Recently, the Chinese netizens are talking about a “summary” of a field study conducted by an economist called Yang Lujun, which states that China has currently plunged into economic & social crises.
Unlike the too-good-to-be-true official numbers, the straightforward style of the “summary” provides a more realistic assessment and outlook for the Chinese economy under the “triple-door”:
- Sino-US trade war
- the structural contradictions and crises accumulated over the years
Who is Yang Lujun?
Yang Lujun was admitted to the Department of World Economics of Fudan University in 1979, and received a bachelor’s and master’s degree in economics in 1983 and 1986.
Since 1980, Yang Lujun has published nearly a hundred academic papers and various articles, and put forward many novel and unique academic opinions, which have attracted widespread attention in the academic community.
He published monographs such as “On Reagan Economics”, and has a large number of translations. He has served as a researcher in many research institutions such as the International Research Institute of China International Trust and Investment Corporation, Shanghai Economic Research Center, China Enterprise Development Research Institute, and Peace and Development Research Institute.
In 1988, he was elected as one of the ten outstanding young people in Shanghai.
Summary of Yang Lujun’s Field Study
The summary is based on Mr. Yang’s field study to assess the economic situation in an affluent area called Jinhua in Zhejiang Province
Now is the worst, most difficult and most grim economic situation in the past 40 years of reform and opening up. 81% of export companies in Jinhua have collapsed. If this continues, the proportion will reach more than 95% by the end of the year. The reason is the cruel blow of the “triple door”. The first is the Sino-US trade war; the second is the COVID-19 pandemic; and the third is the structural contradictions and crises accumulated over the years.
In general, an unprecedented economic recession and crisis have already arrived. The concluding opinion of the highest level on “China’s economy continues to improve and the fundamentals have not changed” is completely unreliable, ungrounded, and deviates from the actual situation; the so-called “China is still in a period of strategic opportunity” is also an irresponsible brag and an outright lie. The indisputable fact is that China has plunged into an economic crisis and a subsequent social crisis.
What is more frightening than the crisis itself is that there is still no way to get out of the crisis. There is no hope or light. In fact, there may be a way out, but the (CCP) leaders do not allow their subordinates to say what the leaders do not like to hear. The leaders even disallow their subordinates to fill in any negative economic growth numbers or other negative conditions. It must be positive growth. Otherwise, the subordinates will be interviewed, warned, and dismissed according to the Chinese Communist Party’s disciplinary measures. This is “forcing the innocent into prostitution”. In some places in Zhejiang, the bazaar phenomenon of “digital fraud” and “turning negative number to positive number” has appeared.
The realistic consequences and progressive logic of the economic crisis are:
- (A) a large number of enterprises close down;
- (B) a large number of workers are unemployed;
- (C) a large number of bank loans default;
- (D) International orders have disappeared, the domestic consumer market has also shrunk sharply, and the purchasing power of the people has declined. The market is gone. This is the burden that China’s economy is bearing but it is unbearable. The so-called “internal circulation”, the so-called “the West is not bright, the East is bright”, is basically wishful thinking, unrequited love, or painting cakes to satisfy hunger and hope for plums to quench thirst;
- (E) the government is facing plummeted tax revenue and financial difficulties;
- (F) The government is forced to print money causing inflation. With reduced income and soaring price, people’s livelihood is hit with a double whammy. We are in a situation of “misfortune-never-comes-alone” and “sandwiched-by-enemy”;
- (G) the sharp decline in exports results in less foreign currency earnings. The country does not have enough U.S. dollars to import one-quarter of the grain, two-thirds of the crude oil, semiconductor-chips, and raw materials that China needs. Therefore, it used to be “turning farmland to forests”, but now it is “turning forests to farmland”. Save food and call for less food consumption; so we advocate alternative energy vehicles and use less gasoline; so we revived the “Naniwan spirit” in an attempt to break through the core technology bottlenecks such as semiconductor-chips, etc…
- (H) the government has to live a frugal life. If government officials cannot make a decent living, they will make power change. Stability maintenance expenses and military expenses are rigid expenditures, how can they be “tightened”? In addition, aid to Africa has declined, and the African countries are turning against China. “When you give money, you are relatives. When you don’t give money, you are the enemy.” This will be a high probability event.
What about the promise that “the people’s yearning for a better life is our goal”? why are the people getting further and further away from a better life after eight years, and even the “good life” they once had is “lost again and again” “, can’t “really own”? Deng Xiaoping said that the people’s “support-or-not, satisfied-or-dissatisfied, happy-or-unhappy” should be taken as the starting point and the bottom line of all policies of the ruling party. May I ask which social class today “supports, is satisfied, and happy” with the governance over these years?
Why do we become hostile to the United States? History has proven that the fastest, best, and most powerful period of China’s economic development is the period of friendship between China and the United States, which was as close as spouses. Now that China and the United States are at odds with each other, China’s economy is about to collapse. Why do we have to turn hostile? Hu Xijin, Jin Canrong, and Fudan’s Chen Ping deserve to be executed. But the roots of the problem are not in them, but in the people behind them. They hope that Biden will change the United States and let the American people begin to learn Chinese collectively. But judging from the campaign materials customized and exported from Yiwu, there should be no suspense for Trump to win the election.
Yang Lujun’s 2017 assessment of the Chinese economy: Chinese GDP is stained with “blood, poison, darkness, and sin”
Chinese economist Yang Lujun said in an exclusive interview in 2017 with “Wind Media” that China’s economic development was abnormally unsustainable, and its GDP (Gross Domestic Product) was “blooded, poisonous and sinful”, and future changes were inevitable.
After so many years of “taking advantage of the market economy”, China is now beginning to “suffer from the market economy.”
Yang Lujun said: “In terms of total GDP, China’s economy is already the second-largest in the world, but its structure is very unbalanced: its manufacturing base is poor, high-tech is weak, and its autonomy is poor. On the whole, the mainland’s economy does not match its status as a major power, but now the mainland is following a Hong Kong model.”
He analyzed that the so-called Hong Kong model economy is an economic system supported by real estate, finance, and re-export trade (ie, logistics), plus the service industry. Hong Kong is an urban economy, and a small place can still be supported by this kind of structure, but the mainland is a big country. There is no major country in the history of the world whose economic rise is supported by real estate. Now the mainland’s economy is supported by real estate and adopts the Hong Kong model. “What a dangerous model this is.” said Mr. Yang.
In addition, Yang Lujun also thinks that Beijing’s substantial increase in military expenditures is “quite unfavorable.” He said that the large increase in the mainland’s military expenses became a great burden. In Deng Xiaoping’s era, submarines and aircraft carriers were not built, and the navy was mainly “nearby defense.” Because we don’t attack others. Now we have to build everything. The policy is to have the ability to “oversea offense”. The daily maintenance cost of aircraft carriers alone is a very large expenditure. At the same time, China still has hundreds of millions of poor people.
On the whole, Yang Lujun is worried that the mainland’s huge profligacy will drain its finances because it will bring about a very large potential crisis in the future. The Qing Dynasty was draining its finances, and even the soldiers’ salaries could not be paid before its collapse. The mainland should remember this lesson.
In addition to economic problems, Yang Lujun believed that social and urban and rural problems are also very serious. He said that in the 40 years of economic reform and opening up on the mainland, the widening of the gap between urban and rural areas has become a major issue.
He described that the mainland “cities are like Europe, but villages are like Africa.” The situation is even worse than during the Cultural Revolution. Urban pollution waste is almost never treated and discarded into the countryside and forests. Rural pollution and ecological deterioration are very serious. Six of China’s seven major water systems have been seriously polluted, and food is not safe.
He emphasized that the most important things for human survival are air, water, and food, but they are all seriously polluted. Even food is not safe. In the mainland, money cannot buy clean air, water, or safe food. Haze even appeared in Lhasa, Tibet.
Many wealthy people immigrated abroad or send their children abroad, and many of them are actually “ecological immigrants”-looking for a clean and safe living environment abroad.
Mr. Yang believed that the mainland has developed viciously and predatorily because of its disregard for ecology and devastation of mountains and rivers. This development method of GDP-driven without caring about the life and death of the people has stained the mainland’s GDP with “blood, poison, darkness & sin”.