Economic recap: Week to September 17BY BENJAMIN ONG | MONDAY, 20 SEP 2021 10:56AM
Remember those Mao Zedong suits? The sartorial fashion that every man, woman and child in China wore (or were required to wear?) during Chinese chairman Mao's "Cultural Revolution" of 1966-1976? Those "uniforms" that comes in grey, navy blue or khaki?
My Chinese father had three of them. He bought my brother and I tiny versions of those suits with the matching cloth "Mao cap" included.
That was Mao's ideology, to create a homogeneous society that's indistinguishable by gender, social class or age.
Then again, where Mao's 'Great Leap Forward' failed, Deng Xiaoping's "Open Door" and "socialism with Chinese characteristics" policies succeeded in taking China to where it is now - the second biggest economy in the world.
Fast forward to now, under President Xi Jinping. His recent edict on "common prosperity" and the stringent diktats that go with it could be taking China back to the "uniformed" days of chairman Mao. A great leap backward?
China's now cracking down on technology, education, gaming and real estate companies, among others. It also has "effiminate men" and feminists on its sites and movie stars and their conspicuous consumption.
President Xi wants all Chinese to get rich at the same time as opposed to Deng Xiaoping's stated anti-Maoist ideology to let some people get rich first - the trickle down effect in Western economics.
This is all well and good. At the point where China is now in the global economic rankings, president Xi could well afford to take the great leap backwards to Mao Zedong's days towards equal prosperity for all.
But like Mao's 'Great Leap Forward', it could become a failed exercise and undo all the progress Deng Xiaoping's socialist cum capitalist philosophy.
"You picked a fine time to leave me, Lucille," as Kenny Rogers would say.
Latest PMI data show that China's manufacturing and services sectors dropped below the expansion/contraction mark in August - manufacturing PMI down to 49.2 in August from 50.3 in the previous month; services PMI down to 46.7 points from 55.0 in July.
These are backed by the weakening August 2021 stats on fixed asset investment (8.9% in the year to August from 10.3% in the previous month), industrial production (5.3% from 6.4%) and retail sales (2.5% from 8.5%).
The biggest uncertainty of all when it comes to investing in China is the uncertainty on how far president for life Xi Jinping would regulate social and business norms to achieve "common prosperity".
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