China’s show of force conceals a sinking economy
Military moves around Taiwan dominate news cycles as Beijing cracks down on critical economic comments
Economic pressure can force countries to do crazy things. For China, launching the largest live-fire exercises encircling Taiwan is an ideal distraction to domestic doom and gloom.
It is also a headline-grabbing response to Washington’s announcement earlier this month of a US$10 billion package of arms sales to the self-ruled island.
Images and sounds of screeching fighter jets and sea-to-air missiles frame a Top Gun-style narrative. A symbol of raw Chinese power by the forces of the People’s Liberation Army.
But behind this week’s news clips and bellicose rhetoric of the ridiculously named Justice Mission 2025, lies a dark secret of decay and unrest at home. The economy is rapidly sinking.
“The timing of PLA drills is increasingly disconnected from single political events,” Amanda Hsiao, the director of China coverage at the Eurasia Group, told The New York Times.
“This drill may be as much intended for domestic audiences as much as Taiwan and US ones,” she added amid an “historic shift” in the world’s second-largest economy.
Negative economic narratives are being suppressed.
China Business Spotlight
Ticking time bomb:
- Last month, retail sales shrunk to levels not seen since 2022 during the nationwide COVID-19 lockdown, the National Bureau of Statistics stated.
- It came at a time when unemployment was rising, wages were stagnating, and consumer confidence had “evaporated” despite stimulus measures.
Delve deeper: The crucial property sector has already collapsed, leaving local governments wading in rivers of debt, while industrial profits have shriveled. Deflation stalks the nation.
Between the lines: Even China’s leader Xi Jinping is spooked. “Expanding domestic demand is related to economic stability and security,” he said earlier this month.
Big picture: His remarks reported by Qiushi, the flagship magazine of the ruling Communist Party’s Central Committee, carries enormous weight and illustrates the fear gripping Beijing.
Bottom line: “The economic crisis [is now] a top priority for the security authorities. This [is a] profound shift in responsibilities,” China Business Spotlight reported earlier this week.
Why it matters: “Negative economic narratives are being suppressed. Platforms are deleting accounts of critical commentators and public debates are disappearing,” it revealed.
China Factor comment: All this has been going on while the “Taiwan Question” dominates news cycles for China’s tightly-controlled state-run media. At least for now.