The Chinese government announced a series of measures aimed at stimulating the economy last week, including injecting funds into the stock market and attempting to revive the property market. This has led to a rare surge in the Chinese stock market. Analysts believe that the leadership in Beijing has once again changed policies in an incredibly radical way, trying to prevent a major economic downturn. However, the roller-coaster style of governance itself is demonstrating the strong centrifugal forces within China, making it a paradoxical prelude to a potential revolution.
September 30th, by the close of trading, the Shanghai Composite Index rose 8.06% to 3336.5 points, the Shenzhen Component Index rose 10.67% to 10529.76 points, the ChiNext Index rose 15.36% to 2175.09 points, the STAR 50 Index rose 17.88%, and the BeiGene 50 Index rose 22.84%. The total turnover of the two markets approached 2.6 trillion yuan, with Chinese media outlets describing it as “setting a new historical high.”
However, many overseas internet users have expressed concerns about this situation, stating that it is dangerous. Some commented, “The economy is collapsing, yet the stock market is skyrocketing.” Others warned, “It seems like a last-ditch effort, be cautious if you decide to jump in.” There were also comments questioning the sustainability of injecting funds into the stock market without tangible improvements in the real economy, predicting a more severe crash in the future.
Chinese political analyst Huang Yu wrote in a commentary for Voice of America on September 28th that the Beijing leadership has once again changed policies in a remarkably radical way, lowering interest rates and reserve requirements, and directly injecting funds into the Chinese stock market and real estate. Rumors suggest that there will be financial and welfare initiatives announced after the upcoming National Day holiday, aiming to reignite public economic confidence and prevent a major economic downturn.
The article pointed out that such familiar policy changes bear resemblance to the sudden halt of the “dynamic clearance” policy at the end of November 2022, raising suspicions among many Chinese about what has actually happened in September 2024.
It was suggested that beneath the appearance of tranquility and stability in China, with no unusual large-scale gatherings on the streets and no signs of a political coup in Beijing, the authorities’ responses indicate as though they are facing an invisible revolution.
Huang Yu noted that since 2012, the Chinese Communist Party has gradually developed a system of personal authoritarianism, replacing the previous collective leadership system and conducting extensive purges of party factions and social forces. The existing dynamic mechanisms of the CCP’s political cycles have disintegrated, giving way to a power struggle between individual CCP leaders and new uncertain forces. The result is increasingly shorter policy cycles and larger fluctuations, intensifying political turmoil within China.
After more than a decade, the CCP’s numerous proposed grand strategies, such as the Belt and Road Initiative, the Asian Infrastructure Investment Bank, the Hundred Billion Chip Project, Xiong’an New Area, and Made in China 2025, have all been seen as failed projects. The continuous deterioration of the Chinese economy over the past two years, with various industries facing recession, waves of layoffs, and the collapse of the real estate market, has led to the belief that initiatives like “Replacing the Old with the New” and “New Quality Productivity” are destined to fail as well.
During the recent abnormally sharp rise in the Chinese stock market, there has been a significant increase in the number of share disposals. A report from Sina Finance on September 29th revealed that due to the soaring market this week, many shareholders are eager to sell off their holdings, with 146 listed companies issuing disposal announcements in the past week alone.
Chinese affairs expert Wang He told the Epoch Times that the current situation of the Chinese economy is uncertain, with a bleak outlook. He stated, “There may be a scenario where new capital comes in, and those previously trapped take the opportunity to escape, creating a death spiral in the Chinese stock market. No matter how much additional funding is injected, it will not revive.”
The article concludes that the recurring failures and roller-coaster style of governance since 2012 in Beijing, particularly in terms of the tug-of-war between national advancement and retreat in reform and opening up, reflect the immense contradictions within Chinese politics and economy.
It depicts a paradoxical prelude to a revolution: the authoritarianization of the CCP over the past 12 years is destroying its own foundation, whether international or internal, institutional or perceptual, wealth or spiritual. It is becoming increasingly unclear whether this is the unintended outcome of the self-revolution promoted by the CCP or the arrival of another invisible revolution following the “dynamic clearance revolution.”
The only certain thing is that the Beijing authorities seem to sense a great danger, not just the perceptible danger of a looming economic downturn but also an unseen process that has begun, a game of reversals playing out between the leadership and everyone else beyond inanely returning to the starting point.