China is not like 2008 US. The leverage with the homeowners is much, much lower. There is no risk of implosion there. Nor is there any chance of implosion in the main financial institutions; whereas, if we remember, almost all the major US financial institutions were going bankrupt in the US, except for a massive irresponsible printing of money, and the pre-destruction of a good future for future generations.

A government that does not curb a bubble is irresponsible, or stupid, or both. That we can see abundantly clear in the US. As the most advanced country with probably the most number of Economics Nobel prizes, it is a wonder how poorly, and irresponsibly the country was governed.

So I would say, the curbing was not "ill-timed" at all. It was excellent that it was done by a courageous government who cared about the future and responsibility. But it takes careful understanding to appreciate it.

Expand full comment
China Curious's avatar

I have a question: You are talking about "ultra leftists." Are you talking about a true movement, similar to that which fired Hu Yao Bang or, worse, that fueled the cultural revolution? Are there genuine ultra leftists in the provinces, at the grassroots or in the political and administrative apparatus at the level of provincial governments or even lower, prefectures or counties? To outside observers, the leftist "reform" movement appears to be, in typical autocratic stye, Xi Jinping's own idea, made possible by his cronies. The leftist drift appears to be more of a old school Communist, top down campaign, than a genuine bottom up movement.

Expand full comment
1 more comment...

No posts