• Currently, facing a challenge from China’s second most important political leader Li Keqiang, President Xi, hailed as the tallest leader of the Middle Kingdom, has been left to fend for himself.
• But then the cost of the crackdown was so huge that its effect paled President Xi Jinping’s anticipation.
Image: FILE
China’s leadership is in war with Premier Li Keqiang, which is compelling President Xi Jinping to shelve his key political campaigns.
Currently, facing a challenge from China’s political leader Li Keqiang, President Xi has been left to fend for himself.
China’s dynamic zero-Covid policy has brought a schism within the Communist Party of China’s core leadership with its immediate impact on plans and policies which were hitherto described as game changer in China.
Xi Jinping’s much politico-economic campaign “common prosperity” has been put on the back burner over China’s economy being under huge strain claims.
According to the tibetpress, China pulling the plug on Ant Group just before launch of its $37 billion initial public offering last year and how China in its brutal regulatory crackdown in 2021, clipped the wings of its high-flying technology giants like Tencent and Alibaba in the name of bringing “common prosperity” in China.
The media said such moves, whose prime objectives were to close the wealth gap by encouraging high-income individuals and businesses to give back more to society, were seen as President Xi Jinping’s efforts to consolidate his power.
This was ahead with the 20th Party Congress of the CPC, scheduled for December 2022.
China’s economy has slowed to a grinding halt, not seen since the 1990s.
The Economist estimated that the crackdown wiped out more than $1 trillion worth of collective market capitalisation of China’s largest internet groups.
The $120 billion private tutoring industry pulled a shutter down on its business, while license freeze on video-game led to closing down of more than 14,000 firms.
Chinese tech firms which once attracted best and brightest youth, are today awash with stories of mass layoffs.
E-commerce giant JD.com has so far laid off more than 400 employees; Alibaba, yet another e-commerce giant has reportedly retrenched 39,000 employees–15 percent of its total staff strength this year; Tencent, which has around 86,000 employees, has cut down staff strength by 10 to 15 percent.
An earlier report by Chinese recruitment site Zhaopin.com, however, suggested that half of the people surveyed said their company had laid off employees in 2021.
Overall, the destruction caused to tech companies under regulatory mechanism and dynamic zero-Covid policy have translated into larger fears of an unemployment wave in China, a factor which was seen during the state sector reforms of the late 1990s.
Year-long crackdown on tech companies has not only taken a huge toll on the Chinese economy and the employment market—which has otherwise been exacerbated by harsh Covid-19 triggered lockdowns in Shanghai, Beijing and other key cities, it has also led to driving away global investors.
In this regard, Russia’s invasion of Ukraine has also had a great impact.
In the midst of such developments, President Xi Jinping has been compelled to put his signature “common prosperity” programme on the backburner.
For this, Premier Li Keqiang’s move to come out of his shell and his boldness to call into question some of the decisions of the President is cited as the reason. Premier Li’s stand is that China needed down-to-earth policies, not grandiose plans like the “Chinese dream” till 2050 to become economic power of the world.
According to Reuters, China’s central leadership has given a tentative green signal to Jack Ma-led Ant Group to revive its initial public offering in Shanghai and Hong Kong.
Behind such decisions, Premier Li’s name is prominently taken by the Chinese official media. With this, a question being asked conspicuously is whether Premier Li has taken control of China’s economic policy. Because, it was Premier Li and not President Xi who recently held a mega-national teleconferencing with more than 100,000 participants, wherein he called on local authorities to stabilise the economy, support market entities, employment and people’s livelihoods.