The “Mary McCarthy” Rule for Discussing the PRC’s Economy and Economic Data… and the WEF

While there is no shortage of threats to the United States, many of these are transparent for those with the eyes to see, such as the People’s Republic of China‘s (PRC) military threats. Others are far more subtle, such as the World Economic Forum (WEF). Occasionally, events capture the intersection of these threats, like the WEF’s annual meeting in Davos, Switzerland, which was one of those moments where the threat to the U.S. could be seen clearly.

WEF Chairman Klaus Schwab, true to form as the Chinese Communist Party’s indefatigable BFF, expressed his confidence in the PRC economy. That was curious, given that the PRC’s economy is tanking. He marveled that the CCP will find new “patterns of economic growth,” apparently without irony. The fact is, the PRC is undergoing a real estate collapse that is far worse than the 2008–2009 crisis in the U.S. According to multiple sources, nearly every public developer in the PRC is bankrupt or going bankrupt, brought about because 70% of Chinese wealth is invested in real estate. In addition, the PRC faces a banking crisis. Xi’s banks are 3.5 times more leveraged than U.S. banks were going into 2008. Additionally, there is a local government debt crisis, which is a $13 trillion USD-equivalent drag on the marketplace where upwards of 80% of debt is in default.

In addition, the PRC’s economy is in a major downturn due to anemic economic growth, not only because of these grave problems but also because of profound structural difficulties in the economy, demographic decline, U.S. pressure on its tech sector, investors concerned about Chinese Communist Party influence, and the viability of alternative markets like India, Indonesia, and Vietnam. The legacy of the COVID-19 pandemic and the end of its “zero COVID” policy are also having a lingering impact.

Despite these well-known problems, and they are likely to be worse, the CCP lies about the true state of its economy, so much so that we propose the “Mary McCarthy” rule when anyone discusses the PRC economy or PRC economic statistics. In a 1979 Dick Cavett television interview, novelist and political activist Mary McCarthy dismissed fellow writer Lillian Hellman when she said: “everything she writes is a lie, including ‘and’ and ‘the.’” So too it is when PRC or other officials tout the strength of the PRC’s economy based on their data.

Last year at Davos, Chinese Vice Premier Liu He’s address was striking for its dishonesty and prevarication. In January 2023, Liu argued, in essence, that “China is back.” He stated that China welcomes the return of foreign investment. He contended that its economy should be viewed by investors with great optimism due to its reforms and the end of an emphasis on ideology as advanced by Xi Jinping rather than economic prosperity. He also submitted that China’s economic growth in 2023 would return to “normal,” that China was a supporter of the “international order,” and of the environment.

Every word of that was a lie, including “and” and “the.”

This year, Klaus Schwab and the rest of the world’s global elites sat there in rapt attention as Chinese Premier Li Qiang made a five-point proposal on rebuilding trust, strengthening cooperation, and promoting global economic recovery. The performance by Schwab and his WEF comrades was eerily reminiscent of the 400 Wall Street and Silicon Valley billionaires and millionaires who gave Xi Jinping a standing ovation in San Francisco last November.

What is worrisome about these same elites who sat there and soaked up Premier Li’s propaganda is that they walked out of the speech by Argentina President Milei who presented a message that more resembled Thomas Jefferson and the founding document of the Republic, the Constitution, than the neo-Marxist propaganda promoted by the WEF. This year’s WEF theme was about reestablishing “trust” by focusing on mis/disinformation.  However, the WEF’s The Global Risk Report 2024 failed to refer to the one nation that does not get called out for promoting mis/disinformation—the PRC. That is a rather big and curious omission and compels us to ask, if the PRC was left out, what exactly was in that report.

While Schwab and others sat through CCP Premier Li’s whoring speech for foreign money, the fact remains these elites care more about retaining power than sustaining the values and principles espoused by the speech by Argentina President Milei who is, in actuality, “a free-market advocate who champions the power of the private sector, entrepreneurial initiatives, the vital benefits of competition, and a streamlined government.”

The choice is clear; Milei framed the issue perfectly as being between communist collectivism or the historic supremacy of western civilization and the rights of the individual. The Heritage Foundation’s President, Kevin Roberts, expressed a similar sentiment when he argued that the WEF’s time has passed. He noted that the WEF and its acolytes are a threat to freedom and liberty. The threat of communist collectivism, advanced not only by the CCP but also by the WEF, is a direct threat to the U.S. The CCP is increasingly overt in its efforts to foist communism on the global community. The powerful addresses made in favor of freedom by Milei and Roberts’ offer the opportunity for Americans, and the rest of the world, to perceive perhaps for the first time that the more concealed threat from the WEF must be rejected. Once perceived clearly, the vision of the future provided by Milei and Roberts at WEF is a proven and better future for the global community of individual nations than that provided by the WEF. Moreover, the deeper issues and choices Milei and Roberts’ have advanced are not only being made on the slopes of Davos, but also in the 2024 presidential election campaign.

The “Mary McCarthy” rule must be applied by Americans to the Chairman of Davos, the CCP, and all others touting the benefits and necessity of trade and investment in the PRC. The pursuit of veracity requires the application of a simple formula as far as the CCP and WEF leadership are concerned. Take every statement made by PRC officials, from Xi Jinping on down, or Klaus Schwab, apply the rule, and you will have the truth.

James E. Fanell and Bradley A. Thayer are coauthors of the forthcoming Embracing Communist China: America’s Greatest Strategic Failure.

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About James E. Fanell and Bradley A. Thayer

James Fanell is a government fellow at the Geneva Centre for Security Policy, a retired captain in the U.S. Navy and a former director of intelligence and information operations for the U.S. Pacific Fleet. Bradley A. Thayer is a Founding Member of the Committee on Present Danger China and the coauthor with Lianchao Han of Understanding the China Threat.

Photo: Chinese Premier Li Qiang attends the World Economic Forum WEF Annual Meeting 2024 and delivers a special address to the event in Davos, Switzerland, Jan. 16, 2024. (Photo by Rao Aimin/Xinhua via Getty Images)