- October 1, 2021
- Posted by: Stratford Team
- Category: Business
CHICAGO (Project Syndicate)— Is there a larger purpose to the Chinese government’s recent actions against the country’s largest corporations, and does its cleanup of the financial sector fit into its economic strategy?
China has sought for at least 15 years to rebalance its growth from exports and fixed-asset investment to greater domestic consumption—efforts that have assumed a new urgency, owing to conflicts with the United States and other countries. As long as its domestic market expands, China will be able to reduce the strategic vulnerabilities its dependence on exports implies, and foreign firms will become more dependent on the Chinese market, giving China new sources of strategic leverage.
But there are serious impediments to this strategy.
“While parallels to Mao’s Cultural Revolution are probably overblown, fears…