It Could Happen Here - The Chinese Economy Demystified: The State Owned Enterprise on Stitcher
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Mia discusses the emerging expert consensus on the Chinese economy and how the actual structure and function of Chinese State Owned Enterprises confounds and refutes it. You can now listen to all Cool Zone Media shows, 100% ad-free through the Cooler Zone Media subscription, available exclusively on Apple Podcasts. So, open your Apple Podcasts app, search for “Cooler Zone Media” and subscribe today! http://apple.co/coolerzone See omnystudio.com/listener for privacy information.

  • China's economy is 40% state-owned – compare Lenin's NEP period, 70-77%

  • Soviet state-owned enterprises were designed to make a thing (like the water service, like the post office). Chinese state-owned enterprises are different: they are profit-making players in the market.

  • China has enterprises owned by local and provincial government – sometimes they compete with each other! So the state competes with itself on the market!

  • They can sell 49% of their stock on the stock market, even to foreigners.

  • The State-owned Assets Supervision and Administration Commission of the State Council (SASAC) is an institution directly under the management of the State Council. It is an ad-hoc ministerial-level organization directly subordinated to the State Council – http://en.sasac.gov.cn/sasacaboutus.html – It's like the Chinese statist Berkshire Hathaway. In theory, it can control a company as much as a shareholder can.

  • Li-Wen Lin & Curtis J Milhaupt write about Chinese corporate structure. They say when direct state industries (like post offices or Soviet bureaux) turned into profit-seeking state-owned things and essentially bought the party off, made it rich.

  • AssortedBiscuits [they/them]
    ·
    1 year ago

    People nitpick or otherwise air out various grievances with the PRC. They fail to look at the big picture:

    1. The PRC once had a GDP per capita lower than Ghana. It obviously has a far higher GDP per capita while Ghana is far less fortunate. Why is that? Are Chinese capitalists simply smarter and had bigger brains than Ghanaian capitalists? Or was there something more at play?

    2. The PRC managed to avoid every single recession that hit everyone else, including the Covid Recession and the Great Recession. They even managed to dodge the 1997 Asian financial crisis. I guess Chinese capitalists are not only smarter and more big brained than Ghanaian capitalists but also smarter and more big brained than almost every other capitalist in the world. The closest thing to a Chinese recession is stock market turbulence and "our economy grew less than projected during Covid."

    The fundamental flaw that critics of the PRC have is they believe that capitalism is somehow efficient or efficient enough to develop the productive forces of a country when capitalism is actually extremely inefficient. The main reason why Western countries were able to industrialize sooner had more to do with slavery and stealing land from Indigenous peoples than their economic system. This is why Tsarist Russia lagged behind Western countries. It lacked both oversea colonies and didn't have an army of slaves to provide near-free millions of hours of labor-time. So, when the PRC economically outperforms another country like India, they inevitably try to rationalize this by saying the PRC just did capitalism better than India or go to full-on cope mode by denying the PRC's economic progress.