Xi plots middle course amid trade war

Editorial | Mary Ma 2 Oct 2018

It was 40 years ago when China embarked on its course of economic reforms that later became known as the "reform and opening up" policy that culminated with the southern tour by then-paramount leader Deng Xiaoping.

Four decades on, President Xi Jinping headed north -- not south -- to tour Heilongjiang, Jilin and Liaoning.

If the south was symbolic of China's opening up, the three northeastern provinces have a history of self-reliance, as the northeast is home to the country's largest agricultural and industrial bases. During his tour, Xi wore a pilot's helmet while sitting in China's home-made "Apache" military helicopter.

In Chinese politics, every public appearance by the top leader is carefully plotted to embody a message.

When Deng made the southern tour, a political debate was raging over economic reforms, with critics questioning whether the nation's socialism was becoming capitalistic. Deng's appearance in Shenzhen ended the debate, and the pace of opening up has since accelerated, turning what were once fishing villages into booming metropolises.

Xi's pick of the northeastern provinces comes at a time of heightened trade tensions with the United States. The political message was loud and clear: China, with 1.4 billion people, must rely on itself for food supply and technological development.

Xi was quoted as admitting it has become increasingly difficult for China to acquire advanced technology but that it's not a bad thing to be self-reliant. It was the first time he has publicly reacted to the Sino-US trade wars.

The tour also came amid a heated debate on the future of private-sector economy at home.

The debate was ignited in a blog posting by Wu Xiaoping, who describes himself as "a veteran in China's financial sector." Wu said the mainland's private sector had basically fulfilled its task of assisting the state-owned economy to achieve rapid development, and should stop expanding blindly. Instead, it's time to substitute it with a new form that's a concentrated, unified and scaled-up model of mixed ownership.

The ensuing debate saw two opposing schools of thought clashing in a debate generally summed up by four words - "public in, private out." Party leadership of private companies was emphasized to supersede boards of directors.

After inspecting state giant PetroChina's Liaoning operation, Xi visited private enterprise, Hong Kong-listed China Zhongwang Group, the world's second largest aluminium manufacturer.

The president reportedly made two points. First, the country was committed to developing a state-owned economy, and it was wrong to criticize state-owned enterprises; and second, Beijing was also committed to "encouraging, supporting, guiding and protecting" the private-sector economy.

Wu's blog has caused much fuss in the mainland and Hong Kong, because commentaries by bloggers in the mainland are generally viewed as test balloons released by the leadership, or factions within.

Will Xi's balanced approach to the debate on the question of public-private economy put the argument to rest?

It'd better because the debate is breeding uncertainties.

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