Thread by @organizejs

Given the crackdowns on China's elite, many seem to think that China is headed towards some renewed socialist direction. But the main takeaway that I see in Xi's article is that he is still committed to state-led capitalism and advancing the Chinese economy.

Lets get into it:

https://twitter.com/KaiserKuo/status/1449229413523116032

1/ Xi pairs the idea of "common prosperity" with economic growth—for him, one is not without the other. This is why "innovation"/"manufacturing" is mentioned countless time in his essay (Also why he continues to frame China as a developing country that still needs catch up)

2/ Despite recent policies that take on 996 working culture among office workers and improvements to the working conditions of gig workers, Xi continues to preach a culture of working hard. He specifically mentions avoiding "involution" and "lying flat".

3/ So why are we seeing this misalignment? The key is seeing *where* these pro-worker policies are being applied (internet, finance, ecommerce, and real-estate) and *where* they're not (heavy industry, semiconductors, anything that might strengthen Chinese manufacturing).

4/ In other words, Xi is betting that future economic growth will come from manufacturing and not the internet/finance sector. My guess is that we won't see much labor regulation when it comes to key growth sectors such as semiconductors and other high-end manufacturing.

5/ He even talks about how he wants to reform education—not to increase equity but to prepare students with specialized knowledge and high-tech skills so that they can swiftly contribute to growth and add to the ranks of high quality tech talent. (remember, high-tech ≠ internet)

6/ Xi champions the idea of upward mobility—the Chinese Dream. He isn't morally opposed to getting rich. Rather, he sees the possibility of being rich as a powerful way for people to contribute to growth. Its clear to him that growth won't happen if social classes are stagnant.

7/ He also champions entrepreneurialism. Xi constantly refers to the importance of working hard, going so far as to say that "emphasis must be put on entrepreneurs who work hard, play by the rules, and dare to start a business in order to get rich."

8/ Economic growth is so central for him that he doubles down on Deng's approach with a small caveat: "We have to allow some to get rich. At the same time, we have to emphasize that those who get rich first must help others to get rich after."

9/ Another theme in his article is establishing a fairer environment for capitalism—or getting rid of the inefficiencies in this current iteration of Chinese capitalism.

10/ The obvious things are to ban illegal incomes, crackdown on corruption, insider trading, stock market manipulation, financial fraud, tax evasion, and other white collar crimes.

11/ But Xi also wants to create more harmony/synthesis among industries, strengthen anti-monopoly policies, enforce better protections of property rights and intellectual property rights.

12/ He also talks about the importance of small-medium sized businesses and wants to support them by "reducing the burden of taxes and fees, and provide more financial services to help them stabilize their operations and continue to increase their income."

13/ The idea here is that the past decade(s) of growth have been unabashedly reckless and now is time to transition into more stable, healthy growth.

14/ On top of all this, Xi wants to support migrant workers, help the elderly with insurance, increase pensions for workers, combat speculation in real estate, and make housing more affordable—all things that I can get behind.

15/ But introducing these policies for better social welfare is far from charting China towards a socialist path. On the flipside, I think we can interpret this as a way to make the current system (state-capitalism) more stable.

16/ I'm certainly not well-read enough on America's economic transition out of the Great Depression, but I imagine that there are some important similarities between these two periods—policies that protect a reckless form of capitalism from its own demise.

END/ In any case, I hope this thread shows that this new "common prosperity" direction is not some radical shift towards a new set of social relations, but a commitment to a healthier and more sustainable version of capitalism (but capitalism nonetheless).