That’s just the standard Israeli media line, propaganda not worth paying attention to. However, Barak David was the first source to break the story of Iran preparing Operation True Promise II hours before the first missiles were launched, something he likely got straight from Israeli intelligence.

With sources like this you have to disregard what they’re saying on political matters, most of the time they just parrot their government’s propaganda.

Ultra leftists are often the first in line to push the Pentagon’s racist propaganda and claim it under the banner of Marxism. It’s truly anti-Marxist and rejects a sober view of the material conditions we have to work with in favor of an idealized puritism of how it should be if it wants to truly be legitimate.

Enjoy your time away, but I do hope to see you posting here again soon. I have really enjoyed and appreciated your commentary and perspective

The analyses are quite good, but as always, the problem for the Chinese leadership is how are you going to convince the local governments into getting onboard with these policies?

To understand why is this such a big issue, we need to briefly go through the Chinese economic history after Mao:

During the early days of reform and opening up, local governments were given a lot of autonomy to promote growth as centralized bureaucratic inefficiency had stifled the national economy.

Under this new central-local relationship, the local governments only had to pay a fixed amount of fiscal tax to the central government and were allowed to keep the rest of the revenues for themselves. This wasn’t so much of a problem in the early days when most provinces were still poor. However, soon the Southeastern coastal provinces were able to take advantage of their exporting capacities and grew very lucrative light manufacturing industries.

Their GDP growth would far surpass those of the other regions, and because the fiscal tax amount was fixed, these coastal provinces would soon accumulate large quantities of wealth, so much so that they began to exempt corporate taxes and initiated a wealth-sharing scheme with the corporations themselves. This only served to exacerbate the wealth disparity between the provinces as corporations would rather invest in those regions where they are allowed to enjoy tremendous benefits and wealth-sharing with the state governments.

By the early 1990s, due to the existing arrangement, the central government received only ~20% of the tax revenues while the rest of the 80% were left for the local governments to do as they please.

To remedy this, the Tax-Sharing Reform was implemented in 1994 that would have profound and unexpected consequences to the Chinese economy.

First, under this new tax reform, local governments would have to pay a much higher tax rate to the central government, and the central government would then re-distribute the wealth back to the local provinces as needed. 75% of value-added tax goes to the central government, while the local governments only get to pocket the remaining 25%.

Second, and more important, local governments are now responsible for their own finances and operating expenditures. This new policy relieved the central government from having to finance for large scale investments as well as the operating expenditures of the SOEs spread across the country. The local governments would now have to find their own means of financing these budgets.

Almost immediately, the Northeastern Three Provinces (Heilongjiang, Jilin and Liaoning) - the fortress of China’s heavy industries - began to panick. These provinces were where most of the heavy industry SOEs were located and heavy industries typically require huge amount of investment and budgets to finance their operations, especially when compared to the light manufacturing sector. Previously, they were able to rely on the central government financing and enjoyed relatively prosperous living standards, but now under the new tax-sharing scheme, they would be the ones to lose the most.

And so, lacking the means to finance themselves, the Northeastern Three Provinces did something so radical that would have a far-reaching consequence to this day - privatization.

Private capital did what private capital does best with their “reforms” of these SOEs and laid off millions of workers. To emphasize on how radical this meant: this would be the first time since the founding of the PRC that a Chinese worker would experience unemployment!

Between 1996-2002, nearly 60 million Chinese workers would lose their jobs. Economic recession fueled sky high rate of inflation, corruption was abundant as local officials would sell off state assets worth billions of yuan for cheap to private capitalists. It would take China joining the WTO in 2001 and turned itself into the world’s factory (while stripping off labor rights) to reverse the economic downturn.

However, this would not be the only consequence. The new tax-sharing policy has made the local governments realize that they can no longer rely on central government financing, and would begin to seek other non-tax revenues to replenish their coffers. And where could the local governments go to find another source of lucrative revenue? That’s right - selling and leasing land.

The seeds for a speculative property bubble had been sown since the late 1990s, and now all it needed was to wait for a new national policy to come into effect for it to blow up.

As the subprime mortgage crisis in the US led to a global financial crisis around 2008, the loss of export revenues would led the central government to carry out a new national policy - a 4 trillion yuan stimulus for infrastructure building.

The time has finally arrived. Local governments would take advantage of their land financing ability, and formed a local government-shadow banks/financial institutions-property developer triad. First, they borrow heavily from the financial institutions through shadow banks to invest in infrastructure building and new housing projects, hoping to drive up land prices that they can then sell off for lucrative sums of income. A speculative housing bubble was being fueled.

By 2015, the amount of hidden debt (i.e. debt borrowed through shadow banks) racked up by the local governments was so massive that the central government had enough of it. And the infamous 谁家孩子谁抱 (if this is your child, then you fetch them yourself) policy aka “we’re tired of bailing you out anymore and you’re now going to be responsible for your own debt problem” was implemented.

Before this, local governments were not allowed to borrow from banks, hence it had to go through shadow banks and ended up as “hidden debt”, but now the central government has conferred the local governments the ability to issue their own debt in public. As expected, the borrowing became even more reckless after this, as peer competition forced each municipal and provincial governments to invest even more in housing and infrastructure to drive up land prices. Truly surprisingly, the housing bubble imploded. Nobody could have seen this coming.

As you can see, a lot of the problems in China today stem from the conflicting and contradictory relationship between the central and the local governments, and the inability of the former to curb the recklessness of the latter.

lowering taxes on the poor

Only 60-70M people pay income taxes in China, because you need to make at least 5000 yuan/month (~$700 USD) in order to be eligible for paying personal income tax.

That’s ~5% of China’s total population, or ~9% of its total workforce. The rest of the 90% don’t even make 5000 yuan/month. How are you going to lower the tax more on the poor?

creating new SOEs and expanding the current ones

The local governments are running on a tight budget right now because of the overhanging debt and there are even SOEs that have delayed wage payments to their employees for months now. This is why Xi has recently doubled down to unswerving support for both the public and the non-public sector to reaffirm the party support for private capital.

The era of public sector driven growth is over. China’s economic model that adheres to neoclassical rules dictates that private (and foreign) capital has to come and save the economy.

more working benefits e.g vacation time, less working hours

Full agreement here. But this is going to cut into the corporate profits and many key sectors including EV and solar panels have been embroiled in price wars that have been driving down their profit to razor-thin margins.

This means the corporations have to exploit the workers even harder to squeeze out more surplus value just to survive. Of course, the government is well aware of this and has been calling to stop the price wars drive by cutthroat competition.

However, the main tax revenue of both China’s central and local governments is the value-added tax and followed by corporate income tax, which presents a dilemma for the government. They need the tax revenue from the corporations to maintain their operating expenditures (somebody has to run the city subway, rails, public utilities and infrastructure, you know), and so exploitative practices will continue until we have a system where the government finances do not rely on these sources of income.

(Not so) fun fact: the EV price war in China was started by Elon Musk’s Tesla in 2023 and has since driven the EV prices in China down so much that we’re looking at ~4-5 surviving companies at the end of this as profits are being cut to non-existent for most of the ~50 EV companies that are still hanging by the thread. In 2018, there were over 500 EV companies in China. The vast majority of them have and will eventually implode, causing more unemployment and job losses down the road.

more worker ownership culture e.g Huawei’s bonuses etc

You realize that Huawei employees get ZERO day of annual leave? Yes, zero.

Workers do not own Huawei. They have access to own “virtual shares” if they sign what’s called the “Striver’s Pledge”, which demands that you forgo many common benefits including annual leave in exchange for better overtime pay, virtual share ownership, and promotion opportunities.

Air defenses have shown themselves incapable of dealing with drone swarms, too… Iran has the capability to make and launch very large swarms in preparation for a missile strike, so they have the capacity to strike with a pretty good chance of success. Of course, this wouldn’t work with a pre-emptive strike, since the drones pretty much announce that a missile attack is coming.