The guy was, as usual, explicitly candid when he spoke to his crowd of global billionaires. The Davos gathering of the superrich does much for generating clickbait headlines, though typically followed by the most nondescript phrases only passed off as useful insight. In this setting, Xi Jinping really has been the disruptor.
How’s that for irony?
Their message – they being everyone but Xi – is that catchy but insipid (as it was designed) tune from the Lego Movie a few years back: Everything Is Awesome!
China’s top Communist leader last January went in the opposite direction from such bland sloganeering. This was easy for the dictator since he’d been ruthlessly (pun intended) following this path for years before COVID provided him and his authoritarians the excuse to further batten down the economic hatches with political methods such as “historical nihilism.”
The latter is a later invention of typical Communist fare; they decide what is or is not history. As the rate of change in the economy goes down, the rate of change in politics has gone up and under XI Jinping Thought this has meant a reactionary rededication to first political principles.
Deng Xiaoping long ago had to admit Mao’s genocidal stupidity was, maybe, only 70% “right” therefore 30% wrong (obviously the limit which CCP masters at the time thought they’d be able to admit without risking another revolution, cultural and otherwise). Historical nihilism is the rehabilitation of not just Mao-ism and all its humanity-destroying elements, it is, basically, literally Orwellian; having always been at war with Eastasia (Mao was 30% wrong) yesterday, today China’s CCP says Oceania’s always been at war with Eurasia (now Deng’s capitalism more wrong than right).
Practically speaking, it means however much economic growth China might be able to muster is exactly the right amount to have been selected by the smartest, most scientific minds employed skillfully by the benevolent Party. Pay no attention to downgraded past growth targets China wasn’t able to meet since, oh, 2011, Xi’s GDP results had really been just perfect all this time.
Don’t you dare recall “your” memory of recent history, either.
This was partly his message to the Davos herd last year, telling the aloof jet-set any pity should be spared for everyone on the outside of the Sino Fortress.
We are going through the worst recession since the end of World War II. For the first time in history, the economies of all regions have been hit hard at the same time, with global industrial and supply chains clogged and trade and investment down in the doldrums. Despite the trillions of dollars in relief packages worldwide, global recovery is rather shaky and the outlook remains uncertain. [emphasis added]
I write this with only trepidation, how sad the state of the discipline of Economics and more importantly the state of the world when China’s unsentimental tyrant has so much better a grasp on economics (small “e”) than every single one of the statisticians who pass themselves off as experts on other things beside regressions and econometric models.
According to this latter group, healthy Davos participation included, it was all smiles for the rest of 2021’s run as their masterplan had been locked into place before their pricey private planes had touched down in Switzerland; “stimulus” by the trillions, as Xi acerbically noted.
Yet, once again, here was Xi Jinping to inform the world’s spoiled and detached elite they had no idea what they were talking about.
Growth scare, indeed.
As I wrote last March, taking many obvious cues from China’s economy as well as its authorities:
Yet, the idea lingers; much, if not most, of the post-COVID economic recovery has been pegged upon China! To that end, Western estimates had been crafted in keeping with Deng not Xi; that huge doses of textbook measures were about to push the Chinese economy up to at least 8% if not 9%, with growing whispers of 2021 back into the double digits real GDP.
That means 2020 and 2021 together are already booked as a prolonged two-year period with the worst possible numbers since Deng’s time. And it won’t even be close.
Furthermore, China is fine with this; or, specifically, the Communists are. They’ve already installed their social credit system of control and have ordered up military-grade levels of secret police (and tactics now tested in places like Hong Kong).
It’s everyone else who will “unexpectedly” suffer when the global recovery predictably falters yet again; the questioning turns more toward “when.”
The answer to “when” is creeping ever forward in time. Nowhere is this creeping more apparent than from inside
Over the Western New Year’s holiday, the Chinese delivered their figures for 2021’s final state. Their National Bureau of Statistics (NBS) compiled a trio of sentiment indicators – for manufacturing, non-manufacturing, and general business (composite) – which show only too well Xi Jinping’s previously stated trepidation.
Quick to blame pandemic outbreaks, “analysts” have yet been unable to explain why it is the new order books for both manufacturing and non-manufacturing dragging each downward (generally speaking).
The manufacturing PMI came in at just 50.3 for December 2021, up just 0.2 pts from November’s lackluster 50.1, with New Orders still under 50 (49.7 vs. 49.4). More to Xi’s year-old point, the index for export orders declined again to 48.1 from 48.5, the eighth straight month on the wrong side dating back to, yes, April 2021.
Non-manufacturing was an ugly 52.7 last month, up a tiny bit from November’s 52.3, and the composite 52.2 for the second straight month in December; each of those nearer the bottom of their respective histories than anything resembling what the world of Davos told the world to expect less than a year ago.
Remember, Economists and Western central bankers last year all said acceleration and then finished 2021 shouting inflation, while there was Xi Jinping right from its beginning spilling “shaky” and “outlook remains uncertain” to the uninterested mainstream.
China’s economy does not, obviously, account for the entire world’s system. However, as Xi was saying, it does account for much of the marginal growth either expected or realistically obtainable. Without Chinese growth, what would/should anyone legitimately come to figure for everyone else (and this includes America)?
Like Germany or Japan, China is a bellwether, a useful gauge for marginal growth prospects worldwide. The US does not necessarily “need” the Chinese economy for its own sake, however the US is no island and China’s problems aren’t actually problems for just China; historical nihilism the result not the cause.
After all, those trillions and trillions that Xi had cleverly questioned were whose, predominantly?
Xi knew (as did the bond market) it was at most a temporary sugar high which was never going to last. Just like the war with Eurasia. Or was it Eastasia? Sorry, there is and has been only one war, the one currency war: eurodollar.