Heralding a major step away from the market-oriented economic policies of the last 40 years, the 20th Chinese Communist Party Congress earlier this month saw the elevation of Liang Huiling, who heads a state-run system of ‘supply and marketing cooperatives’, to the party’s Central Committee, amid other signs that leader Xi Jinping is steering the country away from market economics and closer to a state-dominated economy, RFA reported.

“This is a return to the [state-run] collective economy,” economic commentator Chen Jun told RFA, adding, “It’s pretty scary – they don’t want an economy any more. They may decide they don’t want private companies any more.”

Chen cited recent losses in the Shanghai stock market, as well as plummeting prices of luxury apartments in the city.

“They are also controlling the movements of the population around the country using the pandemic [tracking app]. They are transferring energy consumption to heavy industry and military-linked companies,” Chen said.

“They don’t care about the economy — [they think] ordinary people will be fine if they get enough to eat,” he added.

A senior Chinese media executive, who declined to be named for fear of reprisals, said the supply and marketing co-op system, which used to run general stores in rural areas as late as the 1980s, was never abolished, even though the market economics instigated by late supreme leader Deng Xiaoping in 1979 eventually replaced it with commercial supply chains and distribution networks.

He said he expects the government to use it as a fall-back logistics and supply system to ensure emergency preparedness and food security in the event of worsening relations and further economic decoupling with the rest of the world, RFA reported.

Hunan-based current affairs commentator Li Fang said the government has been quietly restoring funding to the supply and marketing cooperatives in recent years, hiring new people, but without trumpeting the plan in the state-run media.

“They are making a quiet comeback, from the central government down to provincial governments, without much fanfare. Maybe once our relations with Western countries have completely broken down, the economy will decouple and go back to being the planned economy of days gone by,” Li said, RFA reported.

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