The dilemma of self-deception in Beijing's economic decision-making

...a benchmark not to be ignored

I’ve carried on about Liang Jing too often in previous episodes to bore you with it again. though he’s not boring!

In addition, he is writing for events transpiring today Wednesday 27 March 2024, Beijing time, so let’s jump in…

Below is my translation of Liang Jing, “The dilemma of 'self-deception' in Beijing's economic decision-making”, Ziyou Yazhou diantai, 26 March 2024 ( 梁京, “北京经济决策的「自欺」困境”,自由亚洲电台 (in Chinese). In parallel text format here.

Liang Jing

The dilemma of 'self-deception' in Beijing's economic decision-making

Xi Jinping may reportedly hold talks with US business executives in Beijing fo the China Development Forum tomorrow, Wednesday 27 March. Xi, runs the commentary, wants to personally retain or attract foreign investment; but this is, I think, a forced reading. Mulling this, I feel both sides may have quite serious needs for this meeting. It’s not hard to grasp the needs of US executives: an interview with Xi may give a real sense of Beijing's top decision-making mentality. This matters for their assessment of risks to the PRC economy in the near to medium term; it also helps in their accountability to their investors. It’s hence possible that setting this meeting up was a condition for the executives to agree to attend the forum.

What then is Xi's need for face-to-face talks? Were it only for form’s sake, they could have a seriously negative effect, and it would be better not to meet. This would be a major factor in a possible cancellation. Xi would have his own good reasons for failing to meet them.

The primary background is, of course, the PRC economy's current serious crisis. My guess is that Xi is interested in a frank exchange with US executives, not least with ‘old friends,’ about ways to save the economy. This conjecture rests on Beijing's economic decision-making having clearly fallen into serious difficulties.

An obvious advantage of face-to-face talks about the economy with US executives is, not only are they true insiders, but have no reason to lie to him. The fact that CPC officials dare not tell the truth, or generally engage in self-deception, is a critical reason for Beijing's economic policymaking being in trouble.

It’s no surprise that lies abound in officialdom, not least in the PRC; but in terms of their extent , the harm they do to the big picture, I’d argue that Beijing's economic decision-making is in a rare state of disaster. It is otherwise hard to explain why Xi is ever more prone to overstepping Li Qiang or other senior officials in charge, handling crises (such as the stock market crash) in person; or traveling out of town to convene local officials to discuss countermeasures (such as his recent trip to Hunan) directly. Yet his sense of China's economic crisis is, I think, becoming ever more unfathomable: he has no trouble finding that many people make faulty judgments, or fail to tell the truth; the ideas that many come up with are no good, and the situation gets worse and worse. So for Xi to have a chance to hear the opinions of "foreigners" who dare to tell the truth should do no harm.

The question is, can such dialogue produce miracles? Of course, there will be no miracle capable of immediately getting the PRC economy out of the woods. But there is a possibility of giving the outside world a chance to help Beijing's policymakers avoid falling deeper into self-deception, which is probably the best the world can hope for. The PRC’s long-term troubles are in other words an irreversible trend; should they gets out of control, it may be a disaster for everyone. There’s a strong desire in this sense on the part of the international community to reduce this risk.

What is the specific method? The most realistic thing is for international institutions such as the IMF to be given more scope to obtain real data on the PRC economy and assess its actual situation and trends professionally. Are PRC professionals incapable of such assessment? One of the symptoms of Beijing's self-deception dilemma in economic policymaking is that these professionals now fear, or are forbidden, to make such assessments. Xi and his decision-making circles are in other words no longer able, via normal dialogue with professionals, to judge or analyse the economy’s real situation.

Will Xi use the ‘high-level forum’ to give the outside world, and himself, a chance to make China's economy more transparent? This should, I think, be a benchmark for all to judge whether the PRC economic crisis will get seriously out of control,: a benchmark not to be ignored.