In the face of the economic downturn, the Chinese regime has failed in response measures and can no longer use large sums of money to stimulate economic growth. As a result, analysts point out that the Chinese Communist Party (CCP) is in trouble, the debt has piled up, and the debt-provoking economic model has come to an end. At the same time, the CCP’s finances are depleted, and there is no way to stimulate the economy. The main problem is that CCP officials generally have a “lying flat” mentality and wait for the results of the CCP’s 20th National Congress, according to Sound of Hope.
According to SCMP, “Lying flat” basically means doing the bare minimum and striving for nothing more than what is absolutely necessary for one’s survival.
It represents the mindset of lying down instead of being an effective member of society. Rather than work, study, buy a house, or even start a family, a section of society refuses everything to lie still.
According to the BBC, the idea of ’lying flat’, or ping tang in Chinese, means non-stop pausing work. The ping tang movement started in 2021 as many people felt they were under increasing pressure in Chinese society.
Unsustainable investment model
The Wall Street Journal reported on Aug. 18, over the past 20 years, global companies and markets have formed a habit of playing catch up with the Chinese economy. As a result, once the economy shows signs of slowing down, the regime will spend a lot of money to stimulate growth. Now that activity seems to have lost its effect, and although economic growth has lost momentum, the CCP has run out of money to boost a weakening economy.
In response to the continued economic slowdown and weak market demand, the Bank of China cut two key policy rates on Aug. 15. Economists say the cuts may not have much effect on encouraging households and businesses to borrow more.
The report notes that the CCP is currently facing overlapping obstacles. Its 20th National Congress will be held later this year and Xi Jinping is expected to be re-elected for a third term.
At a meeting last month, the CCP’s top policymaking body did not announce new economic stimulus measures as expected. Instead, officials acknowledged the pressure and abandoned the 5.5% growth target of the year.
Economists say China’s leaders have no effective stimulus measures at this time. It shows the CCP’s policy tools have not worked, and the traditional way of lifting the economy by usury to invest in infrastructure is unsustainable.
Officials lying flat: Await outcome of 20th National Congress
To reduce the chance of mistakes, Chinese officials have adopted a ” lying flat policy.”
Sound Of Hope said some economists think the Chinese regime’s failure to take more decisive steps to support the real estate market reflects the political paralysis ahead of the CCP meeting this fall. Officials are reluctant to take measures that could be seen as running counter to Xi’s priorities of reducing overall debt and curbing speculation in the real estate market.
The paper also said that economists at Société Générale SA wrote in a report to clients on Monday (Aug. 15) that according to the most optimistic estimates, a stimulus or debt restructuring package for the real estate market could be introduced as early as the end of November. However, many officials are waiting for the CCP’s 20th National Congress results.