China’s stock turmoil last week sent a shockwave across the globe. Many are concerned that the world’s second largest economy is on the verge of collapsing, and it may drag the rest of the world into a recession.
In an article by Wall Street Journal, The Consequences of China’s Stock Slide for Top Leaders in Beijing, Russell Leigh Moses pointed out that China’s top leaders have been sending conflicting messages regarding how to best handle the economy.
For example, the Chinese Premier, Li Keqiang, has argued that “China’s transition to a developed economy won’t happen while innovation and entrepreneurship are being stifled by too much bureaucracy; that central government oversight has given Chinese firms too little leeway in making difficult choices.”
However, China’s number one guy, President Xi Jinping, believes that “economic instability demands even tighter oversight of society, and that it’s the duty of the Communist Party to come to the rescue of citizens and companies…. Capitalism cares not for losers, only socialism can save China — and saving socialism means making sure that the Communist party is not only clean and loyal, but also willing and able to play the role of savior when the economy stumbles.” Continue reading