SinoInsight 1
Wen Tiejun, an agricultural economist at the Renmin University of China, proposed a “people’s economy” concept (人民經濟) in an interview with state media on Sept. 27.
According to Wen:
1. The “people’s economy” has four characteristics, namely, “autonomy, localization, comprehensiveness, and people-orientedness” (自主性、在地性、綜合性、人民性). Economies that “defend sovereignty, develop autonomously, and are patriotic in nature” can be called “people’s economies.”
Wen said, “The ‘people’s economy’ should be the focus of attention and discussion in the Chinese economics community. It is a general global trend for the ‘people’s economy’ to replace the market economy.”
2. Wen said that “autonomy” is “highly related to the formation and maintenance of national economic sovereignty.” If “autonomy” does not lie in the hands of China but is “formed by foreign intervention,” then the revenue generated by the economy “of course serves foreign interest groups.”
3. Wen said, “compared with globalization, localization has become an international trend. The world should pursue localization, including the development of resources, how to return the benefits of development back to the local community, how to make the development of resources sustainable locally, etc. Autonomy and localization are related to the maintenance of sovereignty.”
4. Regarding “comprehensiveness,” Wen believes that “enterprises should not simply pursue the maximization of private interests, but should have the goal of pursuing comprehensive local development.”
5. As for “people-orientedness,” Wen said that it has a “very important characteristic of property relations, that is, ownership by the whole populace.” He added that state-owned enterprises occupy a “considerable share” of the economy in today’s China, and the Chinese people have “basic rights” (“from property relations to distributions relations”) in these SOEs that are “owned by the whole populace.” How these rights are embodied is “an important connotation of our commitment to remembering our original aspiration.”
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Wen Tiejun’s interview went viral online and sparked heated debate. Several prominent economists criticized (directly or obliquely) the “people’s economy” idea for being a form of “semi-isolationism.” Some accused a group of so-called “economic favorites” (經濟寵臣) for attempting to add an economic dimension to “Xi Jinping Thought.”
Criticism of the “people’s economy” by those in the “reform-minded” camp later met with counterattacks from leftists. Mainland news portals initially carried the debates over the “people’s economy,” but later scrubbed such discussions.
Notable discussions include:
Xiang Songzuo
Xiang Songzuo, an economist and professor at the Renmin University School of Finance, slammed Wen Tiejun’s “people’s economy” in a Weibo post on Sept. 27.
Xiang accused Wen of “spouting nonsense” (信口開河) to the “absurd extent of completely disregarding basic common sense and logic.” By Wen’s argument, Xiang wrote, the pursuit of profit by companies does not meet the requirements of the so-called “people’s economy.”
Xiang further questioned whether “autonomy” under the “people’s economy” is the closing up of the country; whether “localization” is self-imprisoning autarky; whether “comprehensiveness” is the conversion of enterprises into a “great society”; and whether “people-orientedness” is a return to “whole populace” communes that are “large in size and collective in nature” (一大二公; this is a term from the Great Leap Forward). He added that China has tried the aforementioned “experiments” and paid a heavy price for them, including causing hardship for the people.
Xiang also accused Wen of attempting to “deceive and confuse with some inexplicable, absurd new vocabulary” and completely rejecting “reform and opening up.” He added that the “people’s economy” is not in line with the historical experience of development in other countries, nor is in line with the “great historical experience” of China’s over four decades-long effort at “reform and opening up.” Rather, the “people’s economy” runs counter to China’s “basic state policy” of “opening up to the outside world to a high degree on all fronts.”
Xiang Songzuo wrote that the “people’s economy” deceives the people in the name of the people, and will bring harm to the country and the people. In concluding, Xiang expressed hope that Wen Tiejun will take back and review his “gibberish and nonsense” (胡言亂語和胡說八道) and return to “basic conscience and common sense that a professor should at least have.”
Ma Guangyuan
Ma Guangyuan, a deputy director of the Central Economic Committee of China National Democratic Construction Association and commentator for state broadcaster CCTV, wrote in a Sept. 27 Weibo post: “(Bertrand) Russell said, ‘The fundamental cause of the trouble in the modern world today is that the stupid are cocksure while the intelligent are full of doubt.’ This quote is for Wen Tiejun, be a [decent] human being!”
Explainer: By asking Wen to “be a [decent] human being,” Ma is indicating that he believes Wen wants China to revert to a brutal, inhumane commune system,” and hence is insinuating that the latter is currently “not human” and lacking a conscience for proposing the “people’s economy.”
Ren Zeping
Ren Zeping, vice president of the China Private Economy Research Association (中國民營經濟研究會), wrote a Weibo post on Sept. 28 criticizing Wen Tiejun.
Ren wrote that “Professor” Wen had rejected the market economy and was advocating for a return to a planned economy and isolationism. He added that this “experiment” has failed the world over and hundreds of millions of people have paid a heavy price for it.
Ren also noted that Wen’s views are “ignorant and do not respect common sense.” He further noted that the wide circulation of those views is causing widespread concern among private entrepreneurs.
Leftist counterattacks
Some leftist nationalists began publishing articles on their “self-media” channels defending Wen Tiejun and his “people’s economy” while attacking the three aforementioned economists who criticized Wen.
Li Guangman, a leftist WeChat blogger who gained notoriety in August 2021 for an article that supported Xi Jinping’s “common prosperity” and crackdowns on the tech sector and entertainment industries, also penned a defense of Wen Tiejun that was published on a leftist nationalist website on Sept. 30.
OUR TAKE
1. At a glance, Wen Tiejun’s “people’s economy” concept adheres to the Xi Jinping leadership’s left-leaning policies, calls for greater self-sufficiency, and ideological focus (Marxism-Leninism, “socialism with Chinese characteristics,” etc.), and it seems like it could be an initiative ordered by Beijing. However, censorship of debate over the concept suggests that it might not have been the brainchild of the CCP authorities.
Wen’s concept also runs counter to Xi’s pledge to further liberalize the markets (while curbing the “disorderly expansion of capital”), grow the “real” economy, and attract foreign investment to China. Moreover, the Xi leadership has had painful experiences in promoting policies that signal socialist regression—private and foreign capital panicked in 2015 when the CCP pushed “the state advances, the private sector retreats” (囯進民退) concept; in 2018 when the “private economy exit” (私有經濟退場) theory was circulating; and in 2021 following Beijing’s crackdown on the tech, education, and entertainment sectors, promotion of “common prosperity,” and the appearance of Li Guangman’s “profound changes” essay.
The “people’s economy” is more likely the work of PRC scholars looking to “bandwagon” off Xi’s left-leaning policies to secure funding for their research. There is also a small possibility that the Xi camp was floating a trial balloon for a more obvious leftward shift in policy direction through Wen Tiejun, but abandoned the idea (hence the censorship) after seeing the public backlash and concerns from private entrepreneurs. Another very unlikely but not entirely implausible scenario is that the “Maoist left” (毛左) in the CCP on whom the Xi leadership has been consistently cracking down are gaining favor for reasons unknown and are behind the “people’s economy.”
Interestingly, while the authorities are downplaying public discussion of the “people’s economy” concept, the CCP has not totally suppressed the idea. It is possible that the Xi camp does not want people to think that Xi’s political status is in question over the quashing of a left-wing proposal that seems to correspond with Beijing’s policies, which would open up another can of worms during a sensitive political period (20th Party Congress).
2. As several Chinese economists have pointed out, Wen Tiejun’s “people’s economy” is unfeasible and detrimental to China’s economy. For instance, the PRC cannot achieve “autonomy” without having its own core technologies, and cannot carry out “localization” without abundant natural resources; China is currently still very reliant on other countries for both natural resources and core technologies. The implementation of “comprehensiveness” would see virtually all companies in China be transformed into state-owned enterprises. Meanwhile, “people-orientedness” is a sham because the Chinese people will never have control over their property under a fully planned economy; rather, all property and social resources will come under the control of the CCP’s privileged classes, with the Chinese people having a lot less to themselves and being a lot worse off.
Even the PRC’s “national champions” will not meet the requirements of the “people’s economy.” Huawei, arguably the CCP’s most favored “national champion,” lacks “people-orientedness” and “comprehensiveness” because it is not a state-owned enterprise. Neither would Huawei be able to meet the standards of “autonomy” and “localization” since it relies on technological imports.
3. The debates and controversy over the “people’s economy” reflects the Xi leadership’s present political, economic, geopolitical, and ideological predicaments.
In terms of ideology, Xi Jinping needs to keep promoting Marxism-Leninism, “socialism with Chinese characteristics,” and the primacy of the Party to facilitate his efforts at consolidating power and “rectifying” the regime. The constant hyping up of ideology and Party orthodoxy, however, emboldens leftist elements in the regime and gives Party elites who are worried that Xi is taking the regime down Mao Zedong’s “old road of closure and rigidity” even more cause for concern. The Xi leadership also risks undercutting the regime’s political legitimacy when its brand of “Sinicized Marxism” fails to bring prosperity to the Chinese people and instead increases their hardship.
In terms of geopolitics and the economy, the Xi leadership is no doubt aware of rising “great power” competition between the PRC and the West. To safeguard regime security, Beijing will be forced to boost China’s self-sufficiency and even “partially close” up the country to hinder the brewing of “color revolutions” in the PRC by hostile state actors. The Xi leadership’s efforts at “semi-isolationism,” however, again causes worry among the Party elite, private entrepreneurs, and foreign investors, and threatens to accelerate an exodus of capital from the mainland. The Xi leadership’s “semi-isolationism” could even see many affluent Chinese citizens “vote with their feet” while they still can, resulting in mass migration and worsening the PRC’s demographic problems.
In terms of politics, the debate over the “people’s economy” reflects the distrust of the Party elite towards Xi. Despite Xi’s reassurances, his left-leaning policies, embrace of ideology, and move towards “strongman” dictatorship leave the political and business elites in the regime constantly worried that Xi will inevitably revert the PRC back to the Mao era in treading the dead-end path of communism and “isolationism.” Xi appeared to address such concerns in his Oct. 1 Qiushi article, but the CCP elites would undoubtedly recall that Xi “went back” on his word after the 19th Party Congress by removing term limits for the PRC presidency (signaling his intent to rule in perpetuity like Mao) and continuing to roll out left-leaning policies in recent years. The elites’ unease with Xi and where he really stands partially explains the outpouring of furor over the “people’s economy” and why regime censors had to step in.
