The CCP Controlling Everything Is the Root Cause of Chinese Economic Problems: Experts

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Chinese leader Xi Jinping reportedly intends to have a confidant he’s known for decades become the country’s next vice premier, while Xi himself expects to enter his third tenure during the 20th national congress of the Chinese Communist Party (CCP) that occurs later this year.

On March 11, Chinese Premier Li Keqiang revealed at a press conference that he will leave office upon completion of his second term as premier.

On the same day, the Wall Street Journal reported that a Chinese official was “the leading candidate for a promotion to vice-premier” in charge of economics, finance, science and technology, and industrial affairs, which are currently overseen by vice-premier Liu He. The appointment “would ensure his [Xi’s] control over an ambitious effort to remold the world’s second-largest economy,” the report said.

The official, identified as He Lifeng, is currently the director of China’s top economic reform body—the National Development and Reform Commission.

However, no matter how knowledgeable the person in that position is, China’s economy will continue to suffer as long as the CCP rules over everything in China, according to China experts.

Xi’s Conversation with Former Vice Premier Ma Kai

Since Xi stepped into power, there have been two successive vice premiers—Ma Kai and Liu He—in charge of economic and financial systems.

Ma served under Li Keqiang during Xi’s first tenure.

Born in 1946, Ma is a native of Shanghai and is a second-generation communist adherent. As an important member of former premier Wen Jiabao’s cabinet, Ma was nominated by Premier Li Keqiang to be the vice-premier in charge of economy and finance.

The book “Superpower Showdown” by Wall Street Journal reporters Lingling Wei and Bob Davis includes a conversation between Xi and Ma in 2013.

Epoch Times Photo
A soldier keeps watch next to a red wall outside the Zhongnanhai leadership compound in Beijing on May 6, 2013. (Jason Lee/AFP via Getty Images)

In this conversation, Xi asked Ma whether he thought it was the CCP’s central committee or the state council that had been more effective in running China’s economy.

Ma answered, using the location of the institutions: “The North Courtyard.”

The North Courtyard of Zhongnanhai is the seat of the State Council, while the South Courtyard is the seat of the Central Committee of the CCP.

Zhongnanhai, formerly an imperial garden in Beijing, is now the compound that houses the offices of both the CCP and China’s state council, which is the top decision-making body of the government.

Xi’s comment on Ma’s reply was: “I don’t necessarily think so.”

What Xi said reveals what the CCP has been practicing throughout its history—controlling everything and intervening in all aspects of China’s society.

What The Experts Say

“There’s been a popular saying among Chinese economists: ‘Chinese economy becomes chaotic once it is free of restrictions and stagnates when it is put back under restrictions,’” Li Linyi, a China current affairs commentator, said in an interview with the Chinese language edition of The Epoch Times.

Li Linyi believes that the aforementioned dialogue between Xi and Ma Kai is just a reflection of this chaotic mechanism.

He gave a couple of examples.

In 2013, the CCP relaxed the requirements for A-share listings (Chinese companies listed in China’s domestic stock markets), which allowed 48 IPOs within the year; it also removed restrictions on margin trading, which was one of the reasons for the 2015 stock market crisis.

In mid-June 2015, a stock market crash occurred in China during which both the Shanghai and Shenzhen stock market indices fell more than 30 percent in three weeks, and an unprecedented $3.5 trillion in market capitalization was wiped out in that short period.

Epoch Times Photo
The entrance to the Waldorf Astoria, a landmark hotel, on Oct. 6 in New York City. Hilton Worldwide will sell the Waldorf to the Beijing-based Anbang Insurance Group for $1.95 billion. (Spencer Platt/Getty Images)

The second example has to do with Chinese investment overseas, according to Li. In 2014, the CCP lifted its restrictions and allowed Chinese companies to “go global” by merging and acquiring overseas assets massively. The most famous  cases include Chinese insurance company Anbang’s acquisition of the Waldorf Astoria Hotel and the joint venture formed by China Investment Corporation and Carnival Cruise Lines in 2015.

Subsequently, the CCP’s foreign exchange reserves fell from nearly $4 trillion to below $3 trillion.

By the end of 2016, the CCP had to re-impose capital controls, fearing capital outflows. This led to difficulties in corporate financing and an economic downturn in the country.

In fact, Li Linyi said, the CCP has been repeating this relax-chaos-control-stagnation cycle over the years.

The CCP’s authoritarian control over everything in China is the basic cause of problems in China, according to Frank Tian Xie, a John M. Olin Palmetto professor in business at the University of South Carolina Aiken. The CCP is indistinguishable from the government or the society, Xie said.

“As the CCP is above everything else, maintaining its interests and rule is its top priority. The CCP’s rigid system, its overlapping and complicated institutions, its inefficiency, its corruption, and its elite class capturing money from the country and the people—these are the root causes of the problems in China,” Xie told the Chinese edition of The Epoch Times in a recent interview.

“If He [Lifeng] is appointed vice premier, it will give Xi a confidant and crony in the North Courtyard, which will strengthen Xi’s control, but will not help China’s economy,” Xie said.

According to Li Linyi, the trouble with Xi’s next term is that China’s economy will continue to decline and no one will take him seriously. The CCP officialdom will lose momentum.

“Xi has two options in the new term: either he caves in to all CCP officials, giving them the incentive to corrupt, or Xi dismantles the corrupt CCP, doing good for the country and the people,” Li said.

Haizhong Ning


Haizhong Ning was a state employee and worked for a real estate company in China, before moving abroad and working as a reporter with a focus on Chinese affairs and politics for more than seven years.

Luo Ya


Luo Ya is a freelance contributor to The Epoch Times.

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