the supply chain of China have begun to wind up their business and seriously thinking to shift to Bangladesh , Malaysia , Indonesia and India .
Rulers View on Economy of China
In the 19 th Congress of the Communist Party of China ( CPC ), held in October 2017 , a decision was taken to strengthen government control on the economy of China . In this Congress XiJinping said that houses are built for living and not for speculation . Till 2017 , the cost of houses in China had increased too much . In 2017 , the total population of China was about 140 Crores . Today it has crossed 144 Crores . At that time the share of the urban population of China was about 58 %, which has reached to about 64 % today . So the demand for houses in cities increased . According to NBS of China , the cost of houses in 4 big cities increased by 6 to 7 percent and in other cities 4 to 5 percent from 2002 to 2017 . Consequently the burden of loans for purchasing houses increased on big numbers of Chinese families . Due to this , they were not able to finance their essential needs . According to a survey , about 53 % families do not want to have even one child and 30 % families want to have only one child , while the law of China allows them to have three Children . According to the survey , done by micro blogging sight BB , most of the families were unable to bear the burden of costly houses and children . To deal with this situation , the Chinese government announced ‘ 3 Red Lines ’ to control the activities of Real Estate , under which the limit of Financing was imposed . The Real Estate company Evergrande , also did not meet the criteria of ‘ three red lines ’ and it is facing a serious crisis of finance and cash .
The President of China Xi Jinping explained the concept of ‘ New Philosophy of Development ’ and ‘ Socialist Modernization ’ in his famous speech given on 11 th January 2021 . He said that , ‘ we have changed our views of accepting the growth rate of
January - 2022
GDP as the scale of success ….. We should concentrate our efforts on the quality of economic development and reform in return , promotion of a healthy economic development and reall development in domestic production rather than fake development ’. He further said that ‘ our economy is in a slow stage of development , it is a painful adjustment stage and it is a stage to absorb the adverse impacts of past incentive policies …. We have started structural reform in supply side …. To promote structural reform in supply side there are five priorities : i . To cut excessive capacity ii . To reduce the stock of excessively produced goods iii . To distribute loan dependency iv . To reduce cost and v . To strengthen weak sectors ’
Besides this Xi Jinping said that , ‘ we should be active in reducing the gap between urban and rural areas , the rich and the poor ’. In this important speech , the president of China also spoke about promotion of domestic demand and market , reducing the downfall of the rate of growth and solving the problem of unemployment . To solve all these mentioned problems the 19 th Central committee of the CPC formulated a ‘ New Philosophy of Development ’, to be implemented in 15 years , from 2020 to 2035 .
Political Discourse on the New Philosophy of Development of China
Some left parties and analysts believe that the ‘ New Philosophy of Development ’ in the direction of ‘ Modernization of Socialism ’ as advanced by the Chinese government under the leadership of Xi Jinping is in real sense the forward stage of socialist economic development . According to them Xi Jinping is a true Marxist and he is building socialism according to the peculiarities of China . In this context , he is increasing the control of communist Party and government upon private companies and industry .
But , the fact is opposite . It is to note that in the 1980 ’ s , Xi Jinping was very curious in promoting the market reform policies of the capitalist roader Deng Xiao Ping . Xi Jinping himself had announced to lead the market forces in the end of 2013 . Besides , he worked for investing more in the share market , relaxing the government control on the currency of China and handing over the operation of Companies to the professional managers . Again Xi Jinping has mentioned the problems of economy of China ( in his speech ) which are the result of capitalist mode of production . The capitalist mode of production and production relations are governed by objective laws , which works according to their dynamics and independent of our will .
Marxist Explanation of Capitalist Economy
The main proponents of scientific socialism has proved much before , that the principle reason of the crisis of capitalist , is the contradiction between the social production and individual ownership . Due to this basic contradiction , there is revolt of modern productive forces against the modern stage of production . And then the crisis period started . The crisis starts as ‘ periodic crisis ’ and it comes after a fixed time . During such crisis the epidemic of over production rages on . To deal with these ‘ periodic crises ’, the Capitalist classes on the one hand destroy a big part of productive forces forcefully and on the other , they occupy new markets . Periodic crisis does not come in all industries at once . As a result workers leave those industries facing crisis and join other industries . During this period , Capitalists try to reduce the cost of production by using developed technology for increasing labour productivity and extending the hours of work along with reducing the facilities being given to the workers . But due to ‘ cut-throat competition ’ among capitalists , the small producers are forced to come out of markets . In this process , monopoly capitalism comes into existence . When the free competitive capitalism turned into contd . in page 14 11