China: State Inc.

[HOZ]

Since we have been talking about China and I came across this article. Read the whole thing. Very interesting to see how State Capitalism works and how is crushes competition and fosters corruption.

State Inc.

The most important new forces in global business are aggressive, wealthy, and entrepreneurial. But they aren't corporations: they're authoritarian governments.

[HotHotHeat]

State capitalism fosters corruption, allowing smaller circles of state-connected elites to control more wealth. In China, state dominance has meant that "princelings," relatives of leading Communist Party members, have gained control of some of the nation's most powerful companies. Even one Chinese government study of 3,000 of the nation's richest businesspeople admitted that a significant majority are related to top officials.

Now let's compare this to market capitalism. Don't get me wrong, I don't support China in their quest to become...Well...Whatever the hell it is they feel they're becoming, but the division of wealth in North America is growing as well.

The US Government recently demonstrated they are not concerned with people losing their homes, but are willing to jump in and approve a merger that would have bankrupted the 5th largest financial institution in America. Regulators (the FED) made it clear when doing this, that they do not feel they are responsible for the bad decisions of citizens, but are on the hook for helping out corporations. How in the hell is that a democracy?

My point is, if democratic Governments like the US are going to criticize the way the Chinese go about business, they'd better take a look in the mirror. Why was bailing out a large bank more important than people losing their homes? Were they worried about CEO's losing their jobs?

Authoritarian Governments are more worried about obtaining personal wealth, that's for sure. My concern is that I don't see how that's any different than the past eight years in the US. Tax breaks for the rich, widening gaps between rich and poor, the US's top 1% of the population now controls 27% of the wealth.

[Slava]

That is an interesting article. There have been some critical property ownership laws passed in China that are moving more towards a purely free market system though, and those are really not mentioned in that article.

Its interesting from a western perspective where some segments of the population want government out of business entirely (until there is a market crash, and then all want a bailout..but I digress). Funny that the system perhaps most dimetrically opposed to the free market is arguably just as successful. Begs the question what is the difference between a huge multi-national and and authoritarian regime?

[HOZ]

Originally Posted by Slava

Funny that the system perhaps most dimetrically opposed to the free market is arguably just as successful. Begs the question what is the difference between a huge multi-national and and authoritarian regime?

I actually read an article, don't remember where, comparing Government inefficiancy/ bureaucracy versus Corporate ones. Coorporations tended to emulate if not improve on the government examples. On the other hand they would reform quicker or die out to be replaced by more efficient corporations. Government bureacracy is like death and taxes.

[HOZ]

removed

[Option84]

Imo China is heading in a better direction than the US. Growing middle class > shrinking middle class.

[Ironhorse]

Originally Posted by HotHotHeat

Why was bailing out a large bank more important than people losing their homes? Were they worried about CEO's losing their jobs?

More campaign contributions and big business support for re-election? Influential "friends"?

[GirlySports]

Originally Posted by Option84

Imo China is heading in a better direction than the US. Growing middle class > shrinking middle class.

Middle class may be growing in China but it's still nearly non-existant.
There are still massive income differentials.

Only 5% of the total population makes an income of at least $10000 a year (the minimum likely needed to afford a significant level of consumption such as a mortgaged apartment, a car, a computer, and the occasional night out)

[JohnnyB]

Originally Posted by GirlySports

Middle class may be growing in China but it's still nearly non-existant.
There are still massive income differentials.

Only 5% of the total population makes an income of at least $10000 a year (the minimum likely needed to afford a significant level of consumption such as a mortgaged apartment, a car, a computer, and the occasional night out)

Yeah, on the whole China really still is phenomenally poor. Wherever that picture of the world at night with all of the light spots on it went (posted in another thread) is worth looking at just to see how China is a vast dark space except for a few bright spots. The country is nowhere near developed, and has a hell of a lot of growing pains on the road ahead.

[Lanny_MacDonald]

Great article HOZ. Interesting as hell. Looking at the economic and social troubles of the United States, then the closing gap between corporations and government, you have to wonder how soon that gap will be closed in America. Probably never to the extent of China or Russia, but possibly similar. I guess you could say that the United States has already taken the first step with the creation of the US Treasury and the IRS. Both are private institutions, run like corporations, yet are key to the government and revenue generation to sustain government. Interesting stuff.

[CaptainCrunch]

Originally Posted by JohnnyB

Yeah, on the whole China really still is phenomenally poor. Wherever that picture of the world at night with all of the light spots on it went (posted in another thread) is worth looking at just to see how China is a vast dark space except for a few bright spots. The country is nowhere near developed, and has a hell of a lot of growing pains on the road ahead.

Most of their money goes into buying advanced weapons systems in order to close the military technology gap with the U.S.

China has a vast army, a huge airforce, and a puny Navy, but in terms of capabilities its overshadowed by the American's.

However the American Military capability has been bled pretty dry by the multiple engagements that have overstretched them badly.

I think I read somewhere that China is frantically trying to upgrade their Submarine capability in terms of quietness and sensor capability.

[mmanzz]

Fromm HotHOtHeat

"My point is, if democratic Governments like the US are going to criticize the way the Chinese go about business, they'd better take a look in the mirror. Why was bailing out a large bank more important than people losing their homes? Were they worried about CEO's losing their jobs?"

Not sure where your going there, the article is from the Boston Globe, not the US Government. Are you saying that the US would shutdown all internet access and have 100 percent control of all media outlets like the CCP does(no news from Tibet in the last 48 hours). Please put some perspective into your arguments Mr. Heat.

The struggle for power in most of the stronger decentralized western nations is always visible to the outside world and I agree its not always very nice! What is far more dangerous is an appearance of calm with implied terror and the will to use it, that is unquestionably China today.