China’s Wang Warns About Nation’s Economy Taking the ‘Wrong Road’

October 30, 2020 Updated: November 17, 2020

Commentary

Chinese vice president Wang Qishan issued a warning during a speech at the opening of the 2020 Bund Summit in Shanghai.

“China’s financial sector must not take the wrong road of speculation and gambling, self-circulation, and financial bubbles, or of Ponzi schemes,” he said, according to Chinese media Caixin and state-affiliated media Global Times.

However, Wang’s Oct. 24 statement was omitted by regime mouthpieces Xinhua News Agency and People’s Daily.

Wang’s speech may have been a veiled attack on Chinese leader Xi Jinping’s economic policies and could hint at factional infighting within the Chinese Communist Party (CCP).

A Public Rebuttal

The Bund Summit, once known as the Wall Street of the Far East, is an international platform for high-end financial communication.

Also present at the summit were Li Qiang, secretary of the CPC Shanghai Municipal Committee; Yi Gang, governor of the People’s Bank of China; and Chen Yuan, chairman of the Bund Summit organizing committee. 

His remarks at the Shanghai meeting—his first public appearance after keeping a low political profile for nearly a year—about China’s economy taking the “wrong road” indicates he isn’t confident that Xi’s new policies can revive the economy.

China’s economy is under pressure, and the slowdown was exacerbated by the Sino–U.S. trade war and the pandemic. The CCP rolled out economic policies to spur growth and required all 31 provinces to implement economic stimulus plans.

According to data from the National Bureau of Statistics published on Oct. 19, China’s total fixed-asset investment came in at 43.65 trillion yuan (about $6.5 trillion) in the first three quarters of 2020, which is 10 times more than the 4 trillion yuan (about $596 billion) economic stimulus plan of 2008. Such expenditure could only result in a new and even greater round of overcapacity, a huge rise in local debt, inflation, and serious economic structural imbalances.

The investment plan begun in 2008 drew a lot of criticism and concern from Chinese economists. The inflation crisis caused by the 2008 stimulus plan fuels Wang’s concerns about Xi’s new economic policies.

Infighting Within CCP, Different Factions

Wang’s statement about the “wrong road” was excluded from Xinhua’s report, which shows Xi’s full control of Xinhua. But other Chinese media reported on it, suggesting that Wang Huning, a member of the Standing Committee of the CCP and head of the Propaganda Department, intentionally allowed Wang’s speech to be published in its entirety. That could only serve one purpose: to damage the relationship between Xi and Wang, which suggests factional infighting within the Party.

At the same time, Wang’s speech may have pleased Li Keqiang. As premier, Li has little sway in economic policy decision-making when compared with his predecessors, Zhu Rongji and Wen Jiabao. He’s merely a subordinate who carries out Xi’s orders.

In the past few months, Li talked about the “street vendor economy” during his visits to Chongqing and other disaster-stricken areas; the CCP’s official media made no mention of the visits. Moreover, CCP leaders in Beijing and Shanghai criticized the “street vendor economy” for affecting city management.

Another factor that hints at infighting is that Xi has taken down “princelings” (descendants of former senior CCP officials) who have publicly criticized him and the regime. This sends a message to the red second generation (the second generation of top CCP families) that Xi is in control. 

Wang is considered a “princeling” through his marriage to Yao Mingshan, the daughter of former First Vice Premier Yao Yilin.

Xi has recently targeted Wang’s allies.

On Oct. 2, during the Golden Week national holiday, Wang’s former aide, Dong Hong, was placed under investigation for corruption. Dong was a senior disciplinary inspector under Wang until 2017, when Wang was chief of China’s top anti-corruption agency, the Central Commission for Discipline Inspection (CCDI).

Wang’s longtime friend, Ren Zhiqiang, a princeling and the former chairman of Beijing Huayuan Real Estate, was sentenced to 18 years in prison on Sept. 22. Ren criticized Xi and the CCP for concealing the truth about the spread of COVID-19, which led to a pandemic. Some critics believe the harsh sentencing was a political, rather than a legal, punishment.

Chen Yuan, also a princeling and the organizer of the Bund Summit, invited Wang to address the meeting. 

Wang’s summit speech sends a message to the second red generation that Xi’s economic stimulus plan is on the wrong path. Wang also was indirectly telling them that it’s time to pick a side and decide if they want to follow Xi.

It appears that the upper echelons of the CCP are struggling among themselves, and the fight is in full swing. 

Zhang Huidong was a general manager at Rightway China Real Estate in Dalian, Liaoning Province. He earned a master’s degree in business administration and then worked for Dalian Heavy Industry Group Co. Ltd.

Views expressed in this article are the opinions of the author and do not necessarily reflect the views of The Epoch Times.