China is slowly moving away from the policy of economic liberalization

- The whole of economics: Dhawal Mehta

- Despite being a communist country, China has huge disparities in income and wealth

Tawai on big adventures:

In the 19th century, Chinese President Deng introduced a policy of economic liberalization, which resulted in China becoming the world's second largest economy in terms of economic prosperity and GDP. The Soviet Cold War is not between the US and Russia but between the US and China. The United States cannot be considered the second largest country in the world. Of course, compared to China's average per capita income of about 10,000, India's per capita income is about ૦૦ 2,100 and US per capita income is about, 40,000.

Control of the power of private enterprises:

Chinese President Xi Jinping now seems fed up with Deng's 20-year-old mixed economy of liberalization. Seeing the enormous size of China's private enterprises, he fears that these Chinese companies have become so large that they could challenge China's political power in the future. He thinks that in the future, large enterprises like Alibaba, its ant group, Tencent, and DD will also pose challenges to the Chinese communist government in the future as they are private sector. There are two main reasons why Xi Ping has decided to curb the power of the country's giant corporations: (1) Economic inequality is still high in communist China. There is no difference between communism and capitalism if the extra wealth is taken away by the rich businessmen or traders of China. When Deng began liberalization in China in the 19th century, one of his sayings became very popular. It doesn't matter if the cat is black or white as long as the cat can catch the rat. The implication is that as long as China can increase its economic prosperity, it is not a matter of whether it is increased by state enterprises or by private enterprises, but now China's Xi Jinping is also beginning to see the color of the cat.

Government criticism in China is dangerous:

Now Xi Jinping is beginning to feel that private enterprises do not need to be let loose. In October 2020, Jack Shama, China's richest businessman in Shanghai, criticized the Chinese government's financial controls. Perhaps that is why the Chinese government suspended the sale of a ૩૭ 2 billion IPO of the proposed financial company in November 2020 on stock exchanges, including in Shanghai and Hong Kong. This was the largest IPO in the world. In doing so, the Chinese government has shown its position to Jack Ma. This theory fits in with Mao's beliefs. It is to be noted that the Chinese government has not only taken regulatory measures with Jack Ma but has also taken economic measures or imposed restrictions against its other giant companies.

Of course, the richest 1% of people in China own 30% of the country's wealth and the richest 20% of the richest families in China have 6% of the country's income. Xi Jinping seems to be worried about why China can be called a communist country when there is such a huge disparity in income and wealth. But Chinese private companies have proved innovative. They have incurred indebtedness but at the same time these private companies have shown good results in their operations. The Chinese government is very upset that its billionaire industrialists have incurred debts as high as the Himalayas.