Unleashing reforms, Xi returns to China's socialist roots
When Xi Jinping took command of the Communist Party in late 2012 and proclaimed "only socialism can save China", it was largely ignored as the perfunctory mention of an antiquated slogan - not to be taken literally in a modern-day, market-powered economy.
But sweeping new policy moves from crackdowns on internet companies, for-profit education, online gaming and property market excesses - to the promulgation of "Common Prosperity", show Xi's seriousness in steering China back towards its socialist roots.
Having done away with term limits in 2018, China's most powerful leader since Mao Zedong is pushing what some observers describe as a mini "revolution", curbing the excesses of capitalism and shedding negative cultural influences of the West. The effort, touching everything from school curriculums - including the newly required study of "Xi Jinping Thought on Socialism with Chinese Characteristics" - to tighter regulation of the property sector and a squeeze on what the government sees as unwholesome entertainment, has rattled investors and prompted officials and state media to try to assuage markets.
On Wednesday, for example, the official People's Daily sought to reassure the private sector that support for it "had not changed": recent regulatory actions were meant to "rectify market order", promote fair competition, protect consumer rights and "perfect the socialist market economy system".But the intent, observers say, is clear.
"Xi wants to address a very contemporary issue, the way in which neoliberal reforms have made China much less equal, and bring back the sense of mission that shaped early Maoist China," said Rana Mitter, a professor of Chinese history and politics at Oxford University. That inequality, as well as the vast wealth and power accumulated by some industries, threatened to undermine social stability and ultimately the party's legitimacy if left unchecked, some analysts said.
The timing of the reforms reflects confidence that China can solve its problems through its own hybrid system instead of following the model of the West, whose shortcomings - from managing COVID-19 to the chaos of the U.S. election and withdrawal from Afghanistan - are repeatedly depicted in China as evidence of systemic decay.
"The state control model did seem to serve China well in the fight against COVID," said Chen Daoyin, a political commentator who is based in Chile and was formerly an associate professor at Shanghai University of Political Science and Law.
Xi is confident of striking a balance between government and markets, and between power and capital, Chen said. "The danger is when the state can't resist reaching out its visible hand ... it creates unpredictability and political risk for capital," Chen said.
The Hong Kong market, where many Chinese tech firms targeted by the crackdown are listed, has lost over $600 billion in value since July, with investors whipsawed by new regulations and scouring old speeches for clues as to what may be coming. Xi's activist populism also demonstrates confidence that he can afford to alienate elites who fall on the wrong side of his policies as he solidifies his case for a third five-year term not that there is any visible competition.