On September 5th a single black swan flew into Tiananmen Square in central Beijing, not far from the high-security Zhongnanhai compound where China’s top leaders and their families reside. The bird then lingered there for some time.
The Beijing Daily (Beijing Ribao) quickly picked up on the unusual phenomenon, publishing news of this bizarre event accompanied by photos. The avian visit to Tiananmen Square soon also became a hot topic for speculation on social media. Why on earth did the bird choose to come to the vast paved square which totally lacks water and grass?
That remains a mystery. However, for many people the incident predictably brought to mind the “Black Swan Theory.”
That theory holds that the occurrence of a totally unexpected event can cause a tremendous shock to society and markets precisely because previous experience and common sense cannot explain it.
A classic example is the Lehman Shock of September 2008. Another would be the sudden appearance of the novel coronavirus (COVID-19) in the Chinese city of Wuhan in December 2019, which subsequently caused the global pandemic we find ourselves facing today. That can be said to be a terrifying example of a “black swan attack.”
The fact is that over the past several years a sense of alarm about “black swan attacks” has been spreading in various regions of China. One reason is the fondness that China’s supreme leader President Xi Jinping has shown for using the expression “black swan” in various warnings he has issued.
For example, in a January 2019 address he delivered on the subject of financial issues to a study session attended by central government and local officials, Xi said, “We must guard against the black swan of risks we need to be on the alert for.”
Then in January of this year, in admitting that China is directly faced with various risks and problems, Xi showed similar concern, saying, “We need to prepare for black swan-like phenomena.”
One of the black swan attacks Xi apparently is worried about is the outbreak of a debt crisis. Currently, the total amount of liabilities incurred domestically by corporations, local governments and individuals has reached 500 trillion Renminbi (around ￥8,500 trillion JPY, or $77 trillion USD). That is roughly the equivalent of five times China’s annual GDP.
When these debts come due, we are likely to see corporate defaults, individual bankruptcies and local governments collapse, one after another.
Naturally, the occurrence of such debt crises cannot be divorced from the outbreak of financial crises. Consequently, there is a very real chance that the Chinese economy will be beset by a disaster of unprecedented scale.
Another black swan that has long had Chinese worried is the possible bursting of the real estate bubble.
These troubles are not limited to the sphere of economics; they are plentiful on the political front as well.
On August 29, something very strange happened. Scores of official Party-state media, including the People’s Daily (Renmin Ribao), Xinhua News Agency and PLA Daily (Jiefangjun Bao) simultaneously published an article by a virtually unknown blogger named Li Guangman.
Li originally issued this “revolutionary declaration” as a posting on his public social media WeChat account “Freezing Point Commentary.” The official media all used the same headline when republishing it: “Everyone Can Sense That a Profound Transformation Is Underway!”
It is unusual, to say the least, that all the key national media controlled directly by the central authorities of the Chinese Communist Party (CCP) should pick up such a blog posting. Even more astonishing was the content of the posting.
The article starts off by declaring: “What events are telling us is that a monumental change is taking place in China and the economic, political and cultural spheres are all undergoing profound transformation— we might even term it a revolution.”
Li emphasized, “This represents a return from a capitalist clique-centric approach to a people-centric approach…a return to the essence of socialism.”
He then went on to warn ominously, “All those who attempt to obstruct the people-centered transformation will be left behind.”
In other words, Li’s fierce declaration seemed to be calling for the launching of political purges.
Upon reading such vitriol, those Chinese who experienced Mao’s Cultural Revolution no doubt were seized with the terrifying feeling that this article might herald the second coming of the Cultural Revolution.
Considering the recent moves by the Xi regime to bully private businesses and purge the entertainment world, the fears of these people would appear to be by no means unfounded.
It is for that very reason that many Chinese have taken the incident of the black swan setting down in Tiananmen Square as an inauspicious omen and quake at its implications.
But the person who is probably most worried that that black swan is a harbinger of disasters visiting China in the near future is none other than Xi Jinping himself.
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(Find access to the Sankei Shimbun ‘China Watch’ column in Japanese at this link.)
Author: Seki Hei