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Why China is a socialist country

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This error arises among those of such a socialist viewpoint because they have a definition of socialism deriving from Stalin rather than Marx – as will be shown below. To clarify the issues for them this article is therefore a brief outline of the key foundations of China’s economic theories and why they are entirely in line with Marx. Those who prefer to use Western categories can analyse China’s socialist economy in those terms – as outlined in ‘Deng Xiaoping and John Maynard Keynes’ – and not bother to read this article. Those who prefer just to have accurate economic analyses, without being overly concerned with what framework they are put forward in, can ignore whether the cat is black or white and just study China’s economy.


Well, if you define socialism as “the state owns and controls major portions of the economy,” then yes, absolutely. A lot of people say that China is communist in name only and is actually more capitalist than the US, but I don't agree. I think there are two things that make China seem more capitalist than it actually is:

  • A lot of small scale markets. There are, for sure, lots of markets - wet (food) markets, clothing markets, building material markets, actually anything you can think of, you can probably find a market dedicated to it. Increasingly a lot of them are online with Taobao. These are indeed very capitalist, in that they tend to be family-owned and extremely flexible with regard to customer, product and price. You need a particular something, you find the right market, start talking to a few people and negotiate the features you want and the price and time you want it in, you’ll get it both fast and cheap. Sometimes also with decent quality - but that’s part of the negotiation. In my experience this kind of buying experience does not really exist in the west.
  • A lot of gray market activity. I’ve heard people say (or write on Quora) “China is more free than the US! You can do anything you want!” Friends, that’s not freedom, that’s weak institutions. China is, in fact, still a developing country in many ways (yes, I agree that the space program and the high speed rail network are distracting in that regard) and one of the biggest ways that is true is weak institutions. If you don’t like a particular rule, you can go to a different official or government office, or sometimes provide a bribe, until you get the answer you want. Things like patents, copyrights, contract law, employment law, etc. are not unenforced, but they’re unevenly enforced and there are a lot of loopholes and workarounds for people so inclined. The point here is that China’s institutions (following the standard playbook of economic development) are getting stronger very rapidly, so if you’re the kind of entrepreneur who likes to fish in muddy waters, your life is getting more difficult.

So back to the question. As an avowed socialist state, China is still very upfront about its right and intention to guide its economy. Large portions of the economy (energy, media, transportation, finance) are directly controlled through large state-owned enterprises. Private companies do exist in these sectors, but only at the margins, and they basically can’t exist without the large state owned enterprieses (SOEs.) Many other sectors (e.g. real estate, mining, manufacturing) are both highly regulated and managed through the banking system - if a particular sector seems to be growing too fast, the supply of loans will be tightened.

The reach of the government in the economy is pervasive. In the US (for example,) a company has regulations it needs to abide by and taxes it needs to pay, and after that it’s basically on its own. It’s not like that in China. Every Chinese company, whether publicly or privately owned, carefully cultivates a network of relevant government officials for support - in return supplying tax income, investment and employment (and sometimes, especially in the past, more, er, direct benefits.) All investments, from the national high speed rail system to the fitout of the local corner hardware store, are dependent on government support and approval at some level. One of the interesting things about the Chinese economy is how this management has adapted to new economic sectors, like the internet, that did not previously exist.

In return, people expect the government to run the nation and deliver stability and prosperity. Every problem is by definition a government issue, and that’s why the government is working so hard to address obvious social problems such as housing costs, lack of medical insurance, and air pollution - if it doesn’t, people will hold it responsible, and there is of course no opposition party.

So yes, China is still very socialist.

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https://www.quora.com/Is-China-still-a-socialist-country the human rights record is problematic to me, but the economic model is appealing
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On 10/1/2020 at 3:57 AM, Toldya said:

I can't believe I am seeing a relatively unbiased look at China's economy on this cesspool of a forum. Well done, OP!

China sucks.  Nuke China. Arrest Joe and Hunter Biden, partners in crime.

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