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"They Don't Care...They Just Do" - Chinese Economist Explains President Xi's Crackdown

Tyler Durden's Photo
by Tyler Durden
Monday, Dec 06, 2021 - 10:00 PM

President Trump left office nearly a year ago, but much to Beijing's chagrin, the relationship between China and the US has only continued to deteriorate. And now that the Americans are no longer willing to tolerate China's transgressions in the hope that free markets would inevitably free the country from the CCP's grasp, President Xi has decided not to hold back. Hong Kong is now firmly under CCP control, and many fear an invasion of Taiwan might be just around the corner.

Xi's string of heavy handed "reforms", which China launched over the summer, have cracked down on industries as diverse as video games (minors are only allowed to play three hours a week) private tutoring (fears about educational inequality have angered the working class) and Beijing's biggest tech firms, among others. Jack Ma, formerly the country's richest man, has been brought to heel by the CCP after he stepped out of line during an obscure regional tech conference.

Chinese markets and the growing geopolitical tensions in the wake of the COVID outbreak in Wuhan have attracted increasing interest in the US and abroad. So "60 Minutes" decided to interview a few different experts on China's economy, some from the US, and some from China. 

Keyu Jin, an economist, splits her time between the UK (where she teaches at the London School of Economist) and Beijing, where her father is president of one of China's largest state-owned banks.

According to Jin, China grew lawlessly over the last 40 years. But the next 40 years will be much more disciplined.

President Xi envisions what he calls a "modern, socialist economy" for China - a much more "restricted" version of capitalism. According to Jin, President Xi is with the peasants, the middle class, and unlike his predecessors, he "doesn't really care so much about what happens to elites."

Jin says he was sitting in the third row at the conference where Ma's seemingly innocuous criticism about China's tech regs "stifling innovation" led to the sacking of the Ant Global IPO (what would have been the biggest IPO in the world up to that date) and Ma disappearing from public view for months.

Earlier this year, Chinese tech CEOs started stepping down and announcing massive donations.

When confronted by Lesley Stahl about Beijing potentially killing the golden goose, Jin insisted that this was a "complete misinterpretation" of what's going on. Lin insisted that China has been much more effective at lifting people out of poverty.

To try and keep things fair and balanced, 60 Minutes also interviewed Matt Pottinger, a former Trump Administration National Security official whose focus is on China.

According to Pottinger, if you are an American company operating in China, new rules imposed by the CCP require companies to hand over their encryption keys to the Chinese government. By law, the data now belong to the CCP.

While Jin acknowledged that Americans might not be willing to tolerate the level of paternalistic behavior that's imposed on society by the CCP, the approach has the support of the Chinese people. Take Beijing's destruction of the private tutoring industry. Jin says it was an example of free market capitalism run amok by draining the resources of parents. So one weekend in July, the government essentially outlawed this entire $120 billion for-profit sector with the snap of its fingers.

Jin concluded with this: "If [the CCP] is determined to do one thing, they just do it. They don't care about the capital markets, implication of the financial sector. They don't care about the employment implications."

That's a level of control that American leaders will never come close to having.

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