American companies should reconsider their investment in China, as the country’s economy is in serious trouble with a struggling non-state sector, said Mile Yu, a senior fellow and director of the China Center at Hudson Institute.
“China has been playing hard to get for the last several months and they would not talk. Now they relented and agreed to talk with high-level American cabinet members on matters that are vital to both nations’ economies,” Mr. Yu said in an interview with EpochTV’s “American Thought Leaders: NOW.”
The interview came as U.S. Treasury Secretary Janet Yellen traveled to Beijing to meet with China’s Premier Li Qiang, who has recently been tasked to revive China’s COVID lockdown-battered economy by Chinese Communist Party (CCP) head Xi Jinping.
“The reason why they relented is because China’s economy is in big trouble,” Mr. Yu told host Jan Jekielek. “They need the West much more than the West needs China. So they’re being a little bit more realistic this time.”
China’s Economic Reality
A key difference between the U.S. and the Chinese economic model, according to Mr. Yu, is that the CCP is willing to crack down on the non-state sector to ensure state control, even if that means shutting down the main driver of China’s economic growth.
“Chinese economy is pretty predatory. It benefits from the international free trade system, and almost its entire economic growth in the last 20 to 30 years has come from the non-state sectors,” he explained. “Now, China’s financial institution is collapsing. So the Chinese government—particular local government—is trying to squeeze the non-state sectors and push them out of business through policies, such zero-COVID lockdowns and all kinds of egregious taxation schemes.”
For nearly three years, in the name of curbing the spread of COVID-19, China’s authorities were placing entire towns and cities under lockdown if they reported a few cases of infection. Millions of people were forced into overcrowded quarantine camps for just living in the same apartment building as an infected person. Individuals must show their “Green Code”—a digitized proof that they most likely weren’t infected—before using public transportation, entering a grocery store, or simply leaving or re-entering their neighborhood.
By Bill Pan and Jan Jekielek
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