Chinese Central Committee Official and CEO of AVIC Blames Equities Market Crisis on ‘‘‘U.S. Economic Warfare‘
In a high-profile, widely-published interview carried by several Chinese media outlets last week (originally appearing on July 17 in China Aviation News), Lin Zuoming, a prominent member of the Communist Party‘s Central Committee as well as President and CEO of the Aviation Industry Corporation of China (AVIC), blamed the recent Shanghai and Shenzhen stock market crash on an economic warfare strategy being waged by the U.S. against China. According to Mr. Lin, the U.S. is actively working to undermine the Chinese economy and cites two pieces of ‘‘‘evidence.‘ The first was a 300-point market drop on June 19, a day after the Hong Kong Legislative Council vetoed a Beijing-backed election proposal. The second was another sharp decline in the Chinese equities market on June 29, the same day that the Asian Infrastructure Investment Bank agreement was signed.
Mr. Lin accuses the U.S. of waging such an economic war with the intent of toppling Chinese Communist Party rule through the destabilization of the Chinese economy and financial structure. He also asserts that the U.S. has targeted other rising Asian powers in the past, notably Japan, with similar acts of economic aggression. “It is evident, without any doubt,” Mr. Lin said in the interview, “that we are facing an economic war … [whose objective] is to lure the Chinese masses into doubting the Chinese government … [and] to topple the Chinese Communist Party’s ruling position, ultimately leading to the total collapse of China’s economy. Therefore, the economic war ignited in the A Share sector of the stock market is directly targeted at our five-starred red flag.”
Despite the highly inflammatory and fanciful nature of these accusations, the Chinese state-run media has fulsomely backed Mr. Lin‘s statements at Party instructions. The Guanming Daily, for example, put out an editorial that questioned Lin‘s assertions, asking for more specific evidence pointing to U.S. involvement in the recent market crash. Mr. Lin responded in the Chinese government-run Global Times writing ‘‘‘It is beyond belief that there are still people who are asking ‘‘‘Where is the enemy‘‘
Such comments by a powerful political figure and CEO of China‘s largest aviation and defense state-owned enterprise (SOE), with the expressed approval of the Chinese government, officially validates an effort to shift the blame for that government‘s failed market manipulation efforts and panicked overreactions onto the U.S. In an RWR Advisory Group assessment dated July 8, we predicted this deliberate ‘‘‘misdirect‘ stating, ‘‘‘If China can find a way to allocate some of the blame for the [equities market] crisis to Western manipulation, short‘selling or other such conspiratorial behavior, it probably will.‘
Finally, it is ironic that this same SOE headed by Mr. Lin successfully acquired Minnesota-based Cirrus Aircraft in 2011 for a reported $210 million. Cirrus, now 100 percent-owned by the Chinese government, is the world’s second largest single-engine general aviation aircraft maker after Cessna. AVIC is widely regarded as an integral part of the extensive network of Chinese SOEs controlled by the People‘s Liberation Army.