Below are excerpts from a routine report in the Western business press on China's economy. The statistics come from the PRC government.
While many U.S. congresspersons, governors, and so on denounce “communist China,” the Western business press has no problem reporting plain facts just as it does for any other capitalist country.
From Reuters, July 31:
The National Bureau of Statistics (NBS) purchasing managers' index (PMI) contracted for a third month, easing to 49.4 from 49.5 in June, below the 50-mark separating growth from contraction. Producers reported factory gate prices were at their worst in 13 months, while employment stayed in negative territory.
China's $18.6 trillion economy grew more slowly than expected in the second quarter.
July's new export orders sub-index contracted for a third month and suggested factory owners had continued to slash prices to propel outbound shipments.
Consumers have cut back spending on big-ticket items and shied away from premium-priced goods. Car sales, the biggest component of China's retail sales, fell for the third month in June. Starbucks, which has thousands of stores across its second-largest market, reported a 14% plunge in quarterly China sales as coffee drinkers gravitated to cheaper offerings.
Policymakers promised further stimulus to encourage low- and middle-income groups to spend more during a meeting of the top-decision making body of the ruling Communist Party on Tuesday, but stopped short of announcing specific steps. China's state planner announced that half of the 300 billion yuan ($41.40 billion) to be issued in ultra-long treasury bonds will be allocated to support a consumer trade-ins programme [subsidies for buying a new washer or other appliance, trading in your old one]. That amount is equivalent to just 0.12% of economic output and 0.3% of 2023's retail sales.
One of the main reasons people are not spending is that 70% of household wealth is held in real estate, and house prices fell at their fastest pace in nine years in June.
The property sector used to constitute around one quarter of the economy, making it a key growth driver. But the PMI's construction sub-index grew more slowly in July, pointing to diminishing demand for new apartments and other building projects.
While the Western business press has no problem reporting the facts, apologists for the Communist Party of China prattle on about a “socialist market economy.” But things are tough for them. One of their leading websites, Friends of Socialist China, ran 43 puff pieces in July; only one was about the China’s economy. Its markets are not socialist, and they are not doing well. The government has the same fiscal, banking, and regulatory tools that all capitalist countries use to one degree or another. The Chinese government makes big use of them, and now the economy is in a big mess, educated youth cannot find a job, and several hundred million migrant workers toil as they have since China left the socialist path in the late 1970s.
China today is barren of a socialist plan, unified deployment of investment, and production for need. Both private corporations and the ones whose shares are owned by the central, provincial, and city governments must find buyers for their output and sell it at a profit.
China’s capitalist development inescapably leads to export of monopoly capital, pushing exports into markets around the world, and making deals to plunder raw materials from pre-industrial countries just like Western capitalists. PRC expansion demands a re-division of economic and political power. The rise of capitalist China comes into inevitable conflict with the established bases of U.S., European, Japanese and other imperialist powers.
The working class of all countries has only one way out: socialist revolution. We can run things. We can make a secure, prosperous life for ourselves. And then Reuters will have nothing to report to its business audience.
Charles Andrews is author of The Hollow Colossus.
