President Xi Jinping first proposed his Belt and Road Initiative in 2013. (Photo : Getty Images)
President Xi Jinping is clearly in control of China’s economy after two lengthy pieces from People’s Daily revealed the country’s economic policy direction by using the words of an "authoritative" figure and Xi himself.
The South China Morning Post reported on Monday that any doubt on who is driving the Chinese economy right now should have been eradicated by the interview piece featuring statements from an "anonymous authority" and Xi's speech published on the Communist Party's mouthpiece.
Published just a day apart, the pieces were released to explain China's current economic status and direction as the Chinese president himself leads it to overcome the looming debt-fuelled crisis.
Two Articles
On Monday, People's Daily published a 11,000-word article revealing statements on China's economy from a mysterious "authoritative" source in a question-and-answer format.
This included a clarification on the policy shift in China that many investors have grossly misunderstood.
"A tree cannot grow up to the sky--high leverage will definitely lead to high risks," Bloomberg quoted the source as saying. "Any mishandling will lead to systemic financial risks, negative economic growth, or even have households' savings evaporate. That's deadly."
Meanwhile, Xi's 20,000-word speech transcript published on Tuesday clarified some points, particularly one about his supply-side economics that he thoroughly differentiated from the Western-style reform similar to that of former United States President Ronald Reagan.
"I need to be clear, the supply-side structural reform we are talking about is not the same as the supply-side economics school in the West," Xi stated, explaining that the interpretation can be very different.
Xi's concept entails "cutting capacity, reducing inventory, cutting leverage, lowering costs, and strengthening the weak links."
One Point
According to the Hong Kong-based newspaper, while the two articles talk about two different things, they remain as the strongest proof on who really is on the driver's seat.
"Taken together, the articles signal that Xi has decided to take the driver's seat to steer China's economy at a time when there are intense internal debates among officials over its overall direction," SCMP pointed out.
The directions the outlet was referring to include a path where China resorts to its "old ways" that entail the deployment of massive stimulus that has serious consequences such as high debt and overproduction, and one that sees the country at a "painful restructuring" journey to reduce overcapacity and kill all zombie companies.
But whichever direction Xi chooses, the SCMP believes that he would succeed even with staggering odds, considering how he managed to pull off the unprecedented crackdown on corruption and rapid consolidation of power with his leadership style.
