China's critics contradict themselves

Self-contradiction is rife in China analysis, especially by its most vehement critics.

On the one hand, Beijing gets bashed for not pushing through market reforms; on the other, it's blamed for incompetence when it loosens its grip on the economy too much that it triggers global financial volatility.

You have to wonder: What in the world do China bashers really want, other than an implosion of the communist regime that would vindicate their increasingly defunct neo-liberal ideology? Even they know better than to sanguinely assume that the end of CPC rule is the panacea for not just the Chinese but the global economy. Yet they're seemingly so blinded by their hatred of any alternative to the discredited Western notion of "efficient markets" that they'd rather risk a "Chinese spring" turning it into a giant Iraq or Syria than see it somehow muddle through again under communism.

The recent string of revelations on Xi Jinping's economic policy, including a release of notes detailing the central bank's yuan policy reversal in January, should be seen as only bolstering Mr. Xi's administration's credibility with regards to reform. To state the obvious:

At a heavily guarded conclave of senior Communist Party officials in December, Mr. Xi called China’s markets and regulatory system “immature” and said “the majority” of party officials hadn’t done enough to guide the economy toward more sustainable growth, according to people who attended the meeting. 

To the central bank, there was only one possible interpretation: Step on the brakes. 

And so here we are. What would have been a quick and smooth process if the party as a whole were as bold as the minority that's overcome inertia, has now been reduced to a long and drawn-out slog. Things should be better, yes, but they could also be worse.

Needless to say, this is fodder for those who argue that the party itself is the problem - always has been, always will be - and the solution is to tear it down altogether. Good luck with that.

Yes, it's true that China is "hostage" to its lumbering SOE sector, which accounts for the lion's share of what could amount to 8 trillion RMB of bank losses; it's just pointless to argue that the slow and cautious approach to SOE reform and restructuring is somehow worse than doing everything all at once, as if potential dangers later on justify actual dangers today. The real threat of complacency is ignorance: and China's top leaders, at least, are anything but ignorant. They deserve the world's moral and practical support, not constant villainizing or dark intrigue-guessing.

Thankfully, a Donald Trump administration would set the record straight. No, Americans don't want an unbridled "free market" any more than Venezuelans or Zimbabweans want unchecked socialism. We don't want a freely floated yuan anymore than we want loaded Chinese immigrants flooding our shores to make more housing markets like Vancouver.