Many Chinese are receiving calls from the big state-owned banks these days.

The question of whether to take out a company loan is half a million yuan (70,000 euros) at an attractive interest rate of 4 percent.

The answer that you don't run a business at all is not a problem for the providers of cheap money.

We would be happy to help with the forgery of the necessary documents.

The episode may say more about the state of the Chinese economy than the 8.1 percent figure that the Beijing Statistics Office said it grew last year. The fact that this sounds like more than it is is also due to the fact that China's economy only grew strongly in the first quarter of 2021 - but only compared to the first three months of the previous year, when the economy stood still for weeks after the outbreak of the corona virus in Wuhan had. In the fourth quarter of 2021, growth was then only 4 percent. 

Whether China's gross domestic product will grow by 5.6 percent this year, as estimated, and thus not much faster than the USA, does not answer the question of whether China will succeed in becoming a rich country.

In America, the share of private companies in economic output is much higher.

While they have to use their money profitably, the government in China can drive growth to any politically desirable level by building train stations and houses.

Because, in contrast to American private companies, China's state-owned companies do not care whether the many bridges to nowhere pay off, the performance of the economy increases, but not always its value.

Radical Zero Covid Strategy

President Xi Jinping is well aware of the dilemma. In his virtual speech at the Davos Forum, the state leader of the economy certified that its foundations were intact. But at home, Xi is always demanding more “quality”: growth that is created through innovative products. According to the party leader, China's Internet industry should account for a tenth of economic output in three years. But the tech companies were only successful until the government began to overthrow their business models a year ago, canceling IPOs abroad and later banning them almost entirely. 

The development of the internet sector is "not healthy," Xi said in a speech released Monday. The companies are breaking the law and threatening China's national security. With “resolute leadership”, the tech giants are to be persuaded to build products that the state leadership considers crucial in the competition with the United States – such as “integrated circuits and novel display". 

Because it would otherwise become redundant, the Communist Party is reverting to the planned economy for China's further rise. But state power is increasingly coming up against the limits of economic reality. In order to save CO2, Beijing orders the abrupt shutdown of coal-fired power plants, but this causes power outages in hundreds of thousands of companies. In order to reduce China's debt mountain, Beijing cuts off loans to real estate developers overnight, risking the collapse of the housing market. The sudden ban on online education providers kills a once thriving industry.

Because Omikron is undermining the party's radical zero-Covid strategy, the country is threatened with many more lockdowns. After the authorities tracked down the contact person of a case of infection in a Shanghai clothing chain store on Thursday, customers and employees were detained for 48 hours and tested. Thousands of people were not allowed to leave a shopping center for 55 hours for the same reason. This is unlikely to help consumption, which is far too low for China's goal of a sustainable economic model. 

Even the leadership's sharpest sword, monetary policy, seems helpless when the loans are distributed to the people via call centers.

On Monday, the central bank lowered interest rates again, and Beijing could pump billions more into the economic cycle in the next few days.

In two weeks, according to the lunar calendar, the year of the tiger begins, Xi introduced his Davos speech, in the zodiac this stands for strength and courage.

The Chinese might wish for the festival that astrology was not the only hope.

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