26-07-2022, 11:10 AM
The reason is counter intuitive but goes like this
If everything is smooth sailing the left leaning govt will get itchy and make life difficult for companies and tycoons. Like endless regulation to curb tech companies.
If economy is strong it starves the private firm of capital to limit their growth because it can hit growth target without them.
But when the economy tanks and unemployment goes up and property sector is in crisis. It needs to the private companies to solve its problems.
Since the mortgage crisis blew up and China missed growth target and unemployment turning into a big problem. The govt has stopped going after big tech firms and approved game licenses and ease ecommerce. It also stop whining about cyber and data issues.
It also remove curbs on private company borrowings and held back on myriad of anti business policies.
All the major Chinese sovereign wealth and pension funds invest in equities. When the govt implement all the negative policies that cause stocks to tank they discover they burnt their own fingers.
The banking and property crisis will force the central govt to open the spigot to clean all the bad debts and print enough money to sail through the problems.
If there is no crisis, there will be no solution....
The conflict reflects the self conflicting nature of Chinese govt on the one hand it wants socialistic goals to have equality on the other it needs the private enterprise to generate wealth.
If everything is smooth sailing the left leaning govt will get itchy and make life difficult for companies and tycoons. Like endless regulation to curb tech companies.
If economy is strong it starves the private firm of capital to limit their growth because it can hit growth target without them.
But when the economy tanks and unemployment goes up and property sector is in crisis. It needs to the private companies to solve its problems.
Since the mortgage crisis blew up and China missed growth target and unemployment turning into a big problem. The govt has stopped going after big tech firms and approved game licenses and ease ecommerce. It also stop whining about cyber and data issues.
It also remove curbs on private company borrowings and held back on myriad of anti business policies.
All the major Chinese sovereign wealth and pension funds invest in equities. When the govt implement all the negative policies that cause stocks to tank they discover they burnt their own fingers.
The banking and property crisis will force the central govt to open the spigot to clean all the bad debts and print enough money to sail through the problems.
If there is no crisis, there will be no solution....
The conflict reflects the self conflicting nature of Chinese govt on the one hand it wants socialistic goals to have equality on the other it needs the private enterprise to generate wealth.