When power outweighs capital

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When power outweighs capital

SHIN KYUNG-JIN
The author is the Beijing bureau chief of the JoongAng Ilbo.


It all began with the disappearance of Jack Ma. Then, Didi, China’s equivalent of Uber, went public on the New York Stock Exchange. It was labeled as “obedience on the surface but disobedience on the inside.” Didi voluntarily delisted after five months. Then, private education was swept up followed by the devastation of the entertainment industry and the trouble with platform companies.

Foreign products released in China should not have unlucky numbers on their specifications. From March 2022, commercial transactions through payment systems of private companies —such as AliPay and WeChat Pay — will be banned. As uncertainty is growing in business management, all companies are perplexed, regardless of their nationality.

The Communist Party of China (CPC) finalized a document titled “Resolution of Achievement and Experience” for the first time in a century. The 100 years of the CPC was divided into three periods — the eras of Mao, Deng Xiaoping and Xi Jinping.

Chinese-born Professor Guogang Wu of the University of Victoria in Canada showed a pointed interpretation of the move. In a recent interview with Voice Of America, Wu, who helped Deng’s political reform in the 1980s, summed up the dynamics of power and money in China under Mao, Deng and Xi in three phrases.

First, Mao’s era was defined as the “confrontation of money and power.” After the people’s commune was established, a communist society arrived. Contrary to an evaluation by the “resolution,” the country’s economy also disappeared.

When Deng’s era began, there was only power and no money. As power soon served to make money, it was defined as the age of “trade of power and money.” While those with power enjoyed money, those with money enjoyed power. The economy grew, but social unrest also deepened, warning about the sustainability of power.

The new age of Xi Jinping began at the 19th Congress of the CPC, declaring the party will lead the party, politics, military, private sector and academia — you name it. The CPC is dominated by its core members, in other words, the single most powerful person. This is the age of “power controlling money.” That’s what has happened in the past year and what will unfold in China in the future.

As the Chinese people are getting ready to adapt, the world is confused, coupled with the strategic competition between America and China. Unlike the intention of the resolution, the only thing that’s clear is uncertainty. Korean companies desperately need wisdom to deal with a new China if it wants to avoid catastrophe.
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