http://www.heritage.org/testimony/chinese-state-owned-enterprises-and-us-china-economic-relations
"The discussion of SOEs has been undermined by a fundamental error: the conflation of restructured, share-holding firms with the truly private sector. Share-holding SOEs are manifestly not private actors and assessments of the corporate sector that assume so are fatally flawed from the outset. The origin of this mistake is historical. As quasi-state entities emerged and proliferated, it was clear some sort of separate treatment was necessary and the concept of “non-state” was created. This was never intended to indicate “private”—quite the opposite: it was meant to signify that the creation of corporate forms quite different from SOEs could occur without privatization and its ideological pitfalls.
The meaning of “non-state” is very well understood by the Chinese government. The (sometimes willful) misunderstanding outside China rests on two shaky pillars. The first is a mis-rendering of “non-state”—where the PRC sees the opposite of state as non-state, many foreign observers see the opposite of state as “private” and simply re-label accordingly. The second is more sophisticated and based on the share-holding change.
Neither specification of share-holders nor sale of stock by itself does anything to alter state control. The large majority of firms listed on domestic stock markets are specifically designated as state-owned. The sale of small minority stakes on foreign exchanges could be construed as recasting mainstays such as CNPC (through its list vehicle PetroChina), China Mobile, and Chinalco as non-state entities of some form. However, they are still centrally directed SOEs, as explicitly indicated by the Chinese government.
More broadly, firms are defined by inputs and outputs. Most Chinese firms sell in a market environment that is unrecognizably different from the operating environment in 1975 and sharply different even from the one in 1995. In this sense almost none of them are still traditional Chinese SOEs. On the output side, however, the requirement that the state predominate in so many sectors is meant to sharply confine competition, so that SOEs operate within markets but they operate primarily within state-controlled markets. This regulatory protection is the most powerful subsidy many SOEs receive.
The input side also continues to distinguish SOEs clearly from foreign or domestic private companies. Production inputs comprise labor, capital, land, and other physical resources such as energy. For SOEs, including those which have completed share-holding reform, all of these show the state’s overwhelming role. It is routine for Chinese officials to bounce back and forth from corporate to government posts at the behest of the Party, no less so at China Mobile and the like than anywhere else.
In stark contrast to private firms, which often cannot buy land at any price, SOEs have immediate call on free land, which is all technically owned by the state. The main barrier to SOEs acquiring land is other SOEs. SOEs as a matter of course also receive hefty power and other input subsidies not available to genuinely private firms.
As for capital, every aspect is dominated by the state. All large financial institutions are state-owned, the People’s Bank assigns loan quotas every year, and, within these quotas, lending is directed according to state priorities. Interest rates are also controlled, and last year real borrowing costs were barely above zero.
Conveniently, then, loan quotas and bank practices strongly inhibit non-state borrowing. Securities markets are also dominated by the state. As an illustration, the volume of government bond issuance utterly dwarfs corporate bonds and is growing relentlessly, crowding out private firms."
http://wiki.p2pfoundation.net/Role_of_the_State_in_Chinese_Economic_Development
The popular image presented in western media is that the State Owned Enterprises, SOEs, are the last remaining dinosaurs of socialism in China, soon to die out. But the industries of the “rust-belt” stubbornly refuse to do just that. A discussion paper with the title Explaining the Persistence of State Ownership in China7 shows that in the past 10 years the number of SOEs has declined dramatically from 84 397 to 29 229, but the share of the SOEs in the industrial sector has hovered steadily around 33-34 percent, rising slightly in 2003 and 2004 to 35.5 and 37.0 percent respectively. Considering that industrial production as a whole has increased a lot during period, this actually represents a big expansion of the SOEs. Employment in SOEs fell by 40 percent from 1998 to 2003 at the same time as they maintained their share of GDP.9 This represents a considerable increase of productivity in the SOEs, especially considering that GDP leaped forward during this period. Nineteen Chinese companies, all of them SOEs, are in Fortune Global 500 list of the largest companies in the world in 2005.
The SOEs completely dominate the capital intensive industries. It is difficult to see how Chinese capitalists will ever be able to compete with the resources of the state in these areas. Not even foreign multi-nationals, with all the resources they have at their command, are able to do so. Even though managers of state firms have some independence in deciding how to dispose over the surplus created by the workers in their industries that does not turn them into capitalists. As Trotsky remarked: “The biggest apartments, the juiciest steaks, and even Rolls Royces are not enough to transform the bureaucracy into an independent ruling class.”
To fully understand the role of the state sector of the economy it is not enough to just look at what proportion they have of GDP, nor the degree of concentration. It is also important, if not more so, to look at what proportion of investments are channelled through the state sector, because investments are the driving force of the economy. And under capitalism, through the mechanism of the tendency of the rate of profit to fall, the cause of the boom-slump cycle. Fortunately, statistics about fixedasset investments (investments in buildings and machinery) are also much more accurate and uncontested compared to GDP statistics.
They are divided into four periods.
State Investments as Percentage of Total Investments
1981 – 1989 (the “roaring eighties”) 78.6 percent
1990 – 1992 (post-Tiananmen Square) 81.2 percene
1993 – 2001 (the restructuring of the SOEs) 86.7 percent
2002 – 2005 (post-reconstruction) 85.3 percent
These figures are truly astonishing. They show not only that state the plays an absolutely decisive role in the economy, but also that state investments as a proportion of all investments have increased substantially since the eighties, only to fall back slightly between 2002 and 2005. This confirms that rather than moving towards capitalism in the nineties, China moved away from it. The present financial crisis will certainly raise the state’s share of investments again, possibly to its highest level since 1978
https://www.workers.org/2016/03/21/china-the-u-s-and-global-warming-part-3/
The U.S. website mining.com, citing Chinese sources, reported on Jan. 21 that “Beijing plans to close about 4,300 coal mines, remove outdated production capacity of 700 million tons and redeploy around 1 million workers over the next three years. … China has eliminated about 560 million tons of coal production capacity and closed 7,250 coal mines in the last five years.”
This was updated in a China Daily report on Feb. 2 that Beijing “has promised to spend 100 billion yuan ($15.25 billion) a year for up to five years to address overcapacity in sectors such as steel and coal, while local governments will contribute another 100 billion yuan. … The coal industry alone will get around 140 billion yuan, and 1.8 million employees in the sector will be relocated.”
What’s important here, from our point of view, is that China is committing very large sums to relocate the affected workers.
https://www.workers.org/2013/03/01/obamas-energy-choice-shill-for-shale-gas-industry/
Two things there should stand out: one is that China, despite its abundance of coal, is steering its economy away from coal because of the environmental effects it has. The other is that almost 2 million workers who will be out of a job will be given jobs in other industries. If any workers do become unemployed as part of this process, it'll be due to inefficiencies in the state apparatus in relocating them.
What about the US?
"During his Feb. 12 State of the Union address, Obama claimed that climate change was a main concern of his second term. He even suggested he would consider executive actions if Congress failed to regulate carbon emissions. However with his next breath, Obama promised to encourage more drilling for natural gas, in essence giving a wink and a nod to industry executives.
His consideration of Moniz for energy secretary confirms this. Moniz’s study promotes the use of shale gas as an alternative to fossils fuels like coal, while seriously downplaying the question of methane release during fracking. The big industry lie is that natural gas is better for the climate than fossil fuels like coal or oil.
Studies have shown that heavy use of fracking actually promotes greater fossil-fuel reliance, while effectively putting investment in renewable technology on the back burner."
Across the Pittsburgh Metropolitan Statistical Area, which locally includes Fayette, Washington and Westmoreland counties, mining and logging jobs dropped from 11,500 to 9,800.
That helped raise the seasonally adjusted unemployment rate for the entire seven-county area from 5.4 percent to 5.8 percent over the 12 months ending in April. The rate rose during that time from 7.5 percent to 8.7 percent in Fayette, 5.5 percent to 6.8 percent in Washington and 5.4 percent to 6.3 percent in Westmoreland.
Every area county showed a seasonally adjusted increase in the size of the workforce and the number out of work, according to figures provided by the Department of Labor and Industry."
http://crisiscritique.org/wp-content/uploads/2014/01/Boer_Socialism.pdf
https://philosophersforchange.org/2014/05/15/taking-notes-36-is-china-communist/
http://dschwei.sites.luc.edu/ChinaCap.GSA.pdf
https://communistuniversity.wordpress.com/2014/05/05/is-china-sociaslist/
https://robertlindsay.wordpress.com/2012/04/24/china-is-not-as-capitalist-as-you-think/
http://www.china.org.cn/opinion/2012-10/14/content_26776253.htm
Property market bubbles? What property? Private property, for sure, but it’s not real property. All real estate is 100% owned by the people of China. There is not one square metre of private land in the People’s Republic. You can pay for up to a 70-year usage lease on a piece of land and develop it, but no one can buy the dirt.
Private enterprise? It is thriving for sure, but is heavily concentrated in small and medium sized enterprises (SMEs), that complement and do not seriously compete with the state sectors of the economy. The private sector is especially the many millions of mom and pop and solo businesses that blanket the country.
Free markets? There is not one private bank in China. They are all people powered. The world’s largest bank, Industrial and Commercial Bank of China (ICBC) is state owned of course, as well as three other global Top Ten banks: #1 (ICBC), #5 China Construction Bank (CCB), #9 Bank of China (BOC) and #10 Agricultural Bank of China (ABC).³ Ditto all insurance companies, the Shanghai and Shenzhen stock and precious metals markets. Same goes for all major media outlets, especially television, radio and print media, although everyone has heard about Beijing being the new “Hollywood of the East”, which is mostly private sector.
Unfettered capitalism? Get outta here! Almost all major economic sectors in China are dominated by state-owned enterprises (SOEs). Everything from airlines/avionics to aerospace to chemical industries, from construction to maritime shipping to mining, from nuclear energy to petroleum to railways, from steel to telecommunications to utilities, over 100 key sectors have a huge, people-powered footprint. Many are some of the world’s biggest corporations. Not only that, but they are, like the aforementioned state banks, very profitable and well-run, contrary to relentless Western propaganda.
Privatisation? You have to look beyond the deceptive headlines. Baba Beijing caps the sale of SOE stock to the public, at 30%. Furthermore, there are strict controls on making sure someone doesn’t try to control what’s offered. The ownership of the shares has to be spread out. Most of these stocks are owned by Chinese citizens (A shares), but some are on offer to foreigners (B shares). Interestingly, more and more Chinese companies, including SOEs, are doing IPOs in Western stock markets, as part of their 30%.
Reforms? Ha-ha-ha, the joke’s on you! Baba Beijing will never sell off the people’s SOEs. It knows that the citizens’ social harmony and economic stability are rooted in its ability to macro-manage and long term (Five-Year) plan the country’s direction, via the 100% ownership of all the real estate (Marxism’s controlling the means of production), as well as the key industries and sectors. The CPC will continue to create wealth, under the rubric of socialism with Chinese characteristics, by borrowing some capitalist trappings. But it is only transitional. Deng Xiaoping said it many times and it continues going unheard in the West, that the goal is to follow the Marxist economic path to a wealthy communist society.
http://www.greanvillepost.com/2016/10/18/so-called-communist-china/
In short, the expansion of the private sector has been robust, and in the area of industry, the private sector in China is approaching the size of the measureable state sector in many respects. At the same time, it would be a mistake to view these incomplete data and conclude that the pure private sector accounts for the majority of China’s economy. The observable SOE sector under reasonable assumptions accounts for nearly 40 percent of China’s economy. Given additional information on the prevalence of SOE ownership in China’s capital markets, anecdotal and observed data on the prevalence of SOE ownership among LLCs and other
ownership categories, and the SOE role in round‐tripped FDI, it is reasonable to conclude that by 2009 nearly half of China’s economic output could be attributable to either SOEs, SHEs, and other types of enterprises controlled by the SOEs indirectly. If the output of urban collective enterprises and the government‐run proportion of TVEs are considered, the broadly defined state sector likely surpasses 50 percent.
"This conclusion goes beyond all the published estimates we have reviewed, but is consistent with the opinions of knowledgeable individuals currently dealing with Chinese enterprises in policy and business settings. This conclusion is likely startling in view of prior estimates that the private sector in China accounts for 70 percent of GDP. But such a dominant private role is inconsistent with socialism with Chinese characteristics as articulated by the CCP. For example, the government‐run People’s Daily provides this definition of socialism with Chinese characteristics as used in 17th People’s Congress: “On its economic fronts, China sticks to a multi‐ownership‐oriented basic market economic system, with the public ownership in the dominance.”36 This thinking is also memorialized in China’s five year plans.37 Through 2009, at least, the size of the public sector dovetails with the CCP’s vision.
https://www.uscc.gov/sites/default/files/Research/10_26_11_CapitalTradeSOEStudy.pdf
http://www.xinfajia.cn/12967.html
In my personal opinion, the best way to answer questions like this is to examine closely China's socialist revolution and the transformation of China from a semi-feudal semi-colonial country to a socialist one, and come to a full Marxist understanding of what form of ownership is dominant in China. The goal of China's New-Democratic Revolution was to overthrow the big three mountains: "imperialism, feudalism, and bureaucrat-capitalism" and to establish a people's democratic dictatorship based on the alliance of the working class and the peasants.
Generally speaking, socialist relations of production do not come into being under capitalism. In the case of China, though, the seeds of these relations came into being in the liberated areas of China, in the revolutionary base areas. This included economic sectors under state and cooperative ownership which expanded during the war of liberation. Governments in the liberated areas confiscated the property of bureaucrat-capitalists and placed them under state ownership.
After the revolution, the socialist transition began. This period lasted from the foundation of the people's republic in 1949 to 1956. During this period the "Three Transformations" took place, which was the socialist transformation of agriculture, capitalist industry and commerce, and handicraft industry.
In China the socialist public ownership is the mainstay of the economy, the dominant mode of production. However China has diverse forms of ownership which develop side-by-side.
In socialist China, the forms of public ownership of the means of production include the ownership by the whole people, collective ownership, and other forms of public ownership, as well as the public part of the mixed ownership sector. Along these forms, the ownership by the whole people and collective ownership play the dominant role.
The economic sector under the ownership of the whole people is the strongest economic and technological power in China today. It controls the national economy and dominates the major economic resources and natural resources of China.
At this present stage of socialism, the primary stage, ownership by the whole people refers to state ownership.
The economic sector under collective ownership is divided into the rural collective economic sector and urban collective economic sector.
There are also joint-stock companies, economic conglomerates, and enterprise groups which are under the system of ownership by the whole people or collective ownership.
The sector of the economy under mixed ownership usually takes the place of Sino-foreign co-operative businesses including Sino-foreign joint ventures and Sino-foreign contractual businesses, and that of the economic sector which is joint public-private.
In China state-owned enterprises provide the necessary public products for the whole society to meet the growing material and cultural needs of the people. The state-owned enterprises play a leading role in such fields as coal, petroleum, electricity, and steel. They provide 70% of China's coal, 92% of its petroleum, 91% of its electric power and half of its ferrous metal. They supply such basic services such as railway transportation, aviation transportation and maritime transportation.
These state-owned sectors are the pillars of China, without them China would fall and polarization would become extreme.
China is enacting fundamentally correct policies which are the requirements of the primary stage of socialism, where developing the productive forces is required to bring China into the new era and advance socialism to a higher stage. The non-public sectors are subordinate to the socialist public sectors and play a supporting role in building socialism. Despite being very profitable and productive, they are under the thumb of the Communist Party and cannot function without its approval.
http://www.invent-the-future.org/2016/12/from-the-chinese-marxist-viewpoint-an-interview-with-professor-deng-chundong/
https://www.loc.gov/law/help/real-property-law/china.php
https://mobile.nytimes.com/2017/02/12/opinion/china-the-party-corporate-complex.html
China’s many high-profile moves to open up its markets in recent years turn out to have been half-hearted, if not intentional hoodwinking.
Despite the much-ballyhooed dismantling of the more than 2,000-year-old state monopoly on salt, all salt producers are still state-owned. Foreign asset-management companies are now allowed to operate wholly foreign-owned businesses in China, but only in deals with institutional investors and private-equity funds, not retail investors, a much bigger piece of meat. Partly to steady the renminbi, Beijing no longer allows Chinese citizens to take up to $50,000 a year out of the country, and it has recently restricted the repatriation of capital by foreign firms like Deutsche Bank.
Hyper control, interventionism, currency manipulation — no, China is not a market economy. But it’s worse than that: The Chinese Communist Party (C.C.P.) has systematically infiltrated China’s expanding private sector and now operates inside more than half of all nonstate firms; it can manipulate or even control these companies, especially bigger ones, and some foreign ones, too. The modern Chinese economy is a party-corporate conglomerate.
https://www.cnbc.com/2017/02/27/chinese-wages-rise-made-in-china-isnt-so-cheap-anymore.html
Turns out that "made in China" is not so cheap anymore as labor costs have risen rapidly in the country's vast manufacturing sector.
Chinese factory workers are now getting paid more than ever: Average hourly wages hit $3.60 last year, spiking 64 percent from 2011, according to market research firm Euromonitor. That's more than five times hourly manufacturing wages in India, and is more on par with countries such as Portugal and South Africa.
As China's economy expanded at breakneck speed, so has pay for employees. But the wage increase has translated to higher costs for companies with assembly lines in China. Some firms are now taking their business elsewhere, which also means China could start losing jobs to other developing countries like Sri Lanka, where hourly factory wages are $0.50.
http://socialisteconomicbulletin.blogspot.com/2017/07/china-faces-slower-western-growth-than.html
https://www.forbes.com/sites/wadeshepard/2017/07/25/xi-jinping-to-chinas-private-sector-go-home-the-belt-and-road-is-not-for-you/#110bd48817fb
Between 2005 and 2011 whilst the US squabbled China increased health insurance coverage from 50 % to 95 %https://t.co/vGnihBn12F pic.twitter.com/kr1uIS6Kdj
— Adam Tooze (@adam_tooze) July 27, 2017
https://www.economist.com/news/leaders/21725295-bad-china-and-world-chinas-state-enterprises-are-not-retreating-advancing
Mr Xi remains well aware of the need for reform; on July 15th he repeated warnings about indebtedness at SOEs. But only some of the initiatives rolled out on his watch are aimed at slimming the state sector. Two of them point in another direction entirely. One is the merging of competing SOEs. The arm of the government responsible for looking after these firms has engineered mergers of ports, railway-equipment makers and shipping companies; a vast chemicals combination is planned. Such deals often seem intended to spawn national champions, not to pare overcapacity.
The other disturbing trend is the proliferation of “state capital investment and operation” companies (SCIOs). The state has thus far tended to dominate in heavy industries, transport and energy, leaving private firms to forge ahead in technology. SCIOs will, in part, function like state-run private-equity funds whose remit is to extend the reach of government. Provincial governments have published plans to push funds into areas such as biotechnology and cloud computing...
Previous leaders have managed the tension between a liberalising economy and an obsession with stability through a mix of rapid growth and political repression. Mr Xi does not want to change that recipe. But he is doing something more radical: reversing the state’s retreat from the economy.
Over the past few years the state sector has, by several measures, stopped shrinking. There are still more than 150,000 SOEs in operation, two-thirds owned by local governments and the rest under central control. Private firms are much more productive, but state firms gobble up a disproportionate share of resources. They take about half of all bank loans and are the main culprits behind China’s big increase in corporate debt. Since 2015 investment by SOEs has grown faster than private-sector investment, reversing a decades-long trend
...
The fear is that the reforms, taken together, not only fail to solve the most pressing problems, but might even be aggravating them. SOEs are getting bigger, not smaller; their management has become more conservative; and their deficiencies are beginning to infect the economy more widely.
...
At a meeting on SOEs last October he devoted his comments not to reform but to the necessity of strengthening the party’s grip. “The party’s leadership of SOEs is a major political principle, and that principle must be insisted on,” he said.
People who work in and with SOEs report a palpable change in atmosphere in recent years. “Party officials are not the same as the technocrats who used to run the SOEs,” says a top banker. “They don’t take risks. Doing nothing is what’s safe.” Some of the most capable employees are leaving SOEs altogether. Political education, always a part of life in state firms, has been stepped up. One manager who recently quit a big state bank said that a campaign exhorting workers to study the party constitution had been unusually intense.
At the same time the government has capped pay for senior executives, concerned that they were getting more than government employees of equivalent ranks, stoking resentment. Yet on an international basis, SOE bosses are dramatically underpaid. The president of PetroChina, the country’s biggest oil company, earned 774,000 yuan ($112,000) in 2016; the CEO of Chevron, a firm of roughly the same market value, pulled in a handsome $24.7m.
...
There is a big looming worry, however. One aspect of SOE reform is in fact making quick progress: the creation of what are known as “state capital investment and operation” companies (SCIOs), to help manage existing state assets and invest in new ones. This initially looked like part of the solution for China. It borrows an approach honed in Singapore, where Temasek, a government-owned holding company, manages a portfolio of state firms but does not meddle in their operations, apart from demanding that they deliver good returns. It is now clear that this is not what China has in mind. Government officials say that SCIOs should not seek to make money in their investments; rather, they are meant to be more like “policy funds”, seeding firms and industries with government cash or money raised from SOE dividends without worrying about profit.
The other striking feature of SCIOs is that they are expressly enjoined to break into new high-tech sectors. Provincial governments around the country have published plans over the past two years in which they promise to guide more than 80% of their funds into infrastructure, public services and, crucially, “strategic emerging industries”, a category that refers to new energy, biotechnology and IT, among other areas. The upshot is that SCIOs, armed with cheap capital, seem set on expanding the state’s reach into the private sector. “We should anticipate the emergence of literally thousands of well-resourced SCIOs,” says Barry Naughton at the University of California in San Diego.
State-backed private-equity funds, which can be seen as forerunners to the investment function of the SCIOs, are already making a big impact. To give three examples from last year: the city of Shenzhen launched a 150bn yuan fund; Jiangxi, a relatively poor central province, created a 100bn yuan fund; and the city of Chengdu set up a 40bn yuan fund. This influx of cash is pushing up valuations. Bain & Co, a consultancy, calculates that private-equity deals in China were priced last year at a frothy 26-times earnings before interest, tax, depreciation and amortisation, compared with ten times in America. The state may turn out to be a wise investor but experience suggests otherwise. More likely, the state will crowd out private investors, hogging capital and allocating it poorly.
...
SOEs, far from retreating, are on the march, drawing on government support to compensate for their weakness. They are making conquests at home and abroad. Cutting state firms down to size and opening them up to competition ought to be the point of SOE reform. Instead, China is beefing them up and driving them into new territory.
China's Communist party is writing itself into the articles of association of many of the country’s biggest companies in a blow to investor hopes that Beijing would relax its grip on the market.
More than 30 Hong Kong-listed state-owned enterprises, representing more than $1tn in market capitalisation, have this year added lines to their central documents that place the party, rather than the Chinese state, at the heart of each group.
New phrases injected into the articles of association in recent months include describing the party as playing a core role in “an organised, institutionalised and concrete way” and “providing direction managing the overall situation”.
While the new language makes explicit investors’ long-held assumption of party influence, the changes are the first time the party rather than the government has been named, investors said.
...
“This is a reminder to investors they are buying into a party machine,” said David Webb, an independent investor and shareholder activist in Hong Kong. “This move to embed the party into constitutional documents of the companies puts a lie to the government’s claim they want market forces to play a greater role.”
Investors have voiced frustration with their inability to stop the changes.
“While it serves to formalise something investors were already aware of, this formalisation is not really the direction of travel investors wanted to see,” said David Smith, head of corporate governance at Aberdeen Asset Management Asia.
https://www.ft.com/content/a4b28218-80db-11e7-94e2-c5b903247afd
China has announced a “Made in China 2025” plan to dominate in the production of semiconductors, artificial intelligence, autonomous vehicles, biotechnology and every other high-tech industry likely to drive economic growth beyond 2025. The US, which remains the most innovative country in the world, stands firmly in China’s path.
But rather than building a globally competitive free market economy in order to compete, China has chosen instead to compel American companies that want to operate in China to turn over proprietary technology and intellectual property.
China does this by making joint ventures with Chinese companies a prerequisite for market access; by limiting American ownership to 50 per cent or less of most enterprises in China; and, in some cases, by requiring technology transfers as part of product sale contracts.
The Beijing government and Chinese companies also pursue an investment strategy whereby they identify US start-ups with scientific breakthroughs and then make investments in those companies on better-than-market terms. The primary consideration in this investment is not rate of return, but the capture of new technologies, which the Chinese then use for other purposes.
Through investments like this, Chinese companies gain access to breakthrough technologies that could create billions of dollars of future revenues without paying royalties. An initial overpayment of a few million dollars is very important to the American high-technology start up, but is a rounding error relative to China’s multibillion dollar long-term objectives of technological superiority.
The Chinese actively search for those US companies that pioneer the technologies that China lacks. They then carefully target those companies in order to acquire their expertise. Meanwhile, companies seeking access to the Chinese market or to Chinese capital are pressured into turning over their patents, their most advanced research, and their know-how.
The offensive against American intellectual property does not end there. Less well known are the efforts of Chinese lawyers to initiate antitrust actions in Chinese courts to invalidate patents on the theory they create illegal monopolies. Think of how counterintuitive that is. The whole idea of a patent is to reward the inventor with a period of exclusive rights to the invention. A legally granted monopoly is no justification for an antitrust proceeding. But China is willing to go to great lengths to capture American technologies.
https://www.foreignaffairs.com/articles/china/2015-04-20/embracing-chinas-new-normal
It is clear by now that China’s economy is set to slow in the years to come, although economists disagree about how much and for how long. Last year, the country’s gdp growth rate fell to 7.4 percent, the lowest in almost a quarter century, and many expect that figure to drop further in 2015. Plenty of countries struggle to grow at even this pace, but most don’t have to create hundreds of millions of jobs over the next decade, as China will. So understandably, some experts are skeptical about the country’s prospects. They argue that its productionfueled growth model is no longer tenable and warn, as the economist Paul Krugman did in 2013, that the country is “about to hit its Great Wall.” According to this view, the question is not whether the Chinese economy will crash but when.
Such thinking is misguided. China is not nearing the edge of a cliff; it is entering a new stage of development. Chinese President Xi Jinping has called this next phase of growth the “new normal,” a term that Mohamed El-Erian, the former CEO of the global investment firm pimco, famously used to describe the West’s painful economic recovery following the 2008 financial crisis. But Xi used the phrase to describe something different: a crucial rebalancing, one in which the country diversifies its economy, embraces a more sustainable level of growth, and distributes the benefits more evenly. The new normal is in its early stages now, but if Beijing manages to sustain it, China’s citizens can count on continued growth and material improvements in their quality of life. The rest of the world, meanwhile, can expect China to become further integrated into the global economy. The Chinese century is not at the beginning of the end; it is at the end of the beginning.
Understanding China’s new normal requires some historical context. As a latecomer to the modern economy, China has followed what one could call a “catch-up growth” model, which involves rapid economic growth following years of lagging behind. From 1870 to 1913, for example, the U.S. economy followed precisely this path, growing at an average rate of four percent. Between 1928 and 1939, Russia’s gdp grew at an average rate of 4.6 percent. And from 1950 to 1973, Japan’s economy grew at an average rate of 9.3 percent. Yet none of those countries came close to matching China’s record from 1978 to 2011: an average gdp growth rate of nearly ten percent over 33 years.
This ascent has helped China’s economy approach, and perhaps even surpass, that of the United States. In terms of purchasing power parity, a measure economists use for cross-country comparisons, China’s gdp surpassed that of the United States in 2010 or 2014, depending on whether one relies on historical statistics from the Maddison Project or data from the World Bank’s International Comparison Program. Yet if one relies on the World Bank Atlas method, China’s economy won’t likely outgrow the United States’ until 2019. And China’s gdp still trails that of the United States if calculated using current U.S. dollars. But the best method for comparing the two economies objectively is power generation, since it is physical and quantifiable. It also closely tracks modernization; without electricity, after all, or at least without a lot of it, one can’t run factories or build skyscrapers, which is exactly what China has been doing. In 1900, China generated 0.01 percent of the power the United States did. That figure rose to 1.2 percent in 1950 and 34 percent in 2000, with China surpassing the United States in 2011. In this respect, China has caught up.
China’s rise has also brought massive benefits to the country’s population, although here there is obviously much more to be done. With a population more than four times as large as that of its closest economic competitor, China won’t likely match even half the United States’ gdp per capita until around 2030. To be sure, the country has made major strides in other areas. Its average life expectancy (around 76 years) is nearing the United States’ (around 79 years). Educational levels in the two countries are comparable. And measured by the Gini coefficient, economic inequality in China may now be lower than it is in the United States. Yet since 1979, most of the windfall from China’s rise has accrued mainly to those who live in urban or coastal areas. Realizing Beijing’s ultimate development goal—“common development and common prosperity”—will require not only more sustainable growth but also more evenly distributed gains.
To a certain extent, China’s latest slowdown was inevitable. Three decades of breakneck growth have left China with an economy that is simply massive, making marginal increases in size all the more difficult. Even measured using current exchange rates, Chinese gdp exceeded $10 trillion in 2014, which means that growing by ten percent would amount to adding $1 trillion to the economy after one year, a sum greater than the entire gdp of Saudi Arabia, which is among the world’s largest economies. Growth on this scale was bound to become unsustainable at some point. It essentially requires an unlimited supply of energy and puts enormous stress on the environment. China already emits more carbon into the atmosphere than the United States and the EU combined, and its emissions are still increasing.
http://www.globaltimes.cn/content/1068750.shtml
China releases new standards on Marxist education to promote better understanding of Marxist theory and ideology:
"Chinese education authorities have unveiled some standards for the study of Marxism at university, which experts have said shows China's new emphasis on Marxist education and ideology.
The standards come from the Ministry of Education (MOE), with specific requirements for school facilities, faculty and courses, according to a post on MOE's WeChat account Wednesday.
This is the first document in China to give detailed requirement on the subject, and it is especially significant as it offers verifiable standards for evaluation, he added.
The document states that the university's principal and Party chief will have the main responsibility for Marxist work and need to hold at least one office meeting on that each academic year.
Schools of Marxism are to be regarded as independent institutions, directly under the university, whose leaders are responsible for establishing the ideology and theoretical studies for all students.
These quantifications are meant to help clarity the university's responsibilities in a Marxist education and to get their senior personnel to look for more practical applications instead of just talking about it, said Zhuang.
"In this way, schools of Marxism can place more importance on its ideological power and not confine it to one department, but spread its message all over the university," he said.
The standards also call for mid-to-small Marxism classes of no more than 100 students each.
"Small classes have much better quality and a greater effect than large classes, because students can discuss things with each other and communicate with the teacher better," Zhu Andong, an associate professor at Tsinghua University's School of Marxism, told the Global Times.
Most universities still need some time to achieve the standard required, mainly because of the limited number of full-time teachers, Zhu added.
The standards also call for full-time teachers at these schools to be Party members at least in principle, and both part-time and full-time Marxism teachers have to have a related academic background.
In the area of Party and ideological development at Marxism schools, students and teachers are asked to organize Party activities for at least half a day every month.
http://www.chinadaily.com.cn/china/2017-09/30/content_32668217.htm
http://www.chinadaily.com.cn/china/2017-10/01/content_32712243.htm
https://www.washingtonpost.com/news/worldviews/wp/2017/10/11/china-treats-its-foreign-aid-like-a-state-secret-new-research-aims-to-reveal-it/?utm_term=.fcade93720c1
Edited by JohnBeige ()
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JohnBeige posted:heres a billion articles
http://www.heritage.org/testimony/chinese-state-owned-enterprises-and-us-china-economic-relations
"The discussion of SOEs has been undermined by a fundamental error: the conflation of restructured, share-holding firms with the truly private sector. Share-holding SOEs are manifestly not private actors and assessments of the corporate sector that assume so are fatally flawed from the outset. The origin of this mistake is historical. As quasi-state entities emerged and proliferated, it was clear some sort of separate treatment was necessary and the concept of “non-state” was created. This was never intended to indicate “private”—quite the opposite: it was meant to signify that the creation of corporate forms quite different from SOEs could occur without privatization and its ideological pitfalls.
The meaning of “non-state” is very well understood by the Chinese government. The (sometimes willful) misunderstanding outside China rests on two shaky pillars. The first is a mis-rendering of “non-state”—where the PRC sees the opposite of state as non-state, many foreign observers see the opposite of state as “private” and simply re-label accordingly. The second is more sophisticated and based on the share-holding change.
Neither specification of share-holders nor sale of stock by itself does anything to alter state control. The large majority of firms listed on domestic stock markets are specifically designated as state-owned. The sale of small minority stakes on foreign exchanges could be construed as recasting mainstays such as CNPC (through its list vehicle PetroChina), China Mobile, and Chinalco as non-state entities of some form. However, they are still centrally directed SOEs, as explicitly indicated by the Chinese government.
More broadly, firms are defined by inputs and outputs. Most Chinese firms sell in a market environment that is unrecognizably different from the operating environment in 1975 and sharply different even from the one in 1995. In this sense almost none of them are still traditional Chinese SOEs. On the output side, however, the requirement that the state predominate in so many sectors is meant to sharply confine competition, so that SOEs operate within markets but they operate primarily within state-controlled markets. This regulatory protection is the most powerful subsidy many SOEs receive.
The input side also continues to distinguish SOEs clearly from foreign or domestic private companies. Production inputs comprise labor, capital, land, and other physical resources such as energy. For SOEs, including those which have completed share-holding reform, all of these show the state’s overwhelming role. It is routine for Chinese officials to bounce back and forth from corporate to government posts at the behest of the Party, no less so at China Mobile and the like than anywhere else.
In stark contrast to private firms, which often cannot buy land at any price, SOEs have immediate call on free land, which is all technically owned by the state. The main barrier to SOEs acquiring land is other SOEs. SOEs as a matter of course also receive hefty power and other input subsidies not available to genuinely private firms.
As for capital, every aspect is dominated by the state. All large financial institutions are state-owned, the People’s Bank assigns loan quotas every year, and, within these quotas, lending is directed according to state priorities. Interest rates are also controlled, and last year real borrowing costs were barely above zero.
Conveniently, then, loan quotas and bank practices strongly inhibit non-state borrowing. Securities markets are also dominated by the state. As an illustration, the volume of government bond issuance utterly dwarfs corporate bonds and is growing relentlessly, crowding out private firms."
http://wiki.p2pfoundation.net/Role_of_the_State_in_Chinese_Economic_Development
The popular image presented in western media is that the State Owned Enterprises, SOEs, are the last remaining dinosaurs of socialism in China, soon to die out. But the industries of the “rust-belt” stubbornly refuse to do just that. A discussion paper with the title Explaining the Persistence of State Ownership in China7 shows that in the past 10 years the number of SOEs has declined dramatically from 84 397 to 29 229, but the share of the SOEs in the industrial sector has hovered steadily around 33-34 percent, rising slightly in 2003 and 2004 to 35.5 and 37.0 percent respectively. Considering that industrial production as a whole has increased a lot during period, this actually represents a big expansion of the SOEs. Employment in SOEs fell by 40 percent from 1998 to 2003 at the same time as they maintained their share of GDP.9 This represents a considerable increase of productivity in the SOEs, especially considering that GDP leaped forward during this period. Nineteen Chinese companies, all of them SOEs, are in Fortune Global 500 list of the largest companies in the world in 2005.
The SOEs completely dominate the capital intensive industries. It is difficult to see how Chinese capitalists will ever be able to compete with the resources of the state in these areas. Not even foreign multi-nationals, with all the resources they have at their command, are able to do so. Even though managers of state firms have some independence in deciding how to dispose over the surplus created by the workers in their industries that does not turn them into capitalists. As Trotsky remarked: “The biggest apartments, the juiciest steaks, and even Rolls Royces are not enough to transform the bureaucracy into an independent ruling class.”
To fully understand the role of the state sector of the economy it is not enough to just look at what proportion they have of GDP, nor the degree of concentration. It is also important, if not more so, to look at what proportion of investments are channelled through the state sector, because investments are the driving force of the economy. And under capitalism, through the mechanism of the tendency of the rate of profit to fall, the cause of the boom-slump cycle. Fortunately, statistics about fixedasset investments (investments in buildings and machinery) are also much more accurate and uncontested compared to GDP statistics.
They are divided into four periods.
State Investments as Percentage of Total Investments
1981 – 1989 (the “roaring eighties”) 78.6 percent
1990 – 1992 (post-Tiananmen Square) 81.2 percene
1993 – 2001 (the restructuring of the SOEs) 86.7 percent
2002 – 2005 (post-reconstruction) 85.3 percent
These figures are truly astonishing. They show not only that state the plays an absolutely decisive role in the economy, but also that state investments as a proportion of all investments have increased substantially since the eighties, only to fall back slightly between 2002 and 2005. This confirms that rather than moving towards capitalism in the nineties, China moved away from it. The present financial crisis will certainly raise the state’s share of investments again, possibly to its highest level since 1978
https://www.workers.org/2016/03/21/china-the-u-s-and-global-warming-part-3/
The U.S. website mining.com, citing Chinese sources, reported on Jan. 21 that “Beijing plans to close about 4,300 coal mines, remove outdated production capacity of 700 million tons and redeploy around 1 million workers over the next three years. … China has eliminated about 560 million tons of coal production capacity and closed 7,250 coal mines in the last five years.”
This was updated in a China Daily report on Feb. 2 that Beijing “has promised to spend 100 billion yuan ($15.25 billion) a year for up to five years to address overcapacity in sectors such as steel and coal, while local governments will contribute another 100 billion yuan. … The coal industry alone will get around 140 billion yuan, and 1.8 million employees in the sector will be relocated.”
What’s important here, from our point of view, is that China is committing very large sums to relocate the affected workers.
https://www.workers.org/2013/03/01/obamas-energy-choice-shill-for-shale-gas-industry/
Two things there should stand out: one is that China, despite its abundance of coal, is steering its economy away from coal because of the environmental effects it has. The other is that almost 2 million workers who will be out of a job will be given jobs in other industries. If any workers do become unemployed as part of this process, it'll be due to inefficiencies in the state apparatus in relocating them.
What about the US?
"During his Feb. 12 State of the Union address, Obama claimed that climate change was a main concern of his second term. He even suggested he would consider executive actions if Congress failed to regulate carbon emissions. However with his next breath, Obama promised to encourage more drilling for natural gas, in essence giving a wink and a nod to industry executives.
His consideration of Moniz for energy secretary confirms this. Moniz’s study promotes the use of shale gas as an alternative to fossils fuels like coal, while seriously downplaying the question of methane release during fracking. The big industry lie is that natural gas is better for the climate than fossil fuels like coal or oil.
Studies have shown that heavy use of fracking actually promotes greater fossil-fuel reliance, while effectively putting investment in renewable technology on the back burner."
http://www.heraldstandard.com/gcm/news/local_news/coal-job-losses-add-to-region-s-unemployment/article_ff06bb64-9f3f-5928-8d48-4f742651ae07.html
Across the Pittsburgh Metropolitan Statistical Area, which locally includes Fayette, Washington and Westmoreland counties, mining and logging jobs dropped from 11,500 to 9,800.
That helped raise the seasonally adjusted unemployment rate for the entire seven-county area from 5.4 percent to 5.8 percent over the 12 months ending in April. The rate rose during that time from 7.5 percent to 8.7 percent in Fayette, 5.5 percent to 6.8 percent in Washington and 5.4 percent to 6.3 percent in Westmoreland.
Every area county showed a seasonally adjusted increase in the size of the workforce and the number out of work, according to figures provided by the Department of Labor and Industry."
http://crisiscritique.org/wp-content/uploads/2014/01/Boer_Socialism.pdf
https://philosophersforchange.org/2014/05/15/taking-notes-36-is-china-communist/
http://dschwei.sites.luc.edu/ChinaCap.GSA.pdf
https://communistuniversity.wordpress.com/2014/05/05/is-china-sociaslist/
https://robertlindsay.wordpress.com/2012/04/24/china-is-not-as-capitalist-as-you-think/
http://www.china.org.cn/opinion/2012-10/14/content_26776253.htm
Property market bubbles? What property? Private property, for sure, but it’s not real property. All real estate is 100% owned by the people of China. There is not one square metre of private land in the People’s Republic. You can pay for up to a 70-year usage lease on a piece of land and develop it, but no one can buy the dirt.
Private enterprise? It is thriving for sure, but is heavily concentrated in small and medium sized enterprises (SMEs), that complement and do not seriously compete with the state sectors of the economy. The private sector is especially the many millions of mom and pop and solo businesses that blanket the country.
Free markets? There is not one private bank in China. They are all people powered. The world’s largest bank, Industrial and Commercial Bank of China (ICBC) is state owned of course, as well as three other global Top Ten banks: #1 (ICBC), #5 China Construction Bank (CCB), #9 Bank of China (BOC) and #10 Agricultural Bank of China (ABC).³ Ditto all insurance companies, the Shanghai and Shenzhen stock and precious metals markets. Same goes for all major media outlets, especially television, radio and print media, although everyone has heard about Beijing being the new “Hollywood of the East”, which is mostly private sector.
Unfettered capitalism? Get outta here! Almost all major economic sectors in China are dominated by state-owned enterprises (SOEs). Everything from airlines/avionics to aerospace to chemical industries, from construction to maritime shipping to mining, from nuclear energy to petroleum to railways, from steel to telecommunications to utilities, over 100 key sectors have a huge, people-powered footprint. Many are some of the world’s biggest corporations. Not only that, but they are, like the aforementioned state banks, very profitable and well-run, contrary to relentless Western propaganda.
Privatisation? You have to look beyond the deceptive headlines. Baba Beijing caps the sale of SOE stock to the public, at 30%. Furthermore, there are strict controls on making sure someone doesn’t try to control what’s offered. The ownership of the shares has to be spread out. Most of these stocks are owned by Chinese citizens (A shares), but some are on offer to foreigners (B shares). Interestingly, more and more Chinese companies, including SOEs, are doing IPOs in Western stock markets, as part of their 30%.
Reforms? Ha-ha-ha, the joke’s on you! Baba Beijing will never sell off the people’s SOEs. It knows that the citizens’ social harmony and economic stability are rooted in its ability to macro-manage and long term (Five-Year) plan the country’s direction, via the 100% ownership of all the real estate (Marxism’s controlling the means of production), as well as the key industries and sectors. The CPC will continue to create wealth, under the rubric of socialism with Chinese characteristics, by borrowing some capitalist trappings. But it is only transitional. Deng Xiaoping said it many times and it continues going unheard in the West, that the goal is to follow the Marxist economic path to a wealthy communist society.
http://www.greanvillepost.com/2016/10/18/so-called-communist-china/
In short, the expansion of the private sector has been robust, and in the area of industry, the private sector in China is approaching the size of the measureable state sector in many respects. At the same time, it would be a mistake to view these incomplete data and conclude that the pure private sector accounts for the majority of China’s economy. The observable SOE sector under reasonable assumptions accounts for nearly 40 percent of China’s economy. Given additional information on the prevalence of SOE ownership in China’s capital markets, anecdotal and observed data on the prevalence of SOE ownership among LLCs and other
ownership categories, and the SOE role in round‐tripped FDI, it is reasonable to conclude that by 2009 nearly half of China’s economic output could be attributable to either SOEs, SHEs, and other types of enterprises controlled by the SOEs indirectly. If the output of urban collective enterprises and the government‐run proportion of TVEs are considered, the broadly defined state sector likely surpasses 50 percent.
"This conclusion goes beyond all the published estimates we have reviewed, but is consistent with the opinions of knowledgeable individuals currently dealing with Chinese enterprises in policy and business settings. This conclusion is likely startling in view of prior estimates that the private sector in China accounts for 70 percent of GDP. But such a dominant private role is inconsistent with socialism with Chinese characteristics as articulated by the CCP. For example, the government‐run People’s Daily provides this definition of socialism with Chinese characteristics as used in 17th People’s Congress: “On its economic fronts, China sticks to a multi‐ownership‐oriented basic market economic system, with the public ownership in the dominance.”36 This thinking is also memorialized in China’s five year plans.37 Through 2009, at least, the size of the public sector dovetails with the CCP’s vision.
https://www.uscc.gov/sites/default/files/Research/10_26_11_CapitalTradeSOEStudy.pdf
http://www.xinfajia.cn/12967.html
In my personal opinion, the best way to answer questions like this is to examine closely China's socialist revolution and the transformation of China from a semi-feudal semi-colonial country to a socialist one, and come to a full Marxist understanding of what form of ownership is dominant in China. The goal of China's New-Democratic Revolution was to overthrow the big three mountains: "imperialism, feudalism, and bureaucrat-capitalism" and to establish a people's democratic dictatorship based on the alliance of the working class and the peasants.
Generally speaking, socialist relations of production do not come into being under capitalism. In the case of China, though, the seeds of these relations came into being in the liberated areas of China, in the revolutionary base areas. This included economic sectors under state and cooperative ownership which expanded during the war of liberation. Governments in the liberated areas confiscated the property of bureaucrat-capitalists and placed them under state ownership.
After the revolution, the socialist transition began. This period lasted from the foundation of the people's republic in 1949 to 1956. During this period the "Three Transformations" took place, which was the socialist transformation of agriculture, capitalist industry and commerce, and handicraft industry.
In China the socialist public ownership is the mainstay of the economy, the dominant mode of production. However China has diverse forms of ownership which develop side-by-side.
In socialist China, the forms of public ownership of the means of production include the ownership by the whole people, collective ownership, and other forms of public ownership, as well as the public part of the mixed ownership sector. Along these forms, the ownership by the whole people and collective ownership play the dominant role.
The economic sector under the ownership of the whole people is the strongest economic and technological power in China today. It controls the national economy and dominates the major economic resources and natural resources of China.
At this present stage of socialism, the primary stage, ownership by the whole people refers to state ownership.
The economic sector under collective ownership is divided into the rural collective economic sector and urban collective economic sector.
There are also joint-stock companies, economic conglomerates, and enterprise groups which are under the system of ownership by the whole people or collective ownership.
The sector of the economy under mixed ownership usually takes the place of Sino-foreign co-operative businesses including Sino-foreign joint ventures and Sino-foreign contractual businesses, and that of the economic sector which is joint public-private.
In China state-owned enterprises provide the necessary public products for the whole society to meet the growing material and cultural needs of the people. The state-owned enterprises play a leading role in such fields as coal, petroleum, electricity, and steel. They provide 70% of China's coal, 92% of its petroleum, 91% of its electric power and half of its ferrous metal. They supply such basic services such as railway transportation, aviation transportation and maritime transportation.
These state-owned sectors are the pillars of China, without them China would fall and polarization would become extreme.
China is enacting fundamentally correct policies which are the requirements of the primary stage of socialism, where developing the productive forces is required to bring China into the new era and advance socialism to a higher stage. The non-public sectors are subordinate to the socialist public sectors and play a supporting role in building socialism. Despite being very profitable and productive, they are under the thumb of the Communist Party and cannot function without its approval.
http://www.invent-the-future.org/2016/12/from-the-chinese-marxist-viewpoint-an-interview-with-professor-deng-chundong/
https://www.loc.gov/law/help/real-property-law/china.php
https://mobile.nytimes.com/2017/02/12/opinion/china-the-party-corporate-complex.html
China’s many high-profile moves to open up its markets in recent years turn out to have been half-hearted, if not intentional hoodwinking.
Despite the much-ballyhooed dismantling of the more than 2,000-year-old state monopoly on salt, all salt producers are still state-owned. Foreign asset-management companies are now allowed to operate wholly foreign-owned businesses in China, but only in deals with institutional investors and private-equity funds, not retail investors, a much bigger piece of meat. Partly to steady the renminbi, Beijing no longer allows Chinese citizens to take up to $50,000 a year out of the country, and it has recently restricted the repatriation of capital by foreign firms like Deutsche Bank.
Hyper control, interventionism, currency manipulation — no, China is not a market economy. But it’s worse than that: The Chinese Communist Party (C.C.P.) has systematically infiltrated China’s expanding private sector and now operates inside more than half of all nonstate firms; it can manipulate or even control these companies, especially bigger ones, and some foreign ones, too. The modern Chinese economy is a party-corporate conglomerate.
https://www.cnbc.com/2017/02/27/chinese-wages-rise-made-in-china-isnt-so-cheap-anymore.html
Turns out that "made in China" is not so cheap anymore as labor costs have risen rapidly in the country's vast manufacturing sector.
Chinese factory workers are now getting paid more than ever: Average hourly wages hit $3.60 last year, spiking 64 percent from 2011, according to market research firm Euromonitor. That's more than five times hourly manufacturing wages in India, and is more on par with countries such as Portugal and South Africa.
As China's economy expanded at breakneck speed, so has pay for employees. But the wage increase has translated to higher costs for companies with assembly lines in China. Some firms are now taking their business elsewhere, which also means China could start losing jobs to other developing countries like Sri Lanka, where hourly factory wages are $0.50.
http://socialisteconomicbulletin.blogspot.com/2017/07/china-faces-slower-western-growth-than.html
https://www.forbes.com/sites/wadeshepard/2017/07/25/xi-jinping-to-chinas-private-sector-go-home-the-belt-and-road-is-not-for-you/#110bd48817fb
https://www.economist.com/news/leaders/21725295-bad-china-and-world-chinas-state-enterprises-are-not-retreating-advancing
Mr Xi remains well aware of the need for reform; on July 15th he repeated warnings about indebtedness at SOEs. But only some of the initiatives rolled out on his watch are aimed at slimming the state sector. Two of them point in another direction entirely. One is the merging of competing SOEs. The arm of the government responsible for looking after these firms has engineered mergers of ports, railway-equipment makers and shipping companies; a vast chemicals combination is planned. Such deals often seem intended to spawn national champions, not to pare overcapacity.
The other disturbing trend is the proliferation of “state capital investment and operation” companies (SCIOs). The state has thus far tended to dominate in heavy industries, transport and energy, leaving private firms to forge ahead in technology. SCIOs will, in part, function like state-run private-equity funds whose remit is to extend the reach of government. Provincial governments have published plans to push funds into areas such as biotechnology and cloud computing...
Previous leaders have managed the tension between a liberalising economy and an obsession with stability through a mix of rapid growth and political repression. Mr Xi does not want to change that recipe. But he is doing something more radical: reversing the state’s retreat from the economy.
https://www.economist.com/news/finance-and-economics/21725293-outperformed-private-firms-they-are-no-longer-shrinking-share-overall
Over the past few years the state sector has, by several measures, stopped shrinking. There are still more than 150,000 SOEs in operation, two-thirds owned by local governments and the rest under central control. Private firms are much more productive, but state firms gobble up a disproportionate share of resources. They take about half of all bank loans and are the main culprits behind China’s big increase in corporate debt. Since 2015 investment by SOEs has grown faster than private-sector investment, reversing a decades-long trend
...
The fear is that the reforms, taken together, not only fail to solve the most pressing problems, but might even be aggravating them. SOEs are getting bigger, not smaller; their management has become more conservative; and their deficiencies are beginning to infect the economy more widely.
...
At a meeting on SOEs last October he devoted his comments not to reform but to the necessity of strengthening the party’s grip. “The party’s leadership of SOEs is a major political principle, and that principle must be insisted on,” he said.
People who work in and with SOEs report a palpable change in atmosphere in recent years. “Party officials are not the same as the technocrats who used to run the SOEs,” says a top banker. “They don’t take risks. Doing nothing is what’s safe.” Some of the most capable employees are leaving SOEs altogether. Political education, always a part of life in state firms, has been stepped up. One manager who recently quit a big state bank said that a campaign exhorting workers to study the party constitution had been unusually intense.
At the same time the government has capped pay for senior executives, concerned that they were getting more than government employees of equivalent ranks, stoking resentment. Yet on an international basis, SOE bosses are dramatically underpaid. The president of PetroChina, the country’s biggest oil company, earned 774,000 yuan ($112,000) in 2016; the CEO of Chevron, a firm of roughly the same market value, pulled in a handsome $24.7m.
...
There is a big looming worry, however. One aspect of SOE reform is in fact making quick progress: the creation of what are known as “state capital investment and operation” companies (SCIOs), to help manage existing state assets and invest in new ones. This initially looked like part of the solution for China. It borrows an approach honed in Singapore, where Temasek, a government-owned holding company, manages a portfolio of state firms but does not meddle in their operations, apart from demanding that they deliver good returns. It is now clear that this is not what China has in mind. Government officials say that SCIOs should not seek to make money in their investments; rather, they are meant to be more like “policy funds”, seeding firms and industries with government cash or money raised from SOE dividends without worrying about profit.
The other striking feature of SCIOs is that they are expressly enjoined to break into new high-tech sectors. Provincial governments around the country have published plans over the past two years in which they promise to guide more than 80% of their funds into infrastructure, public services and, crucially, “strategic emerging industries”, a category that refers to new energy, biotechnology and IT, among other areas. The upshot is that SCIOs, armed with cheap capital, seem set on expanding the state’s reach into the private sector. “We should anticipate the emergence of literally thousands of well-resourced SCIOs,” says Barry Naughton at the University of California in San Diego.
State-backed private-equity funds, which can be seen as forerunners to the investment function of the SCIOs, are already making a big impact. To give three examples from last year: the city of Shenzhen launched a 150bn yuan fund; Jiangxi, a relatively poor central province, created a 100bn yuan fund; and the city of Chengdu set up a 40bn yuan fund. This influx of cash is pushing up valuations. Bain & Co, a consultancy, calculates that private-equity deals in China were priced last year at a frothy 26-times earnings before interest, tax, depreciation and amortisation, compared with ten times in America. The state may turn out to be a wise investor but experience suggests otherwise. More likely, the state will crowd out private investors, hogging capital and allocating it poorly.
...
SOEs, far from retreating, are on the march, drawing on government support to compensate for their weakness. They are making conquests at home and abroad. Cutting state firms down to size and opening them up to competition ought to be the point of SOE reform. Instead, China is beefing them up and driving them into new territory.
China's Communist party is writing itself into the articles of association of many of the country’s biggest companies in a blow to investor hopes that Beijing would relax its grip on the market.
More than 30 Hong Kong-listed state-owned enterprises, representing more than $1tn in market capitalisation, have this year added lines to their central documents that place the party, rather than the Chinese state, at the heart of each group.
New phrases injected into the articles of association in recent months include describing the party as playing a core role in “an organised, institutionalised and concrete way” and “providing direction managing the overall situation”.
While the new language makes explicit investors’ long-held assumption of party influence, the changes are the first time the party rather than the government has been named, investors said.
...
“This is a reminder to investors they are buying into a party machine,” said David Webb, an independent investor and shareholder activist in Hong Kong. “This move to embed the party into constitutional documents of the companies puts a lie to the government’s claim they want market forces to play a greater role.”
Investors have voiced frustration with their inability to stop the changes.
“While it serves to formalise something investors were already aware of, this formalisation is not really the direction of travel investors wanted to see,” said David Smith, head of corporate governance at Aberdeen Asset Management Asia.
https://www.ft.com/content/a4b28218-80db-11e7-94e2-c5b903247afd
China has announced a “Made in China 2025” plan to dominate in the production of semiconductors, artificial intelligence, autonomous vehicles, biotechnology and every other high-tech industry likely to drive economic growth beyond 2025. The US, which remains the most innovative country in the world, stands firmly in China’s path.
But rather than building a globally competitive free market economy in order to compete, China has chosen instead to compel American companies that want to operate in China to turn over proprietary technology and intellectual property.
China does this by making joint ventures with Chinese companies a prerequisite for market access; by limiting American ownership to 50 per cent or less of most enterprises in China; and, in some cases, by requiring technology transfers as part of product sale contracts.
The Beijing government and Chinese companies also pursue an investment strategy whereby they identify US start-ups with scientific breakthroughs and then make investments in those companies on better-than-market terms. The primary consideration in this investment is not rate of return, but the capture of new technologies, which the Chinese then use for other purposes.
Through investments like this, Chinese companies gain access to breakthrough technologies that could create billions of dollars of future revenues without paying royalties. An initial overpayment of a few million dollars is very important to the American high-technology start up, but is a rounding error relative to China’s multibillion dollar long-term objectives of technological superiority.
The Chinese actively search for those US companies that pioneer the technologies that China lacks. They then carefully target those companies in order to acquire their expertise. Meanwhile, companies seeking access to the Chinese market or to Chinese capital are pressured into turning over their patents, their most advanced research, and their know-how.
The offensive against American intellectual property does not end there. Less well known are the efforts of Chinese lawyers to initiate antitrust actions in Chinese courts to invalidate patents on the theory they create illegal monopolies. Think of how counterintuitive that is. The whole idea of a patent is to reward the inventor with a period of exclusive rights to the invention. A legally granted monopoly is no justification for an antitrust proceeding. But China is willing to go to great lengths to capture American technologies.
https://www.foreignaffairs.com/articles/china/2015-04-20/embracing-chinas-new-normal
It is clear by now that China’s economy is set to slow in the years to come, although economists disagree about how much and for how long. Last year, the country’s gdp growth rate fell to 7.4 percent, the lowest in almost a quarter century, and many expect that figure to drop further in 2015. Plenty of countries struggle to grow at even this pace, but most don’t have to create hundreds of millions of jobs over the next decade, as China will. So understandably, some experts are skeptical about the country’s prospects. They argue that its productionfueled growth model is no longer tenable and warn, as the economist Paul Krugman did in 2013, that the country is “about to hit its Great Wall.” According to this view, the question is not whether the Chinese economy will crash but when.
Such thinking is misguided. China is not nearing the edge of a cliff; it is entering a new stage of development. Chinese President Xi Jinping has called this next phase of growth the “new normal,” a term that Mohamed El-Erian, the former CEO of the global investment firm pimco, famously used to describe the West’s painful economic recovery following the 2008 financial crisis. But Xi used the phrase to describe something different: a crucial rebalancing, one in which the country diversifies its economy, embraces a more sustainable level of growth, and distributes the benefits more evenly. The new normal is in its early stages now, but if Beijing manages to sustain it, China’s citizens can count on continued growth and material improvements in their quality of life. The rest of the world, meanwhile, can expect China to become further integrated into the global economy. The Chinese century is not at the beginning of the end; it is at the end of the beginning.
Understanding China’s new normal requires some historical context. As a latecomer to the modern economy, China has followed what one could call a “catch-up growth” model, which involves rapid economic growth following years of lagging behind. From 1870 to 1913, for example, the U.S. economy followed precisely this path, growing at an average rate of four percent. Between 1928 and 1939, Russia’s gdp grew at an average rate of 4.6 percent. And from 1950 to 1973, Japan’s economy grew at an average rate of 9.3 percent. Yet none of those countries came close to matching China’s record from 1978 to 2011: an average gdp growth rate of nearly ten percent over 33 years.
This ascent has helped China’s economy approach, and perhaps even surpass, that of the United States. In terms of purchasing power parity, a measure economists use for cross-country comparisons, China’s gdp surpassed that of the United States in 2010 or 2014, depending on whether one relies on historical statistics from the Maddison Project or data from the World Bank’s International Comparison Program. Yet if one relies on the World Bank Atlas method, China’s economy won’t likely outgrow the United States’ until 2019. And China’s gdp still trails that of the United States if calculated using current U.S. dollars. But the best method for comparing the two economies objectively is power generation, since it is physical and quantifiable. It also closely tracks modernization; without electricity, after all, or at least without a lot of it, one can’t run factories or build skyscrapers, which is exactly what China has been doing. In 1900, China generated 0.01 percent of the power the United States did. That figure rose to 1.2 percent in 1950 and 34 percent in 2000, with China surpassing the United States in 2011. In this respect, China has caught up.
China’s rise has also brought massive benefits to the country’s population, although here there is obviously much more to be done. With a population more than four times as large as that of its closest economic competitor, China won’t likely match even half the United States’ gdp per capita until around 2030. To be sure, the country has made major strides in other areas. Its average life expectancy (around 76 years) is nearing the United States’ (around 79 years). Educational levels in the two countries are comparable. And measured by the Gini coefficient, economic inequality in China may now be lower than it is in the United States. Yet since 1979, most of the windfall from China’s rise has accrued mainly to those who live in urban or coastal areas. Realizing Beijing’s ultimate development goal—“common development and common prosperity”—will require not only more sustainable growth but also more evenly distributed gains.
To a certain extent, China’s latest slowdown was inevitable. Three decades of breakneck growth have left China with an economy that is simply massive, making marginal increases in size all the more difficult. Even measured using current exchange rates, Chinese gdp exceeded $10 trillion in 2014, which means that growing by ten percent would amount to adding $1 trillion to the economy after one year, a sum greater than the entire gdp of Saudi Arabia, which is among the world’s largest economies. Growth on this scale was bound to become unsustainable at some point. It essentially requires an unlimited supply of energy and puts enormous stress on the environment. China already emits more carbon into the atmosphere than the United States and the EU combined, and its emissions are still increasing.
http://www.globaltimes.cn/content/1068750.shtml
China releases new standards on Marxist education to promote better understanding of Marxist theory and ideology:
"Chinese education authorities have unveiled some standards for the study of Marxism at university, which experts have said shows China's new emphasis on Marxist education and ideology.
The standards come from the Ministry of Education (MOE), with specific requirements for school facilities, faculty and courses, according to a post on MOE's WeChat account Wednesday.
This is the first document in China to give detailed requirement on the subject, and it is especially significant as it offers verifiable standards for evaluation, he added.
The document states that the university's principal and Party chief will have the main responsibility for Marxist work and need to hold at least one office meeting on that each academic year.
Schools of Marxism are to be regarded as independent institutions, directly under the university, whose leaders are responsible for establishing the ideology and theoretical studies for all students.
These quantifications are meant to help clarity the university's responsibilities in a Marxist education and to get their senior personnel to look for more practical applications instead of just talking about it, said Zhuang.
"In this way, schools of Marxism can place more importance on its ideological power and not confine it to one department, but spread its message all over the university," he said.
The standards also call for mid-to-small Marxism classes of no more than 100 students each.
"Small classes have much better quality and a greater effect than large classes, because students can discuss things with each other and communicate with the teacher better," Zhu Andong, an associate professor at Tsinghua University's School of Marxism, told the Global Times.
Most universities still need some time to achieve the standard required, mainly because of the limited number of full-time teachers, Zhu added.
The standards also call for full-time teachers at these schools to be Party members at least in principle, and both part-time and full-time Marxism teachers have to have a related academic background.
In the area of Party and ideological development at Marxism schools, students and teachers are asked to organize Party activities for at least half a day every month.
http://www.chinadaily.com.cn/china/2017-09/30/content_32668217.htm
http://www.chinadaily.com.cn/china/2017-10/01/content_32712243.htm
https://www.washingtonpost.com/news/worldviews/wp/2017/10/11/china-treats-its-foreign-aid-like-a-state-secret-new-research-aims-to-reveal-it/?utm_term=.fcade93720c1
Edited by JohnBeige (today 11:46:23)
Really great post thanks.
Dimashq posted:JohnBeige posted:heres a billion articles
http://www.heritage.org/testimony/chinese-state-owned-enterprises-and-us-china-economic-relations
"The discussion of SOEs has been undermined by a fundamental error: the conflation of restructured, share-holding firms with the truly private sector. Share-holding SOEs are manifestly not private actors and assessments of the corporate sector that assume so are fatally flawed from the outset. The origin of this mistake is historical. As quasi-state entities emerged and proliferated, it was clear some sort of separate treatment was necessary and the concept of “non-state” was created. This was never intended to indicate “private”—quite the opposite: it was meant to signify that the creation of corporate forms quite different from SOEs could occur without privatization and its ideological pitfalls.
The meaning of “non-state” is very well understood by the Chinese government. The (sometimes willful) misunderstanding outside China rests on two shaky pillars. The first is a mis-rendering of “non-state”—where the PRC sees the opposite of state as non-state, many foreign observers see the opposite of state as “private” and simply re-label accordingly. The second is more sophisticated and based on the share-holding change.
Neither specification of share-holders nor sale of stock by itself does anything to alter state control. The large majority of firms listed on domestic stock markets are specifically designated as state-owned. The sale of small minority stakes on foreign exchanges could be construed as recasting mainstays such as CNPC (through its list vehicle PetroChina), China Mobile, and Chinalco as non-state entities of some form. However, they are still centrally directed SOEs, as explicitly indicated by the Chinese government.
More broadly, firms are defined by inputs and outputs. Most Chinese firms sell in a market environment that is unrecognizably different from the operating environment in 1975 and sharply different even from the one in 1995. In this sense almost none of them are still traditional Chinese SOEs. On the output side, however, the requirement that the state predominate in so many sectors is meant to sharply confine competition, so that SOEs operate within markets but they operate primarily within state-controlled markets. This regulatory protection is the most powerful subsidy many SOEs receive.
The input side also continues to distinguish SOEs clearly from foreign or domestic private companies. Production inputs comprise labor, capital, land, and other physical resources such as energy. For SOEs, including those which have completed share-holding reform, all of these show the state’s overwhelming role. It is routine for Chinese officials to bounce back and forth from corporate to government posts at the behest of the Party, no less so at China Mobile and the like than anywhere else.
In stark contrast to private firms, which often cannot buy land at any price, SOEs have immediate call on free land, which is all technically owned by the state. The main barrier to SOEs acquiring land is other SOEs. SOEs as a matter of course also receive hefty power and other input subsidies not available to genuinely private firms.
As for capital, every aspect is dominated by the state. All large financial institutions are state-owned, the People’s Bank assigns loan quotas every year, and, within these quotas, lending is directed according to state priorities. Interest rates are also controlled, and last year real borrowing costs were barely above zero.
Conveniently, then, loan quotas and bank practices strongly inhibit non-state borrowing. Securities markets are also dominated by the state. As an illustration, the volume of government bond issuance utterly dwarfs corporate bonds and is growing relentlessly, crowding out private firms."
http://wiki.p2pfoundation.net/Role_of_the_State_in_Chinese_Economic_Development
The popular image presented in western media is that the State Owned Enterprises, SOEs, are the last remaining dinosaurs of socialism in China, soon to die out. But the industries of the “rust-belt” stubbornly refuse to do just that. A discussion paper with the title Explaining the Persistence of State Ownership in China7 shows that in the past 10 years the number of SOEs has declined dramatically from 84 397 to 29 229, but the share of the SOEs in the industrial sector has hovered steadily around 33-34 percent, rising slightly in 2003 and 2004 to 35.5 and 37.0 percent respectively. Considering that industrial production as a whole has increased a lot during period, this actually represents a big expansion of the SOEs. Employment in SOEs fell by 40 percent from 1998 to 2003 at the same time as they maintained their share of GDP.9 This represents a considerable increase of productivity in the SOEs, especially considering that GDP leaped forward during this period. Nineteen Chinese companies, all of them SOEs, are in Fortune Global 500 list of the largest companies in the world in 2005.
The SOEs completely dominate the capital intensive industries. It is difficult to see how Chinese capitalists will ever be able to compete with the resources of the state in these areas. Not even foreign multi-nationals, with all the resources they have at their command, are able to do so. Even though managers of state firms have some independence in deciding how to dispose over the surplus created by the workers in their industries that does not turn them into capitalists. As Trotsky remarked: “The biggest apartments, the juiciest steaks, and even Rolls Royces are not enough to transform the bureaucracy into an independent ruling class.”
To fully understand the role of the state sector of the economy it is not enough to just look at what proportion they have of GDP, nor the degree of concentration. It is also important, if not more so, to look at what proportion of investments are channelled through the state sector, because investments are the driving force of the economy. And under capitalism, through the mechanism of the tendency of the rate of profit to fall, the cause of the boom-slump cycle. Fortunately, statistics about fixedasset investments (investments in buildings and machinery) are also much more accurate and uncontested compared to GDP statistics.
They are divided into four periods.
State Investments as Percentage of Total Investments
1981 – 1989 (the “roaring eighties”) 78.6 percent
1990 – 1992 (post-Tiananmen Square) 81.2 percene
1993 – 2001 (the restructuring of the SOEs) 86.7 percent
2002 – 2005 (post-reconstruction) 85.3 percent
These figures are truly astonishing. They show not only that state the plays an absolutely decisive role in the economy, but also that state investments as a proportion of all investments have increased substantially since the eighties, only to fall back slightly between 2002 and 2005. This confirms that rather than moving towards capitalism in the nineties, China moved away from it. The present financial crisis will certainly raise the state’s share of investments again, possibly to its highest level since 1978
https://www.workers.org/2016/03/21/china-the-u-s-and-global-warming-part-3/
The U.S. website mining.com, citing Chinese sources, reported on Jan. 21 that “Beijing plans to close about 4,300 coal mines, remove outdated production capacity of 700 million tons and redeploy around 1 million workers over the next three years. … China has eliminated about 560 million tons of coal production capacity and closed 7,250 coal mines in the last five years.”
This was updated in a China Daily report on Feb. 2 that Beijing “has promised to spend 100 billion yuan ($15.25 billion) a year for up to five years to address overcapacity in sectors such as steel and coal, while local governments will contribute another 100 billion yuan. … The coal industry alone will get around 140 billion yuan, and 1.8 million employees in the sector will be relocated.”
What’s important here, from our point of view, is that China is committing very large sums to relocate the affected workers.
https://www.workers.org/2013/03/01/obamas-energy-choice-shill-for-shale-gas-industry/
Two things there should stand out: one is that China, despite its abundance of coal, is steering its economy away from coal because of the environmental effects it has. The other is that almost 2 million workers who will be out of a job will be given jobs in other industries. If any workers do become unemployed as part of this process, it'll be due to inefficiencies in the state apparatus in relocating them.
What about the US?
"During his Feb. 12 State of the Union address, Obama claimed that climate change was a main concern of his second term. He even suggested he would consider executive actions if Congress failed to regulate carbon emissions. However with his next breath, Obama promised to encourage more drilling for natural gas, in essence giving a wink and a nod to industry executives.
His consideration of Moniz for energy secretary confirms this. Moniz’s study promotes the use of shale gas as an alternative to fossils fuels like coal, while seriously downplaying the question of methane release during fracking. The big industry lie is that natural gas is better for the climate than fossil fuels like coal or oil.
Studies have shown that heavy use of fracking actually promotes greater fossil-fuel reliance, while effectively putting investment in renewable technology on the back burner."
http://www.heraldstandard.com/gcm/news/local_news/coal-job-losses-add-to-region-s-unemployment/article_ff06bb64-9f3f-5928-8d48-4f742651ae07.html
Across the Pittsburgh Metropolitan Statistical Area, which locally includes Fayette, Washington and Westmoreland counties, mining and logging jobs dropped from 11,500 to 9,800.
That helped raise the seasonally adjusted unemployment rate for the entire seven-county area from 5.4 percent to 5.8 percent over the 12 months ending in April. The rate rose during that time from 7.5 percent to 8.7 percent in Fayette, 5.5 percent to 6.8 percent in Washington and 5.4 percent to 6.3 percent in Westmoreland.
Every area county showed a seasonally adjusted increase in the size of the workforce and the number out of work, according to figures provided by the Department of Labor and Industry."
http://crisiscritique.org/wp-content/uploads/2014/01/Boer_Socialism.pdf
https://philosophersforchange.org/2014/05/15/taking-notes-36-is-china-communist/
http://dschwei.sites.luc.edu/ChinaCap.GSA.pdf
https://communistuniversity.wordpress.com/2014/05/05/is-china-sociaslist/
https://robertlindsay.wordpress.com/2012/04/24/china-is-not-as-capitalist-as-you-think/
http://www.china.org.cn/opinion/2012-10/14/content_26776253.htm
Property market bubbles? What property? Private property, for sure, but it’s not real property. All real estate is 100% owned by the people of China. There is not one square metre of private land in the People’s Republic. You can pay for up to a 70-year usage lease on a piece of land and develop it, but no one can buy the dirt.
Private enterprise? It is thriving for sure, but is heavily concentrated in small and medium sized enterprises (SMEs), that complement and do not seriously compete with the state sectors of the economy. The private sector is especially the many millions of mom and pop and solo businesses that blanket the country.
Free markets? There is not one private bank in China. They are all people powered. The world’s largest bank, Industrial and Commercial Bank of China (ICBC) is state owned of course, as well as three other global Top Ten banks: #1 (ICBC), #5 China Construction Bank (CCB), #9 Bank of China (BOC) and #10 Agricultural Bank of China (ABC).³ Ditto all insurance companies, the Shanghai and Shenzhen stock and precious metals markets. Same goes for all major media outlets, especially television, radio and print media, although everyone has heard about Beijing being the new “Hollywood of the East”, which is mostly private sector.
Unfettered capitalism? Get outta here! Almost all major economic sectors in China are dominated by state-owned enterprises (SOEs). Everything from airlines/avionics to aerospace to chemical industries, from construction to maritime shipping to mining, from nuclear energy to petroleum to railways, from steel to telecommunications to utilities, over 100 key sectors have a huge, people-powered footprint. Many are some of the world’s biggest corporations. Not only that, but they are, like the aforementioned state banks, very profitable and well-run, contrary to relentless Western propaganda.
Privatisation? You have to look beyond the deceptive headlines. Baba Beijing caps the sale of SOE stock to the public, at 30%. Furthermore, there are strict controls on making sure someone doesn’t try to control what’s offered. The ownership of the shares has to be spread out. Most of these stocks are owned by Chinese citizens (A shares), but some are on offer to foreigners (B shares). Interestingly, more and more Chinese companies, including SOEs, are doing IPOs in Western stock markets, as part of their 30%.
Reforms? Ha-ha-ha, the joke’s on you! Baba Beijing will never sell off the people’s SOEs. It knows that the citizens’ social harmony and economic stability are rooted in its ability to macro-manage and long term (Five-Year) plan the country’s direction, via the 100% ownership of all the real estate (Marxism’s controlling the means of production), as well as the key industries and sectors. The CPC will continue to create wealth, under the rubric of socialism with Chinese characteristics, by borrowing some capitalist trappings. But it is only transitional. Deng Xiaoping said it many times and it continues going unheard in the West, that the goal is to follow the Marxist economic path to a wealthy communist society.
http://www.greanvillepost.com/2016/10/18/so-called-communist-china/
In short, the expansion of the private sector has been robust, and in the area of industry, the private sector in China is approaching the size of the measureable state sector in many respects. At the same time, it would be a mistake to view these incomplete data and conclude that the pure private sector accounts for the majority of China’s economy. The observable SOE sector under reasonable assumptions accounts for nearly 40 percent of China’s economy. Given additional information on the prevalence of SOE ownership in China’s capital markets, anecdotal and observed data on the prevalence of SOE ownership among LLCs and other
ownership categories, and the SOE role in round‐tripped FDI, it is reasonable to conclude that by 2009 nearly half of China’s economic output could be attributable to either SOEs, SHEs, and other types of enterprises controlled by the SOEs indirectly. If the output of urban collective enterprises and the government‐run proportion of TVEs are considered, the broadly defined state sector likely surpasses 50 percent.
"This conclusion goes beyond all the published estimates we have reviewed, but is consistent with the opinions of knowledgeable individuals currently dealing with Chinese enterprises in policy and business settings. This conclusion is likely startling in view of prior estimates that the private sector in China accounts for 70 percent of GDP. But such a dominant private role is inconsistent with socialism with Chinese characteristics as articulated by the CCP. For example, the government‐run People’s Daily provides this definition of socialism with Chinese characteristics as used in 17th People’s Congress: “On its economic fronts, China sticks to a multi‐ownership‐oriented basic market economic system, with the public ownership in the dominance.”36 This thinking is also memorialized in China’s five year plans.37 Through 2009, at least, the size of the public sector dovetails with the CCP’s vision.
https://www.uscc.gov/sites/default/files/Research/10_26_11_CapitalTradeSOEStudy.pdf
http://www.xinfajia.cn/12967.html
In my personal opinion, the best way to answer questions like this is to examine closely China's socialist revolution and the transformation of China from a semi-feudal semi-colonial country to a socialist one, and come to a full Marxist understanding of what form of ownership is dominant in China. The goal of China's New-Democratic Revolution was to overthrow the big three mountains: "imperialism, feudalism, and bureaucrat-capitalism" and to establish a people's democratic dictatorship based on the alliance of the working class and the peasants.
Generally speaking, socialist relations of production do not come into being under capitalism. In the case of China, though, the seeds of these relations came into being in the liberated areas of China, in the revolutionary base areas. This included economic sectors under state and cooperative ownership which expanded during the war of liberation. Governments in the liberated areas confiscated the property of bureaucrat-capitalists and placed them under state ownership.
After the revolution, the socialist transition began. This period lasted from the foundation of the people's republic in 1949 to 1956. During this period the "Three Transformations" took place, which was the socialist transformation of agriculture, capitalist industry and commerce, and handicraft industry.
In China the socialist public ownership is the mainstay of the economy, the dominant mode of production. However China has diverse forms of ownership which develop side-by-side.
In socialist China, the forms of public ownership of the means of production include the ownership by the whole people, collective ownership, and other forms of public ownership, as well as the public part of the mixed ownership sector. Along these forms, the ownership by the whole people and collective ownership play the dominant role.
The economic sector under the ownership of the whole people is the strongest economic and technological power in China today. It controls the national economy and dominates the major economic resources and natural resources of China.
At this present stage of socialism, the primary stage, ownership by the whole people refers to state ownership.
The economic sector under collective ownership is divided into the rural collective economic sector and urban collective economic sector.
There are also joint-stock companies, economic conglomerates, and enterprise groups which are under the system of ownership by the whole people or collective ownership.
The sector of the economy under mixed ownership usually takes the place of Sino-foreign co-operative businesses including Sino-foreign joint ventures and Sino-foreign contractual businesses, and that of the economic sector which is joint public-private.
In China state-owned enterprises provide the necessary public products for the whole society to meet the growing material and cultural needs of the people. The state-owned enterprises play a leading role in such fields as coal, petroleum, electricity, and steel. They provide 70% of China's coal, 92% of its petroleum, 91% of its electric power and half of its ferrous metal. They supply such basic services such as railway transportation, aviation transportation and maritime transportation.
These state-owned sectors are the pillars of China, without them China would fall and polarization would become extreme.
China is enacting fundamentally correct policies which are the requirements of the primary stage of socialism, where developing the productive forces is required to bring China into the new era and advance socialism to a higher stage. The non-public sectors are subordinate to the socialist public sectors and play a supporting role in building socialism. Despite being very profitable and productive, they are under the thumb of the Communist Party and cannot function without its approval.
http://www.invent-the-future.org/2016/12/from-the-chinese-marxist-viewpoint-an-interview-with-professor-deng-chundong/
https://www.loc.gov/law/help/real-property-law/china.php
https://mobile.nytimes.com/2017/02/12/opinion/china-the-party-corporate-complex.html
China’s many high-profile moves to open up its markets in recent years turn out to have been half-hearted, if not intentional hoodwinking.
Despite the much-ballyhooed dismantling of the more than 2,000-year-old state monopoly on salt, all salt producers are still state-owned. Foreign asset-management companies are now allowed to operate wholly foreign-owned businesses in China, but only in deals with institutional investors and private-equity funds, not retail investors, a much bigger piece of meat. Partly to steady the renminbi, Beijing no longer allows Chinese citizens to take up to $50,000 a year out of the country, and it has recently restricted the repatriation of capital by foreign firms like Deutsche Bank.
Hyper control, interventionism, currency manipulation — no, China is not a market economy. But it’s worse than that: The Chinese Communist Party (C.C.P.) has systematically infiltrated China’s expanding private sector and now operates inside more than half of all nonstate firms; it can manipulate or even control these companies, especially bigger ones, and some foreign ones, too. The modern Chinese economy is a party-corporate conglomerate.
https://www.cnbc.com/2017/02/27/chinese-wages-rise-made-in-china-isnt-so-cheap-anymore.html
Turns out that "made in China" is not so cheap anymore as labor costs have risen rapidly in the country's vast manufacturing sector.
Chinese factory workers are now getting paid more than ever: Average hourly wages hit $3.60 last year, spiking 64 percent from 2011, according to market research firm Euromonitor. That's more than five times hourly manufacturing wages in India, and is more on par with countries such as Portugal and South Africa.
As China's economy expanded at breakneck speed, so has pay for employees. But the wage increase has translated to higher costs for companies with assembly lines in China. Some firms are now taking their business elsewhere, which also means China could start losing jobs to other developing countries like Sri Lanka, where hourly factory wages are $0.50.
http://socialisteconomicbulletin.blogspot.com/2017/07/china-faces-slower-western-growth-than.html
https://www.forbes.com/sites/wadeshepard/2017/07/25/xi-jinping-to-chinas-private-sector-go-home-the-belt-and-road-is-not-for-you/#110bd48817fb
https://www.economist.com/news/leaders/21725295-bad-china-and-world-chinas-state-enterprises-are-not-retreating-advancing
Mr Xi remains well aware of the need for reform; on July 15th he repeated warnings about indebtedness at SOEs. But only some of the initiatives rolled out on his watch are aimed at slimming the state sector. Two of them point in another direction entirely. One is the merging of competing SOEs. The arm of the government responsible for looking after these firms has engineered mergers of ports, railway-equipment makers and shipping companies; a vast chemicals combination is planned. Such deals often seem intended to spawn national champions, not to pare overcapacity.
The other disturbing trend is the proliferation of “state capital investment and operation” companies (SCIOs). The state has thus far tended to dominate in heavy industries, transport and energy, leaving private firms to forge ahead in technology. SCIOs will, in part, function like state-run private-equity funds whose remit is to extend the reach of government. Provincial governments have published plans to push funds into areas such as biotechnology and cloud computing...
Previous leaders have managed the tension between a liberalising economy and an obsession with stability through a mix of rapid growth and political repression. Mr Xi does not want to change that recipe. But he is doing something more radical: reversing the state’s retreat from the economy.
https://www.economist.com/news/finance-and-economics/21725293-outperformed-private-firms-they-are-no-longer-shrinking-share-overall
Over the past few years the state sector has, by several measures, stopped shrinking. There are still more than 150,000 SOEs in operation, two-thirds owned by local governments and the rest under central control. Private firms are much more productive, but state firms gobble up a disproportionate share of resources. They take about half of all bank loans and are the main culprits behind China’s big increase in corporate debt. Since 2015 investment by SOEs has grown faster than private-sector investment, reversing a decades-long trend
...
The fear is that the reforms, taken together, not only fail to solve the most pressing problems, but might even be aggravating them. SOEs are getting bigger, not smaller; their management has become more conservative; and their deficiencies are beginning to infect the economy more widely.
...
At a meeting on SOEs last October he devoted his comments not to reform but to the necessity of strengthening the party’s grip. “The party’s leadership of SOEs is a major political principle, and that principle must be insisted on,” he said.
People who work in and with SOEs report a palpable change in atmosphere in recent years. “Party officials are not the same as the technocrats who used to run the SOEs,” says a top banker. “They don’t take risks. Doing nothing is what’s safe.” Some of the most capable employees are leaving SOEs altogether. Political education, always a part of life in state firms, has been stepped up. One manager who recently quit a big state bank said that a campaign exhorting workers to study the party constitution had been unusually intense.
At the same time the government has capped pay for senior executives, concerned that they were getting more than government employees of equivalent ranks, stoking resentment. Yet on an international basis, SOE bosses are dramatically underpaid. The president of PetroChina, the country’s biggest oil company, earned 774,000 yuan ($112,000) in 2016; the CEO of Chevron, a firm of roughly the same market value, pulled in a handsome $24.7m.
...
There is a big looming worry, however. One aspect of SOE reform is in fact making quick progress: the creation of what are known as “state capital investment and operation” companies (SCIOs), to help manage existing state assets and invest in new ones. This initially looked like part of the solution for China. It borrows an approach honed in Singapore, where Temasek, a government-owned holding company, manages a portfolio of state firms but does not meddle in their operations, apart from demanding that they deliver good returns. It is now clear that this is not what China has in mind. Government officials say that SCIOs should not seek to make money in their investments; rather, they are meant to be more like “policy funds”, seeding firms and industries with government cash or money raised from SOE dividends without worrying about profit.
The other striking feature of SCIOs is that they are expressly enjoined to break into new high-tech sectors. Provincial governments around the country have published plans over the past two years in which they promise to guide more than 80% of their funds into infrastructure, public services and, crucially, “strategic emerging industries”, a category that refers to new energy, biotechnology and IT, among other areas. The upshot is that SCIOs, armed with cheap capital, seem set on expanding the state’s reach into the private sector. “We should anticipate the emergence of literally thousands of well-resourced SCIOs,” says Barry Naughton at the University of California in San Diego.
State-backed private-equity funds, which can be seen as forerunners to the investment function of the SCIOs, are already making a big impact. To give three examples from last year: the city of Shenzhen launched a 150bn yuan fund; Jiangxi, a relatively poor central province, created a 100bn yuan fund; and the city of Chengdu set up a 40bn yuan fund. This influx of cash is pushing up valuations. Bain & Co, a consultancy, calculates that private-equity deals in China were priced last year at a frothy 26-times earnings before interest, tax, depreciation and amortisation, compared with ten times in America. The state may turn out to be a wise investor but experience suggests otherwise. More likely, the state will crowd out private investors, hogging capital and allocating it poorly.
...
SOEs, far from retreating, are on the march, drawing on government support to compensate for their weakness. They are making conquests at home and abroad. Cutting state firms down to size and opening them up to competition ought to be the point of SOE reform. Instead, China is beefing them up and driving them into new territory.
China's Communist party is writing itself into the articles of association of many of the country’s biggest companies in a blow to investor hopes that Beijing would relax its grip on the market.
More than 30 Hong Kong-listed state-owned enterprises, representing more than $1tn in market capitalisation, have this year added lines to their central documents that place the party, rather than the Chinese state, at the heart of each group.
New phrases injected into the articles of association in recent months include describing the party as playing a core role in “an organised, institutionalised and concrete way” and “providing direction managing the overall situation”.
While the new language makes explicit investors’ long-held assumption of party influence, the changes are the first time the party rather than the government has been named, investors said.
...
“This is a reminder to investors they are buying into a party machine,” said David Webb, an independent investor and shareholder activist in Hong Kong. “This move to embed the party into constitutional documents of the companies puts a lie to the government’s claim they want market forces to play a greater role.”
Investors have voiced frustration with their inability to stop the changes.
“While it serves to formalise something investors were already aware of, this formalisation is not really the direction of travel investors wanted to see,” said David Smith, head of corporate governance at Aberdeen Asset Management Asia.
https://www.ft.com/content/a4b28218-80db-11e7-94e2-c5b903247afd
China has announced a “Made in China 2025” plan to dominate in the production of semiconductors, artificial intelligence, autonomous vehicles, biotechnology and every other high-tech industry likely to drive economic growth beyond 2025. The US, which remains the most innovative country in the world, stands firmly in China’s path.
But rather than building a globally competitive free market economy in order to compete, China has chosen instead to compel American companies that want to operate in China to turn over proprietary technology and intellectual property.
China does this by making joint ventures with Chinese companies a prerequisite for market access; by limiting American ownership to 50 per cent or less of most enterprises in China; and, in some cases, by requiring technology transfers as part of product sale contracts.
The Beijing government and Chinese companies also pursue an investment strategy whereby they identify US start-ups with scientific breakthroughs and then make investments in those companies on better-than-market terms. The primary consideration in this investment is not rate of return, but the capture of new technologies, which the Chinese then use for other purposes.
Through investments like this, Chinese companies gain access to breakthrough technologies that could create billions of dollars of future revenues without paying royalties. An initial overpayment of a few million dollars is very important to the American high-technology start up, but is a rounding error relative to China’s multibillion dollar long-term objectives of technological superiority.
The Chinese actively search for those US companies that pioneer the technologies that China lacks. They then carefully target those companies in order to acquire their expertise. Meanwhile, companies seeking access to the Chinese market or to Chinese capital are pressured into turning over their patents, their most advanced research, and their know-how.
The offensive against American intellectual property does not end there. Less well known are the efforts of Chinese lawyers to initiate antitrust actions in Chinese courts to invalidate patents on the theory they create illegal monopolies. Think of how counterintuitive that is. The whole idea of a patent is to reward the inventor with a period of exclusive rights to the invention. A legally granted monopoly is no justification for an antitrust proceeding. But China is willing to go to great lengths to capture American technologies.
https://www.foreignaffairs.com/articles/china/2015-04-20/embracing-chinas-new-normal
It is clear by now that China’s economy is set to slow in the years to come, although economists disagree about how much and for how long. Last year, the country’s gdp growth rate fell to 7.4 percent, the lowest in almost a quarter century, and many expect that figure to drop further in 2015. Plenty of countries struggle to grow at even this pace, but most don’t have to create hundreds of millions of jobs over the next decade, as China will. So understandably, some experts are skeptical about the country’s prospects. They argue that its productionfueled growth model is no longer tenable and warn, as the economist Paul Krugman did in 2013, that the country is “about to hit its Great Wall.” According to this view, the question is not whether the Chinese economy will crash but when.
Such thinking is misguided. China is not nearing the edge of a cliff; it is entering a new stage of development. Chinese President Xi Jinping has called this next phase of growth the “new normal,” a term that Mohamed El-Erian, the former CEO of the global investment firm pimco, famously used to describe the West’s painful economic recovery following the 2008 financial crisis. But Xi used the phrase to describe something different: a crucial rebalancing, one in which the country diversifies its economy, embraces a more sustainable level of growth, and distributes the benefits more evenly. The new normal is in its early stages now, but if Beijing manages to sustain it, China’s citizens can count on continued growth and material improvements in their quality of life. The rest of the world, meanwhile, can expect China to become further integrated into the global economy. The Chinese century is not at the beginning of the end; it is at the end of the beginning.
Understanding China’s new normal requires some historical context. As a latecomer to the modern economy, China has followed what one could call a “catch-up growth” model, which involves rapid economic growth following years of lagging behind. From 1870 to 1913, for example, the U.S. economy followed precisely this path, growing at an average rate of four percent. Between 1928 and 1939, Russia’s gdp grew at an average rate of 4.6 percent. And from 1950 to 1973, Japan’s economy grew at an average rate of 9.3 percent. Yet none of those countries came close to matching China’s record from 1978 to 2011: an average gdp growth rate of nearly ten percent over 33 years.
This ascent has helped China’s economy approach, and perhaps even surpass, that of the United States. In terms of purchasing power parity, a measure economists use for cross-country comparisons, China’s gdp surpassed that of the United States in 2010 or 2014, depending on whether one relies on historical statistics from the Maddison Project or data from the World Bank’s International Comparison Program. Yet if one relies on the World Bank Atlas method, China’s economy won’t likely outgrow the United States’ until 2019. And China’s gdp still trails that of the United States if calculated using current U.S. dollars. But the best method for comparing the two economies objectively is power generation, since it is physical and quantifiable. It also closely tracks modernization; without electricity, after all, or at least without a lot of it, one can’t run factories or build skyscrapers, which is exactly what China has been doing. In 1900, China generated 0.01 percent of the power the United States did. That figure rose to 1.2 percent in 1950 and 34 percent in 2000, with China surpassing the United States in 2011. In this respect, China has caught up.
China’s rise has also brought massive benefits to the country’s population, although here there is obviously much more to be done. With a population more than four times as large as that of its closest economic competitor, China won’t likely match even half the United States’ gdp per capita until around 2030. To be sure, the country has made major strides in other areas. Its average life expectancy (around 76 years) is nearing the United States’ (around 79 years). Educational levels in the two countries are comparable. And measured by the Gini coefficient, economic inequality in China may now be lower than it is in the United States. Yet since 1979, most of the windfall from China’s rise has accrued mainly to those who live in urban or coastal areas. Realizing Beijing’s ultimate development goal—“common development and common prosperity”—will require not only more sustainable growth but also more evenly distributed gains.
To a certain extent, China’s latest slowdown was inevitable. Three decades of breakneck growth have left China with an economy that is simply massive, making marginal increases in size all the more difficult. Even measured using current exchange rates, Chinese gdp exceeded $10 trillion in 2014, which means that growing by ten percent would amount to adding $1 trillion to the economy after one year, a sum greater than the entire gdp of Saudi Arabia, which is among the world’s largest economies. Growth on this scale was bound to become unsustainable at some point. It essentially requires an unlimited supply of energy and puts enormous stress on the environment. China already emits more carbon into the atmosphere than the United States and the EU combined, and its emissions are still increasing.
http://www.globaltimes.cn/content/1068750.shtml
China releases new standards on Marxist education to promote better understanding of Marxist theory and ideology:
"Chinese education authorities have unveiled some standards for the study of Marxism at university, which experts have said shows China's new emphasis on Marxist education and ideology.
The standards come from the Ministry of Education (MOE), with specific requirements for school facilities, faculty and courses, according to a post on MOE's WeChat account Wednesday.
This is the first document in China to give detailed requirement on the subject, and it is especially significant as it offers verifiable standards for evaluation, he added.
The document states that the university's principal and Party chief will have the main responsibility for Marxist work and need to hold at least one office meeting on that each academic year.
Schools of Marxism are to be regarded as independent institutions, directly under the university, whose leaders are responsible for establishing the ideology and theoretical studies for all students.
These quantifications are meant to help clarity the university's responsibilities in a Marxist education and to get their senior personnel to look for more practical applications instead of just talking about it, said Zhuang.
"In this way, schools of Marxism can place more importance on its ideological power and not confine it to one department, but spread its message all over the university," he said.
The standards also call for mid-to-small Marxism classes of no more than 100 students each.
"Small classes have much better quality and a greater effect than large classes, because students can discuss things with each other and communicate with the teacher better," Zhu Andong, an associate professor at Tsinghua University's School of Marxism, told the Global Times.
Most universities still need some time to achieve the standard required, mainly because of the limited number of full-time teachers, Zhu added.
The standards also call for full-time teachers at these schools to be Party members at least in principle, and both part-time and full-time Marxism teachers have to have a related academic background.
In the area of Party and ideological development at Marxism schools, students and teachers are asked to organize Party activities for at least half a day every month.
http://www.chinadaily.com.cn/china/2017-09/30/content_32668217.htm
http://www.chinadaily.com.cn/china/2017-10/01/content_32712243.htm
https://www.washingtonpost.com/news/worldviews/wp/2017/10/11/china-treats-its-foreign-aid-like-a-state-secret-new-research-aims-to-reveal-it/?utm_term=.fcade93720c1
Edited by JohnBeige (today 11:46:23)
Really great post thanks.
if you edit the original post out of the quote tags you save everyone from having to scroll so much. just a heads up.
Petrol posted:Dimashq posted:JohnBeige posted:heres a billion articles
http://www.heritage.org/testimony/chinese-state-owned-enterprises-and-us-china-economic-relations
"The discussion of SOEs has been undermined by a fundamental error: the conflation of restructured, share-holding firms with the truly private sector. Share-holding SOEs are manifestly not private actors and assessments of the corporate sector that assume so are fatally flawed from the outset. The origin of this mistake is historical. As quasi-state entities emerged and proliferated, it was clear some sort of separate treatment was necessary and the concept of “non-state” was created. This was never intended to indicate “private”—quite the opposite: it was meant to signify that the creation of corporate forms quite different from SOEs could occur without privatization and its ideological pitfalls.
The meaning of “non-state” is very well understood by the Chinese government. The (sometimes willful) misunderstanding outside China rests on two shaky pillars. The first is a mis-rendering of “non-state”—where the PRC sees the opposite of state as non-state, many foreign observers see the opposite of state as “private” and simply re-label accordingly. The second is more sophisticated and based on the share-holding change.
Neither specification of share-holders nor sale of stock by itself does anything to alter state control. The large majority of firms listed on domestic stock markets are specifically designated as state-owned. The sale of small minority stakes on foreign exchanges could be construed as recasting mainstays such as CNPC (through its list vehicle PetroChina), China Mobile, and Chinalco as non-state entities of some form. However, they are still centrally directed SOEs, as explicitly indicated by the Chinese government.
More broadly, firms are defined by inputs and outputs. Most Chinese firms sell in a market environment that is unrecognizably different from the operating environment in 1975 and sharply different even from the one in 1995. In this sense almost none of them are still traditional Chinese SOEs. On the output side, however, the requirement that the state predominate in so many sectors is meant to sharply confine competition, so that SOEs operate within markets but they operate primarily within state-controlled markets. This regulatory protection is the most powerful subsidy many SOEs receive.
The input side also continues to distinguish SOEs clearly from foreign or domestic private companies. Production inputs comprise labor, capital, land, and other physical resources such as energy. For SOEs, including those which have completed share-holding reform, all of these show the state’s overwhelming role. It is routine for Chinese officials to bounce back and forth from corporate to government posts at the behest of the Party, no less so at China Mobile and the like than anywhere else.
In stark contrast to private firms, which often cannot buy land at any price, SOEs have immediate call on free land, which is all technically owned by the state. The main barrier to SOEs acquiring land is other SOEs. SOEs as a matter of course also receive hefty power and other input subsidies not available to genuinely private firms.
As for capital, every aspect is dominated by the state. All large financial institutions are state-owned, the People’s Bank assigns loan quotas every year, and, within these quotas, lending is directed according to state priorities. Interest rates are also controlled, and last year real borrowing costs were barely above zero.
Conveniently, then, loan quotas and bank practices strongly inhibit non-state borrowing. Securities markets are also dominated by the state. As an illustration, the volume of government bond issuance utterly dwarfs corporate bonds and is growing relentlessly, crowding out private firms."
http://wiki.p2pfoundation.net/Role_of_the_State_in_Chinese_Economic_Development
The popular image presented in western media is that the State Owned Enterprises, SOEs, are the last remaining dinosaurs of socialism in China, soon to die out. But the industries of the “rust-belt” stubbornly refuse to do just that. A discussion paper with the title Explaining the Persistence of State Ownership in China7 shows that in the past 10 years the number of SOEs has declined dramatically from 84 397 to 29 229, but the share of the SOEs in the industrial sector has hovered steadily around 33-34 percent, rising slightly in 2003 and 2004 to 35.5 and 37.0 percent respectively. Considering that industrial production as a whole has increased a lot during period, this actually represents a big expansion of the SOEs. Employment in SOEs fell by 40 percent from 1998 to 2003 at the same time as they maintained their share of GDP.9 This represents a considerable increase of productivity in the SOEs, especially considering that GDP leaped forward during this period. Nineteen Chinese companies, all of them SOEs, are in Fortune Global 500 list of the largest companies in the world in 2005.
The SOEs completely dominate the capital intensive industries. It is difficult to see how Chinese capitalists will ever be able to compete with the resources of the state in these areas. Not even foreign multi-nationals, with all the resources they have at their command, are able to do so. Even though managers of state firms have some independence in deciding how to dispose over the surplus created by the workers in their industries that does not turn them into capitalists. As Trotsky remarked: “The biggest apartments, the juiciest steaks, and even Rolls Royces are not enough to transform the bureaucracy into an independent ruling class.”
To fully understand the role of the state sector of the economy it is not enough to just look at what proportion they have of GDP, nor the degree of concentration. It is also important, if not more so, to look at what proportion of investments are channelled through the state sector, because investments are the driving force of the economy. And under capitalism, through the mechanism of the tendency of the rate of profit to fall, the cause of the boom-slump cycle. Fortunately, statistics about fixedasset investments (investments in buildings and machinery) are also much more accurate and uncontested compared to GDP statistics.
They are divided into four periods.
State Investments as Percentage of Total Investments
1981 – 1989 (the “roaring eighties”) 78.6 percent
1990 – 1992 (post-Tiananmen Square) 81.2 percene
1993 – 2001 (the restructuring of the SOEs) 86.7 percent
2002 – 2005 (post-reconstruction) 85.3 percent
These figures are truly astonishing. They show not only that state the plays an absolutely decisive role in the economy, but also that state investments as a proportion of all investments have increased substantially since the eighties, only to fall back slightly between 2002 and 2005. This confirms that rather than moving towards capitalism in the nineties, China moved away from it. The present financial crisis will certainly raise the state’s share of investments again, possibly to its highest level since 1978
https://www.workers.org/2016/03/21/china-the-u-s-and-global-warming-part-3/
The U.S. website mining.com, citing Chinese sources, reported on Jan. 21 that “Beijing plans to close about 4,300 coal mines, remove outdated production capacity of 700 million tons and redeploy around 1 million workers over the next three years. … China has eliminated about 560 million tons of coal production capacity and closed 7,250 coal mines in the last five years.”
This was updated in a China Daily report on Feb. 2 that Beijing “has promised to spend 100 billion yuan ($15.25 billion) a year for up to five years to address overcapacity in sectors such as steel and coal, while local governments will contribute another 100 billion yuan. … The coal industry alone will get around 140 billion yuan, and 1.8 million employees in the sector will be relocated.”
What’s important here, from our point of view, is that China is committing very large sums to relocate the affected workers.
https://www.workers.org/2013/03/01/obamas-energy-choice-shill-for-shale-gas-industry/
Two things there should stand out: one is that China, despite its abundance of coal, is steering its economy away from coal because of the environmental effects it has. The other is that almost 2 million workers who will be out of a job will be given jobs in other industries. If any workers do become unemployed as part of this process, it'll be due to inefficiencies in the state apparatus in relocating them.
What about the US?
"During his Feb. 12 State of the Union address, Obama claimed that climate change was a main concern of his second term. He even suggested he would consider executive actions if Congress failed to regulate carbon emissions. However with his next breath, Obama promised to encourage more drilling for natural gas, in essence giving a wink and a nod to industry executives.
His consideration of Moniz for energy secretary confirms this. Moniz’s study promotes the use of shale gas as an alternative to fossils fuels like coal, while seriously downplaying the question of methane release during fracking. The big industry lie is that natural gas is better for the climate than fossil fuels like coal or oil.
Studies have shown that heavy use of fracking actually promotes greater fossil-fuel reliance, while effectively putting investment in renewable technology on the back burner."
http://www.heraldstandard.com/gcm/news/local_news/coal-job-losses-add-to-region-s-unemployment/article_ff06bb64-9f3f-5928-8d48-4f742651ae07.html
Across the Pittsburgh Metropolitan Statistical Area, which locally includes Fayette, Washington and Westmoreland counties, mining and logging jobs dropped from 11,500 to 9,800.
That helped raise the seasonally adjusted unemployment rate for the entire seven-county area from 5.4 percent to 5.8 percent over the 12 months ending in April. The rate rose during that time from 7.5 percent to 8.7 percent in Fayette, 5.5 percent to 6.8 percent in Washington and 5.4 percent to 6.3 percent in Westmoreland.
Every area county showed a seasonally adjusted increase in the size of the workforce and the number out of work, according to figures provided by the Department of Labor and Industry."
http://crisiscritique.org/wp-content/uploads/2014/01/Boer_Socialism.pdf
https://philosophersforchange.org/2014/05/15/taking-notes-36-is-china-communist/
http://dschwei.sites.luc.edu/ChinaCap.GSA.pdf
https://communistuniversity.wordpress.com/2014/05/05/is-china-sociaslist/
https://robertlindsay.wordpress.com/2012/04/24/china-is-not-as-capitalist-as-you-think/
http://www.china.org.cn/opinion/2012-10/14/content_26776253.htm
Property market bubbles? What property? Private property, for sure, but it’s not real property. All real estate is 100% owned by the people of China. There is not one square metre of private land in the People’s Republic. You can pay for up to a 70-year usage lease on a piece of land and develop it, but no one can buy the dirt.
Private enterprise? It is thriving for sure, but is heavily concentrated in small and medium sized enterprises (SMEs), that complement and do not seriously compete with the state sectors of the economy. The private sector is especially the many millions of mom and pop and solo businesses that blanket the country.
Free markets? There is not one private bank in China. They are all people powered. The world’s largest bank, Industrial and Commercial Bank of China (ICBC) is state owned of course, as well as three other global Top Ten banks: #1 (ICBC), #5 China Construction Bank (CCB), #9 Bank of China (BOC) and #10 Agricultural Bank of China (ABC).³ Ditto all insurance companies, the Shanghai and Shenzhen stock and precious metals markets. Same goes for all major media outlets, especially television, radio and print media, although everyone has heard about Beijing being the new “Hollywood of the East”, which is mostly private sector.
Unfettered capitalism? Get outta here! Almost all major economic sectors in China are dominated by state-owned enterprises (SOEs). Everything from airlines/avionics to aerospace to chemical industries, from construction to maritime shipping to mining, from nuclear energy to petroleum to railways, from steel to telecommunications to utilities, over 100 key sectors have a huge, people-powered footprint. Many are some of the world’s biggest corporations. Not only that, but they are, like the aforementioned state banks, very profitable and well-run, contrary to relentless Western propaganda.
Privatisation? You have to look beyond the deceptive headlines. Baba Beijing caps the sale of SOE stock to the public, at 30%. Furthermore, there are strict controls on making sure someone doesn’t try to control what’s offered. The ownership of the shares has to be spread out. Most of these stocks are owned by Chinese citizens (A shares), but some are on offer to foreigners (B shares). Interestingly, more and more Chinese companies, including SOEs, are doing IPOs in Western stock markets, as part of their 30%.
Reforms? Ha-ha-ha, the joke’s on you! Baba Beijing will never sell off the people’s SOEs. It knows that the citizens’ social harmony and economic stability are rooted in its ability to macro-manage and long term (Five-Year) plan the country’s direction, via the 100% ownership of all the real estate (Marxism’s controlling the means of production), as well as the key industries and sectors. The CPC will continue to create wealth, under the rubric of socialism with Chinese characteristics, by borrowing some capitalist trappings. But it is only transitional. Deng Xiaoping said it many times and it continues going unheard in the West, that the goal is to follow the Marxist economic path to a wealthy communist society.
http://www.greanvillepost.com/2016/10/18/so-called-communist-china/
In short, the expansion of the private sector has been robust, and in the area of industry, the private sector in China is approaching the size of the measureable state sector in many respects. At the same time, it would be a mistake to view these incomplete data and conclude that the pure private sector accounts for the majority of China’s economy. The observable SOE sector under reasonable assumptions accounts for nearly 40 percent of China’s economy. Given additional information on the prevalence of SOE ownership in China’s capital markets, anecdotal and observed data on the prevalence of SOE ownership among LLCs and other
ownership categories, and the SOE role in round‐tripped FDI, it is reasonable to conclude that by 2009 nearly half of China’s economic output could be attributable to either SOEs, SHEs, and other types of enterprises controlled by the SOEs indirectly. If the output of urban collective enterprises and the government‐run proportion of TVEs are considered, the broadly defined state sector likely surpasses 50 percent.
"This conclusion goes beyond all the published estimates we have reviewed, but is consistent with the opinions of knowledgeable individuals currently dealing with Chinese enterprises in policy and business settings. This conclusion is likely startling in view of prior estimates that the private sector in China accounts for 70 percent of GDP. But such a dominant private role is inconsistent with socialism with Chinese characteristics as articulated by the CCP. For example, the government‐run People’s Daily provides this definition of socialism with Chinese characteristics as used in 17th People’s Congress: “On its economic fronts, China sticks to a multi‐ownership‐oriented basic market economic system, with the public ownership in the dominance.”36 This thinking is also memorialized in China’s five year plans.37 Through 2009, at least, the size of the public sector dovetails with the CCP’s vision.
https://www.uscc.gov/sites/default/files/Research/10_26_11_CapitalTradeSOEStudy.pdf
http://www.xinfajia.cn/12967.html
In my personal opinion, the best way to answer questions like this is to examine closely China's socialist revolution and the transformation of China from a semi-feudal semi-colonial country to a socialist one, and come to a full Marxist understanding of what form of ownership is dominant in China. The goal of China's New-Democratic Revolution was to overthrow the big three mountains: "imperialism, feudalism, and bureaucrat-capitalism" and to establish a people's democratic dictatorship based on the alliance of the working class and the peasants.
Generally speaking, socialist relations of production do not come into being under capitalism. In the case of China, though, the seeds of these relations came into being in the liberated areas of China, in the revolutionary base areas. This included economic sectors under state and cooperative ownership which expanded during the war of liberation. Governments in the liberated areas confiscated the property of bureaucrat-capitalists and placed them under state ownership.
After the revolution, the socialist transition began. This period lasted from the foundation of the people's republic in 1949 to 1956. During this period the "Three Transformations" took place, which was the socialist transformation of agriculture, capitalist industry and commerce, and handicraft industry.
In China the socialist public ownership is the mainstay of the economy, the dominant mode of production. However China has diverse forms of ownership which develop side-by-side.
In socialist China, the forms of public ownership of the means of production include the ownership by the whole people, collective ownership, and other forms of public ownership, as well as the public part of the mixed ownership sector. Along these forms, the ownership by the whole people and collective ownership play the dominant role.
The economic sector under the ownership of the whole people is the strongest economic and technological power in China today. It controls the national economy and dominates the major economic resources and natural resources of China.
At this present stage of socialism, the primary stage, ownership by the whole people refers to state ownership.
The economic sector under collective ownership is divided into the rural collective economic sector and urban collective economic sector.
There are also joint-stock companies, economic conglomerates, and enterprise groups which are under the system of ownership by the whole people or collective ownership.
The sector of the economy under mixed ownership usually takes the place of Sino-foreign co-operative businesses including Sino-foreign joint ventures and Sino-foreign contractual businesses, and that of the economic sector which is joint public-private.
In China state-owned enterprises provide the necessary public products for the whole society to meet the growing material and cultural needs of the people. The state-owned enterprises play a leading role in such fields as coal, petroleum, electricity, and steel. They provide 70% of China's coal, 92% of its petroleum, 91% of its electric power and half of its ferrous metal. They supply such basic services such as railway transportation, aviation transportation and maritime transportation.
These state-owned sectors are the pillars of China, without them China would fall and polarization would become extreme.
China is enacting fundamentally correct policies which are the requirements of the primary stage of socialism, where developing the productive forces is required to bring China into the new era and advance socialism to a higher stage. The non-public sectors are subordinate to the socialist public sectors and play a supporting role in building socialism. Despite being very profitable and productive, they are under the thumb of the Communist Party and cannot function without its approval.
http://www.invent-the-future.org/2016/12/from-the-chinese-marxist-viewpoint-an-interview-with-professor-deng-chundong/
https://www.loc.gov/law/help/real-property-law/china.php
https://mobile.nytimes.com/2017/02/12/opinion/china-the-party-corporate-complex.html
China’s many high-profile moves to open up its markets in recent years turn out to have been half-hearted, if not intentional hoodwinking.
Despite the much-ballyhooed dismantling of the more than 2,000-year-old state monopoly on salt, all salt producers are still state-owned. Foreign asset-management companies are now allowed to operate wholly foreign-owned businesses in China, but only in deals with institutional investors and private-equity funds, not retail investors, a much bigger piece of meat. Partly to steady the renminbi, Beijing no longer allows Chinese citizens to take up to $50,000 a year out of the country, and it has recently restricted the repatriation of capital by foreign firms like Deutsche Bank.
Hyper control, interventionism, currency manipulation — no, China is not a market economy. But it’s worse than that: The Chinese Communist Party (C.C.P.) has systematically infiltrated China’s expanding private sector and now operates inside more than half of all nonstate firms; it can manipulate or even control these companies, especially bigger ones, and some foreign ones, too. The modern Chinese economy is a party-corporate conglomerate.
https://www.cnbc.com/2017/02/27/chinese-wages-rise-made-in-china-isnt-so-cheap-anymore.html
Turns out that "made in China" is not so cheap anymore as labor costs have risen rapidly in the country's vast manufacturing sector.
Chinese factory workers are now getting paid more than ever: Average hourly wages hit $3.60 last year, spiking 64 percent from 2011, according to market research firm Euromonitor. That's more than five times hourly manufacturing wages in India, and is more on par with countries such as Portugal and South Africa.
As China's economy expanded at breakneck speed, so has pay for employees. But the wage increase has translated to higher costs for companies with assembly lines in China. Some firms are now taking their business elsewhere, which also means China could start losing jobs to other developing countries like Sri Lanka, where hourly factory wages are $0.50.
http://socialisteconomicbulletin.blogspot.com/2017/07/china-faces-slower-western-growth-than.html
https://www.forbes.com/sites/wadeshepard/2017/07/25/xi-jinping-to-chinas-private-sector-go-home-the-belt-and-road-is-not-for-you/#110bd48817fb
https://www.economist.com/news/leaders/21725295-bad-china-and-world-chinas-state-enterprises-are-not-retreating-advancing
Mr Xi remains well aware of the need for reform; on July 15th he repeated warnings about indebtedness at SOEs. But only some of the initiatives rolled out on his watch are aimed at slimming the state sector. Two of them point in another direction entirely. One is the merging of competing SOEs. The arm of the government responsible for looking after these firms has engineered mergers of ports, railway-equipment makers and shipping companies; a vast chemicals combination is planned. Such deals often seem intended to spawn national champions, not to pare overcapacity.
The other disturbing trend is the proliferation of “state capital investment and operation” companies (SCIOs). The state has thus far tended to dominate in heavy industries, transport and energy, leaving private firms to forge ahead in technology. SCIOs will, in part, function like state-run private-equity funds whose remit is to extend the reach of government. Provincial governments have published plans to push funds into areas such as biotechnology and cloud computing...
Previous leaders have managed the tension between a liberalising economy and an obsession with stability through a mix of rapid growth and political repression. Mr Xi does not want to change that recipe. But he is doing something more radical: reversing the state’s retreat from the economy.
https://www.economist.com/news/finance-and-economics/21725293-outperformed-private-firms-they-are-no-longer-shrinking-share-overall
Over the past few years the state sector has, by several measures, stopped shrinking. There are still more than 150,000 SOEs in operation, two-thirds owned by local governments and the rest under central control. Private firms are much more productive, but state firms gobble up a disproportionate share of resources. They take about half of all bank loans and are the main culprits behind China’s big increase in corporate debt. Since 2015 investment by SOEs has grown faster than private-sector investment, reversing a decades-long trend
...
The fear is that the reforms, taken together, not only fail to solve the most pressing problems, but might even be aggravating them. SOEs are getting bigger, not smaller; their management has become more conservative; and their deficiencies are beginning to infect the economy more widely.
...
At a meeting on SOEs last October he devoted his comments not to reform but to the necessity of strengthening the party’s grip. “The party’s leadership of SOEs is a major political principle, and that principle must be insisted on,” he said.
People who work in and with SOEs report a palpable change in atmosphere in recent years. “Party officials are not the same as the technocrats who used to run the SOEs,” says a top banker. “They don’t take risks. Doing nothing is what’s safe.” Some of the most capable employees are leaving SOEs altogether. Political education, always a part of life in state firms, has been stepped up. One manager who recently quit a big state bank said that a campaign exhorting workers to study the party constitution had been unusually intense.
At the same time the government has capped pay for senior executives, concerned that they were getting more than government employees of equivalent ranks, stoking resentment. Yet on an international basis, SOE bosses are dramatically underpaid. The president of PetroChina, the country’s biggest oil company, earned 774,000 yuan ($112,000) in 2016; the CEO of Chevron, a firm of roughly the same market value, pulled in a handsome $24.7m.
...
There is a big looming worry, however. One aspect of SOE reform is in fact making quick progress: the creation of what are known as “state capital investment and operation” companies (SCIOs), to help manage existing state assets and invest in new ones. This initially looked like part of the solution for China. It borrows an approach honed in Singapore, where Temasek, a government-owned holding company, manages a portfolio of state firms but does not meddle in their operations, apart from demanding that they deliver good returns. It is now clear that this is not what China has in mind. Government officials say that SCIOs should not seek to make money in their investments; rather, they are meant to be more like “policy funds”, seeding firms and industries with government cash or money raised from SOE dividends without worrying about profit.
The other striking feature of SCIOs is that they are expressly enjoined to break into new high-tech sectors. Provincial governments around the country have published plans over the past two years in which they promise to guide more than 80% of their funds into infrastructure, public services and, crucially, “strategic emerging industries”, a category that refers to new energy, biotechnology and IT, among other areas. The upshot is that SCIOs, armed with cheap capital, seem set on expanding the state’s reach into the private sector. “We should anticipate the emergence of literally thousands of well-resourced SCIOs,” says Barry Naughton at the University of California in San Diego.
State-backed private-equity funds, which can be seen as forerunners to the investment function of the SCIOs, are already making a big impact. To give three examples from last year: the city of Shenzhen launched a 150bn yuan fund; Jiangxi, a relatively poor central province, created a 100bn yuan fund; and the city of Chengdu set up a 40bn yuan fund. This influx of cash is pushing up valuations. Bain & Co, a consultancy, calculates that private-equity deals in China were priced last year at a frothy 26-times earnings before interest, tax, depreciation and amortisation, compared with ten times in America. The state may turn out to be a wise investor but experience suggests otherwise. More likely, the state will crowd out private investors, hogging capital and allocating it poorly.
...
SOEs, far from retreating, are on the march, drawing on government support to compensate for their weakness. They are making conquests at home and abroad. Cutting state firms down to size and opening them up to competition ought to be the point of SOE reform. Instead, China is beefing them up and driving them into new territory.
China's Communist party is writing itself into the articles of association of many of the country’s biggest companies in a blow to investor hopes that Beijing would relax its grip on the market.
More than 30 Hong Kong-listed state-owned enterprises, representing more than $1tn in market capitalisation, have this year added lines to their central documents that place the party, rather than the Chinese state, at the heart of each group.
New phrases injected into the articles of association in recent months include describing the party as playing a core role in “an organised, institutionalised and concrete way” and “providing direction managing the overall situation”.
While the new language makes explicit investors’ long-held assumption of party influence, the changes are the first time the party rather than the government has been named, investors said.
...
“This is a reminder to investors they are buying into a party machine,” said David Webb, an independent investor and shareholder activist in Hong Kong. “This move to embed the party into constitutional documents of the companies puts a lie to the government’s claim they want market forces to play a greater role.”
Investors have voiced frustration with their inability to stop the changes.
“While it serves to formalise something investors were already aware of, this formalisation is not really the direction of travel investors wanted to see,” said David Smith, head of corporate governance at Aberdeen Asset Management Asia.
https://www.ft.com/content/a4b28218-80db-11e7-94e2-c5b903247afd
China has announced a “Made in China 2025” plan to dominate in the production of semiconductors, artificial intelligence, autonomous vehicles, biotechnology and every other high-tech industry likely to drive economic growth beyond 2025. The US, which remains the most innovative country in the world, stands firmly in China’s path.
But rather than building a globally competitive free market economy in order to compete, China has chosen instead to compel American companies that want to operate in China to turn over proprietary technology and intellectual property.
China does this by making joint ventures with Chinese companies a prerequisite for market access; by limiting American ownership to 50 per cent or less of most enterprises in China; and, in some cases, by requiring technology transfers as part of product sale contracts.
The Beijing government and Chinese companies also pursue an investment strategy whereby they identify US start-ups with scientific breakthroughs and then make investments in those companies on better-than-market terms. The primary consideration in this investment is not rate of return, but the capture of new technologies, which the Chinese then use for other purposes.
Through investments like this, Chinese companies gain access to breakthrough technologies that could create billions of dollars of future revenues without paying royalties. An initial overpayment of a few million dollars is very important to the American high-technology start up, but is a rounding error relative to China’s multibillion dollar long-term objectives of technological superiority.
The Chinese actively search for those US companies that pioneer the technologies that China lacks. They then carefully target those companies in order to acquire their expertise. Meanwhile, companies seeking access to the Chinese market or to Chinese capital are pressured into turning over their patents, their most advanced research, and their know-how.
The offensive against American intellectual property does not end there. Less well known are the efforts of Chinese lawyers to initiate antitrust actions in Chinese courts to invalidate patents on the theory they create illegal monopolies. Think of how counterintuitive that is. The whole idea of a patent is to reward the inventor with a period of exclusive rights to the invention. A legally granted monopoly is no justification for an antitrust proceeding. But China is willing to go to great lengths to capture American technologies.
https://www.foreignaffairs.com/articles/china/2015-04-20/embracing-chinas-new-normal
It is clear by now that China’s economy is set to slow in the years to come, although economists disagree about how much and for how long. Last year, the country’s gdp growth rate fell to 7.4 percent, the lowest in almost a quarter century, and many expect that figure to drop further in 2015. Plenty of countries struggle to grow at even this pace, but most don’t have to create hundreds of millions of jobs over the next decade, as China will. So understandably, some experts are skeptical about the country’s prospects. They argue that its productionfueled growth model is no longer tenable and warn, as the economist Paul Krugman did in 2013, that the country is “about to hit its Great Wall.” According to this view, the question is not whether the Chinese economy will crash but when.
Such thinking is misguided. China is not nearing the edge of a cliff; it is entering a new stage of development. Chinese President Xi Jinping has called this next phase of growth the “new normal,” a term that Mohamed El-Erian, the former CEO of the global investment firm pimco, famously used to describe the West’s painful economic recovery following the 2008 financial crisis. But Xi used the phrase to describe something different: a crucial rebalancing, one in which the country diversifies its economy, embraces a more sustainable level of growth, and distributes the benefits more evenly. The new normal is in its early stages now, but if Beijing manages to sustain it, China’s citizens can count on continued growth and material improvements in their quality of life. The rest of the world, meanwhile, can expect China to become further integrated into the global economy. The Chinese century is not at the beginning of the end; it is at the end of the beginning.
Understanding China’s new normal requires some historical context. As a latecomer to the modern economy, China has followed what one could call a “catch-up growth” model, which involves rapid economic growth following years of lagging behind. From 1870 to 1913, for example, the U.S. economy followed precisely this path, growing at an average rate of four percent. Between 1928 and 1939, Russia’s gdp grew at an average rate of 4.6 percent. And from 1950 to 1973, Japan’s economy grew at an average rate of 9.3 percent. Yet none of those countries came close to matching China’s record from 1978 to 2011: an average gdp growth rate of nearly ten percent over 33 years.
This ascent has helped China’s economy approach, and perhaps even surpass, that of the United States. In terms of purchasing power parity, a measure economists use for cross-country comparisons, China’s gdp surpassed that of the United States in 2010 or 2014, depending on whether one relies on historical statistics from the Maddison Project or data from the World Bank’s International Comparison Program. Yet if one relies on the World Bank Atlas method, China’s economy won’t likely outgrow the United States’ until 2019. And China’s gdp still trails that of the United States if calculated using current U.S. dollars. But the best method for comparing the two economies objectively is power generation, since it is physical and quantifiable. It also closely tracks modernization; without electricity, after all, or at least without a lot of it, one can’t run factories or build skyscrapers, which is exactly what China has been doing. In 1900, China generated 0.01 percent of the power the United States did. That figure rose to 1.2 percent in 1950 and 34 percent in 2000, with China surpassing the United States in 2011. In this respect, China has caught up.
China’s rise has also brought massive benefits to the country’s population, although here there is obviously much more to be done. With a population more than four times as large as that of its closest economic competitor, China won’t likely match even half the United States’ gdp per capita until around 2030. To be sure, the country has made major strides in other areas. Its average life expectancy (around 76 years) is nearing the United States’ (around 79 years). Educational levels in the two countries are comparable. And measured by the Gini coefficient, economic inequality in China may now be lower than it is in the United States. Yet since 1979, most of the windfall from China’s rise has accrued mainly to those who live in urban or coastal areas. Realizing Beijing’s ultimate development goal—“common development and common prosperity”—will require not only more sustainable growth but also more evenly distributed gains.
To a certain extent, China’s latest slowdown was inevitable. Three decades of breakneck growth have left China with an economy that is simply massive, making marginal increases in size all the more difficult. Even measured using current exchange rates, Chinese gdp exceeded $10 trillion in 2014, which means that growing by ten percent would amount to adding $1 trillion to the economy after one year, a sum greater than the entire gdp of Saudi Arabia, which is among the world’s largest economies. Growth on this scale was bound to become unsustainable at some point. It essentially requires an unlimited supply of energy and puts enormous stress on the environment. China already emits more carbon into the atmosphere than the United States and the EU combined, and its emissions are still increasing.
http://www.globaltimes.cn/content/1068750.shtml
China releases new standards on Marxist education to promote better understanding of Marxist theory and ideology:
"Chinese education authorities have unveiled some standards for the study of Marxism at university, which experts have said shows China's new emphasis on Marxist education and ideology.
The standards come from the Ministry of Education (MOE), with specific requirements for school facilities, faculty and courses, according to a post on MOE's WeChat account Wednesday.
This is the first document in China to give detailed requirement on the subject, and it is especially significant as it offers verifiable standards for evaluation, he added.
The document states that the university's principal and Party chief will have the main responsibility for Marxist work and need to hold at least one office meeting on that each academic year.
Schools of Marxism are to be regarded as independent institutions, directly under the university, whose leaders are responsible for establishing the ideology and theoretical studies for all students.
These quantifications are meant to help clarity the university's responsibilities in a Marxist education and to get their senior personnel to look for more practical applications instead of just talking about it, said Zhuang.
"In this way, schools of Marxism can place more importance on its ideological power and not confine it to one department, but spread its message all over the university," he said.
The standards also call for mid-to-small Marxism classes of no more than 100 students each.
"Small classes have much better quality and a greater effect than large classes, because students can discuss things with each other and communicate with the teacher better," Zhu Andong, an associate professor at Tsinghua University's School of Marxism, told the Global Times.
Most universities still need some time to achieve the standard required, mainly because of the limited number of full-time teachers, Zhu added.
The standards also call for full-time teachers at these schools to be Party members at least in principle, and both part-time and full-time Marxism teachers have to have a related academic background.
In the area of Party and ideological development at Marxism schools, students and teachers are asked to organize Party activities for at least half a day every month.
http://www.chinadaily.com.cn/china/2017-09/30/content_32668217.htm
http://www.chinadaily.com.cn/china/2017-10/01/content_32712243.htm
https://www.washingtonpost.com/news/worldviews/wp/2017/10/11/china-treats-its-foreign-aid-like-a-state-secret-new-research-aims-to-reveal-it/?utm_term=.fcade93720c1
Edited by JohnBeige (today 11:46:23)
Really great post thanks.
if you edit the original post out of the quote tags you save everyone from having to scroll so much. just a heads up.
cars posted:Petrol posted:Dimashq posted:JohnBeige posted:heres a billion articles
http://www.heritage.org/testimony/chinese-state-owned-enterprises-and-us-china-economic-relations
"The discussion of SOEs has been undermined by a fundamental error: the conflation of restructured, share-holding firms with the truly private sector. Share-holding SOEs are manifestly not private actors and assessments of the corporate sector that assume so are fatally flawed from the outset. The origin of this mistake is historical. As quasi-state entities emerged and proliferated, it was clear some sort of separate treatment was necessary and the concept of “non-state” was created. This was never intended to indicate “private”—quite the opposite: it was meant to signify that the creation of corporate forms quite different from SOEs could occur without privatization and its ideological pitfalls.
The meaning of “non-state” is very well understood by the Chinese government. The (sometimes willful) misunderstanding outside China rests on two shaky pillars. The first is a mis-rendering of “non-state”—where the PRC sees the opposite of state as non-state, many foreign observers see the opposite of state as “private” and simply re-label accordingly. The second is more sophisticated and based on the share-holding change.
Neither specification of share-holders nor sale of stock by itself does anything to alter state control. The large majority of firms listed on domestic stock markets are specifically designated as state-owned. The sale of small minority stakes on foreign exchanges could be construed as recasting mainstays such as CNPC (through its list vehicle PetroChina), China Mobile, and Chinalco as non-state entities of some form. However, they are still centrally directed SOEs, as explicitly indicated by the Chinese government.
More broadly, firms are defined by inputs and outputs. Most Chinese firms sell in a market environment that is unrecognizably different from the operating environment in 1975 and sharply different even from the one in 1995. In this sense almost none of them are still traditional Chinese SOEs. On the output side, however, the requirement that the state predominate in so many sectors is meant to sharply confine competition, so that SOEs operate within markets but they operate primarily within state-controlled markets. This regulatory protection is the most powerful subsidy many SOEs receive.
The input side also continues to distinguish SOEs clearly from foreign or domestic private companies. Production inputs comprise labor, capital, land, and other physical resources such as energy. For SOEs, including those which have completed share-holding reform, all of these show the state’s overwhelming role. It is routine for Chinese officials to bounce back and forth from corporate to government posts at the behest of the Party, no less so at China Mobile and the like than anywhere else.
In stark contrast to private firms, which often cannot buy land at any price, SOEs have immediate call on free land, which is all technically owned by the state. The main barrier to SOEs acquiring land is other SOEs. SOEs as a matter of course also receive hefty power and other input subsidies not available to genuinely private firms.
As for capital, every aspect is dominated by the state. All large financial institutions are state-owned, the People’s Bank assigns loan quotas every year, and, within these quotas, lending is directed according to state priorities. Interest rates are also controlled, and last year real borrowing costs were barely above zero.
Conveniently, then, loan quotas and bank practices strongly inhibit non-state borrowing. Securities markets are also dominated by the state. As an illustration, the volume of government bond issuance utterly dwarfs corporate bonds and is growing relentlessly, crowding out private firms."
http://wiki.p2pfoundation.net/Role_of_the_State_in_Chinese_Economic_Development
The popular image presented in western media is that the State Owned Enterprises, SOEs, are the last remaining dinosaurs of socialism in China, soon to die out. But the industries of the “rust-belt” stubbornly refuse to do just that. A discussion paper with the title Explaining the Persistence of State Ownership in China7 shows that in the past 10 years the number of SOEs has declined dramatically from 84 397 to 29 229, but the share of the SOEs in the industrial sector has hovered steadily around 33-34 percent, rising slightly in 2003 and 2004 to 35.5 and 37.0 percent respectively. Considering that industrial production as a whole has increased a lot during period, this actually represents a big expansion of the SOEs. Employment in SOEs fell by 40 percent from 1998 to 2003 at the same time as they maintained their share of GDP.9 This represents a considerable increase of productivity in the SOEs, especially considering that GDP leaped forward during this period. Nineteen Chinese companies, all of them SOEs, are in Fortune Global 500 list of the largest companies in the world in 2005.
The SOEs completely dominate the capital intensive industries. It is difficult to see how Chinese capitalists will ever be able to compete with the resources of the state in these areas. Not even foreign multi-nationals, with all the resources they have at their command, are able to do so. Even though managers of state firms have some independence in deciding how to dispose over the surplus created by the workers in their industries that does not turn them into capitalists. As Trotsky remarked: “The biggest apartments, the juiciest steaks, and even Rolls Royces are not enough to transform the bureaucracy into an independent ruling class.”
To fully understand the role of the state sector of the economy it is not enough to just look at what proportion they have of GDP, nor the degree of concentration. It is also important, if not more so, to look at what proportion of investments are channelled through the state sector, because investments are the driving force of the economy. And under capitalism, through the mechanism of the tendency of the rate of profit to fall, the cause of the boom-slump cycle. Fortunately, statistics about fixedasset investments (investments in buildings and machinery) are also much more accurate and uncontested compared to GDP statistics.
They are divided into four periods.
State Investments as Percentage of Total Investments
1981 – 1989 (the “roaring eighties”) 78.6 percent
1990 – 1992 (post-Tiananmen Square) 81.2 percene
1993 – 2001 (the restructuring of the SOEs) 86.7 percent
2002 – 2005 (post-reconstruction) 85.3 percent
These figures are truly astonishing. They show not only that state the plays an absolutely decisive role in the economy, but also that state investments as a proportion of all investments have increased substantially since the eighties, only to fall back slightly between 2002 and 2005. This confirms that rather than moving towards capitalism in the nineties, China moved away from it. The present financial crisis will certainly raise the state’s share of investments again, possibly to its highest level since 1978
https://www.workers.org/2016/03/21/china-the-u-s-and-global-warming-part-3/
The U.S. website mining.com, citing Chinese sources, reported on Jan. 21 that “Beijing plans to close about 4,300 coal mines, remove outdated production capacity of 700 million tons and redeploy around 1 million workers over the next three years. … China has eliminated about 560 million tons of coal production capacity and closed 7,250 coal mines in the last five years.”
This was updated in a China Daily report on Feb. 2 that Beijing “has promised to spend 100 billion yuan ($15.25 billion) a year for up to five years to address overcapacity in sectors such as steel and coal, while local governments will contribute another 100 billion yuan. … The coal industry alone will get around 140 billion yuan, and 1.8 million employees in the sector will be relocated.”
What’s important here, from our point of view, is that China is committing very large sums to relocate the affected workers.
https://www.workers.org/2013/03/01/obamas-energy-choice-shill-for-shale-gas-industry/
Two things there should stand out: one is that China, despite its abundance of coal, is steering its economy away from coal because of the environmental effects it has. The other is that almost 2 million workers who will be out of a job will be given jobs in other industries. If any workers do become unemployed as part of this process, it'll be due to inefficiencies in the state apparatus in relocating them.
What about the US?
"During his Feb. 12 State of the Union address, Obama claimed that climate change was a main concern of his second term. He even suggested he would consider executive actions if Congress failed to regulate carbon emissions. However with his next breath, Obama promised to encourage more drilling for natural gas, in essence giving a wink and a nod to industry executives.
His consideration of Moniz for energy secretary confirms this. Moniz’s study promotes the use of shale gas as an alternative to fossils fuels like coal, while seriously downplaying the question of methane release during fracking. The big industry lie is that natural gas is better for the climate than fossil fuels like coal or oil.
Studies have shown that heavy use of fracking actually promotes greater fossil-fuel reliance, while effectively putting investment in renewable technology on the back burner."
http://www.heraldstandard.com/gcm/news/local_news/coal-job-losses-add-to-region-s-unemployment/article_ff06bb64-9f3f-5928-8d48-4f742651ae07.html
Across the Pittsburgh Metropolitan Statistical Area, which locally includes Fayette, Washington and Westmoreland counties, mining and logging jobs dropped from 11,500 to 9,800.
That helped raise the seasonally adjusted unemployment rate for the entire seven-county area from 5.4 percent to 5.8 percent over the 12 months ending in April. The rate rose during that time from 7.5 percent to 8.7 percent in Fayette, 5.5 percent to 6.8 percent in Washington and 5.4 percent to 6.3 percent in Westmoreland.
Every area county showed a seasonally adjusted increase in the size of the workforce and the number out of work, according to figures provided by the Department of Labor and Industry."
http://crisiscritique.org/wp-content/uploads/2014/01/Boer_Socialism.pdf
https://philosophersforchange.org/2014/05/15/taking-notes-36-is-china-communist/
http://dschwei.sites.luc.edu/ChinaCap.GSA.pdf
https://communistuniversity.wordpress.com/2014/05/05/is-china-sociaslist/
https://robertlindsay.wordpress.com/2012/04/24/china-is-not-as-capitalist-as-you-think/
http://www.china.org.cn/opinion/2012-10/14/content_26776253.htm
Property market bubbles? What property? Private property, for sure, but it’s not real property. All real estate is 100% owned by the people of China. There is not one square metre of private land in the People’s Republic. You can pay for up to a 70-year usage lease on a piece of land and develop it, but no one can buy the dirt.
Private enterprise? It is thriving for sure, but is heavily concentrated in small and medium sized enterprises (SMEs), that complement and do not seriously compete with the state sectors of the economy. The private sector is especially the many millions of mom and pop and solo businesses that blanket the country.
Free markets? There is not one private bank in China. They are all people powered. The world’s largest bank, Industrial and Commercial Bank of China (ICBC) is state owned of course, as well as three other global Top Ten banks: #1 (ICBC), #5 China Construction Bank (CCB), #9 Bank of China (BOC) and #10 Agricultural Bank of China (ABC).³ Ditto all insurance companies, the Shanghai and Shenzhen stock and precious metals markets. Same goes for all major media outlets, especially television, radio and print media, although everyone has heard about Beijing being the new “Hollywood of the East”, which is mostly private sector.
Unfettered capitalism? Get outta here! Almost all major economic sectors in China are dominated by state-owned enterprises (SOEs). Everything from airlines/avionics to aerospace to chemical industries, from construction to maritime shipping to mining, from nuclear energy to petroleum to railways, from steel to telecommunications to utilities, over 100 key sectors have a huge, people-powered footprint. Many are some of the world’s biggest corporations. Not only that, but they are, like the aforementioned state banks, very profitable and well-run, contrary to relentless Western propaganda.
Privatisation? You have to look beyond the deceptive headlines. Baba Beijing caps the sale of SOE stock to the public, at 30%. Furthermore, there are strict controls on making sure someone doesn’t try to control what’s offered. The ownership of the shares has to be spread out. Most of these stocks are owned by Chinese citizens (A shares), but some are on offer to foreigners (B shares). Interestingly, more and more Chinese companies, including SOEs, are doing IPOs in Western stock markets, as part of their 30%.
Reforms? Ha-ha-ha, the joke’s on you! Baba Beijing will never sell off the people’s SOEs. It knows that the citizens’ social harmony and economic stability are rooted in its ability to macro-manage and long term (Five-Year) plan the country’s direction, via the 100% ownership of all the real estate (Marxism’s controlling the means of production), as well as the key industries and sectors. The CPC will continue to create wealth, under the rubric of socialism with Chinese characteristics, by borrowing some capitalist trappings. But it is only transitional. Deng Xiaoping said it many times and it continues going unheard in the West, that the goal is to follow the Marxist economic path to a wealthy communist society.
http://www.greanvillepost.com/2016/10/18/so-called-communist-china/
In short, the expansion of the private sector has been robust, and in the area of industry, the private sector in China is approaching the size of the measureable state sector in many respects. At the same time, it would be a mistake to view these incomplete data and conclude that the pure private sector accounts for the majority of China’s economy. The observable SOE sector under reasonable assumptions accounts for nearly 40 percent of China’s economy. Given additional information on the prevalence of SOE ownership in China’s capital markets, anecdotal and observed data on the prevalence of SOE ownership among LLCs and other
ownership categories, and the SOE role in round‐tripped FDI, it is reasonable to conclude that by 2009 nearly half of China’s economic output could be attributable to either SOEs, SHEs, and other types of enterprises controlled by the SOEs indirectly. If the output of urban collective enterprises and the government‐run proportion of TVEs are considered, the broadly defined state sector likely surpasses 50 percent.
"This conclusion goes beyond all the published estimates we have reviewed, but is consistent with the opinions of knowledgeable individuals currently dealing with Chinese enterprises in policy and business settings. This conclusion is likely startling in view of prior estimates that the private sector in China accounts for 70 percent of GDP. But such a dominant private role is inconsistent with socialism with Chinese characteristics as articulated by the CCP. For example, the government‐run People’s Daily provides this definition of socialism with Chinese characteristics as used in 17th People’s Congress: “On its economic fronts, China sticks to a multi‐ownership‐oriented basic market economic system, with the public ownership in the dominance.”36 This thinking is also memorialized in China’s five year plans.37 Through 2009, at least, the size of the public sector dovetails with the CCP’s vision.
https://www.uscc.gov/sites/default/files/Research/10_26_11_CapitalTradeSOEStudy.pdf
http://www.xinfajia.cn/12967.html
In my personal opinion, the best way to answer questions like this is to examine closely China's socialist revolution and the transformation of China from a semi-feudal semi-colonial country to a socialist one, and come to a full Marxist understanding of what form of ownership is dominant in China. The goal of China's New-Democratic Revolution was to overthrow the big three mountains: "imperialism, feudalism, and bureaucrat-capitalism" and to establish a people's democratic dictatorship based on the alliance of the working class and the peasants.
Generally speaking, socialist relations of production do not come into being under capitalism. In the case of China, though, the seeds of these relations came into being in the liberated areas of China, in the revolutionary base areas. This included economic sectors under state and cooperative ownership which expanded during the war of liberation. Governments in the liberated areas confiscated the property of bureaucrat-capitalists and placed them under state ownership.
After the revolution, the socialist transition began. This period lasted from the foundation of the people's republic in 1949 to 1956. During this period the "Three Transformations" took place, which was the socialist transformation of agriculture, capitalist industry and commerce, and handicraft industry.
In China the socialist public ownership is the mainstay of the economy, the dominant mode of production. However China has diverse forms of ownership which develop side-by-side.
In socialist China, the forms of public ownership of the means of production include the ownership by the whole people, collective ownership, and other forms of public ownership, as well as the public part of the mixed ownership sector. Along these forms, the ownership by the whole people and collective ownership play the dominant role.
The economic sector under the ownership of the whole people is the strongest economic and technological power in China today. It controls the national economy and dominates the major economic resources and natural resources of China.
At this present stage of socialism, the primary stage, ownership by the whole people refers to state ownership.
The economic sector under collective ownership is divided into the rural collective economic sector and urban collective economic sector.
There are also joint-stock companies, economic conglomerates, and enterprise groups which are under the system of ownership by the whole people or collective ownership.
The sector of the economy under mixed ownership usually takes the place of Sino-foreign co-operative businesses including Sino-foreign joint ventures and Sino-foreign contractual businesses, and that of the economic sector which is joint public-private.
In China state-owned enterprises provide the necessary public products for the whole society to meet the growing material and cultural needs of the people. The state-owned enterprises play a leading role in such fields as coal, petroleum, electricity, and steel. They provide 70% of China's coal, 92% of its petroleum, 91% of its electric power and half of its ferrous metal. They supply such basic services such as railway transportation, aviation transportation and maritime transportation.
These state-owned sectors are the pillars of China, without them China would fall and polarization would become extreme.
China is enacting fundamentally correct policies which are the requirements of the primary stage of socialism, where developing the productive forces is required to bring China into the new era and advance socialism to a higher stage. The non-public sectors are subordinate to the socialist public sectors and play a supporting role in building socialism. Despite being very profitable and productive, they are under the thumb of the Communist Party and cannot function without its approval.
http://www.invent-the-future.org/2016/12/from-the-chinese-marxist-viewpoint-an-interview-with-professor-deng-chundong/
https://www.loc.gov/law/help/real-property-law/china.php
https://mobile.nytimes.com/2017/02/12/opinion/china-the-party-corporate-complex.html
China’s many high-profile moves to open up its markets in recent years turn out to have been half-hearted, if not intentional hoodwinking.
Despite the much-ballyhooed dismantling of the more than 2,000-year-old state monopoly on salt, all salt producers are still state-owned. Foreign asset-management companies are now allowed to operate wholly foreign-owned businesses in China, but only in deals with institutional investors and private-equity funds, not retail investors, a much bigger piece of meat. Partly to steady the renminbi, Beijing no longer allows Chinese citizens to take up to $50,000 a year out of the country, and it has recently restricted the repatriation of capital by foreign firms like Deutsche Bank.
Hyper control, interventionism, currency manipulation — no, China is not a market economy. But it’s worse than that: The Chinese Communist Party (C.C.P.) has systematically infiltrated China’s expanding private sector and now operates inside more than half of all nonstate firms; it can manipulate or even control these companies, especially bigger ones, and some foreign ones, too. The modern Chinese economy is a party-corporate conglomerate.
https://www.cnbc.com/2017/02/27/chinese-wages-rise-made-in-china-isnt-so-cheap-anymore.html
Turns out that "made in China" is not so cheap anymore as labor costs have risen rapidly in the country's vast manufacturing sector.
Chinese factory workers are now getting paid more than ever: Average hourly wages hit $3.60 last year, spiking 64 percent from 2011, according to market research firm Euromonitor. That's more than five times hourly manufacturing wages in India, and is more on par with countries such as Portugal and South Africa.
As China's economy expanded at breakneck speed, so has pay for employees. But the wage increase has translated to higher costs for companies with assembly lines in China. Some firms are now taking their business elsewhere, which also means China could start losing jobs to other developing countries like Sri Lanka, where hourly factory wages are $0.50.
http://socialisteconomicbulletin.blogspot.com/2017/07/china-faces-slower-western-growth-than.html
https://www.forbes.com/sites/wadeshepard/2017/07/25/xi-jinping-to-chinas-private-sector-go-home-the-belt-and-road-is-not-for-you/#110bd48817fb
https://www.economist.com/news/leaders/21725295-bad-china-and-world-chinas-state-enterprises-are-not-retreating-advancing
Mr Xi remains well aware of the need for reform; on July 15th he repeated warnings about indebtedness at SOEs. But only some of the initiatives rolled out on his watch are aimed at slimming the state sector. Two of them point in another direction entirely. One is the merging of competing SOEs. The arm of the government responsible for looking after these firms has engineered mergers of ports, railway-equipment makers and shipping companies; a vast chemicals combination is planned. Such deals often seem intended to spawn national champions, not to pare overcapacity.
The other disturbing trend is the proliferation of “state capital investment and operation” companies (SCIOs). The state has thus far tended to dominate in heavy industries, transport and energy, leaving private firms to forge ahead in technology. SCIOs will, in part, function like state-run private-equity funds whose remit is to extend the reach of government. Provincial governments have published plans to push funds into areas such as biotechnology and cloud computing...
Previous leaders have managed the tension between a liberalising economy and an obsession with stability through a mix of rapid growth and political repression. Mr Xi does not want to change that recipe. But he is doing something more radical: reversing the state’s retreat from the economy.
https://www.economist.com/news/finance-and-economics/21725293-outperformed-private-firms-they-are-no-longer-shrinking-share-overall
Over the past few years the state sector has, by several measures, stopped shrinking. There are still more than 150,000 SOEs in operation, two-thirds owned by local governments and the rest under central control. Private firms are much more productive, but state firms gobble up a disproportionate share of resources. They take about half of all bank loans and are the main culprits behind China’s big increase in corporate debt. Since 2015 investment by SOEs has grown faster than private-sector investment, reversing a decades-long trend
...
The fear is that the reforms, taken together, not only fail to solve the most pressing problems, but might even be aggravating them. SOEs are getting bigger, not smaller; their management has become more conservative; and their deficiencies are beginning to infect the economy more widely.
...
At a meeting on SOEs last October he devoted his comments not to reform but to the necessity of strengthening the party’s grip. “The party’s leadership of SOEs is a major political principle, and that principle must be insisted on,” he said.
People who work in and with SOEs report a palpable change in atmosphere in recent years. “Party officials are not the same as the technocrats who used to run the SOEs,” says a top banker. “They don’t take risks. Doing nothing is what’s safe.” Some of the most capable employees are leaving SOEs altogether. Political education, always a part of life in state firms, has been stepped up. One manager who recently quit a big state bank said that a campaign exhorting workers to study the party constitution had been unusually intense.
At the same time the government has capped pay for senior executives, concerned that they were getting more than government employees of equivalent ranks, stoking resentment. Yet on an international basis, SOE bosses are dramatically underpaid. The president of PetroChina, the country’s biggest oil company, earned 774,000 yuan ($112,000) in 2016; the CEO of Chevron, a firm of roughly the same market value, pulled in a handsome $24.7m.
...
There is a big looming worry, however. One aspect of SOE reform is in fact making quick progress: the creation of what are known as “state capital investment and operation” companies (SCIOs), to help manage existing state assets and invest in new ones. This initially looked like part of the solution for China. It borrows an approach honed in Singapore, where Temasek, a government-owned holding company, manages a portfolio of state firms but does not meddle in their operations, apart from demanding that they deliver good returns. It is now clear that this is not what China has in mind. Government officials say that SCIOs should not seek to make money in their investments; rather, they are meant to be more like “policy funds”, seeding firms and industries with government cash or money raised from SOE dividends without worrying about profit.
The other striking feature of SCIOs is that they are expressly enjoined to break into new high-tech sectors. Provincial governments around the country have published plans over the past two years in which they promise to guide more than 80% of their funds into infrastructure, public services and, crucially, “strategic emerging industries”, a category that refers to new energy, biotechnology and IT, among other areas. The upshot is that SCIOs, armed with cheap capital, seem set on expanding the state’s reach into the private sector. “We should anticipate the emergence of literally thousands of well-resourced SCIOs,” says Barry Naughton at the University of California in San Diego.
State-backed private-equity funds, which can be seen as forerunners to the investment function of the SCIOs, are already making a big impact. To give three examples from last year: the city of Shenzhen launched a 150bn yuan fund; Jiangxi, a relatively poor central province, created a 100bn yuan fund; and the city of Chengdu set up a 40bn yuan fund. This influx of cash is pushing up valuations. Bain & Co, a consultancy, calculates that private-equity deals in China were priced last year at a frothy 26-times earnings before interest, tax, depreciation and amortisation, compared with ten times in America. The state may turn out to be a wise investor but experience suggests otherwise. More likely, the state will crowd out private investors, hogging capital and allocating it poorly.
...
SOEs, far from retreating, are on the march, drawing on government support to compensate for their weakness. They are making conquests at home and abroad. Cutting state firms down to size and opening them up to competition ought to be the point of SOE reform. Instead, China is beefing them up and driving them into new territory.
China's Communist party is writing itself into the articles of association of many of the country’s biggest companies in a blow to investor hopes that Beijing would relax its grip on the market.
More than 30 Hong Kong-listed state-owned enterprises, representing more than $1tn in market capitalisation, have this year added lines to their central documents that place the party, rather than the Chinese state, at the heart of each group.
New phrases injected into the articles of association in recent months include describing the party as playing a core role in “an organised, institutionalised and concrete way” and “providing direction managing the overall situation”.
While the new language makes explicit investors’ long-held assumption of party influence, the changes are the first time the party rather than the government has been named, investors said.
...
“This is a reminder to investors they are buying into a party machine,” said David Webb, an independent investor and shareholder activist in Hong Kong. “This move to embed the party into constitutional documents of the companies puts a lie to the government’s claim they want market forces to play a greater role.”
Investors have voiced frustration with their inability to stop the changes.
“While it serves to formalise something investors were already aware of, this formalisation is not really the direction of travel investors wanted to see,” said David Smith, head of corporate governance at Aberdeen Asset Management Asia.
https://www.ft.com/content/a4b28218-80db-11e7-94e2-c5b903247afd
China has announced a “Made in China 2025” plan to dominate in the production of semiconductors, artificial intelligence, autonomous vehicles, biotechnology and every other high-tech industry likely to drive economic growth beyond 2025. The US, which remains the most innovative country in the world, stands firmly in China’s path.
But rather than building a globally competitive free market economy in order to compete, China has chosen instead to compel American companies that want to operate in China to turn over proprietary technology and intellectual property.
China does this by making joint ventures with Chinese companies a prerequisite for market access; by limiting American ownership to 50 per cent or less of most enterprises in China; and, in some cases, by requiring technology transfers as part of product sale contracts.
The Beijing government and Chinese companies also pursue an investment strategy whereby they identify US start-ups with scientific breakthroughs and then make investments in those companies on better-than-market terms. The primary consideration in this investment is not rate of return, but the capture of new technologies, which the Chinese then use for other purposes.
Through investments like this, Chinese companies gain access to breakthrough technologies that could create billions of dollars of future revenues without paying royalties. An initial overpayment of a few million dollars is very important to the American high-technology start up, but is a rounding error relative to China’s multibillion dollar long-term objectives of technological superiority.
The Chinese actively search for those US companies that pioneer the technologies that China lacks. They then carefully target those companies in order to acquire their expertise. Meanwhile, companies seeking access to the Chinese market or to Chinese capital are pressured into turning over their patents, their most advanced research, and their know-how.
The offensive against American intellectual property does not end there. Less well known are the efforts of Chinese lawyers to initiate antitrust actions in Chinese courts to invalidate patents on the theory they create illegal monopolies. Think of how counterintuitive that is. The whole idea of a patent is to reward the inventor with a period of exclusive rights to the invention. A legally granted monopoly is no justification for an antitrust proceeding. But China is willing to go to great lengths to capture American technologies.
https://www.foreignaffairs.com/articles/china/2015-04-20/embracing-chinas-new-normal
It is clear by now that China’s economy is set to slow in the years to come, although economists disagree about how much and for how long. Last year, the country’s gdp growth rate fell to 7.4 percent, the lowest in almost a quarter century, and many expect that figure to drop further in 2015. Plenty of countries struggle to grow at even this pace, but most don’t have to create hundreds of millions of jobs over the next decade, as China will. So understandably, some experts are skeptical about the country’s prospects. They argue that its productionfueled growth model is no longer tenable and warn, as the economist Paul Krugman did in 2013, that the country is “about to hit its Great Wall.” According to this view, the question is not whether the Chinese economy will crash but when.
Such thinking is misguided. China is not nearing the edge of a cliff; it is entering a new stage of development. Chinese President Xi Jinping has called this next phase of growth the “new normal,” a term that Mohamed El-Erian, the former CEO of the global investment firm pimco, famously used to describe the West’s painful economic recovery following the 2008 financial crisis. But Xi used the phrase to describe something different: a crucial rebalancing, one in which the country diversifies its economy, embraces a more sustainable level of growth, and distributes the benefits more evenly. The new normal is in its early stages now, but if Beijing manages to sustain it, China’s citizens can count on continued growth and material improvements in their quality of life. The rest of the world, meanwhile, can expect China to become further integrated into the global economy. The Chinese century is not at the beginning of the end; it is at the end of the beginning.
Understanding China’s new normal requires some historical context. As a latecomer to the modern economy, China has followed what one could call a “catch-up growth” model, which involves rapid economic growth following years of lagging behind. From 1870 to 1913, for example, the U.S. economy followed precisely this path, growing at an average rate of four percent. Between 1928 and 1939, Russia’s gdp grew at an average rate of 4.6 percent. And from 1950 to 1973, Japan’s economy grew at an average rate of 9.3 percent. Yet none of those countries came close to matching China’s record from 1978 to 2011: an average gdp growth rate of nearly ten percent over 33 years.
This ascent has helped China’s economy approach, and perhaps even surpass, that of the United States. In terms of purchasing power parity, a measure economists use for cross-country comparisons, China’s gdp surpassed that of the United States in 2010 or 2014, depending on whether one relies on historical statistics from the Maddison Project or data from the World Bank’s International Comparison Program. Yet if one relies on the World Bank Atlas method, China’s economy won’t likely outgrow the United States’ until 2019. And China’s gdp still trails that of the United States if calculated using current U.S. dollars. But the best method for comparing the two economies objectively is power generation, since it is physical and quantifiable. It also closely tracks modernization; without electricity, after all, or at least without a lot of it, one can’t run factories or build skyscrapers, which is exactly what China has been doing. In 1900, China generated 0.01 percent of the power the United States did. That figure rose to 1.2 percent in 1950 and 34 percent in 2000, with China surpassing the United States in 2011. In this respect, China has caught up.
China’s rise has also brought massive benefits to the country’s population, although here there is obviously much more to be done. With a population more than four times as large as that of its closest economic competitor, China won’t likely match even half the United States’ gdp per capita until around 2030. To be sure, the country has made major strides in other areas. Its average life expectancy (around 76 years) is nearing the United States’ (around 79 years). Educational levels in the two countries are comparable. And measured by the Gini coefficient, economic inequality in China may now be lower than it is in the United States. Yet since 1979, most of the windfall from China’s rise has accrued mainly to those who live in urban or coastal areas. Realizing Beijing’s ultimate development goal—“common development and common prosperity”—will require not only more sustainable growth but also more evenly distributed gains.
To a certain extent, China’s latest slowdown was inevitable. Three decades of breakneck growth have left China with an economy that is simply massive, making marginal increases in size all the more difficult. Even measured using current exchange rates, Chinese gdp exceeded $10 trillion in 2014, which means that growing by ten percent would amount to adding $1 trillion to the economy after one year, a sum greater than the entire gdp of Saudi Arabia, which is among the world’s largest economies. Growth on this scale was bound to become unsustainable at some point. It essentially requires an unlimited supply of energy and puts enormous stress on the environment. China already emits more carbon into the atmosphere than the United States and the EU combined, and its emissions are still increasing.
http://www.globaltimes.cn/content/1068750.shtml
China releases new standards on Marxist education to promote better understanding of Marxist theory and ideology:
"Chinese education authorities have unveiled some standards for the study of Marxism at university, which experts have said shows China's new emphasis on Marxist education and ideology.
The standards come from the Ministry of Education (MOE), with specific requirements for school facilities, faculty and courses, according to a post on MOE's WeChat account Wednesday.
This is the first document in China to give detailed requirement on the subject, and it is especially significant as it offers verifiable standards for evaluation, he added.
The document states that the university's principal and Party chief will have the main responsibility for Marxist work and need to hold at least one office meeting on that each academic year.
Schools of Marxism are to be regarded as independent institutions, directly under the university, whose leaders are responsible for establishing the ideology and theoretical studies for all students.
These quantifications are meant to help clarity the university's responsibilities in a Marxist education and to get their senior personnel to look for more practical applications instead of just talking about it, said Zhuang.
"In this way, schools of Marxism can place more importance on its ideological power and not confine it to one department, but spread its message all over the university," he said.
The standards also call for mid-to-small Marxism classes of no more than 100 students each.
"Small classes have much better quality and a greater effect than large classes, because students can discuss things with each other and communicate with the teacher better," Zhu Andong, an associate professor at Tsinghua University's School of Marxism, told the Global Times.
Most universities still need some time to achieve the standard required, mainly because of the limited number of full-time teachers, Zhu added.
The standards also call for full-time teachers at these schools to be Party members at least in principle, and both part-time and full-time Marxism teachers have to have a related academic background.
In the area of Party and ideological development at Marxism schools, students and teachers are asked to organize Party activities for at least half a day every month.
http://www.chinadaily.com.cn/china/2017-09/30/content_32668217.htm
http://www.chinadaily.com.cn/china/2017-10/01/content_32712243.htm
https://www.washingtonpost.com/news/worldviews/wp/2017/10/11/china-treats-its-foreign-aid-like-a-state-secret-new-research-aims-to-reveal-it/?utm_term=.fcade93720c1
Edited by JohnBeige (today 11:46:23)
Really great post thanks.
if you edit the original post out of the quote tags you save everyone from having to scroll so much. just a heads up.
cars i think you got it backwards... you take the old post out... not yours... what were you gonna say?
Edited by levoydpage ()
levoydpage posted:cars posted:Petrol posted:Dimashq posted:JohnBeige posted:
levoydpage posted:cars posted:Petrol posted:Dimashq posted:JohnBeige posted:heres a billion articles
http://www.heritage.org/testimony/chinese-state-owned-enterprises-and-us-china-economic-relations
"The discussion of SOEs has been undermined by a fundamental error: the conflation of restructured, share-holding firms with the truly private sector. Share-holding SOEs are manifestly not private actors and assessments of the corporate sector that assume so are fatally flawed from the outset. The origin of this mistake is historical. As quasi-state entities emerged and proliferated, it was clear some sort of separate treatment was necessary and the concept of “non-state” was created. This was never intended to indicate “private”—quite the opposite: it was meant to signify that the creation of corporate forms quite different from SOEs could occur without privatization and its ideological pitfalls.
The meaning of “non-state” is very well understood by the Chinese government. The (sometimes willful) misunderstanding outside China rests on two shaky pillars. The first is a mis-rendering of “non-state”—where the PRC sees the opposite of state as non-state, many foreign observers see the opposite of state as “private” and simply re-label accordingly. The second is more sophisticated and based on the share-holding change.
Neither specification of share-holders nor sale of stock by itself does anything to alter state control. The large majority of firms listed on domestic stock markets are specifically designated as state-owned. The sale of small minority stakes on foreign exchanges could be construed as recasting mainstays such as CNPC (through its list vehicle PetroChina), China Mobile, and Chinalco as non-state entities of some form. However, they are still centrally directed SOEs, as explicitly indicated by the Chinese government.
More broadly, firms are defined by inputs and outputs. Most Chinese firms sell in a market environment that is unrecognizably different from the operating environment in 1975 and sharply different even from the one in 1995. In this sense almost none of them are still traditional Chinese SOEs. On the output side, however, the requirement that the state predominate in so many sectors is meant to sharply confine competition, so that SOEs operate within markets but they operate primarily within state-controlled markets. This regulatory protection is the most powerful subsidy many SOEs receive.
The input side also continues to distinguish SOEs clearly from foreign or domestic private companies. Production inputs comprise labor, capital, land, and other physical resources such as energy. For SOEs, including those which have completed share-holding reform, all of these show the state’s overwhelming role. It is routine for Chinese officials to bounce back and forth from corporate to government posts at the behest of the Party, no less so at China Mobile and the like than anywhere else.
In stark contrast to private firms, which often cannot buy land at any price, SOEs have immediate call on free land, which is all technically owned by the state. The main barrier to SOEs acquiring land is other SOEs. SOEs as a matter of course also receive hefty power and other input subsidies not available to genuinely private firms.
As for capital, every aspect is dominated by the state. All large financial institutions are state-owned, the People’s Bank assigns loan quotas every year, and, within these quotas, lending is directed according to state priorities. Interest rates are also controlled, and last year real borrowing costs were barely above zero.
Conveniently, then, loan quotas and bank practices strongly inhibit non-state borrowing. Securities markets are also dominated by the state. As an illustration, the volume of government bond issuance utterly dwarfs corporate bonds and is growing relentlessly, crowding out private firms."
http://wiki.p2pfoundation.net/Role_of_the_State_in_Chinese_Economic_Development
The popular image presented in western media is that the State Owned Enterprises, SOEs, are the last remaining dinosaurs of socialism in China, soon to die out. But the industries of the “rust-belt” stubbornly refuse to do just that. A discussion paper with the title Explaining the Persistence of State Ownership in China7 shows that in the past 10 years the number of SOEs has declined dramatically from 84 397 to 29 229, but the share of the SOEs in the industrial sector has hovered steadily around 33-34 percent, rising slightly in 2003 and 2004 to 35.5 and 37.0 percent respectively. Considering that industrial production as a whole has increased a lot during period, this actually represents a big expansion of the SOEs. Employment in SOEs fell by 40 percent from 1998 to 2003 at the same time as they maintained their share of GDP.9 This represents a considerable increase of productivity in the SOEs, especially considering that GDP leaped forward during this period. Nineteen Chinese companies, all of them SOEs, are in Fortune Global 500 list of the largest companies in the world in 2005.
The SOEs completely dominate the capital intensive industries. It is difficult to see how Chinese capitalists will ever be able to compete with the resources of the state in these areas. Not even foreign multi-nationals, with all the resources they have at their command, are able to do so. Even though managers of state firms have some independence in deciding how to dispose over the surplus created by the workers in their industries that does not turn them into capitalists. As Trotsky remarked: “The biggest apartments, the juiciest steaks, and even Rolls Royces are not enough to transform the bureaucracy into an independent ruling class.”
To fully understand the role of the state sector of the economy it is not enough to just look at what proportion they have of GDP, nor the degree of concentration. It is also important, if not more so, to look at what proportion of investments are channelled through the state sector, because investments are the driving force of the economy. And under capitalism, through the mechanism of the tendency of the rate of profit to fall, the cause of the boom-slump cycle. Fortunately, statistics about fixedasset investments (investments in buildings and machinery) are also much more accurate and uncontested compared to GDP statistics.
They are divided into four periods.
State Investments as Percentage of Total Investments
1981 – 1989 (the “roaring eighties”) 78.6 percent
1990 – 1992 (post-Tiananmen Square) 81.2 percene
1993 – 2001 (the restructuring of the SOEs) 86.7 percent
2002 – 2005 (post-reconstruction) 85.3 percent
These figures are truly astonishing. They show not only that state the plays an absolutely decisive role in the economy, but also that state investments as a proportion of all investments have increased substantially since the eighties, only to fall back slightly between 2002 and 2005. This confirms that rather than moving towards capitalism in the nineties, China moved away from it. The present financial crisis will certainly raise the state’s share of investments again, possibly to its highest level since 1978
https://www.workers.org/2016/03/21/china-the-u-s-and-global-warming-part-3/
The U.S. website mining.com, citing Chinese sources, reported on Jan. 21 that “Beijing plans to close about 4,300 coal mines, remove outdated production capacity of 700 million tons and redeploy around 1 million workers over the next three years. … China has eliminated about 560 million tons of coal production capacity and closed 7,250 coal mines in the last five years.”
This was updated in a China Daily report on Feb. 2 that Beijing “has promised to spend 100 billion yuan ($15.25 billion) a year for up to five years to address overcapacity in sectors such as steel and coal, while local governments will contribute another 100 billion yuan. … The coal industry alone will get around 140 billion yuan, and 1.8 million employees in the sector will be relocated.”
What’s important here, from our point of view, is that China is committing very large sums to relocate the affected workers.
https://www.workers.org/2013/03/01/obamas-energy-choice-shill-for-shale-gas-industry/
Two things there should stand out: one is that China, despite its abundance of coal, is steering its economy away from coal because of the environmental effects it has. The other is that almost 2 million workers who will be out of a job will be given jobs in other industries. If any workers do become unemployed as part of this process, it'll be due to inefficiencies in the state apparatus in relocating them.
What about the US?
"During his Feb. 12 State of the Union address, Obama claimed that climate change was a main concern of his second term. He even suggested he would consider executive actions if Congress failed to regulate carbon emissions. However with his next breath, Obama promised to encourage more drilling for natural gas, in essence giving a wink and a nod to industry executives.
His consideration of Moniz for energy secretary confirms this. Moniz’s study promotes the use of shale gas as an alternative to fossils fuels like coal, while seriously downplaying the question of methane release during fracking. The big industry lie is that natural gas is better for the climate than fossil fuels like coal or oil.
Studies have shown that heavy use of fracking actually promotes greater fossil-fuel reliance, while effectively putting investment in renewable technology on the back burner."
http://www.heraldstandard.com/gcm/news/local_news/coal-job-losses-add-to-region-s-unemployment/article_ff06bb64-9f3f-5928-8d48-4f742651ae07.html
Across the Pittsburgh Metropolitan Statistical Area, which locally includes Fayette, Washington and Westmoreland counties, mining and logging jobs dropped from 11,500 to 9,800.
That helped raise the seasonally adjusted unemployment rate for the entire seven-county area from 5.4 percent to 5.8 percent over the 12 months ending in April. The rate rose during that time from 7.5 percent to 8.7 percent in Fayette, 5.5 percent to 6.8 percent in Washington and 5.4 percent to 6.3 percent in Westmoreland.
Every area county showed a seasonally adjusted increase in the size of the workforce and the number out of work, according to figures provided by the Department of Labor and Industry."
http://crisiscritique.org/wp-content/uploads/2014/01/Boer_Socialism.pdf
https://philosophersforchange.org/2014/05/15/taking-notes-36-is-china-communist/
http://dschwei.sites.luc.edu/ChinaCap.GSA.pdf
https://communistuniversity.wordpress.com/2014/05/05/is-china-sociaslist/
https://robertlindsay.wordpress.com/2012/04/24/china-is-not-as-capitalist-as-you-think/
http://www.china.org.cn/opinion/2012-10/14/content_26776253.htm
Property market bubbles? What property? Private property, for sure, but it’s not real property. All real estate is 100% owned by the people of China. There is not one square metre of private land in the People’s Republic. You can pay for up to a 70-year usage lease on a piece of land and develop it, but no one can buy the dirt.
Private enterprise? It is thriving for sure, but is heavily concentrated in small and medium sized enterprises (SMEs), that complement and do not seriously compete with the state sectors of the economy. The private sector is especially the many millions of mom and pop and solo businesses that blanket the country.
Free markets? There is not one private bank in China. They are all people powered. The world’s largest bank, Industrial and Commercial Bank of China (ICBC) is state owned of course, as well as three other global Top Ten banks: #1 (ICBC), #5 China Construction Bank (CCB), #9 Bank of China (BOC) and #10 Agricultural Bank of China (ABC).³ Ditto all insurance companies, the Shanghai and Shenzhen stock and precious metals markets. Same goes for all major media outlets, especially television, radio and print media, although everyone has heard about Beijing being the new “Hollywood of the East”, which is mostly private sector.
Unfettered capitalism? Get outta here! Almost all major economic sectors in China are dominated by state-owned enterprises (SOEs). Everything from airlines/avionics to aerospace to chemical industries, from construction to maritime shipping to mining, from nuclear energy to petroleum to railways, from steel to telecommunications to utilities, over 100 key sectors have a huge, people-powered footprint. Many are some of the world’s biggest corporations. Not only that, but they are, like the aforementioned state banks, very profitable and well-run, contrary to relentless Western propaganda.
Privatisation? You have to look beyond the deceptive headlines. Baba Beijing caps the sale of SOE stock to the public, at 30%. Furthermore, there are strict controls on making sure someone doesn’t try to control what’s offered. The ownership of the shares has to be spread out. Most of these stocks are owned by Chinese citizens (A shares), but some are on offer to foreigners (B shares). Interestingly, more and more Chinese companies, including SOEs, are doing IPOs in Western stock markets, as part of their 30%.
Reforms? Ha-ha-ha, the joke’s on you! Baba Beijing will never sell off the people’s SOEs. It knows that the citizens’ social harmony and economic stability are rooted in its ability to macro-manage and long term (Five-Year) plan the country’s direction, via the 100% ownership of all the real estate (Marxism’s controlling the means of production), as well as the key industries and sectors. The CPC will continue to create wealth, under the rubric of socialism with Chinese characteristics, by borrowing some capitalist trappings. But it is only transitional. Deng Xiaoping said it many times and it continues going unheard in the West, that the goal is to follow the Marxist economic path to a wealthy communist society.
http://www.greanvillepost.com/2016/10/18/so-called-communist-china/
In short, the expansion of the private sector has been robust, and in the area of industry, the private sector in China is approaching the size of the measureable state sector in many respects. At the same time, it would be a mistake to view these incomplete data and conclude that the pure private sector accounts for the majority of China’s economy. The observable SOE sector under reasonable assumptions accounts for nearly 40 percent of China’s economy. Given additional information on the prevalence of SOE ownership in China’s capital markets, anecdotal and observed data on the prevalence of SOE ownership among LLCs and other
ownership categories, and the SOE role in round‐tripped FDI, it is reasonable to conclude that by 2009 nearly half of China’s economic output could be attributable to either SOEs, SHEs, and other types of enterprises controlled by the SOEs indirectly. If the output of urban collective enterprises and the government‐run proportion of TVEs are considered, the broadly defined state sector likely surpasses 50 percent.
"This conclusion goes beyond all the published estimates we have reviewed, but is consistent with the opinions of knowledgeable individuals currently dealing with Chinese enterprises in policy and business settings. This conclusion is likely startling in view of prior estimates that the private sector in China accounts for 70 percent of GDP. But such a dominant private role is inconsistent with socialism with Chinese characteristics as articulated by the CCP. For example, the government‐run People’s Daily provides this definition of socialism with Chinese characteristics as used in 17th People’s Congress: “On its economic fronts, China sticks to a multi‐ownership‐oriented basic market economic system, with the public ownership in the dominance.”36 This thinking is also memorialized in China’s five year plans.37 Through 2009, at least, the size of the public sector dovetails with the CCP’s vision.
https://www.uscc.gov/sites/default/files/Research/10_26_11_CapitalTradeSOEStudy.pdf
http://www.xinfajia.cn/12967.html
In my personal opinion, the best way to answer questions like this is to examine closely China's socialist revolution and the transformation of China from a semi-feudal semi-colonial country to a socialist one, and come to a full Marxist understanding of what form of ownership is dominant in China. The goal of China's New-Democratic Revolution was to overthrow the big three mountains: "imperialism, feudalism, and bureaucrat-capitalism" and to establish a people's democratic dictatorship based on the alliance of the working class and the peasants.
Generally speaking, socialist relations of production do not come into being under capitalism. In the case of China, though, the seeds of these relations came into being in the liberated areas of China, in the revolutionary base areas. This included economic sectors under state and cooperative ownership which expanded during the war of liberation. Governments in the liberated areas confiscated the property of bureaucrat-capitalists and placed them under state ownership.
After the revolution, the socialist transition began. This period lasted from the foundation of the people's republic in 1949 to 1956. During this period the "Three Transformations" took place, which was the socialist transformation of agriculture, capitalist industry and commerce, and handicraft industry.
In China the socialist public ownership is the mainstay of the economy, the dominant mode of production. However China has diverse forms of ownership which develop side-by-side.
In socialist China, the forms of public ownership of the means of production include the ownership by the whole people, collective ownership, and other forms of public ownership, as well as the public part of the mixed ownership sector. Along these forms, the ownership by the whole people and collective ownership play the dominant role.
The economic sector under the ownership of the whole people is the strongest economic and technological power in China today. It controls the national economy and dominates the major economic resources and natural resources of China.
At this present stage of socialism, the primary stage, ownership by the whole people refers to state ownership.
The economic sector under collective ownership is divided into the rural collective economic sector and urban collective economic sector.
There are also joint-stock companies, economic conglomerates, and enterprise groups which are under the system of ownership by the whole people or collective ownership.
The sector of the economy under mixed ownership usually takes the place of Sino-foreign co-operative businesses including Sino-foreign joint ventures and Sino-foreign contractual businesses, and that of the economic sector which is joint public-private.
In China state-owned enterprises provide the necessary public products for the whole society to meet the growing material and cultural needs of the people. The state-owned enterprises play a leading role in such fields as coal, petroleum, electricity, and steel. They provide 70% of China's coal, 92% of its petroleum, 91% of its electric power and half of its ferrous metal. They supply such basic services such as railway transportation, aviation transportation and maritime transportation.
These state-owned sectors are the pillars of China, without them China would fall and polarization would become extreme.
China is enacting fundamentally correct policies which are the requirements of the primary stage of socialism, where developing the productive forces is required to bring China into the new era and advance socialism to a higher stage. The non-public sectors are subordinate to the socialist public sectors and play a supporting role in building socialism. Despite being very profitable and productive, they are under the thumb of the Communist Party and cannot function without its approval.
http://www.invent-the-future.org/2016/12/from-the-chinese-marxist-viewpoint-an-interview-with-professor-deng-chundong/
https://www.loc.gov/law/help/real-property-law/china.php
https://mobile.nytimes.com/2017/02/12/opinion/china-the-party-corporate-complex.html
China’s many high-profile moves to open up its markets in recent years turn out to have been half-hearted, if not intentional hoodwinking.
Despite the much-ballyhooed dismantling of the more than 2,000-year-old state monopoly on salt, all salt producers are still state-owned. Foreign asset-management companies are now allowed to operate wholly foreign-owned businesses in China, but only in deals with institutional investors and private-equity funds, not retail investors, a much bigger piece of meat. Partly to steady the renminbi, Beijing no longer allows Chinese citizens to take up to $50,000 a year out of the country, and it has recently restricted the repatriation of capital by foreign firms like Deutsche Bank.
Hyper control, interventionism, currency manipulation — no, China is not a market economy. But it’s worse than that: The Chinese Communist Party (C.C.P.) has systematically infiltrated China’s expanding private sector and now operates inside more than half of all nonstate firms; it can manipulate or even control these companies, especially bigger ones, and some foreign ones, too. The modern Chinese economy is a party-corporate conglomerate.
https://www.cnbc.com/2017/02/27/chinese-wages-rise-made-in-china-isnt-so-cheap-anymore.html
Turns out that "made in China" is not so cheap anymore as labor costs have risen rapidly in the country's vast manufacturing sector.
Chinese factory workers are now getting paid more than ever: Average hourly wages hit $3.60 last year, spiking 64 percent from 2011, according to market research firm Euromonitor. That's more than five times hourly manufacturing wages in India, and is more on par with countries such as Portugal and South Africa.
As China's economy expanded at breakneck speed, so has pay for employees. But the wage increase has translated to higher costs for companies with assembly lines in China. Some firms are now taking their business elsewhere, which also means China could start losing jobs to other developing countries like Sri Lanka, where hourly factory wages are $0.50.
http://socialisteconomicbulletin.blogspot.com/2017/07/china-faces-slower-western-growth-than.html
https://www.forbes.com/sites/wadeshepard/2017/07/25/xi-jinping-to-chinas-private-sector-go-home-the-belt-and-road-is-not-for-you/#110bd48817fb
https://www.economist.com/news/leaders/21725295-bad-china-and-world-chinas-state-enterprises-are-not-retreating-advancing
Mr Xi remains well aware of the need for reform; on July 15th he repeated warnings about indebtedness at SOEs. But only some of the initiatives rolled out on his watch are aimed at slimming the state sector. Two of them point in another direction entirely. One is the merging of competing SOEs. The arm of the government responsible for looking after these firms has engineered mergers of ports, railway-equipment makers and shipping companies; a vast chemicals combination is planned. Such deals often seem intended to spawn national champions, not to pare overcapacity.
The other disturbing trend is the proliferation of “state capital investment and operation” companies (SCIOs). The state has thus far tended to dominate in heavy industries, transport and energy, leaving private firms to forge ahead in technology. SCIOs will, in part, function like state-run private-equity funds whose remit is to extend the reach of government. Provincial governments have published plans to push funds into areas such as biotechnology and cloud computing...
Previous leaders have managed the tension between a liberalising economy and an obsession with stability through a mix of rapid growth and political repression. Mr Xi does not want to change that recipe. But he is doing something more radical: reversing the state’s retreat from the economy.
https://www.economist.com/news/finance-and-economics/21725293-outperformed-private-firms-they-are-no-longer-shrinking-share-overall
Over the past few years the state sector has, by several measures, stopped shrinking. There are still more than 150,000 SOEs in operation, two-thirds owned by local governments and the rest under central control. Private firms are much more productive, but state firms gobble up a disproportionate share of resources. They take about half of all bank loans and are the main culprits behind China’s big increase in corporate debt. Since 2015 investment by SOEs has grown faster than private-sector investment, reversing a decades-long trend
...
The fear is that the reforms, taken together, not only fail to solve the most pressing problems, but might even be aggravating them. SOEs are getting bigger, not smaller; their management has become more conservative; and their deficiencies are beginning to infect the economy more widely.
...
At a meeting on SOEs last October he devoted his comments not to reform but to the necessity of strengthening the party’s grip. “The party’s leadership of SOEs is a major political principle, and that principle must be insisted on,” he said.
People who work in and with SOEs report a palpable change in atmosphere in recent years. “Party officials are not the same as the technocrats who used to run the SOEs,” says a top banker. “They don’t take risks. Doing nothing is what’s safe.” Some of the most capable employees are leaving SOEs altogether. Political education, always a part of life in state firms, has been stepped up. One manager who recently quit a big state bank said that a campaign exhorting workers to study the party constitution had been unusually intense.
At the same time the government has capped pay for senior executives, concerned that they were getting more than government employees of equivalent ranks, stoking resentment. Yet on an international basis, SOE bosses are dramatically underpaid. The president of PetroChina, the country’s biggest oil company, earned 774,000 yuan ($112,000) in 2016; the CEO of Chevron, a firm of roughly the same market value, pulled in a handsome $24.7m.
...
There is a big looming worry, however. One aspect of SOE reform is in fact making quick progress: the creation of what are known as “state capital investment and operation” companies (SCIOs), to help manage existing state assets and invest in new ones. This initially looked like part of the solution for China. It borrows an approach honed in Singapore, where Temasek, a government-owned holding company, manages a portfolio of state firms but does not meddle in their operations, apart from demanding that they deliver good returns. It is now clear that this is not what China has in mind. Government officials say that SCIOs should not seek to make money in their investments; rather, they are meant to be more like “policy funds”, seeding firms and industries with government cash or money raised from SOE dividends without worrying about profit.
The other striking feature of SCIOs is that they are expressly enjoined to break into new high-tech sectors. Provincial governments around the country have published plans over the past two years in which they promise to guide more than 80% of their funds into infrastructure, public services and, crucially, “strategic emerging industries”, a category that refers to new energy, biotechnology and IT, among other areas. The upshot is that SCIOs, armed with cheap capital, seem set on expanding the state’s reach into the private sector. “We should anticipate the emergence of literally thousands of well-resourced SCIOs,” says Barry Naughton at the University of California in San Diego.
State-backed private-equity funds, which can be seen as forerunners to the investment function of the SCIOs, are already making a big impact. To give three examples from last year: the city of Shenzhen launched a 150bn yuan fund; Jiangxi, a relatively poor central province, created a 100bn yuan fund; and the city of Chengdu set up a 40bn yuan fund. This influx of cash is pushing up valuations. Bain & Co, a consultancy, calculates that private-equity deals in China were priced last year at a frothy 26-times earnings before interest, tax, depreciation and amortisation, compared with ten times in America. The state may turn out to be a wise investor but experience suggests otherwise. More likely, the state will crowd out private investors, hogging capital and allocating it poorly.
...
SOEs, far from retreating, are on the march, drawing on government support to compensate for their weakness. They are making conquests at home and abroad. Cutting state firms down to size and opening them up to competition ought to be the point of SOE reform. Instead, China is beefing them up and driving them into new territory.
China's Communist party is writing itself into the articles of association of many of the country’s biggest companies in a blow to investor hopes that Beijing would relax its grip on the market.
More than 30 Hong Kong-listed state-owned enterprises, representing more than $1tn in market capitalisation, have this year added lines to their central documents that place the party, rather than the Chinese state, at the heart of each group.
New phrases injected into the articles of association in recent months include describing the party as playing a core role in “an organised, institutionalised and concrete way” and “providing direction managing the overall situation”.
While the new language makes explicit investors’ long-held assumption of party influence, the changes are the first time the party rather than the government has been named, investors said.
...
“This is a reminder to investors they are buying into a party machine,” said David Webb, an independent investor and shareholder activist in Hong Kong. “This move to embed the party into constitutional documents of the companies puts a lie to the government’s claim they want market forces to play a greater role.”
Investors have voiced frustration with their inability to stop the changes.
“While it serves to formalise something investors were already aware of, this formalisation is not really the direction of travel investors wanted to see,” said David Smith, head of corporate governance at Aberdeen Asset Management Asia.
https://www.ft.com/content/a4b28218-80db-11e7-94e2-c5b903247afd
China has announced a “Made in China 2025” plan to dominate in the production of semiconductors, artificial intelligence, autonomous vehicles, biotechnology and every other high-tech industry likely to drive economic growth beyond 2025. The US, which remains the most innovative country in the world, stands firmly in China’s path.
But rather than building a globally competitive free market economy in order to compete, China has chosen instead to compel American companies that want to operate in China to turn over proprietary technology and intellectual property.
China does this by making joint ventures with Chinese companies a prerequisite for market access; by limiting American ownership to 50 per cent or less of most enterprises in China; and, in some cases, by requiring technology transfers as part of product sale contracts.
The Beijing government and Chinese companies also pursue an investment strategy whereby they identify US start-ups with scientific breakthroughs and then make investments in those companies on better-than-market terms. The primary consideration in this investment is not rate of return, but the capture of new technologies, which the Chinese then use for other purposes.
Through investments like this, Chinese companies gain access to breakthrough technologies that could create billions of dollars of future revenues without paying royalties. An initial overpayment of a few million dollars is very important to the American high-technology start up, but is a rounding error relative to China’s multibillion dollar long-term objectives of technological superiority.
The Chinese actively search for those US companies that pioneer the technologies that China lacks. They then carefully target those companies in order to acquire their expertise. Meanwhile, companies seeking access to the Chinese market or to Chinese capital are pressured into turning over their patents, their most advanced research, and their know-how.
The offensive against American intellectual property does not end there. Less well known are the efforts of Chinese lawyers to initiate antitrust actions in Chinese courts to invalidate patents on the theory they create illegal monopolies. Think of how counterintuitive that is. The whole idea of a patent is to reward the inventor with a period of exclusive rights to the invention. A legally granted monopoly is no justification for an antitrust proceeding. But China is willing to go to great lengths to capture American technologies.
https://www.foreignaffairs.com/articles/china/2015-04-20/embracing-chinas-new-normal
It is clear by now that China’s economy is set to slow in the years to come, although economists disagree about how much and for how long. Last year, the country’s gdp growth rate fell to 7.4 percent, the lowest in almost a quarter century, and many expect that figure to drop further in 2015. Plenty of countries struggle to grow at even this pace, but most don’t have to create hundreds of millions of jobs over the next decade, as China will. So understandably, some experts are skeptical about the country’s prospects. They argue that its productionfueled growth model is no longer tenable and warn, as the economist Paul Krugman did in 2013, that the country is “about to hit its Great Wall.” According to this view, the question is not whether the Chinese economy will crash but when.
Such thinking is misguided. China is not nearing the edge of a cliff; it is entering a new stage of development. Chinese President Xi Jinping has called this next phase of growth the “new normal,” a term that Mohamed El-Erian, the former CEO of the global investment firm pimco, famously used to describe the West’s painful economic recovery following the 2008 financial crisis. But Xi used the phrase to describe something different: a crucial rebalancing, one in which the country diversifies its economy, embraces a more sustainable level of growth, and distributes the benefits more evenly. The new normal is in its early stages now, but if Beijing manages to sustain it, China’s citizens can count on continued growth and material improvements in their quality of life. The rest of the world, meanwhile, can expect China to become further integrated into the global economy. The Chinese century is not at the beginning of the end; it is at the end of the beginning.
Understanding China’s new normal requires some historical context. As a latecomer to the modern economy, China has followed what one could call a “catch-up growth” model, which involves rapid economic growth following years of lagging behind. From 1870 to 1913, for example, the U.S. economy followed precisely this path, growing at an average rate of four percent. Between 1928 and 1939, Russia’s gdp grew at an average rate of 4.6 percent. And from 1950 to 1973, Japan’s economy grew at an average rate of 9.3 percent. Yet none of those countries came close to matching China’s record from 1978 to 2011: an average gdp growth rate of nearly ten percent over 33 years.
This ascent has helped China’s economy approach, and perhaps even surpass, that of the United States. In terms of purchasing power parity, a measure economists use for cross-country comparisons, China’s gdp surpassed that of the United States in 2010 or 2014, depending on whether one relies on historical statistics from the Maddison Project or data from the World Bank’s International Comparison Program. Yet if one relies on the World Bank Atlas method, China’s economy won’t likely outgrow the United States’ until 2019. And China’s gdp still trails that of the United States if calculated using current U.S. dollars. But the best method for comparing the two economies objectively is power generation, since it is physical and quantifiable. It also closely tracks modernization; without electricity, after all, or at least without a lot of it, one can’t run factories or build skyscrapers, which is exactly what China has been doing. In 1900, China generated 0.01 percent of the power the United States did. That figure rose to 1.2 percent in 1950 and 34 percent in 2000, with China surpassing the United States in 2011. In this respect, China has caught up.
China’s rise has also brought massive benefits to the country’s population, although here there is obviously much more to be done. With a population more than four times as large as that of its closest economic competitor, China won’t likely match even half the United States’ gdp per capita until around 2030. To be sure, the country has made major strides in other areas. Its average life expectancy (around 76 years) is nearing the United States’ (around 79 years). Educational levels in the two countries are comparable. And measured by the Gini coefficient, economic inequality in China may now be lower than it is in the United States. Yet since 1979, most of the windfall from China’s rise has accrued mainly to those who live in urban or coastal areas. Realizing Beijing’s ultimate development goal—“common development and common prosperity”—will require not only more sustainable growth but also more evenly distributed gains.
To a certain extent, China’s latest slowdown was inevitable. Three decades of breakneck growth have left China with an economy that is simply massive, making marginal increases in size all the more difficult. Even measured using current exchange rates, Chinese gdp exceeded $10 trillion in 2014, which means that growing by ten percent would amount to adding $1 trillion to the economy after one year, a sum greater than the entire gdp of Saudi Arabia, which is among the world’s largest economies. Growth on this scale was bound to become unsustainable at some point. It essentially requires an unlimited supply of energy and puts enormous stress on the environment. China already emits more carbon into the atmosphere than the United States and the EU combined, and its emissions are still increasing.
http://www.globaltimes.cn/content/1068750.shtml
China releases new standards on Marxist education to promote better understanding of Marxist theory and ideology:
"Chinese education authorities have unveiled some standards for the study of Marxism at university, which experts have said shows China's new emphasis on Marxist education and ideology.
The standards come from the Ministry of Education (MOE), with specific requirements for school facilities, faculty and courses, according to a post on MOE's WeChat account Wednesday.
This is the first document in China to give detailed requirement on the subject, and it is especially significant as it offers verifiable standards for evaluation, he added.
The document states that the university's principal and Party chief will have the main responsibility for Marxist work and need to hold at least one office meeting on that each academic year.
Schools of Marxism are to be regarded as independent institutions, directly under the university, whose leaders are responsible for establishing the ideology and theoretical studies for all students.
These quantifications are meant to help clarity the university's responsibilities in a Marxist education and to get their senior personnel to look for more practical applications instead of just talking about it, said Zhuang.
"In this way, schools of Marxism can place more importance on its ideological power and not confine it to one department, but spread its message all over the university," he said.
The standards also call for mid-to-small Marxism classes of no more than 100 students each.
"Small classes have much better quality and a greater effect than large classes, because students can discuss things with each other and communicate with the teacher better," Zhu Andong, an associate professor at Tsinghua University's School of Marxism, told the Global Times.
Most universities still need some time to achieve the standard required, mainly because of the limited number of full-time teachers, Zhu added.
The standards also call for full-time teachers at these schools to be Party members at least in principle, and both part-time and full-time Marxism teachers have to have a related academic background.
In the area of Party and ideological development at Marxism schools, students and teachers are asked to organize Party activities for at least half a day every month.
http://www.chinadaily.com.cn/china/2017-09/30/content_32668217.htm
http://www.chinadaily.com.cn/china/2017-10/01/content_32712243.htm
https://www.washingtonpost.com/news/worldviews/wp/2017/10/11/china-treats-its-foreign-aid-like-a-state-secret-new-research-aims-to-reveal-it/?utm_term=.fcade93720c1
Edited by JohnBeige (today 11:46:23)
Really great post thanks.
if you edit the original post out of the quote tags you save everyone from having to scroll so much. just a heads up.
cars i think you got it backwards... you take the old post out... not yours... what were you gonna say?
what cars did is called an 'emptyquote', where you quote an entire post without commenting to show your approval for it.
Petrol posted:levoydpage posted:cars posted:Petrol posted:Dimashq posted:JohnBeige posted:heres a billion articles
http://www.heritage.org/testimony/chinese-state-owned-enterprises-and-us-china-economic-relations
"The discussion of SOEs has been undermined by a fundamental error: the conflation of restructured, share-holding firms with the truly private sector. Share-holding SOEs are manifestly not private actors and assessments of the corporate sector that assume so are fatally flawed from the outset. The origin of this mistake is historical. As quasi-state entities emerged and proliferated, it was clear some sort of separate treatment was necessary and the concept of “non-state” was created. This was never intended to indicate “private”—quite the opposite: it was meant to signify that the creation of corporate forms quite different from SOEs could occur without privatization and its ideological pitfalls.
The meaning of “non-state” is very well understood by the Chinese government. The (sometimes willful) misunderstanding outside China rests on two shaky pillars. The first is a mis-rendering of “non-state”—where the PRC sees the opposite of state as non-state, many foreign observers see the opposite of state as “private” and simply re-label accordingly. The second is more sophisticated and based on the share-holding change.
Neither specification of share-holders nor sale of stock by itself does anything to alter state control. The large majority of firms listed on domestic stock markets are specifically designated as state-owned. The sale of small minority stakes on foreign exchanges could be construed as recasting mainstays such as CNPC (through its list vehicle PetroChina), China Mobile, and Chinalco as non-state entities of some form. However, they are still centrally directed SOEs, as explicitly indicated by the Chinese government.
More broadly, firms are defined by inputs and outputs. Most Chinese firms sell in a market environment that is unrecognizably different from the operating environment in 1975 and sharply different even from the one in 1995. In this sense almost none of them are still traditional Chinese SOEs. On the output side, however, the requirement that the state predominate in so many sectors is meant to sharply confine competition, so that SOEs operate within markets but they operate primarily within state-controlled markets. This regulatory protection is the most powerful subsidy many SOEs receive.
The input side also continues to distinguish SOEs clearly from foreign or domestic private companies. Production inputs comprise labor, capital, land, and other physical resources such as energy. For SOEs, including those which have completed share-holding reform, all of these show the state’s overwhelming role. It is routine for Chinese officials to bounce back and forth from corporate to government posts at the behest of the Party, no less so at China Mobile and the like than anywhere else.
In stark contrast to private firms, which often cannot buy land at any price, SOEs have immediate call on free land, which is all technically owned by the state. The main barrier to SOEs acquiring land is other SOEs. SOEs as a matter of course also receive hefty power and other input subsidies not available to genuinely private firms.
As for capital, every aspect is dominated by the state. All large financial institutions are state-owned, the People’s Bank assigns loan quotas every year, and, within these quotas, lending is directed according to state priorities. Interest rates are also controlled, and last year real borrowing costs were barely above zero.
Conveniently, then, loan quotas and bank practices strongly inhibit non-state borrowing. Securities markets are also dominated by the state. As an illustration, the volume of government bond issuance utterly dwarfs corporate bonds and is growing relentlessly, crowding out private firms."
http://wiki.p2pfoundation.net/Role_of_the_State_in_Chinese_Economic_Development
The popular image presented in western media is that the State Owned Enterprises, SOEs, are the last remaining dinosaurs of socialism in China, soon to die out. But the industries of the “rust-belt” stubbornly refuse to do just that. A discussion paper with the title Explaining the Persistence of State Ownership in China7 shows that in the past 10 years the number of SOEs has declined dramatically from 84 397 to 29 229, but the share of the SOEs in the industrial sector has hovered steadily around 33-34 percent, rising slightly in 2003 and 2004 to 35.5 and 37.0 percent respectively. Considering that industrial production as a whole has increased a lot during period, this actually represents a big expansion of the SOEs. Employment in SOEs fell by 40 percent from 1998 to 2003 at the same time as they maintained their share of GDP.9 This represents a considerable increase of productivity in the SOEs, especially considering that GDP leaped forward during this period. Nineteen Chinese companies, all of them SOEs, are in Fortune Global 500 list of the largest companies in the world in 2005.
The SOEs completely dominate the capital intensive industries. It is difficult to see how Chinese capitalists will ever be able to compete with the resources of the state in these areas. Not even foreign multi-nationals, with all the resources they have at their command, are able to do so. Even though managers of state firms have some independence in deciding how to dispose over the surplus created by the workers in their industries that does not turn them into capitalists. As Trotsky remarked: “The biggest apartments, the juiciest steaks, and even Rolls Royces are not enough to transform the bureaucracy into an independent ruling class.”
To fully understand the role of the state sector of the economy it is not enough to just look at what proportion they have of GDP, nor the degree of concentration. It is also important, if not more so, to look at what proportion of investments are channelled through the state sector, because investments are the driving force of the economy. And under capitalism, through the mechanism of the tendency of the rate of profit to fall, the cause of the boom-slump cycle. Fortunately, statistics about fixedasset investments (investments in buildings and machinery) are also much more accurate and uncontested compared to GDP statistics.
They are divided into four periods.
State Investments as Percentage of Total Investments
1981 – 1989 (the “roaring eighties”) 78.6 percent
1990 – 1992 (post-Tiananmen Square) 81.2 percene
1993 – 2001 (the restructuring of the SOEs) 86.7 percent
2002 – 2005 (post-reconstruction) 85.3 percent
These figures are truly astonishing. They show not only that state the plays an absolutely decisive role in the economy, but also that state investments as a proportion of all investments have increased substantially since the eighties, only to fall back slightly between 2002 and 2005. This confirms that rather than moving towards capitalism in the nineties, China moved away from it. The present financial crisis will certainly raise the state’s share of investments again, possibly to its highest level since 1978
https://www.workers.org/2016/03/21/china-the-u-s-and-global-warming-part-3/
The U.S. website mining.com, citing Chinese sources, reported on Jan. 21 that “Beijing plans to close about 4,300 coal mines, remove outdated production capacity of 700 million tons and redeploy around 1 million workers over the next three years. … China has eliminated about 560 million tons of coal production capacity and closed 7,250 coal mines in the last five years.”
This was updated in a China Daily report on Feb. 2 that Beijing “has promised to spend 100 billion yuan ($15.25 billion) a year for up to five years to address overcapacity in sectors such as steel and coal, while local governments will contribute another 100 billion yuan. … The coal industry alone will get around 140 billion yuan, and 1.8 million employees in the sector will be relocated.”
What’s important here, from our point of view, is that China is committing very large sums to relocate the affected workers.
https://www.workers.org/2013/03/01/obamas-energy-choice-shill-for-shale-gas-industry/
Two things there should stand out: one is that China, despite its abundance of coal, is steering its economy away from coal because of the environmental effects it has. The other is that almost 2 million workers who will be out of a job will be given jobs in other industries. If any workers do become unemployed as part of this process, it'll be due to inefficiencies in the state apparatus in relocating them.
What about the US?
"During his Feb. 12 State of the Union address, Obama claimed that climate change was a main concern of his second term. He even suggested he would consider executive actions if Congress failed to regulate carbon emissions. However with his next breath, Obama promised to encourage more drilling for natural gas, in essence giving a wink and a nod to industry executives.
His consideration of Moniz for energy secretary confirms this. Moniz’s study promotes the use of shale gas as an alternative to fossils fuels like coal, while seriously downplaying the question of methane release during fracking. The big industry lie is that natural gas is better for the climate than fossil fuels like coal or oil.
Studies have shown that heavy use of fracking actually promotes greater fossil-fuel reliance, while effectively putting investment in renewable technology on the back burner."
http://www.heraldstandard.com/gcm/news/local_news/coal-job-losses-add-to-region-s-unemployment/article_ff06bb64-9f3f-5928-8d48-4f742651ae07.html
Across the Pittsburgh Metropolitan Statistical Area, which locally includes Fayette, Washington and Westmoreland counties, mining and logging jobs dropped from 11,500 to 9,800.
That helped raise the seasonally adjusted unemployment rate for the entire seven-county area from 5.4 percent to 5.8 percent over the 12 months ending in April. The rate rose during that time from 7.5 percent to 8.7 percent in Fayette, 5.5 percent to 6.8 percent in Washington and 5.4 percent to 6.3 percent in Westmoreland.
Every area county showed a seasonally adjusted increase in the size of the workforce and the number out of work, according to figures provided by the Department of Labor and Industry."
http://crisiscritique.org/wp-content/uploads/2014/01/Boer_Socialism.pdf
https://philosophersforchange.org/2014/05/15/taking-notes-36-is-china-communist/
http://dschwei.sites.luc.edu/ChinaCap.GSA.pdf
https://communistuniversity.wordpress.com/2014/05/05/is-china-sociaslist/
https://robertlindsay.wordpress.com/2012/04/24/china-is-not-as-capitalist-as-you-think/
http://www.china.org.cn/opinion/2012-10/14/content_26776253.htm
Property market bubbles? What property? Private property, for sure, but it’s not real property. All real estate is 100% owned by the people of China. There is not one square metre of private land in the People’s Republic. You can pay for up to a 70-year usage lease on a piece of land and develop it, but no one can buy the dirt.
Private enterprise? It is thriving for sure, but is heavily concentrated in small and medium sized enterprises (SMEs), that complement and do not seriously compete with the state sectors of the economy. The private sector is especially the many millions of mom and pop and solo businesses that blanket the country.
Free markets? There is not one private bank in China. They are all people powered. The world’s largest bank, Industrial and Commercial Bank of China (ICBC) is state owned of course, as well as three other global Top Ten banks: #1 (ICBC), #5 China Construction Bank (CCB), #9 Bank of China (BOC) and #10 Agricultural Bank of China (ABC).³ Ditto all insurance companies, the Shanghai and Shenzhen stock and precious metals markets. Same goes for all major media outlets, especially television, radio and print media, although everyone has heard about Beijing being the new “Hollywood of the East”, which is mostly private sector.
Unfettered capitalism? Get outta here! Almost all major economic sectors in China are dominated by state-owned enterprises (SOEs). Everything from airlines/avionics to aerospace to chemical industries, from construction to maritime shipping to mining, from nuclear energy to petroleum to railways, from steel to telecommunications to utilities, over 100 key sectors have a huge, people-powered footprint. Many are some of the world’s biggest corporations. Not only that, but they are, like the aforementioned state banks, very profitable and well-run, contrary to relentless Western propaganda.
Privatisation? You have to look beyond the deceptive headlines. Baba Beijing caps the sale of SOE stock to the public, at 30%. Furthermore, there are strict controls on making sure someone doesn’t try to control what’s offered. The ownership of the shares has to be spread out. Most of these stocks are owned by Chinese citizens (A shares), but some are on offer to foreigners (B shares). Interestingly, more and more Chinese companies, including SOEs, are doing IPOs in Western stock markets, as part of their 30%.
Reforms? Ha-ha-ha, the joke’s on you! Baba Beijing will never sell off the people’s SOEs. It knows that the citizens’ social harmony and economic stability are rooted in its ability to macro-manage and long term (Five-Year) plan the country’s direction, via the 100% ownership of all the real estate (Marxism’s controlling the means of production), as well as the key industries and sectors. The CPC will continue to create wealth, under the rubric of socialism with Chinese characteristics, by borrowing some capitalist trappings. But it is only transitional. Deng Xiaoping said it many times and it continues going unheard in the West, that the goal is to follow the Marxist economic path to a wealthy communist society.
http://www.greanvillepost.com/2016/10/18/so-called-communist-china/
In short, the expansion of the private sector has been robust, and in the area of industry, the private sector in China is approaching the size of the measureable state sector in many respects. At the same time, it would be a mistake to view these incomplete data and conclude that the pure private sector accounts for the majority of China’s economy. The observable SOE sector under reasonable assumptions accounts for nearly 40 percent of China’s economy. Given additional information on the prevalence of SOE ownership in China’s capital markets, anecdotal and observed data on the prevalence of SOE ownership among LLCs and other
ownership categories, and the SOE role in round‐tripped FDI, it is reasonable to conclude that by 2009 nearly half of China’s economic output could be attributable to either SOEs, SHEs, and other types of enterprises controlled by the SOEs indirectly. If the output of urban collective enterprises and the government‐run proportion of TVEs are considered, the broadly defined state sector likely surpasses 50 percent.
"This conclusion goes beyond all the published estimates we have reviewed, but is consistent with the opinions of knowledgeable individuals currently dealing with Chinese enterprises in policy and business settings. This conclusion is likely startling in view of prior estimates that the private sector in China accounts for 70 percent of GDP. But such a dominant private role is inconsistent with socialism with Chinese characteristics as articulated by the CCP. For example, the government‐run People’s Daily provides this definition of socialism with Chinese characteristics as used in 17th People’s Congress: “On its economic fronts, China sticks to a multi‐ownership‐oriented basic market economic system, with the public ownership in the dominance.”36 This thinking is also memorialized in China’s five year plans.37 Through 2009, at least, the size of the public sector dovetails with the CCP’s vision.
https://www.uscc.gov/sites/default/files/Research/10_26_11_CapitalTradeSOEStudy.pdf
http://www.xinfajia.cn/12967.html
In my personal opinion, the best way to answer questions like this is to examine closely China's socialist revolution and the transformation of China from a semi-feudal semi-colonial country to a socialist one, and come to a full Marxist understanding of what form of ownership is dominant in China. The goal of China's New-Democratic Revolution was to overthrow the big three mountains: "imperialism, feudalism, and bureaucrat-capitalism" and to establish a people's democratic dictatorship based on the alliance of the working class and the peasants.
Generally speaking, socialist relations of production do not come into being under capitalism. In the case of China, though, the seeds of these relations came into being in the liberated areas of China, in the revolutionary base areas. This included economic sectors under state and cooperative ownership which expanded during the war of liberation. Governments in the liberated areas confiscated the property of bureaucrat-capitalists and placed them under state ownership.
After the revolution, the socialist transition began. This period lasted from the foundation of the people's republic in 1949 to 1956. During this period the "Three Transformations" took place, which was the socialist transformation of agriculture, capitalist industry and commerce, and handicraft industry.
In China the socialist public ownership is the mainstay of the economy, the dominant mode of production. However China has diverse forms of ownership which develop side-by-side.
In socialist China, the forms of public ownership of the means of production include the ownership by the whole people, collective ownership, and other forms of public ownership, as well as the public part of the mixed ownership sector. Along these forms, the ownership by the whole people and collective ownership play the dominant role.
The economic sector under the ownership of the whole people is the strongest economic and technological power in China today. It controls the national economy and dominates the major economic resources and natural resources of China.
At this present stage of socialism, the primary stage, ownership by the whole people refers to state ownership.
The economic sector under collective ownership is divided into the rural collective economic sector and urban collective economic sector.
There are also joint-stock companies, economic conglomerates, and enterprise groups which are under the system of ownership by the whole people or collective ownership.
The sector of the economy under mixed ownership usually takes the place of Sino-foreign co-operative businesses including Sino-foreign joint ventures and Sino-foreign contractual businesses, and that of the economic sector which is joint public-private.
In China state-owned enterprises provide the necessary public products for the whole society to meet the growing material and cultural needs of the people. The state-owned enterprises play a leading role in such fields as coal, petroleum, electricity, and steel. They provide 70% of China's coal, 92% of its petroleum, 91% of its electric power and half of its ferrous metal. They supply such basic services such as railway transportation, aviation transportation and maritime transportation.
These state-owned sectors are the pillars of China, without them China would fall and polarization would become extreme.
China is enacting fundamentally correct policies which are the requirements of the primary stage of socialism, where developing the productive forces is required to bring China into the new era and advance socialism to a higher stage. The non-public sectors are subordinate to the socialist public sectors and play a supporting role in building socialism. Despite being very profitable and productive, they are under the thumb of the Communist Party and cannot function without its approval.
http://www.invent-the-future.org/2016/12/from-the-chinese-marxist-viewpoint-an-interview-with-professor-deng-chundong/
https://www.loc.gov/law/help/real-property-law/china.php
https://mobile.nytimes.com/2017/02/12/opinion/china-the-party-corporate-complex.html
China’s many high-profile moves to open up its markets in recent years turn out to have been half-hearted, if not intentional hoodwinking.
Despite the much-ballyhooed dismantling of the more than 2,000-year-old state monopoly on salt, all salt producers are still state-owned. Foreign asset-management companies are now allowed to operate wholly foreign-owned businesses in China, but only in deals with institutional investors and private-equity funds, not retail investors, a much bigger piece of meat. Partly to steady the renminbi, Beijing no longer allows Chinese citizens to take up to $50,000 a year out of the country, and it has recently restricted the repatriation of capital by foreign firms like Deutsche Bank.
Hyper control, interventionism, currency manipulation — no, China is not a market economy. But it’s worse than that: The Chinese Communist Party (C.C.P.) has systematically infiltrated China’s expanding private sector and now operates inside more than half of all nonstate firms; it can manipulate or even control these companies, especially bigger ones, and some foreign ones, too. The modern Chinese economy is a party-corporate conglomerate.
https://www.cnbc.com/2017/02/27/chinese-wages-rise-made-in-china-isnt-so-cheap-anymore.html
Turns out that "made in China" is not so cheap anymore as labor costs have risen rapidly in the country's vast manufacturing sector.
Chinese factory workers are now getting paid more than ever: Average hourly wages hit $3.60 last year, spiking 64 percent from 2011, according to market research firm Euromonitor. That's more than five times hourly manufacturing wages in India, and is more on par with countries such as Portugal and South Africa.
As China's economy expanded at breakneck speed, so has pay for employees. But the wage increase has translated to higher costs for companies with assembly lines in China. Some firms are now taking their business elsewhere, which also means China could start losing jobs to other developing countries like Sri Lanka, where hourly factory wages are $0.50.
http://socialisteconomicbulletin.blogspot.com/2017/07/china-faces-slower-western-growth-than.html
https://www.forbes.com/sites/wadeshepard/2017/07/25/xi-jinping-to-chinas-private-sector-go-home-the-belt-and-road-is-not-for-you/#110bd48817fb
https://www.economist.com/news/leaders/21725295-bad-china-and-world-chinas-state-enterprises-are-not-retreating-advancing
Mr Xi remains well aware of the need for reform; on July 15th he repeated warnings about indebtedness at SOEs. But only some of the initiatives rolled out on his watch are aimed at slimming the state sector. Two of them point in another direction entirely. One is the merging of competing SOEs. The arm of the government responsible for looking after these firms has engineered mergers of ports, railway-equipment makers and shipping companies; a vast chemicals combination is planned. Such deals often seem intended to spawn national champions, not to pare overcapacity.
The other disturbing trend is the proliferation of “state capital investment and operation” companies (SCIOs). The state has thus far tended to dominate in heavy industries, transport and energy, leaving private firms to forge ahead in technology. SCIOs will, in part, function like state-run private-equity funds whose remit is to extend the reach of government. Provincial governments have published plans to push funds into areas such as biotechnology and cloud computing...
Previous leaders have managed the tension between a liberalising economy and an obsession with stability through a mix of rapid growth and political repression. Mr Xi does not want to change that recipe. But he is doing something more radical: reversing the state’s retreat from the economy.
https://www.economist.com/news/finance-and-economics/21725293-outperformed-private-firms-they-are-no-longer-shrinking-share-overall
Over the past few years the state sector has, by several measures, stopped shrinking. There are still more than 150,000 SOEs in operation, two-thirds owned by local governments and the rest under central control. Private firms are much more productive, but state firms gobble up a disproportionate share of resources. They take about half of all bank loans and are the main culprits behind China’s big increase in corporate debt. Since 2015 investment by SOEs has grown faster than private-sector investment, reversing a decades-long trend
...
The fear is that the reforms, taken together, not only fail to solve the most pressing problems, but might even be aggravating them. SOEs are getting bigger, not smaller; their management has become more conservative; and their deficiencies are beginning to infect the economy more widely.
...
At a meeting on SOEs last October he devoted his comments not to reform but to the necessity of strengthening the party’s grip. “The party’s leadership of SOEs is a major political principle, and that principle must be insisted on,” he said.
People who work in and with SOEs report a palpable change in atmosphere in recent years. “Party officials are not the same as the technocrats who used to run the SOEs,” says a top banker. “They don’t take risks. Doing nothing is what’s safe.” Some of the most capable employees are leaving SOEs altogether. Political education, always a part of life in state firms, has been stepped up. One manager who recently quit a big state bank said that a campaign exhorting workers to study the party constitution had been unusually intense.
At the same time the government has capped pay for senior executives, concerned that they were getting more than government employees of equivalent ranks, stoking resentment. Yet on an international basis, SOE bosses are dramatically underpaid. The president of PetroChina, the country’s biggest oil company, earned 774,000 yuan ($112,000) in 2016; the CEO of Chevron, a firm of roughly the same market value, pulled in a handsome $24.7m.
...
There is a big looming worry, however. One aspect of SOE reform is in fact making quick progress: the creation of what are known as “state capital investment and operation” companies (SCIOs), to help manage existing state assets and invest in new ones. This initially looked like part of the solution for China. It borrows an approach honed in Singapore, where Temasek, a government-owned holding company, manages a portfolio of state firms but does not meddle in their operations, apart from demanding that they deliver good returns. It is now clear that this is not what China has in mind. Government officials say that SCIOs should not seek to make money in their investments; rather, they are meant to be more like “policy funds”, seeding firms and industries with government cash or money raised from SOE dividends without worrying about profit.
The other striking feature of SCIOs is that they are expressly enjoined to break into new high-tech sectors. Provincial governments around the country have published plans over the past two years in which they promise to guide more than 80% of their funds into infrastructure, public services and, crucially, “strategic emerging industries”, a category that refers to new energy, biotechnology and IT, among other areas. The upshot is that SCIOs, armed with cheap capital, seem set on expanding the state’s reach into the private sector. “We should anticipate the emergence of literally thousands of well-resourced SCIOs,” says Barry Naughton at the University of California in San Diego.
State-backed private-equity funds, which can be seen as forerunners to the investment function of the SCIOs, are already making a big impact. To give three examples from last year: the city of Shenzhen launched a 150bn yuan fund; Jiangxi, a relatively poor central province, created a 100bn yuan fund; and the city of Chengdu set up a 40bn yuan fund. This influx of cash is pushing up valuations. Bain & Co, a consultancy, calculates that private-equity deals in China were priced last year at a frothy 26-times earnings before interest, tax, depreciation and amortisation, compared with ten times in America. The state may turn out to be a wise investor but experience suggests otherwise. More likely, the state will crowd out private investors, hogging capital and allocating it poorly.
...
SOEs, far from retreating, are on the march, drawing on government support to compensate for their weakness. They are making conquests at home and abroad. Cutting state firms down to size and opening them up to competition ought to be the point of SOE reform. Instead, China is beefing them up and driving them into new territory.
China's Communist party is writing itself into the articles of association of many of the country’s biggest companies in a blow to investor hopes that Beijing would relax its grip on the market.
More than 30 Hong Kong-listed state-owned enterprises, representing more than $1tn in market capitalisation, have this year added lines to their central documents that place the party, rather than the Chinese state, at the heart of each group.
New phrases injected into the articles of association in recent months include describing the party as playing a core role in “an organised, institutionalised and concrete way” and “providing direction managing the overall situation”.
While the new language makes explicit investors’ long-held assumption of party influence, the changes are the first time the party rather than the government has been named, investors said.
...
“This is a reminder to investors they are buying into a party machine,” said David Webb, an independent investor and shareholder activist in Hong Kong. “This move to embed the party into constitutional documents of the companies puts a lie to the government’s claim they want market forces to play a greater role.”
Investors have voiced frustration with their inability to stop the changes.
“While it serves to formalise something investors were already aware of, this formalisation is not really the direction of travel investors wanted to see,” said David Smith, head of corporate governance at Aberdeen Asset Management Asia.
https://www.ft.com/content/a4b28218-80db-11e7-94e2-c5b903247afd
China has announced a “Made in China 2025” plan to dominate in the production of semiconductors, artificial intelligence, autonomous vehicles, biotechnology and every other high-tech industry likely to drive economic growth beyond 2025. The US, which remains the most innovative country in the world, stands firmly in China’s path.
But rather than building a globally competitive free market economy in order to compete, China has chosen instead to compel American companies that want to operate in China to turn over proprietary technology and intellectual property.
China does this by making joint ventures with Chinese companies a prerequisite for market access; by limiting American ownership to 50 per cent or less of most enterprises in China; and, in some cases, by requiring technology transfers as part of product sale contracts.
The Beijing government and Chinese companies also pursue an investment strategy whereby they identify US start-ups with scientific breakthroughs and then make investments in those companies on better-than-market terms. The primary consideration in this investment is not rate of return, but the capture of new technologies, which the Chinese then use for other purposes.
Through investments like this, Chinese companies gain access to breakthrough technologies that could create billions of dollars of future revenues without paying royalties. An initial overpayment of a few million dollars is very important to the American high-technology start up, but is a rounding error relative to China’s multibillion dollar long-term objectives of technological superiority.
The Chinese actively search for those US companies that pioneer the technologies that China lacks. They then carefully target those companies in order to acquire their expertise. Meanwhile, companies seeking access to the Chinese market or to Chinese capital are pressured into turning over their patents, their most advanced research, and their know-how.
The offensive against American intellectual property does not end there. Less well known are the efforts of Chinese lawyers to initiate antitrust actions in Chinese courts to invalidate patents on the theory they create illegal monopolies. Think of how counterintuitive that is. The whole idea of a patent is to reward the inventor with a period of exclusive rights to the invention. A legally granted monopoly is no justification for an antitrust proceeding. But China is willing to go to great lengths to capture American technologies.
https://www.foreignaffairs.com/articles/china/2015-04-20/embracing-chinas-new-normal
It is clear by now that China’s economy is set to slow in the years to come, although economists disagree about how much and for how long. Last year, the country’s gdp growth rate fell to 7.4 percent, the lowest in almost a quarter century, and many expect that figure to drop further in 2015. Plenty of countries struggle to grow at even this pace, but most don’t have to create hundreds of millions of jobs over the next decade, as China will. So understandably, some experts are skeptical about the country’s prospects. They argue that its productionfueled growth model is no longer tenable and warn, as the economist Paul Krugman did in 2013, that the country is “about to hit its Great Wall.” According to this view, the question is not whether the Chinese economy will crash but when.
Such thinking is misguided. China is not nearing the edge of a cliff; it is entering a new stage of development. Chinese President Xi Jinping has called this next phase of growth the “new normal,” a term that Mohamed El-Erian, the former CEO of the global investment firm pimco, famously used to describe the West’s painful economic recovery following the 2008 financial crisis. But Xi used the phrase to describe something different: a crucial rebalancing, one in which the country diversifies its economy, embraces a more sustainable level of growth, and distributes the benefits more evenly. The new normal is in its early stages now, but if Beijing manages to sustain it, China’s citizens can count on continued growth and material improvements in their quality of life. The rest of the world, meanwhile, can expect China to become further integrated into the global economy. The Chinese century is not at the beginning of the end; it is at the end of the beginning.
Understanding China’s new normal requires some historical context. As a latecomer to the modern economy, China has followed what one could call a “catch-up growth” model, which involves rapid economic growth following years of lagging behind. From 1870 to 1913, for example, the U.S. economy followed precisely this path, growing at an average rate of four percent. Between 1928 and 1939, Russia’s gdp grew at an average rate of 4.6 percent. And from 1950 to 1973, Japan’s economy grew at an average rate of 9.3 percent. Yet none of those countries came close to matching China’s record from 1978 to 2011: an average gdp growth rate of nearly ten percent over 33 years.
This ascent has helped China’s economy approach, and perhaps even surpass, that of the United States. In terms of purchasing power parity, a measure economists use for cross-country comparisons, China’s gdp surpassed that of the United States in 2010 or 2014, depending on whether one relies on historical statistics from the Maddison Project or data from the World Bank’s International Comparison Program. Yet if one relies on the World Bank Atlas method, China’s economy won’t likely outgrow the United States’ until 2019. And China’s gdp still trails that of the United States if calculated using current U.S. dollars. But the best method for comparing the two economies objectively is power generation, since it is physical and quantifiable. It also closely tracks modernization; without electricity, after all, or at least without a lot of it, one can’t run factories or build skyscrapers, which is exactly what China has been doing. In 1900, China generated 0.01 percent of the power the United States did. That figure rose to 1.2 percent in 1950 and 34 percent in 2000, with China surpassing the United States in 2011. In this respect, China has caught up.
China’s rise has also brought massive benefits to the country’s population, although here there is obviously much more to be done. With a population more than four times as large as that of its closest economic competitor, China won’t likely match even half the United States’ gdp per capita until around 2030. To be sure, the country has made major strides in other areas. Its average life expectancy (around 76 years) is nearing the United States’ (around 79 years). Educational levels in the two countries are comparable. And measured by the Gini coefficient, economic inequality in China may now be lower than it is in the United States. Yet since 1979, most of the windfall from China’s rise has accrued mainly to those who live in urban or coastal areas. Realizing Beijing’s ultimate development goal—“common development and common prosperity”—will require not only more sustainable growth but also more evenly distributed gains.
To a certain extent, China’s latest slowdown was inevitable. Three decades of breakneck growth have left China with an economy that is simply massive, making marginal increases in size all the more difficult. Even measured using current exchange rates, Chinese gdp exceeded $10 trillion in 2014, which means that growing by ten percent would amount to adding $1 trillion to the economy after one year, a sum greater than the entire gdp of Saudi Arabia, which is among the world’s largest economies. Growth on this scale was bound to become unsustainable at some point. It essentially requires an unlimited supply of energy and puts enormous stress on the environment. China already emits more carbon into the atmosphere than the United States and the EU combined, and its emissions are still increasing.
http://www.globaltimes.cn/content/1068750.shtml
China releases new standards on Marxist education to promote better understanding of Marxist theory and ideology:
"Chinese education authorities have unveiled some standards for the study of Marxism at university, which experts have said shows China's new emphasis on Marxist education and ideology.
The standards come from the Ministry of Education (MOE), with specific requirements for school facilities, faculty and courses, according to a post on MOE's WeChat account Wednesday.
This is the first document in China to give detailed requirement on the subject, and it is especially significant as it offers verifiable standards for evaluation, he added.
The document states that the university's principal and Party chief will have the main responsibility for Marxist work and need to hold at least one office meeting on that each academic year.
Schools of Marxism are to be regarded as independent institutions, directly under the university, whose leaders are responsible for establishing the ideology and theoretical studies for all students.
These quantifications are meant to help clarity the university's responsibilities in a Marxist education and to get their senior personnel to look for more practical applications instead of just talking about it, said Zhuang.
"In this way, schools of Marxism can place more importance on its ideological power and not confine it to one department, but spread its message all over the university," he said.
The standards also call for mid-to-small Marxism classes of no more than 100 students each.
"Small classes have much better quality and a greater effect than large classes, because students can discuss things with each other and communicate with the teacher better," Zhu Andong, an associate professor at Tsinghua University's School of Marxism, told the Global Times.
Most universities still need some time to achieve the standard required, mainly because of the limited number of full-time teachers, Zhu added.
The standards also call for full-time teachers at these schools to be Party members at least in principle, and both part-time and full-time Marxism teachers have to have a related academic background.
In the area of Party and ideological development at Marxism schools, students and teachers are asked to organize Party activities for at least half a day every month.
http://www.chinadaily.com.cn/china/2017-09/30/content_32668217.htm
http://www.chinadaily.com.cn/china/2017-10/01/content_32712243.htm
https://www.washingtonpost.com/news/worldviews/wp/2017/10/11/china-treats-its-foreign-aid-like-a-state-secret-new-research-aims-to-reveal-it/?utm_term=.fcade93720c1
Edited by JohnBeige (today 11:46:23)
Really great post thanks.
if you edit the original post out of the quote tags you save everyone from having to scroll so much. just a heads up.
cars i think you got it backwards... you take the old post out... not yours... what were you gonna say?
what cars did is called an 'emptyquote', where you quote an entire post without commenting to show your approval for it.
unless you were being ironic, and you already knew what an emptypost is, in which case - well played, goon sire.
Petrol posted:Petrol posted:levoydpage posted:cars posted:Petrol posted:Dimashq posted:JohnBeige posted:heres a billion articles
http://www.heritage.org/testimony/chinese-state-owned-enterprises-and-us-china-economic-relations
"The discussion of SOEs has been undermined by a fundamental error: the conflation of restructured, share-holding firms with the truly private sector. Share-holding SOEs are manifestly not private actors and assessments of the corporate sector that assume so are fatally flawed from the outset. The origin of this mistake is historical. As quasi-state entities emerged and proliferated, it was clear some sort of separate treatment was necessary and the concept of “non-state” was created. This was never intended to indicate “private”—quite the opposite: it was meant to signify that the creation of corporate forms quite different from SOEs could occur without privatization and its ideological pitfalls.
The meaning of “non-state” is very well understood by the Chinese government. The (sometimes willful) misunderstanding outside China rests on two shaky pillars. The first is a mis-rendering of “non-state”—where the PRC sees the opposite of state as non-state, many foreign observers see the opposite of state as “private” and simply re-label accordingly. The second is more sophisticated and based on the share-holding change.
Neither specification of share-holders nor sale of stock by itself does anything to alter state control. The large majority of firms listed on domestic stock markets are specifically designated as state-owned. The sale of small minority stakes on foreign exchanges could be construed as recasting mainstays such as CNPC (through its list vehicle PetroChina), China Mobile, and Chinalco as non-state entities of some form. However, they are still centrally directed SOEs, as explicitly indicated by the Chinese government.
More broadly, firms are defined by inputs and outputs. Most Chinese firms sell in a market environment that is unrecognizably different from the operating environment in 1975 and sharply different even from the one in 1995. In this sense almost none of them are still traditional Chinese SOEs. On the output side, however, the requirement that the state predominate in so many sectors is meant to sharply confine competition, so that SOEs operate within markets but they operate primarily within state-controlled markets. This regulatory protection is the most powerful subsidy many SOEs receive.
The input side also continues to distinguish SOEs clearly from foreign or domestic private companies. Production inputs comprise labor, capital, land, and other physical resources such as energy. For SOEs, including those which have completed share-holding reform, all of these show the state’s overwhelming role. It is routine for Chinese officials to bounce back and forth from corporate to government posts at the behest of the Party, no less so at China Mobile and the like than anywhere else.
In stark contrast to private firms, which often cannot buy land at any price, SOEs have immediate call on free land, which is all technically owned by the state. The main barrier to SOEs acquiring land is other SOEs. SOEs as a matter of course also receive hefty power and other input subsidies not available to genuinely private firms.
As for capital, every aspect is dominated by the state. All large financial institutions are state-owned, the People’s Bank assigns loan quotas every year, and, within these quotas, lending is directed according to state priorities. Interest rates are also controlled, and last year real borrowing costs were barely above zero.
Conveniently, then, loan quotas and bank practices strongly inhibit non-state borrowing. Securities markets are also dominated by the state. As an illustration, the volume of government bond issuance utterly dwarfs corporate bonds and is growing relentlessly, crowding out private firms."
http://wiki.p2pfoundation.net/Role_of_the_State_in_Chinese_Economic_Development
The popular image presented in western media is that the State Owned Enterprises, SOEs, are the last remaining dinosaurs of socialism in China, soon to die out. But the industries of the “rust-belt” stubbornly refuse to do just that. A discussion paper with the title Explaining the Persistence of State Ownership in China7 shows that in the past 10 years the number of SOEs has declined dramatically from 84 397 to 29 229, but the share of the SOEs in the industrial sector has hovered steadily around 33-34 percent, rising slightly in 2003 and 2004 to 35.5 and 37.0 percent respectively. Considering that industrial production as a whole has increased a lot during period, this actually represents a big expansion of the SOEs. Employment in SOEs fell by 40 percent from 1998 to 2003 at the same time as they maintained their share of GDP.9 This represents a considerable increase of productivity in the SOEs, especially considering that GDP leaped forward during this period. Nineteen Chinese companies, all of them SOEs, are in Fortune Global 500 list of the largest companies in the world in 2005.
The SOEs completely dominate the capital intensive industries. It is difficult to see how Chinese capitalists will ever be able to compete with the resources of the state in these areas. Not even foreign multi-nationals, with all the resources they have at their command, are able to do so. Even though managers of state firms have some independence in deciding how to dispose over the surplus created by the workers in their industries that does not turn them into capitalists. As Trotsky remarked: “The biggest apartments, the juiciest steaks, and even Rolls Royces are not enough to transform the bureaucracy into an independent ruling class.”
To fully understand the role of the state sector of the economy it is not enough to just look at what proportion they have of GDP, nor the degree of concentration. It is also important, if not more so, to look at what proportion of investments are channelled through the state sector, because investments are the driving force of the economy. And under capitalism, through the mechanism of the tendency of the rate of profit to fall, the cause of the boom-slump cycle. Fortunately, statistics about fixedasset investments (investments in buildings and machinery) are also much more accurate and uncontested compared to GDP statistics.
They are divided into four periods.
State Investments as Percentage of Total Investments
1981 – 1989 (the “roaring eighties”) 78.6 percent
1990 – 1992 (post-Tiananmen Square) 81.2 percene
1993 – 2001 (the restructuring of the SOEs) 86.7 percent
2002 – 2005 (post-reconstruction) 85.3 percent
These figures are truly astonishing. They show not only that state the plays an absolutely decisive role in the economy, but also that state investments as a proportion of all investments have increased substantially since the eighties, only to fall back slightly between 2002 and 2005. This confirms that rather than moving towards capitalism in the nineties, China moved away from it. The present financial crisis will certainly raise the state’s share of investments again, possibly to its highest level since 1978
https://www.workers.org/2016/03/21/china-the-u-s-and-global-warming-part-3/
The U.S. website mining.com, citing Chinese sources, reported on Jan. 21 that “Beijing plans to close about 4,300 coal mines, remove outdated production capacity of 700 million tons and redeploy around 1 million workers over the next three years. … China has eliminated about 560 million tons of coal production capacity and closed 7,250 coal mines in the last five years.”
This was updated in a China Daily report on Feb. 2 that Beijing “has promised to spend 100 billion yuan ($15.25 billion) a year for up to five years to address overcapacity in sectors such as steel and coal, while local governments will contribute another 100 billion yuan. … The coal industry alone will get around 140 billion yuan, and 1.8 million employees in the sector will be relocated.”
What’s important here, from our point of view, is that China is committing very large sums to relocate the affected workers.
https://www.workers.org/2013/03/01/obamas-energy-choice-shill-for-shale-gas-industry/
Two things there should stand out: one is that China, despite its abundance of coal, is steering its economy away from coal because of the environmental effects it has. The other is that almost 2 million workers who will be out of a job will be given jobs in other industries. If any workers do become unemployed as part of this process, it'll be due to inefficiencies in the state apparatus in relocating them.
What about the US?
"During his Feb. 12 State of the Union address, Obama claimed that climate change was a main concern of his second term. He even suggested he would consider executive actions if Congress failed to regulate carbon emissions. However with his next breath, Obama promised to encourage more drilling for natural gas, in essence giving a wink and a nod to industry executives.
His consideration of Moniz for energy secretary confirms this. Moniz’s study promotes the use of shale gas as an alternative to fossils fuels like coal, while seriously downplaying the question of methane release during fracking. The big industry lie is that natural gas is better for the climate than fossil fuels like coal or oil.
Studies have shown that heavy use of fracking actually promotes greater fossil-fuel reliance, while effectively putting investment in renewable technology on the back burner."
http://www.heraldstandard.com/gcm/news/local_news/coal-job-losses-add-to-region-s-unemployment/article_ff06bb64-9f3f-5928-8d48-4f742651ae07.html
Across the Pittsburgh Metropolitan Statistical Area, which locally includes Fayette, Washington and Westmoreland counties, mining and logging jobs dropped from 11,500 to 9,800.
That helped raise the seasonally adjusted unemployment rate for the entire seven-county area from 5.4 percent to 5.8 percent over the 12 months ending in April. The rate rose during that time from 7.5 percent to 8.7 percent in Fayette, 5.5 percent to 6.8 percent in Washington and 5.4 percent to 6.3 percent in Westmoreland.
Every area county showed a seasonally adjusted increase in the size of the workforce and the number out of work, according to figures provided by the Department of Labor and Industry."
http://crisiscritique.org/wp-content/uploads/2014/01/Boer_Socialism.pdf
https://philosophersforchange.org/2014/05/15/taking-notes-36-is-china-communist/
http://dschwei.sites.luc.edu/ChinaCap.GSA.pdf
https://communistuniversity.wordpress.com/2014/05/05/is-china-sociaslist/
https://robertlindsay.wordpress.com/2012/04/24/china-is-not-as-capitalist-as-you-think/
http://www.china.org.cn/opinion/2012-10/14/content_26776253.htm
Property market bubbles? What property? Private property, for sure, but it’s not real property. All real estate is 100% owned by the people of China. There is not one square metre of private land in the People’s Republic. You can pay for up to a 70-year usage lease on a piece of land and develop it, but no one can buy the dirt.
Private enterprise? It is thriving for sure, but is heavily concentrated in small and medium sized enterprises (SMEs), that complement and do not seriously compete with the state sectors of the economy. The private sector is especially the many millions of mom and pop and solo businesses that blanket the country.
Free markets? There is not one private bank in China. They are all people powered. The world’s largest bank, Industrial and Commercial Bank of China (ICBC) is state owned of course, as well as three other global Top Ten banks: #1 (ICBC), #5 China Construction Bank (CCB), #9 Bank of China (BOC) and #10 Agricultural Bank of China (ABC).³ Ditto all insurance companies, the Shanghai and Shenzhen stock and precious metals markets. Same goes for all major media outlets, especially television, radio and print media, although everyone has heard about Beijing being the new “Hollywood of the East”, which is mostly private sector.
Unfettered capitalism? Get outta here! Almost all major economic sectors in China are dominated by state-owned enterprises (SOEs). Everything from airlines/avionics to aerospace to chemical industries, from construction to maritime shipping to mining, from nuclear energy to petroleum to railways, from steel to telecommunications to utilities, over 100 key sectors have a huge, people-powered footprint. Many are some of the world’s biggest corporations. Not only that, but they are, like the aforementioned state banks, very profitable and well-run, contrary to relentless Western propaganda.
Privatisation? You have to look beyond the deceptive headlines. Baba Beijing caps the sale of SOE stock to the public, at 30%. Furthermore, there are strict controls on making sure someone doesn’t try to control what’s offered. The ownership of the shares has to be spread out. Most of these stocks are owned by Chinese citizens (A shares), but some are on offer to foreigners (B shares). Interestingly, more and more Chinese companies, including SOEs, are doing IPOs in Western stock markets, as part of their 30%.
Reforms? Ha-ha-ha, the joke’s on you! Baba Beijing will never sell off the people’s SOEs. It knows that the citizens’ social harmony and economic stability are rooted in its ability to macro-manage and long term (Five-Year) plan the country’s direction, via the 100% ownership of all the real estate (Marxism’s controlling the means of production), as well as the key industries and sectors. The CPC will continue to create wealth, under the rubric of socialism with Chinese characteristics, by borrowing some capitalist trappings. But it is only transitional. Deng Xiaoping said it many times and it continues going unheard in the West, that the goal is to follow the Marxist economic path to a wealthy communist society.
http://www.greanvillepost.com/2016/10/18/so-called-communist-china/
In short, the expansion of the private sector has been robust, and in the area of industry, the private sector in China is approaching the size of the measureable state sector in many respects. At the same time, it would be a mistake to view these incomplete data and conclude that the pure private sector accounts for the majority of China’s economy. The observable SOE sector under reasonable assumptions accounts for nearly 40 percent of China’s economy. Given additional information on the prevalence of SOE ownership in China’s capital markets, anecdotal and observed data on the prevalence of SOE ownership among LLCs and other
ownership categories, and the SOE role in round‐tripped FDI, it is reasonable to conclude that by 2009 nearly half of China’s economic output could be attributable to either SOEs, SHEs, and other types of enterprises controlled by the SOEs indirectly. If the output of urban collective enterprises and the government‐run proportion of TVEs are considered, the broadly defined state sector likely surpasses 50 percent.
"This conclusion goes beyond all the published estimates we have reviewed, but is consistent with the opinions of knowledgeable individuals currently dealing with Chinese enterprises in policy and business settings. This conclusion is likely startling in view of prior estimates that the private sector in China accounts for 70 percent of GDP. But such a dominant private role is inconsistent with socialism with Chinese characteristics as articulated by the CCP. For example, the government‐run People’s Daily provides this definition of socialism with Chinese characteristics as used in 17th People’s Congress: “On its economic fronts, China sticks to a multi‐ownership‐oriented basic market economic system, with the public ownership in the dominance.”36 This thinking is also memorialized in China’s five year plans.37 Through 2009, at least, the size of the public sector dovetails with the CCP’s vision.
https://www.uscc.gov/sites/default/files/Research/10_26_11_CapitalTradeSOEStudy.pdf
http://www.xinfajia.cn/12967.html
In my personal opinion, the best way to answer questions like this is to examine closely China's socialist revolution and the transformation of China from a semi-feudal semi-colonial country to a socialist one, and come to a full Marxist understanding of what form of ownership is dominant in China. The goal of China's New-Democratic Revolution was to overthrow the big three mountains: "imperialism, feudalism, and bureaucrat-capitalism" and to establish a people's democratic dictatorship based on the alliance of the working class and the peasants.
Generally speaking, socialist relations of production do not come into being under capitalism. In the case of China, though, the seeds of these relations came into being in the liberated areas of China, in the revolutionary base areas. This included economic sectors under state and cooperative ownership which expanded during the war of liberation. Governments in the liberated areas confiscated the property of bureaucrat-capitalists and placed them under state ownership.
After the revolution, the socialist transition began. This period lasted from the foundation of the people's republic in 1949 to 1956. During this period the "Three Transformations" took place, which was the socialist transformation of agriculture, capitalist industry and commerce, and handicraft industry.
In China the socialist public ownership is the mainstay of the economy, the dominant mode of production. However China has diverse forms of ownership which develop side-by-side.
In socialist China, the forms of public ownership of the means of production include the ownership by the whole people, collective ownership, and other forms of public ownership, as well as the public part of the mixed ownership sector. Along these forms, the ownership by the whole people and collective ownership play the dominant role.
The economic sector under the ownership of the whole people is the strongest economic and technological power in China today. It controls the national economy and dominates the major economic resources and natural resources of China.
At this present stage of socialism, the primary stage, ownership by the whole people refers to state ownership.
The economic sector under collective ownership is divided into the rural collective economic sector and urban collective economic sector.
There are also joint-stock companies, economic conglomerates, and enterprise groups which are under the system of ownership by the whole people or collective ownership.
The sector of the economy under mixed ownership usually takes the place of Sino-foreign co-operative businesses including Sino-foreign joint ventures and Sino-foreign contractual businesses, and that of the economic sector which is joint public-private.
In China state-owned enterprises provide the necessary public products for the whole society to meet the growing material and cultural needs of the people. The state-owned enterprises play a leading role in such fields as coal, petroleum, electricity, and steel. They provide 70% of China's coal, 92% of its petroleum, 91% of its electric power and half of its ferrous metal. They supply such basic services such as railway transportation, aviation transportation and maritime transportation.
These state-owned sectors are the pillars of China, without them China would fall and polarization would become extreme.
China is enacting fundamentally correct policies which are the requirements of the primary stage of socialism, where developing the productive forces is required to bring China into the new era and advance socialism to a higher stage. The non-public sectors are subordinate to the socialist public sectors and play a supporting role in building socialism. Despite being very profitable and productive, they are under the thumb of the Communist Party and cannot function without its approval.
http://www.invent-the-future.org/2016/12/from-the-chinese-marxist-viewpoint-an-interview-with-professor-deng-chundong/
https://www.loc.gov/law/help/real-property-law/china.php
https://mobile.nytimes.com/2017/02/12/opinion/china-the-party-corporate-complex.html
China’s many high-profile moves to open up its markets in recent years turn out to have been half-hearted, if not intentional hoodwinking.
Despite the much-ballyhooed dismantling of the more than 2,000-year-old state monopoly on salt, all salt producers are still state-owned. Foreign asset-management companies are now allowed to operate wholly foreign-owned businesses in China, but only in deals with institutional investors and private-equity funds, not retail investors, a much bigger piece of meat. Partly to steady the renminbi, Beijing no longer allows Chinese citizens to take up to $50,000 a year out of the country, and it has recently restricted the repatriation of capital by foreign firms like Deutsche Bank.
Hyper control, interventionism, currency manipulation — no, China is not a market economy. But it’s worse than that: The Chinese Communist Party (C.C.P.) has systematically infiltrated China’s expanding private sector and now operates inside more than half of all nonstate firms; it can manipulate or even control these companies, especially bigger ones, and some foreign ones, too. The modern Chinese economy is a party-corporate conglomerate.
https://www.cnbc.com/2017/02/27/chinese-wages-rise-made-in-china-isnt-so-cheap-anymore.html
Turns out that "made in China" is not so cheap anymore as labor costs have risen rapidly in the country's vast manufacturing sector.
Chinese factory workers are now getting paid more than ever: Average hourly wages hit $3.60 last year, spiking 64 percent from 2011, according to market research firm Euromonitor. That's more than five times hourly manufacturing wages in India, and is more on par with countries such as Portugal and South Africa.
As China's economy expanded at breakneck speed, so has pay for employees. But the wage increase has translated to higher costs for companies with assembly lines in China. Some firms are now taking their business elsewhere, which also means China could start losing jobs to other developing countries like Sri Lanka, where hourly factory wages are $0.50.
http://socialisteconomicbulletin.blogspot.com/2017/07/china-faces-slower-western-growth-than.html
https://www.forbes.com/sites/wadeshepard/2017/07/25/xi-jinping-to-chinas-private-sector-go-home-the-belt-and-road-is-not-for-you/#110bd48817fb
https://www.economist.com/news/leaders/21725295-bad-china-and-world-chinas-state-enterprises-are-not-retreating-advancing
Mr Xi remains well aware of the need for reform; on July 15th he repeated warnings about indebtedness at SOEs. But only some of the initiatives rolled out on his watch are aimed at slimming the state sector. Two of them point in another direction entirely. One is the merging of competing SOEs. The arm of the government responsible for looking after these firms has engineered mergers of ports, railway-equipment makers and shipping companies; a vast chemicals combination is planned. Such deals often seem intended to spawn national champions, not to pare overcapacity.
The other disturbing trend is the proliferation of “state capital investment and operation” companies (SCIOs). The state has thus far tended to dominate in heavy industries, transport and energy, leaving private firms to forge ahead in technology. SCIOs will, in part, function like state-run private-equity funds whose remit is to extend the reach of government. Provincial governments have published plans to push funds into areas such as biotechnology and cloud computing...
Previous leaders have managed the tension between a liberalising economy and an obsession with stability through a mix of rapid growth and political repression. Mr Xi does not want to change that recipe. But he is doing something more radical: reversing the state’s retreat from the economy.
https://www.economist.com/news/finance-and-economics/21725293-outperformed-private-firms-they-are-no-longer-shrinking-share-overall
Over the past few years the state sector has, by several measures, stopped shrinking. There are still more than 150,000 SOEs in operation, two-thirds owned by local governments and the rest under central control. Private firms are much more productive, but state firms gobble up a disproportionate share of resources. They take about half of all bank loans and are the main culprits behind China’s big increase in corporate debt. Since 2015 investment by SOEs has grown faster than private-sector investment, reversing a decades-long trend
...
The fear is that the reforms, taken together, not only fail to solve the most pressing problems, but might even be aggravating them. SOEs are getting bigger, not smaller; their management has become more conservative; and their deficiencies are beginning to infect the economy more widely.
...
At a meeting on SOEs last October he devoted his comments not to reform but to the necessity of strengthening the party’s grip. “The party’s leadership of SOEs is a major political principle, and that principle must be insisted on,” he said.
People who work in and with SOEs report a palpable change in atmosphere in recent years. “Party officials are not the same as the technocrats who used to run the SOEs,” says a top banker. “They don’t take risks. Doing nothing is what’s safe.” Some of the most capable employees are leaving SOEs altogether. Political education, always a part of life in state firms, has been stepped up. One manager who recently quit a big state bank said that a campaign exhorting workers to study the party constitution had been unusually intense.
At the same time the government has capped pay for senior executives, concerned that they were getting more than government employees of equivalent ranks, stoking resentment. Yet on an international basis, SOE bosses are dramatically underpaid. The president of PetroChina, the country’s biggest oil company, earned 774,000 yuan ($112,000) in 2016; the CEO of Chevron, a firm of roughly the same market value, pulled in a handsome $24.7m.
...
There is a big looming worry, however. One aspect of SOE reform is in fact making quick progress: the creation of what are known as “state capital investment and operation” companies (SCIOs), to help manage existing state assets and invest in new ones. This initially looked like part of the solution for China. It borrows an approach honed in Singapore, where Temasek, a government-owned holding company, manages a portfolio of state firms but does not meddle in their operations, apart from demanding that they deliver good returns. It is now clear that this is not what China has in mind. Government officials say that SCIOs should not seek to make money in their investments; rather, they are meant to be more like “policy funds”, seeding firms and industries with government cash or money raised from SOE dividends without worrying about profit.
The other striking feature of SCIOs is that they are expressly enjoined to break into new high-tech sectors. Provincial governments around the country have published plans over the past two years in which they promise to guide more than 80% of their funds into infrastructure, public services and, crucially, “strategic emerging industries”, a category that refers to new energy, biotechnology and IT, among other areas. The upshot is that SCIOs, armed with cheap capital, seem set on expanding the state’s reach into the private sector. “We should anticipate the emergence of literally thousands of well-resourced SCIOs,” says Barry Naughton at the University of California in San Diego.
State-backed private-equity funds, which can be seen as forerunners to the investment function of the SCIOs, are already making a big impact. To give three examples from last year: the city of Shenzhen launched a 150bn yuan fund; Jiangxi, a relatively poor central province, created a 100bn yuan fund; and the city of Chengdu set up a 40bn yuan fund. This influx of cash is pushing up valuations. Bain & Co, a consultancy, calculates that private-equity deals in China were priced last year at a frothy 26-times earnings before interest, tax, depreciation and amortisation, compared with ten times in America. The state may turn out to be a wise investor but experience suggests otherwise. More likely, the state will crowd out private investors, hogging capital and allocating it poorly.
...
SOEs, far from retreating, are on the march, drawing on government support to compensate for their weakness. They are making conquests at home and abroad. Cutting state firms down to size and opening them up to competition ought to be the point of SOE reform. Instead, China is beefing them up and driving them into new territory.
China's Communist party is writing itself into the articles of association of many of the country’s biggest companies in a blow to investor hopes that Beijing would relax its grip on the market.
More than 30 Hong Kong-listed state-owned enterprises, representing more than $1tn in market capitalisation, have this year added lines to their central documents that place the party, rather than the Chinese state, at the heart of each group.
New phrases injected into the articles of association in recent months include describing the party as playing a core role in “an organised, institutionalised and concrete way” and “providing direction managing the overall situation”.
While the new language makes explicit investors’ long-held assumption of party influence, the changes are the first time the party rather than the government has been named, investors said.
...
“This is a reminder to investors they are buying into a party machine,” said David Webb, an independent investor and shareholder activist in Hong Kong. “This move to embed the party into constitutional documents of the companies puts a lie to the government’s claim they want market forces to play a greater role.”
Investors have voiced frustration with their inability to stop the changes.
“While it serves to formalise something investors were already aware of, this formalisation is not really the direction of travel investors wanted to see,” said David Smith, head of corporate governance at Aberdeen Asset Management Asia.
https://www.ft.com/content/a4b28218-80db-11e7-94e2-c5b903247afd
China has announced a “Made in China 2025” plan to dominate in the production of semiconductors, artificial intelligence, autonomous vehicles, biotechnology and every other high-tech industry likely to drive economic growth beyond 2025. The US, which remains the most innovative country in the world, stands firmly in China’s path.
But rather than building a globally competitive free market economy in order to compete, China has chosen instead to compel American companies that want to operate in China to turn over proprietary technology and intellectual property.
China does this by making joint ventures with Chinese companies a prerequisite for market access; by limiting American ownership to 50 per cent or less of most enterprises in China; and, in some cases, by requiring technology transfers as part of product sale contracts.
The Beijing government and Chinese companies also pursue an investment strategy whereby they identify US start-ups with scientific breakthroughs and then make investments in those companies on better-than-market terms. The primary consideration in this investment is not rate of return, but the capture of new technologies, which the Chinese then use for other purposes.
Through investments like this, Chinese companies gain access to breakthrough technologies that could create billions of dollars of future revenues without paying royalties. An initial overpayment of a few million dollars is very important to the American high-technology start up, but is a rounding error relative to China’s multibillion dollar long-term objectives of technological superiority.
The Chinese actively search for those US companies that pioneer the technologies that China lacks. They then carefully target those companies in order to acquire their expertise. Meanwhile, companies seeking access to the Chinese market or to Chinese capital are pressured into turning over their patents, their most advanced research, and their know-how.
The offensive against American intellectual property does not end there. Less well known are the efforts of Chinese lawyers to initiate antitrust actions in Chinese courts to invalidate patents on the theory they create illegal monopolies. Think of how counterintuitive that is. The whole idea of a patent is to reward the inventor with a period of exclusive rights to the invention. A legally granted monopoly is no justification for an antitrust proceeding. But China is willing to go to great lengths to capture American technologies.
https://www.foreignaffairs.com/articles/china/2015-04-20/embracing-chinas-new-normal
It is clear by now that China’s economy is set to slow in the years to come, although economists disagree about how much and for how long. Last year, the country’s gdp growth rate fell to 7.4 percent, the lowest in almost a quarter century, and many expect that figure to drop further in 2015. Plenty of countries struggle to grow at even this pace, but most don’t have to create hundreds of millions of jobs over the next decade, as China will. So understandably, some experts are skeptical about the country’s prospects. They argue that its productionfueled growth model is no longer tenable and warn, as the economist Paul Krugman did in 2013, that the country is “about to hit its Great Wall.” According to this view, the question is not whether the Chinese economy will crash but when.
Such thinking is misguided. China is not nearing the edge of a cliff; it is entering a new stage of development. Chinese President Xi Jinping has called this next phase of growth the “new normal,” a term that Mohamed El-Erian, the former CEO of the global investment firm pimco, famously used to describe the West’s painful economic recovery following the 2008 financial crisis. But Xi used the phrase to describe something different: a crucial rebalancing, one in which the country diversifies its economy, embraces a more sustainable level of growth, and distributes the benefits more evenly. The new normal is in its early stages now, but if Beijing manages to sustain it, China’s citizens can count on continued growth and material improvements in their quality of life. The rest of the world, meanwhile, can expect China to become further integrated into the global economy. The Chinese century is not at the beginning of the end; it is at the end of the beginning.
Understanding China’s new normal requires some historical context. As a latecomer to the modern economy, China has followed what one could call a “catch-up growth” model, which involves rapid economic growth following years of lagging behind. From 1870 to 1913, for example, the U.S. economy followed precisely this path, growing at an average rate of four percent. Between 1928 and 1939, Russia’s gdp grew at an average rate of 4.6 percent. And from 1950 to 1973, Japan’s economy grew at an average rate of 9.3 percent. Yet none of those countries came close to matching China’s record from 1978 to 2011: an average gdp growth rate of nearly ten percent over 33 years.
This ascent has helped China’s economy approach, and perhaps even surpass, that of the United States. In terms of purchasing power parity, a measure economists use for cross-country comparisons, China’s gdp surpassed that of the United States in 2010 or 2014, depending on whether one relies on historical statistics from the Maddison Project or data from the World Bank’s International Comparison Program. Yet if one relies on the World Bank Atlas method, China’s economy won’t likely outgrow the United States’ until 2019. And China’s gdp still trails that of the United States if calculated using current U.S. dollars. But the best method for comparing the two economies objectively is power generation, since it is physical and quantifiable. It also closely tracks modernization; without electricity, after all, or at least without a lot of it, one can’t run factories or build skyscrapers, which is exactly what China has been doing. In 1900, China generated 0.01 percent of the power the United States did. That figure rose to 1.2 percent in 1950 and 34 percent in 2000, with China surpassing the United States in 2011. In this respect, China has caught up.
China’s rise has also brought massive benefits to the country’s population, although here there is obviously much more to be done. With a population more than four times as large as that of its closest economic competitor, China won’t likely match even half the United States’ gdp per capita until around 2030. To be sure, the country has made major strides in other areas. Its average life expectancy (around 76 years) is nearing the United States’ (around 79 years). Educational levels in the two countries are comparable. And measured by the Gini coefficient, economic inequality in China may now be lower than it is in the United States. Yet since 1979, most of the windfall from China’s rise has accrued mainly to those who live in urban or coastal areas. Realizing Beijing’s ultimate development goal—“common development and common prosperity”—will require not only more sustainable growth but also more evenly distributed gains.
To a certain extent, China’s latest slowdown was inevitable. Three decades of breakneck growth have left China with an economy that is simply massive, making marginal increases in size all the more difficult. Even measured using current exchange rates, Chinese gdp exceeded $10 trillion in 2014, which means that growing by ten percent would amount to adding $1 trillion to the economy after one year, a sum greater than the entire gdp of Saudi Arabia, which is among the world’s largest economies. Growth on this scale was bound to become unsustainable at some point. It essentially requires an unlimited supply of energy and puts enormous stress on the environment. China already emits more carbon into the atmosphere than the United States and the EU combined, and its emissions are still increasing.
http://www.globaltimes.cn/content/1068750.shtml
China releases new standards on Marxist education to promote better understanding of Marxist theory and ideology:
"Chinese education authorities have unveiled some standards for the study of Marxism at university, which experts have said shows China's new emphasis on Marxist education and ideology.
The standards come from the Ministry of Education (MOE), with specific requirements for school facilities, faculty and courses, according to a post on MOE's WeChat account Wednesday.
This is the first document in China to give detailed requirement on the subject, and it is especially significant as it offers verifiable standards for evaluation, he added.
The document states that the university's principal and Party chief will have the main responsibility for Marxist work and need to hold at least one office meeting on that each academic year.
Schools of Marxism are to be regarded as independent institutions, directly under the university, whose leaders are responsible for establishing the ideology and theoretical studies for all students.
These quantifications are meant to help clarity the university's responsibilities in a Marxist education and to get their senior personnel to look for more practical applications instead of just talking about it, said Zhuang.
"In this way, schools of Marxism can place more importance on its ideological power and not confine it to one department, but spread its message all over the university," he said.
The standards also call for mid-to-small Marxism classes of no more than 100 students each.
"Small classes have much better quality and a greater effect than large classes, because students can discuss things with each other and communicate with the teacher better," Zhu Andong, an associate professor at Tsinghua University's School of Marxism, told the Global Times.
Most universities still need some time to achieve the standard required, mainly because of the limited number of full-time teachers, Zhu added.
The standards also call for full-time teachers at these schools to be Party members at least in principle, and both part-time and full-time Marxism teachers have to have a related academic background.
In the area of Party and ideological development at Marxism schools, students and teachers are asked to organize Party activities for at least half a day every month.
http://www.chinadaily.com.cn/china/2017-09/30/content_32668217.htm
http://www.chinadaily.com.cn/china/2017-10/01/content_32712243.htm
https://www.washingtonpost.com/news/worldviews/wp/2017/10/11/china-treats-its-foreign-aid-like-a-state-secret-new-research-aims-to-reveal-it/?utm_term=.fcade93720c1
Edited by JohnBeige (today 11:46:23)
Really great post thanks.
if you edit the original post out of the quote tags you save everyone from having to scroll so much. just a heads up.
cars i think you got it backwards... you take the old post out... not yours... what were you gonna say?
what cars did is called an 'emptyquote', where you quote an entire post without commenting to show your approval for it.
unless you were being ironic, and you already knew what an emptypost is, in which case - well played, goon sire.
the really funny thing is that after the first guy quoted the whole thing, i wanted to post that you didn't have to quote the whole thing, since i took me like 20 minutes to scroll past it on my phone. but then i thought it would be funnier to quote the whole thing. but then multiple people also thought that would be funny. so good on us as a community that we all thought the same thing.
well, i did it cause i'm really like the different colour borders... and uh...people should really read it.
Red_Canadian posted:the really funny thing is that after the first guy quoted the whole thing, i wanted to post that you didn't have to quote the whole thing, since i took me like 20 minutes to scroll past it on my phone. but then i thought it would be funnier to quote the whole thing. but then multiple people also thought that would be funny. so good on us as a community that we all thought the same thing.
well, i did it cause i'm really like the different colour borders... and uh...people should really read it.
You're banned
gyrofry posted:
gyrofry posted:
swampman posted:Red_Canadian posted:
i thought the movie was pretty bad but it's viewed as one of the few unmitigated successes of "viral marketing" in terms of sheer income and is now the textbook example i guess, it kind of makes me want to die reading about the brutal sales victory of stuff like Ryan Reynolds running a taco truck for a day in a gimp suit... excellent shit
- all russia is mad about film that didnt come out yet
- actually its fringe nationalists who are mad but all russian are the same yeah?
- theyre so mad theyll probably ban the film! i mean, who knows, nobody applied for certificate yet,
- get this crazy shit - russia actually likes stalin!
- because of, uh. putin
- and crimea. they love stalin because crimea
It's pretty fixable so not the end of the world but just for a couple minutes I'm going to contemplate the triumphant return of the 80's all-wired cyberpunk future
cars posted:reading about the Clock of the Long Now, a bourgeois project to determine how to keep looters from stripping something useless, for 10000 years
cars posted:reading about the Clock of the Long Now, a bourgeois project to determine how to keep looters from stripping something useless, for 10000 years
yeah this is super neat, i think there was a thread about it here or on some incarnation of the other offsite but im not sure. i thought the point was to prevent people from dying from radiation though? i dont remember much about it but this comes to mind.
https://en.wikipedia.org/wiki/Goiânia_accident
Dimashq posted:Anyone here read German and have cool reading suggestions for an intermediate learner? I thought it'd be cool to just pick up a volume of the collected works of Marx and Engels and just start reading and using a dictionary even if it takes forever, not sure if that's effective or not.
start with their personal letters to each other
Dimashq posted:Anyone here read German and have cool reading suggestions for an intermediate learner? I thought it'd be cool to just pick up a volume of the collected works of Marx and Engels and just start reading and using a dictionary even if it takes forever, not sure if that's effective or not.
it woul;d be cooL if someone produced an english-german of marx's works with the german on one page and the english on the facing page,so u can compare the two, like the loeb classics library stuff. anyone is free to steal this idea from me and i wont even be mad
tears posted:Dimashq posted:Anyone here read German and have cool reading suggestions for an intermediate learner? I thought it'd be cool to just pick up a volume of the collected works of Marx and Engels and just start reading and using a dictionary even if it takes forever, not sure if that's effective or not.
it woul;d be cooL if someone produced an english-german of marx's works with the german on one page and the english on the facing page,so u can compare the two, like the loeb classics library stuff. anyone is free to steal this idea from me and i wont even be mad
Better idea, communists should be like Christian missionaries translating the Bible, except we would be translating basic Marxist writings into small third world languages. Or maybe it’s more efficient to just teach English actually, there’s too many languages lmao.
