What’s the reason for the second enlistment?

In other words, China’s economy is struggling.

YOU SANG-CHULThe author is the head of the China Institute of the JoongAng Ilbo and CEO of China Lab. Articles recommending a second enlistment in China have been published in state-run media and social media, including the People’s Daily. The motive is controversial, as some think it is aimed to expand military power ahead of a reunification war to liberate Taiwan, while others say it is to address youth unemployment. The United States is suspicious. Former U.S. Deputy Undersecretary of Defense David Trachtenberg interprets the second enlistment as a part of China’s strategic mobilization.

However, Wei Jingsheng, a Chinese dissident living in the United States, views it as a solution to resolve unemployment rather than a military buildup. He says China is not short of troops. Also, the second enlistment is across the Army, Navy and Air Force, not necessarily reinforcing any specific force.

China’s youth unemployment was at a record high last year at over 20 percent, and therefore, the purpose is more to ease unemployment.

In the same context, some Chinese universities are extending their master’s programs by one year. Xi’an International Studies University and South China Normal University announced that some of their master’s programs will take three years instead of two. As many young people cannot find a job after graduating with a master’s degree, the universities offer one more year at school as a “grace period.” According to the Hong Kong newspaper Ming Pao, 23 of the 31 provinces, cities and autonomous regions in China failed to meet the first-half GDP target set at the beginning of the year.

In other words, China’s economy is struggling. What happened? In my opinion, the critical factor was the “exit of private companies” in China in 2018. At the time, online posts stressed the need for the private economy to gradually exit as it accomplished the duty of helping the development of the public economy. Since then, private companies in China, which were the symbols of reform and opening, have lost their vitality, starting with the exit of Alibaba’s Jack Ma.

What do private companies mean in China? They are often explained by “56789.” Private companies account for more than 50 percent of China’s tax revenue, 60 percent of the GDP, 70 percent of technological innovation, 80 percent of urban employment, and 90 percent of the number of companies. It is natural that the Chinese economy is facing difficulties as private companies, which used to create jobs for more than 80 percent of urban workers, have lost vitality. Domestic demand cannot be stimulated when people can’t find a job.

As a result, Chinese authorities are struggling with the recent “Private Economy Promotion Act,” but it seems inadequate to change the minds of Chinese entrepreneurs.