An Internet posting by author Tuozhanlaogou (拓展老狗, WeChat account name) has been widely spread in China. Using data and charts, the author explained that China’s economy is at its most difficult time:

• 28.54 million people used Baidu to search for jobs in 2019, whereas less than 7.5 million people did that in 2018.
• China’s banking section is making so much money that it squeezes profits out of other industries. China has four companies ranked in the top ten companies with the highest profits in the world. All of them are banks. China’s banking section claimed 40 percent net income return, whereas the U.S. banking section only claims 14 percent.
• China’s state-owned enterprises (SOEs) are growing and the private companies and foreign companies are shrinking. In 2018, the rate of net asset increase vs. total profit (an indicator of investing profits into businesses) was 60.7 percent, -99.4 percent, and -1.6 percent, for the three types of business. The negative number itself indicates that the economic sizes of the private and foreign companies are shrinking.
• People are short of money. The fund industry (both mutual funds and hedge funds) raised 500 billion yuan (US $72 billion) in the third quarter of 2017 alone. However, for the whole year of 2019, it has only raised 180 billion yuan.
• 1,884 movie or TV related companies closed in 2019.
• New car sales dropped 2.76 percent in 2018 compared to 2017. From January to October 2019, the number of new cars manufactured and sold dropped 10.4 percent and 9.7 percent respectively, compared to a year ago.
• China’s M2 money is out of control. It has increased from 11 trillion yuan in 1999 to 194 trillion yuan (US $28 trillion) in 2019, twice China’s anticipated GDP in 2019. The U.S. M2 money in 2019 is only US $15 trillion and its GDP is US $21 billion; its M2 is only 71.6 percent of its GDP.
• In the past 12 months (December 2018 to November 2019), the Purchasing Manager’s Index (PMI) was below 50 for nine months and above 50 for only three months. The economy is considered contracting when the PMI is below 50 and expanding when above 50.
• China is departing from real (manufacturing) businesses. Among the total companies’ assets in China, the financial and real estate industries claim 47.9 percent of the assets, whereas the manufacturing sector only accounts for 11.7 percent.
• In the first six months of 2019, all provinces in China, except Shanghai, ran into a fiscal deficit.

Source: Sina, December 8, 2019
https://cj.sina.com.cn/articles/view/1931232181/731c43b501900jjam

The Chinese Communist Party’s (CCP’s) Central Committee and the State Council of the Chinese government issued the “Opinions on Supporting the Reform and Development of Private Enterprises.” In the contents, the CCP vows to “protect the legal property of private enterprises and entrepreneurs” and to “implement larger scale tax and fee cuts” to “substantially reduce the burden on private enterprises.”

This opinion claims to improve the fair and competitive market environment, improve a precise and effective policy environment, enhance the legal environment for equal protection, encourage and guide the reforms and innovations of private enterprises, and promote the normal and healthy development of private enterprises.

On the “protect the legal property of private enterprises and entrepreneurs,” the opinion claims to adopt measures such as seizure and freezing in strict accordance with legal procedures, strictly to distinguish illegal income in other case-related property and legal property, strictly to distinguish corporate legal personal property from shareholders’ personal property, and strictly to distinguish between the personal property of the persons involved and the property of family members.

As China’s economic policy has turned left in recent years, private enterprises are projecting a gloomier future. In the second half of 2019, the founders of a few large private enterprises in China retired one by one. Following the announcements, Alibaba founder Jack Ma, Ma Huateng from Tencent, Li Yanhong from Baidu, and Liu Qiangdong from JD.com, Inc. all resigned as chairman one after the other. In December, Wang Wei, chairman of SF Express Group, and Liu Chuanzhi, founder of the Lenovo Group announced their resignations. In response, Beijing’s recent move is suspected to boost the low economic sentiments, especially among the private sector.

Source: Central News Agency, December 22, 2019
https://www.cna.com.tw/news/acn/201912220192.aspx