xiaohongshu

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xiaohongshu [none/use name] @hexbear.net 7h ago

If we’re talking about the policy makers, then the old school Mao era central planners were all purged back in the 1990s (Chen Yun et al.). Marxism has been banished to the humanities departments in the academia. The policy making decision is mostly advised by neoclassical economists at this point.

However, there are still mandatory Marxism-Leninism class in universities, which, to be quite frank, are just patriotism classes these days. This is the kind of classes that 99% of the students will find boring except for those politics nerds (you know, the type of people who love to post and argue on leftist internet forums lol), yet it is undeniable that the students are being primed to seek out socialist theories. When life was good, nobody really cared. But in times when the economy isn’t going so well, suddenly you begin to question “is this really the socialism I’m being taught?”

With the rapid development of China’s economy over the past two decades, deep inequalities also began to emerge. In late 2019, there was a small resurgence of reading Mao’s work, mostly by college students from middle class background because these are the people who have the most time to study. The working class is far too exhausted to read theory.

Then Covid hit in 2020 and people suddenly had more time to do some soul searching with Mao. This coincided with the failure of the Chinese economy to pick up pace after abandoning the Zero Covid policy in early 2023. At first, people thought, OK, maybe the economy is still recovering, let’s give it some time. The mood was still optimistic.

During that time, the property prices peaked in 2021 and the Evergrande implosion that unfolded between 2021-2023 also caused many people, especially the middle class and the many corporations that had jumped on to the property buying frenzy in the 2010s, to start losing their wealth.

By mid-2024, it became clear that the economy is unlikely to return to the pre-Covid level. Pessimism began to spread and people started to save money (there is no welfare in China for most people, so losing your job can be a big deal especially if you still have 20-30 years of mortgage to pay), which led to a deflationary spiral. As businesses began to lose profit because people are unwilling to spend, production shrinkage turned into layoffs and wage stagnation. Nearly 40-50% of fresh graduates could not find jobs. The tangping (lying down) movement is picking up pace, as the youth become increasingly disillusioned about their future.

By 2025, all hope is lost. I don’t know of anyone who still believe that we can return to the pre-Covid level of economic spending in a short period. Even the most optimistic think we have to endure until the end of the decade. So, it should not surprise you that some people are beginning to question about the “socialism” in China, which is being made more dissonant by the fact that, on the one hand, great infrastructure building and China becoming a superpower, and on the other, the positive outlook of the 2010s where jobs were abundant and personal wealth was rapidly rising was all gone.

As I have written elsewhere, it all comes down to unleashing the domestic consumer market to offset the export and investment sectors, both of which have now run their courses. However, the massive wealth inequality, which had not been addressed in the decades prior, is exactly what’s causing weak consumption. This is the root cause of the problem, hence what I said before about whether the government is serious about tacking the wealth inequality issue.

xiaohongshu [none/use name] @hexbear.net 17h ago

You are absolutely correct. I am using it in the BC/AD sense, or closer to the contemporary historical period, pre/post-GFC.

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xiaohongshu [none/use name] @hexbear.net 17h ago

It’s bad either way. But this has an added social aspect to it since the economic downturn after Covid. In the BC (Before Covid) era, few people cared about whether China is socialist or capitalist. As long as the economy is growing, opportunities are abundant, people just don’t care. Black cats, white cats, they’re all the same if they catch mice.

Since Covid, more and more people are suddenly finding the mandatory Marxism-Leninism class they used to find boring in college useful, and started to pick up Mao selected works. That’s how things work.

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xiaohongshu [none/use name] @hexbear.net 17h ago

It was a stalemate. If the PRC actually won, there wouldn't be an ROK unless you're one of those people who thinks that the PRC actually wants Korea to be forever divided into two countries.

Erm… A poor country fought the most advanced military in the world at the time to a stalemate, and protected the DPRK.

Yes, because the SU had a much more dangerous military. Compared with the US/NATO, the SU had more nukes and had a larger standing army among other things.

Are you telling me that China today can only competently protect its interest in Eurasia only if it has numerical advantage to the US? And if we’re being honest, China already has that in various aspects of its military.

War isn’t always about conquering your enemy’s territory, you know? It’s about imposing significant costs - political, economic, social costs - to your opponents such that it makes it harder for them to intervene in your affairs.

By your standards, the US should have steamrolled their enemies in Korea and Vietnam, but they didn’t. And the latter did not win decisively against the US military either. It was the mounting costs that made the US withdrew.

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xiaohongshu [none/use name] @hexbear.net 19h ago

There are so many of these internet dramas lol.

It makes sense - with the wealth inequality deepening and under the current economic downturn, there is a real discontent brewing among the working class who feel that they are the ones who are losing out.

Back in 2017-2019, you don’t think about this at all - there was no such concern as unemployment. As long as you’re working hard, you will be able to find a job. It might not pay well, but there was a lot of room for improvement. The property prices were rising, and everyone was feeling like they are becoming richer, the middle class spent more, created more jobs, and the positive feedback loop caused by the rising land prices.

Post-Covid is a very different world. In just a few short years, people have now turned to getting real worried about losing their jobs, so people prefer to save than to spend. In aggregate, less spending means less profit for the enterprises (and more expensive debt to service), hence the deflation, production cut, job loss and delayed wage payment and stagnation. The rise of AI automation does not help!

So you wouldn’t want people to think about people flaunting their wealth. This is all good. But will the government take actual step to address the wealth inequality problem? This is the real question right here.

xiaohongshu [none/use name] @hexbear.net 19h ago

I mean, what’s the worst that can happen? The worst for China is probably become like Japan (unthinkable just a few years ago if you ask me, but COVID changed everything), with a couple decades of stagnation. Wealth inequality will deepen but it’s not like China is going to “collapse” as some people are obsessed with. It is a world superpower after all.

I think people are scarred by the USSR collapsing but remember that it was a voluntary dissolution - if Gorbachev had wanted to carry the USSR in a decaying state for a few more decades, it was totally doable. As long as the ruling political regime wants to keep going, I don’t see there is any way for a developed economy to collapse. The countries that collapsed happen under the conditions of their productive capacities being destroyed.

I wouldn’t put much stock in the youth Maoism thing. It was a collective outburst of emotion on the internet (much like Americans protesting about Trump on the internet), but the Chinese government has a lot of tools to keep things under control. They control the algorithms after all.

What I am worried about the most are the Global South countries. Like it or not, China is a superpower and its policy will affect the rest of the world. Even China’s non-intervention will deeply affect the Global South. We’re already seeing Mexico (the 8th largest car manufacturing country in the world) putting up 50% tariffs against China, and the EU crying about trade imbalance with China. This shows that the world is close to its limits for absorbing China’s exports. The loss of consumer market in the US cannot simply magically re-appear elsewhere - someone has to be willing to run the deficit to absorb the global export surplus goods, which nobody is willing to do.

CADTM made a report about the BRICS Summit at Rio this year titled The BRICS are the new defenders of free trade, the WTO, the IMF and the World Bank:

The BRICS+ countries assert that the IMF should continue to be the cornerstone of the international financial system.

In the final declaration of the BRICS+ summit held in Rio de Janeiro (Brazil) in early July 2025, the following is stated in point 11:

"The International Monetary Fund (IMF) must remain adequately resourced and agile, at the centre of the global financial safety net (GFSN), to effectively support its members, particularly the most vulnerable countries.” https://dirco.gov.za/rio-de-janeiro-declaration-strengthening-global-south-cooperation-for-a-more-inclusive-and-sustainable-governance-rio-de-janeiro-brazil-6-july-2025/

They also express their support for the World Bank. In point 12 of their declaration, they indicate a desire to enhance the legitimacy of this institution. However, since their inception, both the World Bank and the IMF have implemented policies that contradict the interests of people and ecological balance.

So, BRICS will continue to defend neoliberal free trade. No new alternative economic doctrine has emerged.

This is also why I have to remind everyone that the Ukraine war that caused the US sanction on Russia’s foreign reserves and the Biden rate hike in response to inflation after the oil and gas supply was disrupted, was a very very special period in the post-90s world. There was a lot of potential to break the dollar hegemony, for the dollar liquidity shortage across the world was seriously driving many countries to look for alternatives. This was why BRICS came to the spotlight in 2022. Unfortunately that window of opportunity is mostly gone.

I don’t know what we’re going to see next. The next US economy crash isn’t going to be pretty (e.g. the AI bubble bursting), because remember that last time China saved the world by going into the infrastructure investment that drove the construction and raw material sectors. This time, even China does not have that capacity anymore, so there is little to no mitigation when the US inevitably exports its unemployment to the rest of the world, just like the 2008 GFC.

It is only now that you learn to appreciate why China’s domestic market can save the world.

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xiaohongshu [none/use name] @hexbear.net 1d ago

If we get to using nukes, then it’s already over. This is truly the last resort.

China in the 1950s fought the Americans and won in the Korean War without owning any nukes at all.

Similarly, the USSR provided extensive military support during the Vietnam War.

Since the reform and opening up, China’s foreign policy in terms of military has taken a drastic turn. Its first major operation was to invade Vietnam.

So, it’s not that China is not capable of a military alliance. The main reason has more to do with ideology since the reform and opening up era, which will entail heavy economic costs for China if it were to commit to such strategic defense alliance, as others have also wrote.

As for China’s economy, I don’t know if you have noticed, but China is going through a deflation and low consumption problem right now. This has paradoxically made China more reliant on its export sector, hence the $1 trillion trade surplus which is simply a number in their bank accounts but will never translate into real benefits. China could use those dollars to pay off the Global South’s dollar debt, but it’s not doing so.

What is worse is that Trump’s tariffs is forcing China to dump its products on other countries that also want to run a trade surplus, and it is only going to deepen the Global South’s reliance on US consumer market to make up for the trade deficit they are taking from China, and making it harder for those countries to earn the dollars to service their dollar-denominated debt (since China is not making any moves to repay their debt with its vast dollar reserves). As a result, those countries become even more vulnerable to US imperialism, NOT less of it!

With the US ramping up its sanctions, it is in China’s interest to steer away from such export-led growth strategy and prioritize on its domestic consumer market, which as I have written before, requires solving the massive wealth inequality problem. However, China’s adherence to neoliberal ideology is preventing exactly that, therefore you have a socialist country with the world’s greatest economy (as you have noted yourself) yet cannot provide full employment for its own people. Again, it goes back to ideology.

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xiaohongshu [none/use name] @hexbear.net 1d ago

Actually, it’s the contrary. The current system relies extensively on dollar hegemony, where the US provides a huge consumer market to sustain China’s outsized productive capacity. And as you can see that the investment-led growth phase is winding down, it paradoxically drives China to become even more reliant on its export market since the domestic consumer market has failed to absorb its own production.

Therefore, we see record China’s trade surplus of $1 trillion for the last couple of years - the reason is simple: in order to keep up the same level of growth, but without investment and domestic consumption, the export sector has to make up for it in order to keep the workers employed and the industries running. As the US ramps up its sanctions, China has no choice but to dump its goods in other countries, in order to save its own economy.

Meanwhile, Chinese workers receive no real benefit in return, because these are surplus dollar is simply a number in the bank account, and is not used for importing goods and services that can improve lives of the Chinese workers. In fact, all of that $1 trillion surplus shipment of goods can sink in the sea during transport and nothing changes financially for China - so what’s the point of accumulating those dollars to begin with, which required real labor and resources that could have been allocated for other parts of the domestic economy?

Finally, there is nothing - no real constraints - that stops China from providing full employment for its people, raising wages, while performing its military buildup. What is constraining China’s economic policy is its adherence to Western neoclassical theories (which provide justification for neoliberalism). You cannot convince me that China’s economy today cannot provide what the USSR (a far weaker economy) could easily provide for its own people decades ago?

This is the fundamental difference between China’s reform era and the Soviet economy. The USSR focused on building a workers’ state where their rights are fully protected. The industrialization and the technological advancements came as a product of this new system. Of course, the USSR was not a paradise and they have corruption problems of their own, but one cannot deny that wealth inequality in the USSR was amongst the lowest in the world. In fact, pension and free public services in the USSR never stopped even during the Great Patriotic War from 1941-1945, as millions of people were killed and its economy greatly disrupted.

China’s post-reform era is very different, and followed much closer to the Japan and South Korea’s model. As Deng Xiaoping himself said, we have to let a small bunch of people to get rich first. Black cats, white cats, it doesn’t matter. Well, it’s been 50 years, I think we are overdue for addressing the massive wealth inequality issue - which, as I have pointed out, is exactly causing the low domestic consumption.

As for the US, who says the US consumption-based economy is what’s causing its deindustrialization and its poor military buildup? These are policy choices.

The US, of course, can do all of them. But the problem with re-industrialization is the re-proletarianization of the US working class, who will have the leverage to challenge the capitalist class at home. This, the bourgeoisie cannot allow. Besides, industrial capital threatens the profitability of Wall Street finance capital. This is a contradiction of US hyper-financialized capitalism, not a real constraint.

Similarly, the financialization (grifting) of US military industrial complex came after the collapse of the USSR, when during the 1990s there were no longer credible threats to the US military hegemony. To sustain the profitability of the MIC, grifting had to take place to allow the money to flow into the defense contractors. The Boeing/McDonnell Douglas merging in the 1990s was a prime example of this. This has more to do with Wall Street finance capitalism than a domestic consumption-led economy problem.

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xiaohongshu [none/use name] @hexbear.net 1d ago

Appreciate your perspective. I don’t disagree that the Chinese leadership is a lot more competent than the many Western governments, especially when it comes to macro policy adjustments (though there are many long-standing corruption problems that have festered deep inside the bureaucracy in spite of 10 years of anti-corruption campaign).

However, the major contention here is whether socialism can be achieved through neoliberal principles, which is exactly what China is practicing right now.

There is no economic constraint in China today other than a blind belief in neoliberalism that says the government cannot institute full employment program, raise the wages of the people, provide welfare and healthcare etc. especially to the 600 million people (mostly rural population) who received the short end of the stick with the reform and opening up. Now that the economy is going into downturn, it is the rural population and the Tier 3/4 and below cities that will bear the most burden as the country prioritizes recovery in the Tier 1/2 cities. So, remember this every time you hear that “China has alleviated millions out of poverty”, because that came from a very specific phase of economic development in the 2000s-2010s.

This is not to say Deng’s reform era is not useful. The USSR needed the NEP to stabilize its post-revolution economy, but you also cannot possibly believe that the USSR could have emerged as a socialist superpower had Stalin not transitioned away from the NEP into the Five-Year Plan in 1929?

What I am saying here is that China’s neoliberal phase was already over 10 years ago and the time to transition is not a few years from now, not even today, it should have been yesterday.

In my view, China really lost the golden opportunity to transition its economy in the mid-2010s, when the economic trajectory was still very much in the upswing. The government’s attitude to curbing property prices was half-hearted to begin with (because it was delivering the big GDP numbers), and so the situation was allowed to go out of control. The vibes back in 2017-2019 were completely different than they are today, when nobody had to worry about unemployment. You have to see it to believe it.

What you’re seeing in China today is really the outcome of an ongoing over-investment phase that should have stopped 10 years ago, back in the mid-2010s. This is why you’re seeing such dissonance in China today - on the one hand, great infrastructure, on the other, unemployment and wage stagnation. Because the local governments have taken out so much debt for the infrastructure building that with the current deflation, it has become very difficult to service. As a result, the local governments delay wages and payments, and has begun to institute austerity (or at least raising prices of public services).

I know Westerners cannot comprehend what over-investment in infrastructure means. It looks very shiny with the latest model of high speed rails and the most advanced urban technologies. But remember that these all require constant maintenance, which costs money and effort (and therefore, labor and resource allocation), and as the government subsidies become less and less during an economic downturn, as we are experiencing today, the upkeep of these infrastructure is placing a lot of financial strain on the local governments. In fact, the central government has already denied new cities from building subway systems since 2021 (we have 54 cities with subways so far) because the over-investment strategy to drive GDP numbers was already seeing diminishing returns. The quality of service and the state of maintenance will only degrade if the local governments cannot improve their financial situation.

On the other hand, if the country had begun its transition towards domestic consumption a decade ago, you would still see the infrastructure building AND the job opportunities and continued growth today. That’s the point I have been trying to drive across.

Finally, nobody could have foreseen the COVID pandemic. I am not conspiratorially minded, but let’s just say that the US got really really lucky with COVID when it comes to China’s economy. The whole investment gambit could have possibly worked for a few more years, but COVID really put a fast deceleration brake on China’s economy abruptly and with export-driven and investment-driven growth fading, the deep inequalities that had been obfuscated due to the prior fast growing periods have now started to manifest themselves in the form of low domestic consumption. Exactly what China needed today to save itself. Ironic, huh?

xiaohongshu [none/use name] @hexbear.net 1d ago

Yup, actually the entire Belt and Road Initiative, which started in 2013, is highly dependent on (and presumed) regional stability.

Why did the Ming empire turn to sea-based trade routes (e.g. Zheng He’s treasure fleet in the 15th century AD)? Because the Ming empire did not have the military capability to ensure the security of the Silk Road, and also because the Mongols had pretty much devastated much of the civilizations along the Silk Road in the 13th century.

The whole Eurasian strategy requires military alliance in the form of security guarantees. Economic cooperation, especially when driven by private sector lending for investment projects, is far too volatile. As is evident, the US simply has to sow discontent and create regional instability to scare away the investors.

EDIT: And this is not to mention that the Belt and Road infrastructure lending was mostly conducted in dollars, so the US already has a foot in the door. So contrary to Western narrative, it’s not a China debt trap, it’s China creating debt trap for the US to benefit from! A true Russia-Iran-China axis would mean Chinese investors losing value on the trillions of US dollars they have accumulated, so there’s the financial obstacle as well.

xiaohongshu [none/use name] @hexbear.net 1d ago

I’ve said for years that Chomsky is John Hurt’s character in Snowpiercer. So, not surprised at all.

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xiaohongshu [none/use name] @hexbear.net 1d ago

The summary for China’s Central Economic Work Conference this week can be found on a substack here with quite professional translation.

(Note: I don’t know anything about this substack (linked from Naked Capitalism) but the reporting on the CEWC seems accurate compared to the Chinese readouts. I’m just happy not having to do the translation myself this time).

As the summary says:

The meeting noted that there are still many old problems and new challenges in China’s economic development. The impact of changes in the external environment is deepening, the contradiction of strong domestic supply and weak demand is prominent, and there are many risks and hidden dangers in key areas. Most of these are problems arising during development and transformation, and they can be solved through effort. The supporting conditions and the basic trend of China’s economy remaining positive in the long run have not changed. We must strengthen confidence, utilize our advantages, respond to challenges, and continuously consolidate and expand the trend of economic recovery and improvement.

So, first, please don’t tell me that China has “no domestic consumption and oversupply problem”, which is a narrative perpetuated by many pro-China accounts on Twitter who don’t even live in China (a lot of them are overseas Chinese who live comfortably in New Zealand, Australia and the likes).

The Chinese government has fully acknowledged the adverse effects on the current state of its economy and has made it a priority to solve the problems.

The most important points are:

We must continue to implement a more proactive fiscal policy.
Maintain necessary fiscal deficit levels, total debt scale, and total expenditure, strengthen scientific fiscal management, optimize the structure of fiscal expenditure, and standardize tax incentives and fiscal subsidy policies.
Attach importance to solving local fiscal difficulties and firmly hold the bottom line of the “three guarantees” at the grassroots level. (Note: the three guarantees refer to guaranteeing basic livelihood, wage and services e.g. education, healthcare etc.)
Enforce strict financial and economic discipline, and insist that party and government organs get used to “tightening one’s belt 过紧日子”.
We must continue to implement a moderately loose monetary policy.
Take promoting stable economic growth and a reasonable recovery of prices as important considerations for monetary policy, flexibly and efficiently use various policy tools such as cutting the reserve requirement ratio (RRR) and interest rates to maintain sufficient liquidity, smooth the transmission mechanism of monetary policy, and guide financial institutions to increase support for key areas such as expanding domestic demand, technological innovation, and micro, small, and medium-sized enterprises.
Keep the RMB exchange rate basically stable at a reasonable and balanced level.

In other words, nothing really new here. From other reports, it looks like the 2026 goal is still to maintain a 5% GDP growth with 4% deficit (same as 2025), which in my opinion, is far too low to solve the low consumption problem caused by the massive wealth inequality.

Nothing about providing jobs guarantee (of which high youth unemployment is a real issue). It’s still mostly focusing on providing fiscal stimulus in necessary areas to help the private sector to create new jobs, rather than direct government intervention. The problem with this approach is that you need to have a lot of faith in the private sector to do the right thing, but that’s what the libs believe, I guess.

And obviously since the government is not inclined to run a high deficit, the already outsized debt burden in the private sector will continue to mount with little means to be alleviated.

Although the official policy will not be made until early next year, the CEWC pretty much sets the direction for what is to come, especially with the new Five-Year Plan about to commence.

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xiaohongshu [none/use name] @hexbear.net 1d ago

Nothing obnoxious about it. Please tell me how Germany’s rebuilding of its military capability can stop itself from being a US vassal?

The US is not militarily invading Germany anytime soon, nor is Germany capable of reaching the US across the Atlantic anytime soon. The US exerts its influence over Germany by manipulating its ability to access energy, resources and global market through restricting trade and sanctions with other countries.

For example, the Ukraine war killed Nord Stream. Trump’s tariffs forced China to dump cheap EVs and solar panels on to the EU, which is killing the European green tech industries.

Germany’s militarization is driven by its neoliberal ideology (that its economy has to be driven by a trade surplus export strategy). And because Germany needs to run a trade surplus under such constraints, it will have no choice but to steal resources from the other countries, hence all the war rhetoric against Russia.

This was exactly what led to the rise of Nazi Germany back in the 1930s. The US simply demanded its war debt repayment from the Allied powers, which far exceeded their capacity to repay at the time, so they turned to the defeated Germany to squeeze even more out of them to service their debt. In response, Germany militarized and invaded Europe and Russia. The entire predicament was dictated by global capital. The same happens today.

xiaohongshu [none/use name] @hexbear.net 1d ago

You can search for “芳华解读” on Youtube and there should be some mirrors (I haven’t looked closely).

But notice that the videos are very “meta” and frequently made references to other media, as well as various substitute names that are easily recognized by the Chinese audience but would otherwise be incomprehensible for a foreign audience. This is due to the long-term Chinese internet censorship that prohibits certain sensitive words so you end up having an entire alternative lingo on the internet.

I still recommend watching the film though. It’s not overtly political or anything but you can feel the class divide that already existed back then. The director came from that background.

xiaohongshu [none/use name] @hexbear.net 1d ago

There is a recent Hindi film called 12th Fail. When I saw that I immediately thought: that’s literally Imperial Court Examination!

xiaohongshu [none/use name] @hexbear.net 1d ago

Not in a day, but more like over the span of 5-6 days. But the last 24 hours picked up the pace significantly so easily a few million views in a day.

xiaohongshu [none/use name]

@ xiaohongshu @hexbear.net

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xiaohongshu [none/use name]

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