- Will “common prosperity” remain a vague promise?
- China’s risky fracking plan
- CIA chief: Taiwan invasion very likely
- Party cell for HSBC
- Smart underwater drone unveiled
- SMIC makes progress on 7 nm chips
- Johnny Erling on the heralds of diplomacy in Bonn and Beijing
It’s a shame that dreams sometimes have to be so complicated! Xi Jinping’s vision of “common prosperity” is a noble goal, but unfortunately, the less-than-rosy reality stands in the way: Bank protests, meager growth figures, enraged real estate buyers, disappointed graduates slipping from college straight into record unemployment. The problems are piling up, as our author Fabian Kretschmer analyzes from Beijing. And all this just a few months before the Party Congress that is to usher in Xi Jinping’s third term in office.
And the gas issue is not exactly a dream either. China actually sits on huge shale gas deposits. These could help supply the country with power and offer an alternative to coal, which China’s energy supply still heavily depends on. But fracking is not only harmful to the environment, but it is also extremely difficult in China. Geographical conditions make it complicated, expensive, and could even cause earthquakes. In Sichuan, earthquakes damaged some 20,000 homes in 2019, killing two people and prompting protests. Still, China continues to rely on fracking. Nico Beckert analyzes its prospects.
Johnny Erling introduces you today to the heralds of diplomatic relations between the Federal Republic of Germany and China. A Chinese journalist and an opposition politician from the CDU initiated diplomatic contact 50 years ago: Gerhard Schroeder and Wang Shu. In the fall of 1972, Beijing and Bonn sealed their intentions in a communiqué with just one sentence. Something diplomats can only dream of today.
Xi’s vision of common prosperity is put to the test
What has happened to several thousand small savers in China’s central province of Henan may have shaken their worldview to the core. For months, they have been unable to access their bank accounts after four regional banks froze them in the wake of an alleged speculation scandal (China.Table reported).
The banking scandal in Henan may only involve a relatively small sum in economic terms. Nevertheless, it has stirred up a primal fear among the population. Since the beginning of the country’s economic opening, society has been held together by a silent agreement: The Chinese willingly surrender their claim to a political say as long as the party leadership in Beijing ensures a steady rise of material living standards. And for decades, the plan worked perfectly: Between 1978, the beginning of Deng Xiaoping’s reform policy, and Xi Jinping’s inauguration in 2013, China’s gross domestic product increased more than 64-fold.
But the tide has turned completely in the wake of the dogmatic “zero-Covid” policy at the latest. Economic growth has virtually ground to a halt: Between April and June, the gross domestic product grew by only 0.4 percent year-on-year. Compared to the first quarter of the year, the world’s second-largest economy actually shrank by 2.6 percent. The immediate effects of the impending recession are beginning to show more and more clearly. In the overheated real estate sector, a central pillar of the domestic economy, a downward spiral is already impending: Currently, tens of thousands of Chinese are threatening to stop making their mortgage payments because their apartment buildings are sitting around unfinished. (China.Table reported).