Welcome to the December 30th edition of “News Insight”. Today’s episode features Guest Speaker Fan Jiazhong, a professor of economics at National Taiwan University, hosted by Zhang Dongxu.
Today’s focus: Why are the decision-makers of the Chinese Communist Party oblivious to the looming huge risks? Is the unchanging system making China’s economic turnaround hopeless? Double Nobel Prize nominee Yang Xiaokai and the continued mention of the “latecomer disadvantage”! All major Chinese enterprises have CCP offices! National opportunism prevails!
According to a report by The Wall Street Journal, the simple phrase from the CCP leader, “What’s wrong with tightening monetary policy?” has frightened many people. There are alarming rumors circulating, with concerns about the possibility of the leading real estate developer Vanke going bankrupt, leading to a wave of closures in 2025.
The so-called “Chinese model” touted by the CCP seems to be heading towards complete bankruptcy this year. Many have previously predicted the predicament of the CCP and warned Beijing. For example, the 2024 Nobel laureate in economics based his award-winning research on studies conducted 12 years earlier. Economists such as Yang Xiaokai, who emerged from the shadow of the Cultural Revolution in the late 1980s, warned of the “latecomer disadvantage,” but the CCP seems to have chosen the path of decline in all aspects. The global community is questioning the true nature of the CCP. The book “Nine Commentaries on the Communist Party” in 2004 decoded the nine major genes of the CCP, and in 2024, economist Xu Chenggang’s new book analyzed the genes of the system.
Rumors have recently surfaced speculating about the possible bankruptcy of China’s leading real estate developer, Vanke Group. With state-owned backgrounds, Vanke’s slogan shifted from “survive” in 2018 to the dilemma of “not being able to survive” by 2024. However, the CCP intervened in the first half of the year to assist in overcoming its debt default crisis. There was widespread discussion as to why Vanke was saved while Evergrande was left to its fate.
We ask Professor Fan Jiazhong: (1) If the representative Vanke were to go bankrupt, what does this mean for the Chinese property market? (2) Comparing with past experiences and strategies of market support in the United States, what problems do you see in China?
The 2024 Nobel Prize in Economics was awarded to three scholars, all from the United States, for their research on how social institutions shape and influence a nation’s prosperity. Many are juxtaposing the CCP’s hyped “Chinese model” with its path to bankruptcy.
At face value, mainland China once had a great opportunity to learn from the development pitfalls and lessons of many countries to do better. However, despite some scholars within the CCP echoing the so-called “latecomer advantage,” the outcome seems to be a “latecomer disadvantage,” with China’s economic issues forming an almost unsolvable abnormal structure, described as multiple organ failure.
Yang Xiaokai, a Chinese economist who was once considered the closest to the Nobel Prize, spent ten years in labor camps during the Cultural Revolution. He warned of the “latecomer disadvantage” over thirty years ago in the late 1980s.
We ask Professor Fan Jiazhong: (1) What was the debate on the “latecomer disadvantage” and “latecomer advantage” over twenty years ago? What did Yang Xiaokai see? (2) Could you provide an explanation of the research that led to the 2024 Nobel Prize in Economics for the three laureates, Daron Acemoglu, James A. Robinson, and Simon Johnson?
The recent report by The Wall Street Journal highlights the CCP’s adherence to a top-down economic policy, with the statement “What’s wrong with tightening monetary policy?” leaving many people in shock. More are pondering, what is the matter with the Communist Party? What are its fundamental genes?
The book “Nine Commentaries on the Communist Party,” published in 2004, spurred a wave of 400 million people withdrawing from the CCP, outlining the nine major genes of the party. Recently, Chinese-American economist, Xu Chenggang, has published a new book advocating that authoritarian systems crushed the Soviet Union and will also lead the CCP down the same path. From an economic perspective, he sees no way out for the People’s Republic of China.
Could you please ask Professor Fan Jiazhong to outline Professor Xu Chenggang’s discourse? What insights can we gain from the analysis of “system genes” in observing the direction of the CCP and China today?
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