Are some upper-class Chinese citizens upset with the common prosperity vision of CPC Chairman Xi Jinping?
From 2015–2020, in China, it was observed that out of 100 Homebuyers, only 53 Homebuyers were purchasing their first home, whereas a whopping 47 Homebuyers were purchasing second or more homes It was also observed that the price of homes had risen from 2000–2020 in the big four cities by an average of 1651% where a flat costing 198,000 RMB in 2000 now sold for 3.31 Million RMB in 2020. That’s a market speculation of 15% a year. Normally, Xi Jingping wouldn’t have bothered except for a deeply disturbing after note.
Most Middle Class YOUNG COUPLES are hesitant to marry and have kids unless they can buy their own home, and in 2000, an average couple could buy their home in 6 years against 17 years in 2020. So Xi Jingping broke the entire circle and cut the gordian knot. In 2022–2023 alone – 86% homebuyers are FIRST TIME BUYERS and thanks to a cut in the own contribution from 40% to 25% and increase in the maximum repayment term from 21 years to 35 years – the mortgage sum is far lesser.
In 2020, to buy an apartment worth 2.1 million, a couple needed 800K upfront, which they had to borrow from other sources, savings, etc. They then could borrow 1.2 million from the bank at 5.75% interest for 21 years, which came to 8200 RMB a month. Today, the couple to buy an apartment worth 1.9 million (Prices have fallen from 2.1 to 1.9 million) , they need only 475,000 RMB upfront. Plus, they can borrow 1.425 million from the bank at 5.20% interest for 35 years, which comes to 7300 RMB a month. So the Middle Class Chinese and the Upper Middle Class Chinese earning less than 500K a household are delighted with Xi Jingping. Especially the younger generations.
However, the Wealthier Chinese are FURIOUS. They are the investors in Evergrande and Country Garden shares and those who speculate in property and earned millions of RMB in the same speculation. They lost a lot of money. Their real estate holdings worth several millions are unlikely to be sold except at maybe 30% loss and not even then. They hate Xi Jingping because he has done something necessary for the Average Mainlander and, for once, has had the balls to allow the move to affect the Rich Mainlander.
Likewise, Xi Jingping made it impossible for Alibaba to keep throttling smaller players and suppliers and creating a near monopoly. Alibaba was listing 93% of his own suppliers on his platform, and only 7% of others. That was literally a Monopoly. Xi made it illegal. He also dismantled the Payments Bank of Alibaba that had dispensed billions of RMB of loans to Mainlanders without the slightest counter check and compliance. He also ended the rampant speculation of Alibabas value and brought in new valuation rules under which Alibabas IPO was affected.
The Average Mainlander who could have invested a lot of money into these ventures and burnt their pockets were saved. More than 130,000 suppliers got a new fair chance now and didn’t need to pay 70% to Alibaba just for a platform. Only the routine 15%. The Wealthier Chinese, including Jack Ma, were Furious. 47 million RMB in Equity Options ended up becoming worth 13 million RMB in a matter of weeks or months. Investment Banks lost potentially billions from the IPO at higher values. Jack Ma himself lost many billions.
Xi Jingping found out that tutoring entities were now valued at over 1.3 trillion RMB or around $ 270 billion. He realized that they bothered less about the children and more about valuation and aggregation. AKA THE BYJU MODEL. So he BANNED THEM. He had no problem with student tutors who charged 30 RMB or 35 RMB an hour and platforms that connected tutors to students. The Cost of Tuitions CRASHED. The Average Mainlander who paid 9100 RMB a year for Tutoring now pays 3800 RMB a year. The financial burden is gone, plus the kids now have begun learning on their own, like the Mainland generation of the 1980s. T
he Middle Class Chinese is blissfully happy. Yet the Wealthier Chinese are FURIOUS. They saw the crash in their value of their tutoring (toilet cleaning app) entities fall by 80%. They saw a market evaporating. So they hate Xi Jingping.
In every case, XI HAS PROTECTED HIS PEOPLE FROM THE PERILS OF TOO MUCH CAPITALISM. The way Biden or Modi are not doing even a fraction of the effort and are allowing exploitative capitalism to outrightly consume the Middle Class Citizen. It’s why 2–3% of the people in the Mainland are furious with him. Yet over 80% love him and hail him as a great man, the third father after Mao and Deng. Can’t get more democratic than that, right??
Only the rich affected by subsidy cuts, says PM
The move to cut government subsidies only affects the rich or T20 group and that, too, is at a minimal rate, said Prime Minister Anwar Ibrahim.
“The subsidy reduction only involves the rich T20 households. Can’t they do with fewer subsidies?
“I have to take away some from those well off in order not to burden the poor,”
Citing the electricity subsidy as an example, the prime minister said 90% of the people were not affected by the reduction, as it only has an impact on the T20 households with their big houses.
He said the government has also not increased electricity tariffs for small and medium industries or SMEs as well as the food industry.
“The cut in electricity subsidy was not aimed at the masses (but) only the wealthy in the T20 group. So why do we have to make this a political issue? Who are we championing?
“Furthermore, in terms of the haj subsidy, the price hike did not affect the people as the increase only involved the T20 group.
“If you are already filthy rich, you don’t expect Tabung Haji to subsidise your trip to Mecca. Some have complained, but I have to be firm on that,” he said.
PRIME Minister Datuk Seri Anwar Ibrahim said he was not against the “ultra rich” group in the move of slashing subsidies for the top wealthiest of Malaysians.
Instead, he said the “maha kaya” remark on his Budget 2024 last week was only to remark that they do not need charity such as subsidies to survive.
“We are not imposing additional tax on them (the ultra rich). What we meant to do is only to stop giving them subsidies. That’s all.
The Coverage Malaysia
