It’s the Politburo of the Chinese Communist Party, the Central Committee of the Central Committee, a 24-man central planning board.
The latest revelations about their ineffably brilliant stupid economic plans, which are signaling “bolder economic support next year,” says Bloomberg News, have to do with throwing more money and credit at the teetering economy and hoping that it can be bribed into submission.
Sounds corrupt, but no, corruption is another thing. Corruption is disloyalty to Xi Jinping. Further efforts to root out disloyalty to Xi were among the topics at the Politburo meeting at which various attendees piped up to echo Xi Jinping. In this respect, the news flash issuing from the meeting is that Xi’s efforts since 2012 to root out corruption or clobber disloyal Party members will continue.
An end to prudence
The “prudent” policy of the past—that’s right, the Chinese Communist Party has been prudent up to now, or at least for the past 14 years, according to Bloomberg News—is to be displaced by a “moderately loose” fiscal policy in the coming year, with more rate cuts, more proactivity and more red-ink-spilling (“China Signals Bolder Stimulus for Next Year as Trump Returns,” December 9, 2024).
The 24-man body also pledged “more proactive” fiscal policy at its monthly huddle, raising expectations for Beijing to widen the fiscal deficit from 3% at the annual parliamentary session in March. That would open the door to more central government borrowing to shore up the faltering economy.
The Politburo’s December meeting “sent the most aggressive stimulus tone in a decade,” Morgan Stanley economists including Robin Xing wrote in a research note, adding that “while the tone is very positive, implementation remains uncertain.”….
While Politburo readouts never reveal numerical economic targets, the vaguely worded statements give important clues on future policy. The December huddle sets the agenda for the larger Central Economic Work Conference that crafts priorities, such as the annual growth goal….
Top leaders tackled nearly every major problem plaguing the economy at Monday’s meeting, with direct pledges to “stabilize” the stock market as well as the property sector that’s fighting a years-long slump. Cadres for the first time touted “extraordinary” measures for counter-cyclical policy adjustment….
The December meeting will likely raise expectations for more support next year, even though it lacked details.
“The Politburo statement is very positive,” said He Wei, China economist at Gavekal Dragonomics. “It has everything that people wanted.”
All dreams have come true. Proactive and extraordinary moderate loosening is on the horizon. Freedom and free enterprise have failed, apparently. Time, finally, for the Chinese Communist Party to interfere in the affairs of the nation.
Zhaopeng Zing, with Australia & New Zealand Banking Group, is attuned to the never before seen or heard newness of the Politburo pronouncements. “The wording in this Politburo meeting statement is unprecedented.” That’s not all, either: “The policy tone shows strong confidence against Trump’s threats.”
Looks like we’re wasting our time, guys. It’s pointless to fight a CCP so adept and creative and new-path-forging, as well as so adamantinely inert to Trump threats.
Aggressive and stimulating
Look, it’s the most aggressive stimulus tone in a decade, according to Morgan Stanley economists. The tone is very positive. It’s just something about the implementation that maybe is a little foggy and uncertain. We’ll have to see how the implementation goes. But the tone: fabulous.
Among the aspirations jotted down at the unprecedently daring Politburo meeting as summarized by Bloomberg: With the help of borrowing, “Proactive fiscal policy to be appropriately strengthened and improved in quality and efficiency.”
Also, the innovative and daring clear but vague Politburo team wants to “Stabilize the property market and reverse its downturn” (must do both).
Also, the Politburo thinks it’s crucial to “Vigorously boost consumption.” How to do it? “Increase the incomes of middle- and low-income groups and improve the consumption structure.”
Wow, this is indeed novel and unprecedented. But when you’re right, you’re right. Improve the income and improve the consumption structure.
Also, “Expand domestic demand and form a virtuous cycle of mutual promotion between consumption and investment.” Free tip. Hand out copies of Keynes’s General Theory to everybody to help facilitate the magic and the government borrowing that are required “to shore up the faltering economy.”
The goal is nicely positive. Shore up the faltering economy! Hmm. Instead of destroying the economy, shore it up. As we amble toward shared global future.
But let’s see how the implementation goes. Morgan Stanley has a point there.
Or the planners could do this: just get the hell out of the way. May as well, if doing the unprecedented really is on the agenda.
Also see:
StopTheChinazis.org: “China’s Corruption and Anti-corruption Are Forever”
StopTheChinazis.org: “China’s Bold Stimulus Package Backs Losers, Reinforces Failure, Extends Losses”
