WEBVTT - What Does China’s Economic Slowdown Mean For the Communist Party? 0:00:03.120 --> 0:00:09.920 Bloomberg Audio Studios, podcasts, radio news China's economy is in 0:00:09.960 --> 0:00:15.080 a slowdown. To get a better picture of how the 0:00:15.120 --> 0:00:19.200 slowing economy is affecting people on the ground, Bloomberg talked 0:00:19.239 --> 0:00:22.120 to people across a range of incomes and industries. 0:00:22.440 --> 0:00:25.599 People with their own companies, entrepreneurs, people working in the 0:00:25.640 --> 0:00:30.680 financial sector, but also people working as window cleaners, people 0:00:30.760 --> 0:00:33.200 supplementing their income as d D drivers. 0:00:33.760 --> 0:00:37.320 Rebecca Chung Wilkins is Bloomberg's correspondent for the Economy and 0:00:37.360 --> 0:00:40.519 Government team in Hong Kong. None of the people Bloomberg 0:00:40.560 --> 0:00:43.360 spoke to wanted us to record their voices for fear 0:00:43.360 --> 0:00:46.960 of repercussions in China, but by and large, people did 0:00:47.000 --> 0:00:49.720 tell us that they aren't feeling as well off as 0:00:49.760 --> 0:00:53.480 they did five years ago. One of them is mister Kwang, 0:00:53.720 --> 0:00:55.800 who asked us to use just his last name. 0:00:56.200 --> 0:01:00.080 He is an entrepreneur, so he's a commodity trader in 0:01:00.120 --> 0:01:03.080 his forties, and a few years ago he started his 0:01:03.160 --> 0:01:05.400 own company, running his own outfit. 0:01:05.600 --> 0:01:09.640 Essentially in the pre COVID years, Huang was pretty successful 0:01:09.840 --> 0:01:11.160 and had a cushy life. 0:01:11.400 --> 0:01:14.920 He bought an apartment in this very trendy district of Shenjen. 0:01:15.240 --> 0:01:17.920 He also bought himself and treated himself to a Tesla 0:01:18.240 --> 0:01:19.000 Model X. 0:01:19.480 --> 0:01:22.080 But things have really changed for him in the last 0:01:22.120 --> 0:01:26.160 few years. Huang says business has never been tougher. 0:01:26.840 --> 0:01:31.280 So his business essentially predicated on buying energy from generators 0:01:31.319 --> 0:01:35.040 and selling this to small factories. And what he told 0:01:35.120 --> 0:01:38.520 us is that he finds that these factories aren't wanting 0:01:38.560 --> 0:01:41.800 to lock in chower contracts that as long as they 0:01:41.840 --> 0:01:45.440 previously would, and it's essentially because they're just not sure 0:01:45.720 --> 0:01:49.480 that there is going to be continued strong demand for 0:01:49.800 --> 0:01:50.600 their products. 0:01:51.000 --> 0:01:53.400 All that meant Huang has had to make some hard 0:01:53.440 --> 0:01:55.480 decisions about his own business. 0:01:56.080 --> 0:02:00.000 Ultimately, he's ended up sacking five employees in his life 0:02:00.160 --> 0:02:04.240 firm because he has this worsening outlook over the market 0:02:04.480 --> 0:02:09.320 for twenty twenty four and he talks about having last 0:02:09.440 --> 0:02:13.160 year to become a sort of so called run fan nane. 0:02:13.919 --> 0:02:15.919 Okay, wait, wait, so you have to explain what is 0:02:16.000 --> 0:02:16.960 run funan. 0:02:17.120 --> 0:02:20.760 So ruan fan nan is this expression that literally translates 0:02:20.800 --> 0:02:24.519 as something like a sort of soft rice man. But 0:02:24.680 --> 0:02:27.680 this idea of being a soft man and not being 0:02:27.720 --> 0:02:30.720 able to provide for your family, and it's really a 0:02:30.800 --> 0:02:33.120 joke about the fact that he had to rely on 0:02:33.200 --> 0:02:37.120 his wife's income to take care as his family last year. 0:02:37.480 --> 0:02:41.040 What Huang is experiencing is a new reality for many 0:02:41.240 --> 0:02:42.200 Chinese citizens. 0:02:42.639 --> 0:02:45.880 Mister Huang also tells us that he's far from alone 0:02:46.000 --> 0:02:49.280 in this situation. He talks about how a lot of 0:02:49.280 --> 0:02:52.040 the private business owners that he knows are trapped in 0:02:52.120 --> 0:02:54.440 this debt cycle, so they're borrowing new loans to pay 0:02:54.440 --> 0:02:58.280 old ones, and even those who were, for example, considering 0:02:58.360 --> 0:03:01.800 having more kids have had to cancel those plans because 0:03:01.800 --> 0:03:04.960 they can't afford to grow their family right now. 0:03:05.880 --> 0:03:09.359 Rebecca says, the negative sentiments the downturn is stirring up 0:03:09.520 --> 0:03:12.560 could be a real problem for the ruling Communist Party, 0:03:13.240 --> 0:03:16.080 and that's because for decades the party has held power 0:03:16.240 --> 0:03:18.480 through a kind of bargain with the Chinese people. 0:03:18.760 --> 0:03:20.680 So one way to think about this bargain or this 0:03:20.760 --> 0:03:24.079 relationship is as a kind of social contract. Essentially, people 0:03:24.240 --> 0:03:27.400 accept fewer freedoms in exchange for a promise of a 0:03:27.400 --> 0:03:30.600 better life. So Chinese people don't necessarily have an active 0:03:30.760 --> 0:03:33.560 say in how they're being governed. They don't get to 0:03:33.639 --> 0:03:37.240 vote in elections, but what they do get for the 0:03:37.320 --> 0:03:41.960 last several decades is a rapid increase in their prosperity. Now, 0:03:42.000 --> 0:03:44.600 some political scientists debate whether you can really call this 0:03:44.640 --> 0:03:48.160 a social contract because ordinary Chinese people don't have a 0:03:48.240 --> 0:03:51.680 say in that exchange. But there is still this broader question, 0:03:52.080 --> 0:03:55.160 which is what happens when that promise of prosperity, when 0:03:55.200 --> 0:03:59.120 that bargain starts to falter. And now we see that 0:04:00.080 --> 0:04:03.640 it isn't necessarily breaking down entirely, but we are starting 0:04:03.680 --> 0:04:10.640 to see these signs that the bargain is beginning to fray. 0:04:12.360 --> 0:04:16.240 Welcome to The Big Take Asia from Bloomberg News. I'm wanh. 0:04:16.760 --> 0:04:19.160 Every week we take you inside some of the world's 0:04:19.200 --> 0:04:23.240 biggest and most powerful economies and the markets, tycoons, and 0:04:23.400 --> 0:04:28.360 businesses that drive this ever shifting region. Today on the show, 0:04:28.760 --> 0:04:33.120 China's economic miracle is ending. So how does President shi 0:04:33.200 --> 0:04:36.080 Jinping keep up the bargain that the communist parties had 0:04:36.120 --> 0:04:43.520 with its people for decades? So there are a number 0:04:43.520 --> 0:04:46.600 of reasons why people in China aren't feeling great about 0:04:46.640 --> 0:04:50.080 the economy right now. The most looming setback is the 0:04:50.120 --> 0:04:51.039 property sector. 0:04:51.560 --> 0:04:53.880 So the bulk of household wealth in China is actually 0:04:53.920 --> 0:04:57.479 held in real estate. About seventy percent of family assets 0:04:57.520 --> 0:05:00.400 are tied up in property, and for more than decade 0:05:00.400 --> 0:05:04.160 there was too much property speculation, too much building, and 0:05:04.240 --> 0:05:08.719 too much debt. And the consequence ultimately of this whole 0:05:08.800 --> 0:05:11.920 housing boom was that China was left with a huge 0:05:11.960 --> 0:05:15.760 amount of overcapacity in the real estate sector. Bluebug Economics 0:05:15.839 --> 0:05:18.839 estimates that at the start of the twenty twenties, China 0:05:18.920 --> 0:05:21.560 was building about thirty percent more property than it actually 0:05:21.640 --> 0:05:22.600 needed each year. 0:05:23.120 --> 0:05:25.520 At the end of twenty twenty one, one of China's 0:05:25.520 --> 0:05:30.600 biggest developers, ever Grant, defaulted on its bonds. Basically, they 0:05:30.600 --> 0:05:34.200 were unable to pay their debt to investors. Their default 0:05:34.400 --> 0:05:37.279 was followed by more than three dozen firms that also 0:05:37.320 --> 0:05:41.200 struggled to manage their debt loads. Rebecca says the collapse 0:05:41.240 --> 0:05:44.919 in the property market has people feeling pessimistic about making 0:05:44.960 --> 0:05:46.560 other kinds of investments. 0:05:46.800 --> 0:05:49.080 So Chinese people have gone from thinking I've got this 0:05:49.200 --> 0:05:53.039 asset which is hugely valuable and accruing more value each 0:05:53.120 --> 0:05:56.520 year I'm rich to now thinking I've got this asset 0:05:56.600 --> 0:05:59.480 which I thought was really valuable, but maybe it isn't, 0:05:59.560 --> 0:06:02.120 and I just don't feel quite as rich as I 0:06:02.120 --> 0:06:03.760 did a few years ago. 0:06:05.080 --> 0:06:08.520 Another reason why some Chinese people aren't feeling quite as 0:06:08.680 --> 0:06:12.240 rich as wage cuts. The Common Prosperity Agenda, one of 0:06:12.240 --> 0:06:19.360 Schijenping's signature policies, brought crackdowns on multiple industries, technology, property, education, 0:06:19.520 --> 0:06:22.839 and even gaming, and that of course led to massive 0:06:23.000 --> 0:06:31.000 job and wage cuts. It aimed to close the wealth 0:06:31.000 --> 0:06:34.360 gap and lift the country's poorest. Here's what Bloomberg's chief 0:06:34.360 --> 0:06:37.039 economist Tom Orlick has to say on the policy. 0:06:37.360 --> 0:06:41.200 What's the motivation for the Common Prosperity Agenda. Well, I 0:06:41.200 --> 0:06:45.840 think it's partly that China had a big problem with inequality. 0:06:46.200 --> 0:06:49.480 The rich were getting really, really rich, but a bunch 0:06:49.520 --> 0:06:52.919 of people were being left behind. So Common Prosperity is 0:06:52.960 --> 0:06:57.200 partly about addressing that problem. It's also about how to 0:06:57.320 --> 0:07:00.840 deal with a slower growing economy. When the economy is 0:07:00.880 --> 0:07:05.599 growing eight, nine, ten percent, everyone's getting richer, everyone's feeling happy, 0:07:05.839 --> 0:07:10.440 everyone's supportive of Communist Party rule. When the economy is 0:07:10.520 --> 0:07:13.560 just growing four or five percent, well, you need to 0:07:13.560 --> 0:07:16.040 pay a bit more attention to how that four or 0:07:16.040 --> 0:07:19.360 five percent is getting shared out to make sure everyone's 0:07:19.400 --> 0:07:22.920 getting a little bit of the pie now. 0:07:22.960 --> 0:07:26.040 To be clear, the official data show average incomes are 0:07:26.080 --> 0:07:31.320 still rising, more slowly, but still rising, but other indicators 0:07:31.360 --> 0:07:33.520 suggest that things might be less positive. 0:07:34.120 --> 0:07:38.800 We look at business surveys. They show factories and offices 0:07:39.400 --> 0:07:43.960 thinking more about shedding workers than adding workers. We look 0:07:44.000 --> 0:07:47.240 at a survey from the Central Bank, which suggests that 0:07:47.320 --> 0:07:51.400 households are getting more and more pessimistic about their future earnings. 0:07:51.880 --> 0:07:55.760 So we don't have perfect clarity on what's happening in 0:07:55.840 --> 0:07:59.080 China's labor market or what's happening with China's wages, but 0:07:59.160 --> 0:08:03.400 the data we do have suggests a minimum wage grate 0:08:03.560 --> 0:08:07.400 is slowing, and perhaps there are some more serious problems there. 0:08:08.360 --> 0:08:12.040 All that leads to a shrinking of household spending. People 0:08:12.080 --> 0:08:15.080 aren't buying new houses or having kids. 0:08:15.520 --> 0:08:18.360 So, just like mister Huang mentioned when he talked to us, 0:08:18.480 --> 0:08:22.000 some of his friends no longer want to have children, 0:08:22.080 --> 0:08:25.360 or they're delaying plans to have children because they just 0:08:25.400 --> 0:08:28.160 don't feel like they can afford to. And this is 0:08:28.200 --> 0:08:31.520 a bigger problem that people don't necessarily want to have 0:08:31.600 --> 0:08:34.520 babies if they're worried about being able to afford a 0:08:34.559 --> 0:08:37.800 bigger apartment to house another child. As well as account 0:08:37.800 --> 0:08:42.200 for all the extra cost things like education, medical care. Essentially, 0:08:42.240 --> 0:08:44.840 it's this concern that they're worried about whether or not 0:08:44.880 --> 0:08:47.400 they have enough money and just how much is going 0:08:47.559 --> 0:08:49.199 to cost to have a bigger family. 0:08:49.559 --> 0:08:52.040 So, Rebecca, at the beginning of the show, we mentioned 0:08:52.080 --> 0:08:54.880 the bargain between China's rule and Communist Party and the 0:08:55.000 --> 0:08:58.040 Chinese people. Right, you give his control, we make you 0:08:58.080 --> 0:09:02.360 prosperous now, and his current leadership is facing an ongoing 0:09:02.480 --> 0:09:06.079 real estate crisis. You've got slowing growth and income and 0:09:06.160 --> 0:09:09.839 a low fertility rate, among other things. On top of that, 0:09:10.160 --> 0:09:13.080 many Chinese may not be as hopeful about their futures 0:09:13.120 --> 0:09:17.000 right now. Is China's social contract being renegotiated here? 0:09:17.240 --> 0:09:20.959 So the way we frame this question in our story 0:09:21.080 --> 0:09:23.400 is in terms of Ronald Reagan's famous question to US 0:09:23.480 --> 0:09:25.800 voters back in nineteen eighty, which is, are you better 0:09:25.880 --> 0:09:28.880 off than you were four years ago? And of course, 0:09:29.160 --> 0:09:32.280 back in nineteen eighty, for many American voters, the resounding 0:09:32.280 --> 0:09:34.840 answer to that question was no, I'm worse off, which 0:09:34.880 --> 0:09:38.040 is why Jimmy Carter lost the election and Ronald Reagan 0:09:38.440 --> 0:09:41.520 entered the White House. Now, China doesn't have elections, but 0:09:41.559 --> 0:09:44.960 it does have politics, and one of the reasons why 0:09:45.240 --> 0:09:48.720 politics in China has been so stable is because the 0:09:48.800 --> 0:09:52.400 Chinese Communist Party for much of the past for decades, 0:09:52.440 --> 0:09:56.599 have been able to deliver this really stellar increase in prosperity. 0:09:57.000 --> 0:09:59.520 So if you ask Chinese people, are you better off 0:09:59.559 --> 0:10:01.320 than new we are five years ago, which is the 0:10:01.400 --> 0:10:05.320 length of China's presidential term, at almost any point over 0:10:05.360 --> 0:10:08.400 the past forty years, the answer would most likely have 0:10:08.440 --> 0:10:11.440 been yes, I'm much better off than I was. But 0:10:11.520 --> 0:10:15.560 under Jinping the answer is quite a bit more complicated. 0:10:15.800 --> 0:10:20.320 So while average households are still seeing their incomes rising, 0:10:20.679 --> 0:10:23.640 they are rising at a much slower pace than they were, 0:10:24.240 --> 0:10:27.320 and anyone who put their nest egg in say Chinese 0:10:27.400 --> 0:10:32.120 real estate or equities, will have taken a pretty significant hit. 0:10:33.160 --> 0:10:37.480 So Chinese households aren't necessarily feeling richer than they did, 0:10:37.800 --> 0:10:40.720 and in fact, many of them might be feeling poorer. 0:10:43.520 --> 0:10:46.760 There was one moment where that prosperity evaporated at the 0:10:46.840 --> 0:10:50.439 end of the nineteen eighties, where inflation and unemployment shut up. 0:10:51.280 --> 0:10:53.440 That was when we saw a genuine challenge to the 0:10:53.480 --> 0:10:57.199 authority of the Communist Party. That culminated in the bloody 0:10:57.240 --> 0:11:02.760 crackdown at Tieneman Square. So, Rebecca, where are we now? 0:11:03.360 --> 0:11:06.440 Well, we're certainly not in anything like as dire a 0:11:06.520 --> 0:11:10.000 situation as the end of the nineteen eighties. Back then 0:11:10.080 --> 0:11:13.840 we saw real incomes we actually falling, for example. But 0:11:13.960 --> 0:11:17.400 even so we are seeing this shift from a long 0:11:17.559 --> 0:11:21.480 period of rapid rises in prosperity to a much more 0:11:21.520 --> 0:11:27.880 complicated situation where incomes are growing more slowly, wealth is falling. 0:11:28.240 --> 0:11:30.880 And all of that does mean there is a change 0:11:31.200 --> 0:11:35.320 in the social contract or a change in the relationship 0:11:35.360 --> 0:11:38.560 between the Chinese Communist Party and the Chinese people. 0:11:40.720 --> 0:11:44.680 After the break, how President Sheijinping is managing the fraying 0:11:44.960 --> 0:11:57.040 of the social contract. The sound you're hearing is from 0:11:57.040 --> 0:12:00.480 the white Paper movement in twenty twenty two. That's when 0:12:00.480 --> 0:12:04.040 protesters held up blank sheets of paper to oppose COVID 0:12:04.080 --> 0:12:07.840 controls in Shanghai, and it eventually brought a rapid end 0:12:07.920 --> 0:12:12.040 to the lockdown that lasted two months. Since then, there 0:12:12.040 --> 0:12:15.560 has been striking developments in demonstrations in China over the 0:12:15.600 --> 0:12:16.120 past year. 0:12:16.679 --> 0:12:20.800 Freedom Houses China Descent Monitor, for example, calculated that about 0:12:20.880 --> 0:12:24.200 eighty percent of all the protests that they documented for 0:12:24.240 --> 0:12:27.560 twenty twenty three were related to the economy. We're seeing 0:12:27.600 --> 0:12:30.920 an increasing number of protests related to the economic strains 0:12:30.960 --> 0:12:35.040 that people are feeling these days, including failed real estate projects, 0:12:35.280 --> 0:12:39.280 but that isn't bubbling up into widespread protests that present 0:12:39.400 --> 0:12:44.360 any kind of existential challenge to the Party. What's really 0:12:44.480 --> 0:12:49.160 rare to see coordinated widespread protests in China because of 0:12:49.200 --> 0:12:53.000 the sort of tightly controlled nature of society, which is 0:12:53.120 --> 0:12:58.520 heavily surveiled. So typically protests in China's quite small scale, 0:12:58.679 --> 0:13:03.640 is quite sporadic, spontaneous in nature, and it very rarely 0:13:03.960 --> 0:13:09.480 targets the central government or President Shei Jinping himself directly 0:13:09.880 --> 0:13:14.400 with criticism. If we do see criticism of authorities, it's 0:13:14.520 --> 0:13:18.480 more often directed, for example, to local governments or local 0:13:18.520 --> 0:13:22.360 authorities who they may feel have not sufficiently protected them 0:13:22.640 --> 0:13:24.000 against certain risks. 0:13:25.200 --> 0:13:28.360 But Tom says it's important to keep the recent slowdown 0:13:28.520 --> 0:13:32.880 in context. The average Chinese household is still much better 0:13:32.960 --> 0:13:35.800 off than they were, say, forty years ago, and that 0:13:36.000 --> 0:13:39.760 buys the Party a certain amount of goodwill from the people. Plus, 0:13:40.040 --> 0:13:42.360 things are bad, but they aren't that bad. 0:13:42.760 --> 0:13:48.640 We don't have mass unemployment we don't have average incomes falling. 0:13:49.360 --> 0:13:53.079 We don't have a financial crisis. So we're talking about 0:13:53.480 --> 0:13:57.320 a slowdown for many, a stagnation for some, but we're 0:13:57.320 --> 0:13:59.160 not talking about an economic crisis. 0:13:59.600 --> 0:14:03.600 Meanwhile, the Pilot Bureau, China's highest policy making body, is 0:14:03.640 --> 0:14:06.680 signaling that it will take action to help support the economy. 0:14:07.000 --> 0:14:10.440 So in economics, as in fairy tales, the magic number 0:14:10.640 --> 0:14:14.880 is very often three, and I see three planks to 0:14:14.920 --> 0:14:18.800 the Chinese Communist Party's strategy to deal with this new 0:14:18.920 --> 0:14:24.440 problem of slower income growth and falling wealth. The first 0:14:24.480 --> 0:14:28.320 strategy is to stimulate. We're not seeing the big bazooka 0:14:28.400 --> 0:14:32.960 stimulus that we've seen in past Chinese downturns, but Beijing 0:14:33.200 --> 0:14:36.200 has definitely got out a bunch of water pistols, and 0:14:36.240 --> 0:14:39.480 it's trying to doubt the flames in the property sector 0:14:39.880 --> 0:14:43.200 and ensure that incomes and wealth don't fall too far. 0:14:44.160 --> 0:14:47.480 The second part of the strategy is something that political 0:14:47.520 --> 0:14:55.120 scientists call preventative repression. That's the technological panopticon, which gives 0:14:55.200 --> 0:14:59.680 China's one point four billion citizens the strong sense that 0:14:59.720 --> 0:15:05.080 weather they're online or walking on the street, somebody's watching them. 0:15:05.360 --> 0:15:07.880 And the third part of the strategy is what Shei 0:15:07.960 --> 0:15:12.440 Jinpin calls common prosperity. It's the idea that the pie 0:15:12.560 --> 0:15:15.160 is going to grow more slowly, but it's going to 0:15:15.160 --> 0:15:18.320 be shared out in a more equitable way. It's kind 0:15:18.360 --> 0:15:22.440 of a grab bag of different policies, finds for the 0:15:22.520 --> 0:15:28.000 tech monopolies, instructions to the gig economy, companies to pay 0:15:28.080 --> 0:15:32.320 their workers at least a living wage. The crackdown on 0:15:32.320 --> 0:15:35.960 the real estate sector, which is causing enormous pain for 0:15:36.080 --> 0:15:40.400 Chinese economy writ large, but is also bringing down house 0:15:40.440 --> 0:15:43.840 prices and making them more affordable to first time buyers. 0:15:44.160 --> 0:15:47.120 And Rebecca says it's important to remember that the Chinese 0:15:47.160 --> 0:15:51.160 economy has multiple engines for growth. It's not just about 0:15:51.160 --> 0:15:54.600 real estate. She says. The government is eyeing new growth drivers. 0:15:55.080 --> 0:15:58.560 One way to think about the Chinese economy is like 0:15:58.720 --> 0:16:02.720 an aeroplane that has two or four engines, so different 0:16:02.760 --> 0:16:05.920 engines and different things that are driving it. Now. Property 0:16:06.080 --> 0:16:09.040 is one of those engines, but there are other things too. 0:16:09.040 --> 0:16:12.000 There are things like exports that rely on global demand. 0:16:12.400 --> 0:16:15.960 And what we're kind of currently underway is a plan 0:16:16.160 --> 0:16:19.200 by seats in Pying and Buy Beijing to change what 0:16:19.360 --> 0:16:23.160 engines are driving that plane and what is essentially keeping 0:16:23.160 --> 0:16:26.880 that plane up in the air. And as that happens, naturally, 0:16:26.920 --> 0:16:30.360 of course you get quite a bit of disruption. And 0:16:30.400 --> 0:16:32.640 if you're on the plane you look at that property 0:16:32.680 --> 0:16:34.920 engine and it looks like it's on fire. Of course, 0:16:34.920 --> 0:16:37.440 people start to panic, You start to really worry. 0:16:37.720 --> 0:16:39.880 Yeah, And of course it's not going to be helpful 0:16:39.920 --> 0:16:41.240 to tell people not to panic. 0:16:41.760 --> 0:16:44.360 Absolutely, it doesn't help to see one of those engines 0:16:44.400 --> 0:16:47.240 caught on fire. And it's very hard then to try 0:16:47.360 --> 0:16:52.960 and restore confidence. Ultimately, the goal is to get consumers 0:16:53.080 --> 0:16:54.800 back on the streets and spending. 0:16:54.880 --> 0:16:55.480 It's hard to. 0:16:55.480 --> 0:16:58.640 Do that if you see property in the state that 0:16:58.680 --> 0:17:00.680 it is. It's hard to be convince that you should 0:17:00.680 --> 0:17:02.960 go out and invest in a business. But that's not 0:17:03.120 --> 0:17:06.640 to say that, of course, the economy is anywhere close 0:17:06.680 --> 0:17:09.240 to the precipice of collapse, because you definitely still have 0:17:09.400 --> 0:17:12.119 these other engines of growth, and in the meantime, Beijing is, 0:17:12.119 --> 0:17:15.639 of course China institute these other mechanisms. So look at, 0:17:15.680 --> 0:17:20.640 for example, the three new drivers, things like solar panels, evs, batteries, 0:17:21.040 --> 0:17:23.480 where the hope is that they will start to make 0:17:23.600 --> 0:17:25.880 up some of the losses that you're seeing in other 0:17:25.920 --> 0:17:26.879 parts of the economy. 0:17:29.119 --> 0:17:32.480 And to better understand Reagan's question, are you better off 0:17:33.000 --> 0:17:36.159 in the China context, Bloomberg looked at two data sets, 0:17:36.320 --> 0:17:40.320 one on economic growth and another on political freedom. Bloomberg's 0:17:40.320 --> 0:17:44.960 analysis suggests China has come full circle in those two respects. 0:17:45.359 --> 0:17:49.160 So we looked at IMF data on China's GDP growth, 0:17:49.680 --> 0:17:52.840 and we looked at a political science data set on 0:17:53.000 --> 0:17:56.359 freedom in China that includes things like freedom of the press, 0:17:56.440 --> 0:18:00.479 freedom for academics, and freedom to express your opinion public, 0:18:00.520 --> 0:18:03.680 for example. And these two data sets, when you bring 0:18:03.760 --> 0:18:07.399 them together and look at how growth and freedom have 0:18:07.520 --> 0:18:11.400 evolved in China over the last forty years, they tell 0:18:11.440 --> 0:18:14.680 a really striking story. So back at the start of 0:18:14.720 --> 0:18:18.360 the reform era, or even before the reform era began, 0:18:19.000 --> 0:18:22.119 we see that growth was really weak and freedom was 0:18:22.160 --> 0:18:26.040 really constrained. And then if we go through and look 0:18:26.400 --> 0:18:33.000 later during China's leadership under Dengxilping, freedom's expanded and growth accelerated. 0:18:33.440 --> 0:18:37.840 Under Jang Zamin, freedoms remained in place and growth remained strong. 0:18:38.200 --> 0:18:41.680 And then finally under Hujin Tao, you saw the beginnings 0:18:41.720 --> 0:18:45.320 of a slowdown in growth, the beginnings of an erosion 0:18:45.760 --> 0:18:50.399 of social freedoms. Finally, under Shejinping, the erosion of growth 0:18:50.440 --> 0:18:53.960 and the narrowing of social freedoms has continued to the 0:18:54.000 --> 0:18:57.720 point where China has almost come full circle, with growth 0:18:57.920 --> 0:19:02.119 slower and freedoms more strained. Though it is important to 0:19:02.240 --> 0:19:06.439 bear in mind, of course, living standards under President cy 0:19:06.520 --> 0:19:10.640 j In Ping versus under mauzadong a much much higher. 0:19:14.320 --> 0:19:16.840 Thanks for listening to The Big Take Asia podcast from 0:19:16.840 --> 0:19:20.760 Bloomberg News. I'm wan ha. This episode was produced by 0:19:20.800 --> 0:19:24.679 Young Young, Naomi Um, Jessica Beck, and David Fox. It 0:19:24.720 --> 0:19:28.280 was mixed by Blake Maples and fact checked by Adriana Tapia. 0:19:29.240 --> 0:19:31.959 It was edited by Caitlin Kenney, Daniel ten Kate, and 0:19:32.000 --> 0:19:35.960 Ben Holland. There was additional assistants from Emily Cadman, Alan 0:19:36.080 --> 0:19:40.480 Juan Chen Hua When Eric Jue, Jennifer Welch, and Nick 0:19:40.520 --> 0:19:44.240 Hallmark Name with Shaven and Kim Gettlelson are our senior producers. 0:19:44.560 --> 0:19:48.080 Nicole Beemster Bower is our executive producer. Sage Bauman is 0:19:48.080 --> 0:19:51.400 Bloomberg's head of Podcasts. Please follow and review The Big 0:19:51.440 --> 0:19:54.280 Take Asia Wherever you listen to podcasts, it helps new 0:19:54.320 --> 0:20:00.680 listeners find the show.