That is the title of my contribution to a new book published by the Center for Strategic & International Studies entitled Chinese State Capitalism: Diagnosis and Prognosis. The book is the fruit of a very interesting workshop held back in February, organized by the estimable Jude Blanchette and Scott Kennedy. That event was one of the more interesting intellectual exchanges I’ve had in a while and it was a great opportunity to learn from some of the best people working on China today.
What I’ve tried to do in this short piece is very simple: just identify some basic empirical facts and established regularities about China’s economic system, based on my own findings and the insights of the other contributors. Our workshop started off as a discussion of “state capitalism,” which is probably as good of a shorthand description of that system as we’re going to get in the English language. Personally I think you can still make a case for calling China “socialist,” or perhaps “Leninist,” and some folks have recently made a good argument for preferring “Party-state capitalism” to account for the direction it has evolved under Xi.
But ultimately the label is less important than getting closer to a common understanding of the reality–even if Scott, in his conclusion to the book, feels that we have not yet managed to achieve that. Read it and decide for yourself.
Andrew, your graph about the state share in GDP in this document is somewhat different from the one given by you in the document “The State Never Retreats”. The state share in the former hovers around 45% of GDP, while in the latter it’s around 40%. Which one is to be taken? Also let me know if your estimate consider many of the enterprises owned/controlled by the state but considered “private” due to various reasons?
Thanks for being a careful reader. The difference is that I used a different line item from the flow of funds to measure the government’s size: in the original piece I used disposable income, then I decided that was imprecise and switched to value-added for a more accurate comparison. The more recent one is more correct. The size of the SOE sector is based on what the state says is a state-controlled enterprise; the official definition is a company where a state entity has either majority control or is the largest single shareholder. This is a broad definition that does in fact cover most things usually considered SOEs.
Thanks for the explanation Andrew. Your writings and the facts and figures you present in them are always enlightening. Coming back to the topic, can we assume that the state share in GDP may be (way) more than your estimations, as there are many enterprises which the state says “aren’t state owned” but which in reality are state owned and controlled? Also we must consider the contribution to the GDP by the firms in which the state is minority stake holder. What do you say about it?
There are of course many different channels of state influence besides ownership and control, as I discuss in the contribution to the CSIS volume. I am skeptical whether these other channels can be measured in terms of share of GDP.