Demanding and not very left-leaning, but potentially effective. These, in summary, are the characteristics of Beijing’s new approach according to Alberto Forchielli.
How should we interpret Xi Jinping’s program?
As the confirmation that one of the last communist governments on Earth has at this point become Thatcherian.
In what way?
China has always had problems with welfare: almost every Five-Year Plan has contained anti-poverty programs, but the biggest steps forward have almost always occurred where the market had more weight: incomes rise, but the numbers of poor don’t decrease. On the contrary.
Will it be different this time?
Xi Jinping seems to have taken action– like the Iron Lady did– with the objective of creating wealth and impacting industrializing processes. Which, in China, means intervening in the political, social, and economic relationships between urban areas and suburbs.
They will need to move a part of public investments from infrastructure to the service economy where there’s less salary competition; opening sectors like healthcare, education, and kindergartens to privatization or foreigners; keeping the level of non-performing loans under control that tend to grow with wild urbanization.
This is not a simple solution, not even for a decision-maker like Xi Jinping.
No, but it’s the only way.