China’s Inefficient and Unsustainable Central Planning

November 01, 2023

by Antonio Graceffo Mises.org

Over one hundred years ago, Ludwig von Mises wrote about the impossibility of successful rational economic planning under socialism. Yet China is still trying, even while its blend of markets and socialism results in shortages and surpluses. This article examines three contemporary initiatives spearheaded by Xi Jinping, each marked by an inherent problem: food insecurity, the aging crisis, and the real-estate bubble. Each problem was created by legislation and is being made worse by further legislation enacted to correct the problem.

Food Scarcity

China is a net food importer, capable of producing only 66 percent of the food it needs. The country has less than half as much farmland as the United States and four times the population. In order to increase food security, possibly in preparation for war, Xi Jinping has ordered some public parks to be razed and planted with food. Meanwhile, he has also set a green agenda, incentivizing local governments to plant trees. To meet quotas for both objectives, some local governments are cutting down forests to make way for farmland while destroying other assets to plant trees.