During the recent fourth plenary session of the 20th Central Committee of the Chinese Communist Party (CCP), the internal struggle within the party has come to a temporary halt. Apart from the rare internal “purge,” the official release of suggestions for the “15th Five-Year Plan” has been made, emphasizing both deepening reforms and strengthening CCP control. Observers note that when looking back at the history of CCP governance in China, starting from the Mao era to the Deng era and now the Xi Jinping era, the Chinese economy has become entangled in a stalemate.
Professor Xie Tian from the Darla Moore School of Business at the University of South Carolina stated that the economic collapse during the Mao era was due to the planned economy’s inability to keep up with the constantly changing market demands of modern humanity. Similar countries worldwide that adopted planned economies faced the same issues.
Chinese affairs expert Wang He stated that since the CCP came to power, the Chinese economy has been spinning in a dead end. “During the Mao Zedong era, following the example of the Soviet Union, a comprehensive planned economy was established, binding all Chinese people and creating a contemporary form of slavery. The economy couldn’t function properly and faced collapse by the time Mao Zedong passed away.”
Xie Tian commented that during the Deng era, under authoritarian rule, the so-called reforms and opening up were carried out to align with the world’s opening up to China. However, it was not a system based on economic freedom and fairness but rather a form of privileged capitalist socialism for CCP elites to seek rents and convert power into capital, reaping the maximum benefits. Not only state-owned enterprises but even major private enterprises are outcomes of CCP’s privileged capitalist system.
Wang He mentioned that Deng Xiaoping’s reforms aimed to loosen restrictions domestically and expand influence globally, allowing for a certain level of autonomy internally and a share in the global economy, establishing CCP’s territory.
He explained that Deng Xiaoping’s introduction of the so-called socialist market economy transitioned from the planned economy of the past to a privileged economy under CCP control, referred to as the “birdcage economy.” “During Mao Zedong’s era, the birdcage was small and tightly bound; Deng Xiaoping expanded it, allowing some space to maneuver, even connecting with the global economy. However, the cage still exists, and when necessary, it can still be closed.”
Wang He continued, mentioning that CCP’s privileged economy has led to another deadlock. “During the Jiang and Hu period, moral collapse occurred, evident in the 2008 melamine scandal. Simultaneously, the Chinese economy is destructive to the environment, leading to disasters like sandstorms and haze, causing ecological catastrophes. The Chinese economy cannot sustain itself.”
Since taking office, current CCP leader Xi Jinping has been continuously praised by state media for his ability to stabilize a shaking building. However, he has also been labeled as the “chief accelerator” by outsiders, as the CCP is now caught in an unprecedented political and economic crisis. During the “14th Five-Year Plan” period (2021-2025), experiencing three years of pandemic control and recovery, high local debts, financial crises, unemployment, and downgrading consumption have become hot topics.
After over a decade under Xi Jinping’s leadership, China’s social wealth remains highly skewed, with the vast majority controlled by CCP elites. Former Chinese Premier Li Keqiang once mentioned that over 600 million Chinese people earn less than 1000 RMB per month. Data also shows that over 900 million people in China earn less than 2000 RMB per month.
Wang He expressed that Xi Jinping also recognizes that completely returning to the Mao Zedong era is no longer feasible. The immense wealth of China’s entrenched elite class has become deeply interconnected with international monopoly capital. Disconnecting from the world economy, without global economic circulation, would lead to the downfall of the Chinese economy. Moreover, the CCP must ensure that the entrenched elite class reaps a large part of the wealth accumulated over the past few decades. In this scenario, Xi Jinping has reverted the loosening seen during Deng Xiaoping’s era back to a form of binding.
“The CCP cannot completely sever ties with international capital. In the past, China’s entrenched elite cooperated with international capital; now, they need international capital to align with CCP’s privileged capital. The most obvious example is how the CCP is currently using the threat of rare earths to intimidate the world.”
Regarding this tough stance on foreign relations, Wang He pointed out that it is intertwined with CCP’s domestic shift to the left. He emphasized the impact of the pandemic on Chinese citizens, indicating that while CCP elites control the entire economic lifeline of China, the situation has only worsened. Following the pandemic’s containment, China’s economy continues to decline, and indiscriminate attacks are becoming more frequent, illustrating the inability to address the societal injustices stemming from the privileged economic system, possibly worsening the situation.
Xie Tian noted that under Xi Jinping’s era, this model of privileged capitalism has come to an end. As wealth continues to polarize, the top CCP members possess unlimited wealth and power, while ordinary citizens are being squeezed financially and burdened with debts due to the real estate bubble.
Xi started to address the issues of the privileged economy under the guise of an anti-corruption campaign, attempting to solve the problems left behind by Deng Xiaoping and Jiang Zemin. However, he soon realized that it was impossible to continue as the vested interest groups were deeply entrenched; removing them would mean dismantling the entire CCP regime.
“Just like a doctor performing surgery on a patient; initially, they thought they could solve the problem by removing two tumors, only to discover malignant tumors throughout the patient’s body. If you were to remove them, the CCP’s political zombie would immediately face death. Ultimately, they had to close up the patient without resolving the issue.”
In the past two years, the CCP cracked down on private enterprises, only to significantly promote support for them this year. Moreover, previous efforts to establish cooperatives in rural areas and community canteens in cities have been toned down.
Xie Tian mentioned that Xi Jinping seems to be leaning towards a return to a planned economy, believing it could lead to full control. He envisions the control scene of the Mao era, yet quickly realized that China cannot turn back time.
The recently concluded fourth plenary session of the 20th Central Committee saw the approval of suggestions for the “15th Five-Year Plan.” The official documents clearly outline the main objectives for economic and social development during the “15th Five-Year Plan” period, emphasizing aspects such as “high-quality development,” “technological self-reliance and advancement,” and “comprehensive deepening of reforms.”
After experiencing five years of political regression and economic decline, the economic topics of the “15th Five-Year Plan” continue to emphasize “technological self-reliance,” “deepening reforms,” “high-quality development,” and “high-level opening up to the outside world,” reiterating “placing economic construction at the center.” However, some observers have noted from the plenary session report that the CCP is bidding farewell to the era of reform and opening up, entering a phase of survival.
In light of the CCP’s renewed emphasis on opening up to the outside world, Xie Tian stated that in recent years, the true face of CCP communism has not changed. Citing national security as a reason, they forcefully demand penetration into various enterprises, including foreign companies, to establish CCP branch organizations, even resorting to intellectual property theft, causing a significant outflow of foreign capital.
It is reported that Xi Jinping personally planned, commanded, and formulated the “15th Five-Year Plan,” emphasizing the need to “adhere to and strengthen the centralized and unified leadership of the Party Central Committee.”
Wang He stated that after the recent plenary session, the infighting within the CCP has intensified, solely to maintain the party’s rule, with all sides temporarily compromising and allowing Xi Jinping to continue playing his role.
Xie Tian mentioned that post-plenary session, Xi Jinping faces an even greater crisis, with economic collapse looming as the backdrop behind the political turmoil. This political and economic environment poses significant risks for foreign investments in China.
US President Trump is currently engaged in intensive activities in Asia, expected to meet with CCP leader Xi Jinping in South Korea.
Regarding the CCP’s “15th Five-Year Plan” and its propaganda concerning reforms and openness, Canadian writer and senior commentator Sheng Xue warned in an article on October 27 that under external containment led by Trump, system fears, and elite’s self-saving tactics, Xi Jinping’s regime might resort to a deceptive form of “reform and opening up.” It’s a rerun of an old script, never for the freedom and dignity of the Chinese people, but to prolong the single-party dictatorship’s rule.
Wang He mentioned that China’s economy is deteriorating, with the populace facing increasing survival crises. The international community sees that with the recent escalation in rare earth controls, the CCP wishes to exert pressure on the West. While CCP may negotiate with the US and make temporary concessions, this regime remains unreliable. The international community is increasingly skeptical of CCP’s slogans for the future five-year plan.
“The CCP is a rogue regime; it’s easy to enter, but difficult to exit. Those large Western capitals, especially Taiwanese, would rather incur losses than stay. ”
In recent times, the CCP has intensified internal Stalinist purges and enhanced domestic stability measures while promoting nationalism and emphasizing regime security. Simultaneously, they engage in aggressive wolf-warrior diplomacy, conducting cross-border suppression through united front infiltration.
The latest plenary session report employed phrases like “turbulent winds and waves,” “stormy and turbulent,” “daring to struggle and skilled in fighting.”
Wang He stated that while the CCP presents a tough exterior, internally it’s riddled with vulnerabilities. For instance, Xi Jinping’s cleanup of the privileged economy, dismantling companies like Hainan Airlines Group, Tomorrow Group, and Anbang Group linked to Deng Xiaoping’s granddaughter’s husband, Wu Xiaohui, show tensions between the elites and Xi Jinping. Moreover, the recent collapse of Evergrande, involving political struggles, indicates the ongoing battles within the regime.
He believes that Xi Jinping’s shift to the left has intensified infighting among the elite class. In the midst of struggles, like a car with everyone fighting over the steering wheel, the vehicle is bound to drive off a cliff, reflecting the inevitable fate of the CCP regime.
Xie Tian added that from Mao and Deng to Xi, China’s society has faced challenges not only in politics and economics but also in terms of moral degradation and corruption. “As we reach the Xi era, people call him the ‘chief of acceleration,’ the last party leader, because the CCP regime is headed towards a dead end.”