Why China Clings to State Capitalism (Excellent summary of China problem)

RealClearPolitics ^ | Robert Samuelson

[RoosterRedux]

American officials traveled to China this week in an effort to end the bitter trade war between the two countries. The main obstacle to a settlement is natural rivalry: The United States is trying to protect its position as the most important superpower; and China is serving notice that it covets that status for itself.

What further complicates matters is a clash of economic systems. China practices state capitalism; the government owns many large firms and decides which industries will receive subsidies, protected markets and favorable loans. In the United States, private markets and firms mostly determine which companies grow or shrink.

...

In 1978, when Deng Xiaoping launched China's present economic reform, state-owned firms dominated the economy. Now, according to Lardy's estimates, private firms account for roughly 70 percent of the country's output (gross domestic product).

The reversal came after Xi Jinping assumed leadership of the Communist Party in 2012 and, later, the presidency. He changed course, favoring state-owned firms, as Lardy shows by citing loans to businesses.

In 2013, 57 percent of loans went to private firms and 35 percent to state-controlled firms. By 2016, there had been a stunning reversal; state firms received 83 percent of loans, compared with 11 percent for private firms. Much of this lending came from state-owned banks.

[FreedomPoster]

>>what do we need politicians for?

Creating a fair system for markets and private property. And there are reasonable public works.

[RoosterRedux]

I was taught as a child (working for my Dad), in business school, and in my career that the best businesses are those who shove the decision making responsibility as far down the chain of command as possible.

In marketing, this means all the way down to where the company is in contact with the consumer. Only then can the "real" boss, the consumer, clearly communicate what he wants and needs.

That is, of course, free market capitalism.

Taking it a step further, that same decision principle can be used in manufacturing and other processes.

Only the man on the assembly line really knows the real answers as to how the machinery is best run to optimize production. And only the production men in concert with purchasing agents, accountants, front line marketeers and QC can really make the best decisions as to the optimum use of materials.

Companies that makes such decisions in the C-suite end up making the mistakes like those recent ones of Mary Barra and GM.

[gunsequalfreedom]

This article is very incorrect.

[RoosterRedux]

Can you be more specific?

[marktwain]

And if economics cannot be controlled, what do we need politicians for?

A court system, property rights, the rule of law, roads, defense from foreign enemies.

There may not be much the government is needed for, but we do need it.

[CDB]

Fascists. They went from full commie to full on fascist. And it is the model that the NWO would like to shackle the rest of the world to - only with unelected bureaucrats from Brussels running things instead of the politburo.

Fascism is right. Especially after Emperor Eleven (XI in Roman Numerals) declared that he was Fuhrer for Life.

[central_va]

We should stop trading with our new cold war enemies. So I totally agree.

[minnesota_bound]

Who do these Chinese communists think they are? Democrats?