(Bloomberg) — Chinese President Xi Jinping’s recent language suggests the country is moving even further toward more state-backed intervention, says former Australian Prime Minister Kevin Rudd.
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Xi’s speech to the Communist Party congress on Sunday re-emphasized how China’s economy is moving to the ideological left, according to Rudd. In his report, Xi signaled no change in direction for two main risk factors dragging down China’s economy — strict Covid rules and housing market policies.
“What I see in this document is a reassertion of that right to intervention” in the economy, Rudd said via video link to an Asia Society conference in Sydney Thursday. “I see no evidence of a return to the market. I see more evidence of a doubling down of support for the party state.”
Rudd, speaking in his role as President of the Asia Society, said that resulted in “an overall conclusion therefore that this shift to the left of economic policy is going to continue.”
Xi praised Covid Zero, his no-tolerance approach to containing infections, in his opening speech on Sunday. His slogans on China’s property market, meanwhile, repeated prior language even as the sector experiences its longest-ever slump due to policies aimed at curbing debt and financial risks.
The economic impact of China’s commitment to keep Covid-19 cases at a minimum is in focus as infections in Beijing swelled to the highest in four months.
“If Covid Zero stays in place in its radical form, China could very well have very little to no growth this year,” Richard McGregor, senior fellow for East Asia at the Lowy Institute, said at the Sydney event.
Economists surveyed by Bloomberg expect GDP to show a rebound in the third quarter to 3.3% after near-zero growth in the April-to-June period. That would still be a low growth rate for China, reflecting the impact of tight coronavirus controls and the lengthy property slump.
The ruling party’s congress has consumed the attention of investors and economists trying to assess policy changes in areas such as the economy, foreign affairs and international relations. The twice-a-decade event is expected to hand Xi a third term as party chief.
Rudd served as prime minister of Australia between 2007 and 2010, and again in 2013.
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