At the end of 2013, the president of China, Xi Jinping, announced the “Silk Road Economic Belt and the 21st Century Maritime Silk Road” initiative (the B&R initiative). The Chinese love invoking the country’s rich and glorious past, so they lapped up this initiative, which aims to restore the country’s old maritime and overland trade routes. Mr. Xi hopes to lift the value of trade with more than 40 countries to $2.5 trillion within a decade, spending nearly $1 trillion of government money. Chief executives from big companies are quick to praise the president’s initiative. The public believes this initiative will rebuild the country’s glory again. However, two years has past, this initiative turns out to be a propaganda.

 

It is the private sector, not state capitalism, that is responsible for modern China’s economic rise, and yet the private sector is often given insufficient credit for the rise. Under the B&R initiative, SOEs (State-Owned Enterprise) and state financial institutions are being pushed to invest overseas in such areas as infrastructure and construction. But these lumbering giants are not the drivers of China’s economy; they are millstones around it neck. Some 96% of the 60m-odd companies registered in China are private. It seems that president Xi wants something different. He wants to help SOEs instead of private sectors under the circumstance that private sectors have already become more important than SOEs. This is exactly what Chairman Mao executed during the 50’s and 60’s. The country is going back, back to an age that SOEs were the dominant of the economy, and back to an era of command economy, even back to communism. President Xi Jinping is a left wing. He wants the country to be what his father wanted to be. Yet, the public haven’t noticed it, and they love him and support him.