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China’s tech crackdown & the Jack Ma problem
Is the Communist Party losing support in China?
On GZERO World with Ian Bremmer, Shaun Rein, founder and managing director of the China Market Research Group, explains why wealthy Chinese citizens fear that the country is moving towards socialism and is no longer pro-business as it was in the past.
“People have trusted the Chinese government to do the right thing. It was almost like they were invincible,” Rein explains, “But zero-COVID wasn’t done well, so they’re starting to lose some support, especially among the wealthy.”
Along with zero-COVID sapping domestic consumption and production, Rein also points to the example of Jack Ma. Ma was a hero to many young Chinese, rising from a peasant to become the billionaire owner of one of China’s biggest tech companies, Alibaba. But Communist Party's crackdown on the private sector forced Alibaba to split into six separate companies and forced Ma to give up his control.
Rein says he agrees with the decision because companies like Alibaba were becoming too powerful, controlling too many industries and stifling fair market competition. But the Beijing's crackdown has rattled the business community and some worry that China’s ethos of “socialism with Chinese characteristics” is starting to look a lot more like traditional socialism, full stop.
Watch the GZERO World episode: China’s economy in trouble
And watch GZERO World with Ian Bremmer every week on gzeromedia.com/gzeroworld and on US public television. Check local listings.
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TikTok, Huawei, and the US-China tech arms race
“When the Chinese get good at something, all of the sudden, the United States says, ‘This is a national security risk.’”
That’s what Shaun Rein, founder and managing director of the China Market Research Group, argued on GZERO World with Ian Bremmer while discussing the increasingly hostile geopolitical environment between the two superpowers.
China's COVID lockdowns made its people depressed and hurt its economy
China’s economy keeps slowing down, and that could be a problem for the rest of the world.
On GZERO World, Shaun Rein, founder and managing director of the China Market Research Group, sits down with Ian Bremmer to explain why he’s become bearish on China’s economic outlook.
2023 was supposed to be the year China’s economy came roaring back after almost three years of brutal zero-COVID lockdowns that ground domestic spending and production to a halt. But Rein points to a few reasons why China’s rebound hasn’t exploded the way some economists predicted.
“I think people underestimated how much the lingering effects, not just economically but physiologically, that [zero-COVID] would have on China,” Rein says, pointing out that 50% of people in Shanghai suffer from anxiety and depression, according to the government.
Rein argues that because income levels in 2022 stayed so low, with millions of Chinese locked down and furloughed from their jobs, the revenge spending expected after zero-COVID ended never materialized. He also says that an increasingly hostile geopolitical environment under the Biden administration has made COVID recovery even more challenging.
Watch the GZERO World episode: China’s economy in trouble
And watch GZERO World with Ian Bremmer every week on gzeromedia.com/gzeroworld and on US public television. Check local listings.
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China’s economy in trouble
China’s economy has averaged about 10% annual growth year over year for the past four decades. It’s undoubtedly the biggest economic success story of our lifetime, but how long can that last?
Shaun Rein, founder and managing director of the Shanghai-based China Market Research Group, sits down with Ian Bremmer on GZERO World to talk China's post-COVID recovery, Xi's crackdown on the private sector, and why the last year has turned him from a bull to a bear on China's economic outlook.
Annual GDP growth has been on a relative decline since 2010, barring a big jump coming out of the pandemic. Decades of infrastructure investment have left local governments drowning in debt. Almost three years of zero-COVID politics ground China’s economy to a halt. Youth unemployment is surging to record highs and expected to keep climbing.
At the same time, President Xi Jinping is moving China away from the pro-investment policies of his predecessors in favor of ideological and national security priorities. But public support for China’s Communist Party is starting to show cracks, especially among citizens in wealthy cities who experienced the brunt of China’s brutal zero-COVID policies.
Can communist ideology mixed with capitalist ambition sustain growth into the future? Is Xi setting up China for another 4 decades of economic success? And what do China’s citizens make of its return to socialist roots?
Watch GZERO World with Ian Bremmer every week at gzeromedia.com/gzeroworld or on US public television. Check local listings.
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Podcast: China's great economic slowdown
Listen: China is undoubtedly the biggest economic success story of our lifetime.
Between 1978 and 2017, China averaged almost 10% year-over-year GDP growth. Decades of pro-investment policies transformed China from a closed, centrally-planned economy to an economic powerhouse that could rival the US.
But in the last decade, Chinese President Xi Jinping has been moving the country back to its socialist roots, with major crackdowns in tech, real estate, and foreign investment. Xi’s vision is one of almost total state control, where businesses conform to the goals of the Chinese Communist Party, not the other way around.
Can communist ideology mixed with capitalist ambition sustain growth into the future? Is Xi setting up China for another four decades of economic success? And what do China’s citizens make of its return to socialist roots?
To discuss all that and more on the GZERO World podcast, Ian Bremmer sits down with Shaun Rein, Founder and Managing Director of the China Market Research Group, based in Shanghai.