Is China better at capitalism?

[Odysseus]

Discuss!

http://www.time.com/time/world/article/0,8599,2043235,00.html?artId=2043235?contType=arti cle?chn=world

One of the great ironies revealed by the global recession that began in 2008 is that Communist Party–ruled China may be doing a better job managing capitalism's crisis than the democratically elected U.S. government. Beijing's stimulus spending was larger, infinitely more effective at overcoming the slowdown and directed at laying the infrastructural tracks for further economic expansion.

As Western democracies shuffle wheezily forward, China's economy roars along at a steady clip, having lifted some half a billion people out of poverty over the past three decades and rapidly created the world's largest middle class to provide an engine for long-term domestic consumer demand. Sure, there's massive social inequality, but there always is in a capitalist system. (Income inequality rates in the U.S. are some of the worst in the industrialized world, and more Americans are falling into poverty than are being raised out of it. The number of Americans officially designated as living in poverty in 2009 — 43 million — was the highest in the 51 years that records have been kept.)
(See TIME's photo-essay "The Rise of Hu Jintao.")

Beijing is also doing a far more effective job than Washington of tooling its economy to meet future challenges — at least according to historian Francis ***uyama, erstwhile neoconservative intellectual heavyweight. "President Hu Jintao's rare state visit to Washington this week comes at a time when many Chinese see their weathering of the financial crisis as a vindication of their own system, and the beginning of an era in which U.S.-style liberal ideas will no longer be dominant," wrote ***uyama in Monday's Financial Times under a headline stating that the U.S. had little to teach China. "State-owned enterprises are back in vogue, and were the chosen mechanism through which Beijing administered its massive stimulus."

Today Chinese leaders are more inclined to scold the U.S. — its debtor to the tune of close to a trillion dollars — than to emulate it, and ***uyama noted that polls show that a larger percentage of Chinese believe their country is headed in the right direction, compared with Americans. China's success in navigating the economic crisis, wrote ***uyama, was based on the ability of its authoritarian political system to "make large, complex decisions quickly, and ... make them relatively well, at least in economic policy."

These are startling observations from a writer who, 19 years ago, famously proclaimed that the collapse of the Soviet Union heralded "the end of history as such ... That is, the end point of mankind's ideological evolution and the universalization of Western liberal democracy as the final form of human government."
(See TIME's video "An Eye on China, Old and New.")

***uyama has had the good grace and intellectual honesty to admit he was wrong. And he's no apologist for Chinese authoritarianism, calling out its abuses and corruption, and making clear that he believes the absence of democracy will eventually hobble China's progress. Still, as he noted in the Financial Times, while they don't hold elections, China's communist leaders are nonetheless responsive to public opinion. (Of course they are! A party brought to power by a peasant rebellion knows full well the destructive potential of the rage of working people.) But the regime claims solid support from the Chinese middle class, and hedges against social explosion by directing resources and investment to more marginal parts of the country.

China's leaders, of course, never subscribed to ***uyama's "end of history" maxim; the Marxism on which they were reared would have taught them that there is no contingent relationship between capitalism and democracy, and they only had to look at neighbors such as Taiwan, South Korea and Singapore to see economic success stories under authoritarian rule — although the prosperity thus achieved played a major role in transforming Taiwan and South Korea into the noisy democracies they are today. Nor were Beijing's leaders under any illusions that the free market could take care of such basic needs as education, health care and infrastructure necessary to keep the system as a whole growing.

But ***uyama also made a point about the comparative inability of the U.S. system to respond decisively to a long-term crisis. "China adapts quickly, making difficult decisions and implementing them effectively," ***uyama wrote. "Americans pride themselves on constitutional checks and balances, based on a political culture that distrusts centralised government. This system has ensured individual liberty and a vibrant private sector, but it has now become polarised and ideologically rigid. At present it shows little appetite for dealing with the long-term fiscal challenges the U.S. faces. Democracy in America may have an inherent legitimacy that the Chinese system lacks, but it will not be much of a model to anyone if the government is divided against itself and cannot govern."
(See "China's High-Speed Rail.")

Money has emerged as the electoral trump card in the U.S. political system, and corporations have a Supreme Court–recognized right to use their considerable financial muscle to promote candidates and policies favorable to their business operations and to resist policies and shut out candidates deemed inimical to their business interests. So whether it's health reform or the stimulus package, the power of special interests in the U.S. system invariably produces either gridlock or mishmash legislation crafted to please the narrow interests of a variety of competing interests rather than the aggregated interests of the economy and society as a whole. Efficient and rational decisionmaking it's not. Nor does it appear capable of tackling long-term problems.

China is the extreme opposite, of course. It can ride roughshod over the lives of its citizens (e.g., building a dam that requires the forced relocation of 1.5 million people who have no channels through which to protest). But China's system is unlikely to give corporations the power to veto or shape government decisionmaking to suit their bottom lines at the expense of the needs of the system as a whole in the way that, to choose but one example, U.S. pharmaceutical companies are able to wield political influence to deny the government the right to negotiate drug prices for the public health system. ***uyama seems to be warning that, in Darwinian terms, the Chinese system may be more adaptive than the land of the free.



Read more: http://www.time.com/time/world/article/0,8599,2043235,00.html#ixzz1C21AL5HC

[epicSocialism4tw]

In 50 years, China could be a burgeoning Capitalist, Christian nation.

The US on the other hand is headed toward Orwell's 1984.

[Jay3]

China doesn't really do capitalism; it does tyranny where the biggest capitalist is the government, placing all the wealth and the monopoly on the coercive use of force in single hands.

China employs capitalist economic principles in the way it goes about its business. But it doesn't believe in the accumulation of private property rights, or the power of the individual.

It is a totalitarian, collectivist state that happens to have noticed capitalism has always been the best way to deliver a high standard of living to the common working man.

[alkemical]

Ody,

Do you think that the way the Chinese "regime" is run, it functions MORE like a business. If you work for a company you are just an asset. Drive down labor cost, if people don't own much, there's not much "cost" associated with your labor, and competition is nil, it's a closed shop. What the boss says, goes sort of world.

Where, we - are still having meetings about our meetings. We accomplish little, and talk more. We stopped taking care of each other, and focusing on how to one up each other. We were sold capitalism by "survival of the fittest", yet many of the "fittest" were just purchased and exploited by "the company".

[Garcia Bronco]

no they aren't. the artifically keep wages and their currency value low. Like us; they fix the market.

[Garcia Bronco]

and China spends 8 percent of their gdp on infrastructure; We spend half a percent.

[Mile High Shack]

and China spends 8 percent of their gdp on infrastructure; We spend half a percent.

this is what annoys me, why we continue to let our infrastructure go to **** is annoying

[orinjkrush]

a better question is whether capitalism functions "better" under their current governmental structure than it does within our current governmental environment (gridlock?).

[Garcia Bronco]

this is what annoys me, why we continue to let our infrastructure go to **** is annoying

We pass taxes here in Colorado for infrastructure and then give it to the local governemnt and the locals spend it elsewhere.

[Mile High Shack]

We pass taxes here in Colorado for infrastructure and then give it to the local governemnt and the locals spend it elsewhere.

if they would've used the stimulus money to build up our infrastructure and not bail out the mfin' banks that got us into the trouble to begin with, I think our unemployment rate would be much lower and our country would be in better shape

[alkemical]

a better question is whether capitalism functions "better" under their current governmental structure than it does within our current governmental environment (gridlock?).

Ody,

Do you think that the way the Chinese "regime" is run, it functions MORE like a business. If you work for a company you are just an asset. Drive down labor cost, if people don't own much, there's not much "cost" associated with your labor, and competition is nil, it's a closed shop. What the boss says, goes sort of world.

Where, we - are still having meetings about our meetings. We accomplish little, and talk more. We stopped taking care of each other, and focusing on how to one up each other. We were sold capitalism by "survival of the fittest", yet many of the "fittest" were just purchased and exploited by "the company".


That's what I was getting at....

[Play2win]

I wonder how China deals with its illegal aliens... Does it let the illegal dilute its country's resources?

[alkemical]

I wonder how China deals with its illegal aliens... Does it let the illegal dilute its country's resources?

Just an increase in labor assets. ;)

[elsid13]

No. It easy to look at their growth and say they are better, but that fails to understand that they were so inefficient that that introducing Western Business ideas and practices was going to cause a major growth spurt. While the US marketplace is extremely efficient (in relative terms), that we are playing on margins.

[JJJ]

no they aren't. the artifically keep wages and their currency value low. Like us; they fix the market.

Where did you get that from?

Typically salaried people are seeing 7% to 10% annual wage increases in line with the growth. Less for hourly folks but still 3% to 5% range. Some companies have had to make 20 to 30% adjustments in the wage levels.

http://www.nytimes.com/2010/06/08/business/global/08wages.html

[shakenbake]

Where did you get that from?

Typically salaried people are seeing 7% to 10% annual wage increases in line with the growth. Less for hourly folks but still 3% to 5% range. Some companies have had to make 20 to 30% adjustments in the wage levels.

http://www.nytimes.com/2010/06/08/business/global/08wages.html

Working in China, I would say the current system works well for China, and it is a market based or capitalist based system.

In regards to wages, in my industry the average annual increase for Chinese workers is 13%-17%.

[alkemical]

Where did you get that from?

Typically salaried people are seeing 7% to 10% annual wage increases in line with the growth. Less for hourly folks but still 3% to 5% range. Some companies have had to make 20 to 30% adjustments in the wage levels.

http://www.nytimes.com/2010/06/08/business/global/08wages.html

As an IT contractor, wages have gone down and rolling furloughs are now happening. This is for a major telecom and a major iIT company.

[Rigs11]

In 50 years, China could be a burgeoning Capitalist, Christian nation.

The US on the other hand is headed toward Orwell's 1984.http://www.threadbombing.com/data/media/32/drama_queen.jpg

[epicSocialism4tw]

blippity blah

http://www.mta.info/news/stories/images/see_something_lg.png
http://photos.upi.com/slideshow/lbox/9f40295b69f8e4d7792afe24a9fbe99b/If-you-See-Something-Say-Something.jpg

[Odysseus]

A friend of mine was making $85,000 as a Systems Administrator. He went overseas for awhile. He went back and the best offer he got was for $45k. My sister has a master's degree in I.T. She is making $35k.

On the other hand SAP consultants can command $100,000 stateside and if you have your CCIE globally you are money!

The larger issue is quality of life but that seems too intangible for people to grasp. Our animal natures seem to dominate our thinking. If it does not affect me than it's nothing that concerns me. The problem is sooner or later all of us will concerned because it will affect all of us.

The movie The Pianist displayed this the best. Nowhere in anyone's logic could they associate where they were with what was coming. We all know the horrifying story but to say NOBODY saw that coming is foolish. I doubt anybody knew the extent that things would go including the people forcing that issue.

Let's face it. I feels good to punish someone who deserves it. This is why people channel their anger and hatred into some of the most foolish of places. We think hatred validates us. This is the same with Islamic fundementalist. They want to hate someone or something so bad that their focus went from Islam to world domination. People all around the world project themselves on others in order to see themselves and people are loathe to reflect on what the larger issue is.

The global misery index is climbing. Jobs in America is just one symptom of a much larger change that is coming.

[Bronco Yoda]

Working in China, I would say the current system works well for China, and it is a market based or capitalist based system.

In regards to wages, in my industry the average annual increase for Chinese workers is 13%-17%.


So give us the real scoop then. They truely are kicking our ass aren't they!?

[shakenbake]

So give us the real scoop then. They truely are kicking our ass aren't they!?

No they are not kicking our ass, and they have a long way to go. Infrastructure outside of the developed areas is poor, their higher education sucks, this is a major lack of talent for management, engineering etc. But they are getting better.

I think the biggest mistake people make when coming to China is they visit places like Beijing, Shanghai, and Tianjin. These are the most developed areas in China, and the difference between then and other areas is HUGE. People talk about them spending 8% of GDP on infrastructure and the reason they do is because what they have SUCKS. Yea they have high speed trains, but you can't compare that to the US, because trains have never been a real popular mode of transportation in the US.

I would say the one thing they have going for them that we don't have in America as corny as it may sound is HOPE. Young people believe their lives will be better than their parents, and that if they work hard and get a good education they can have a nice life, buy nice things, travel the world. I don't get that feeling from people when I am in the US.

I am always Leary of any article that says China is this or China is that. I heard a joke recently that said if a foreigner comes to China for a week he will go home and write a book about how China is, if they come for a month they will write a article, and if they stay for more than a year they wont write anything because they know they can never explain the "China is"

After being here for 4 years I can say It is a very diverse place, that changes very quickly.

[Bronco Yoda]

Thanks for the insight.

Hows the air over there. Is it really as bad as reported?

How do people view us? See us? Talk about us?

[shakenbake]

Thanks for the insight.

Hows the air over there. Is it really as bad as reported?

How do people view us? See us? Talk about us?

The air quality last year was great in Shanghai because of the world expo, but when that ended they started many of the construction projects they had on hold again and it is bad again. But you have your good days and bad days.

In regards to how people see us, it really just depends. Most people are very nice to foreigners here and treat you very nice. I don't hear a lot of negative things said about Americans, but every now and again you will hear them say something about our government.

They think we all own guns, and that we are all very sexually open.

They think Americans and Europeans are all the same, much like we think Chinese and all other Asians are the same.

They are very nationalistic, but not because they love their government but because they are proud to be Chinese. I think this is a mistake made by many in the US as people seem to see the government and the people as the same. Where just like in the US, that is not the case.

Because they are nationalistic they don't take criticism very well and take it very personal.

I think the reason why you see all the really tall buildings, and fastest trains in the world, is partly because they have a small penis syndrome and want so desperately to be considered a player in global affairs. But this is also as a tool for the government to show the people they are bringing advancement. It gives them face. The US government should use this as a method to get China to do what it wants them to do rather than criticize them, which wont work because if they give in to the criticism they will lose face in the Chinese peoples mind.

Recently I have heard more dissatisfaction with the government and high taxes. This is because inflation has been quite high in recent months. 4 years ago I didn't hear anything but recently a lot of people have complained about this.

[Arkie]

Everything that is consumed has to be produced. America consumes more than we produce, and China picks up the slack by producing more than they consume.

[Jay3]

Everything that is consumed has to be produced. America consumes more than we produce, and China picks up the slack by producing more than they consume.

There's no "slack." We could easily produce what we consume. China undercuts price, and we choose to buy the cheaper goods.

[Arkie]

There's no "slack." We could easily produce what we consume. China undercuts price, and we choose to buy the cheaper goods.

The cheaper goods illustrate one of the ways China is better at capitalism. The labor market will maximize employment if its allowed to set wages. Supply and demand works for labor just like everything else. Artificially raising wages will raise the price artificially of the good sold (not to mention unemployment). "Picking up the slack" may have been a poor choice of words for "making up the difference," but "undercutting" may be a poor choice for "selling cheaper than prices set artificially high."

[Jay3]

The cheaper goods illustrate one of the ways China is better at capitalism. The labor market will maximize employment if its allowed to set wages. Supply and demand works for labor just like everything else. Artificially raising wages will raise the price artificially of the good sold (not to mention unemployment). "Picking up the slack" may have been a poor choice of words for "making up the difference," but "undercutting" may be a poor choice for "selling cheaper than prices set artificially high."

Our prices aren't artificially high, China's are artificially low. The control all the variables and can essentially compel people to work for the wages set, if needed. They also manipulate currency and debt to make themselves cheaper.

I'm a free-trader, though. It actually enriches us, what China does. I'm not sure it enriches them as much. Though a purist would say it just about has to be equal.

[Odysseus]

No they are not kicking our ass, and they have a long way to go. Infrastructure outside of the developed areas is poor, their higher education sucks, this is a major lack of talent for management, engineering etc. But they are getting better.

I think the biggest mistake people make when coming to China is they visit places like Beijing, Shanghai, and Tianjin. These are the most developed areas in China, and the difference between then and other areas is HUGE. People talk about them spending 8% of GDP on infrastructure and the reason they do is because what they have SUCKS. Yea they have high speed trains, but you can't compare that to the US, because trains have never been a real popular mode of transportation in the US.

I would say the one thing they have going for them that we don't have in America as corny as it may sound is HOPE. Young people believe their lives will be better than their parents, and that if they work hard and get a good education they can have a nice life, buy nice things, travel the world. I don't get that feeling from people when I am in the US.

I am always Leary of any article that says China is this or China is that. I heard a joke recently that said if a foreigner comes to China for a week he will go home and write a book about how China is, if they come for a month they will write a article, and if they stay for more than a year they wont write anything because they know they can never explain the "China is"

After being here for 4 years I can say It is a very diverse place, that changes very quickly.


I don't think China knows who China is. That place is very confucian and very large.

[Odysseus]

The cheaper goods illustrate one of the ways China is better at capitalism. The labor market will maximize employment if its allowed to set wages. Supply and demand works for labor just like everything else. Artificially raising wages will raise the price artificially of the good sold (not to mention unemployment). "Picking up the slack" may have been a poor choice of words for "making up the difference," but "undercutting" may be a poor choice for "selling cheaper than prices set artificially high."

If America focused on it's infrastructure (power, Internet, high speed rail, and green technology) we could create our own growth internally but we are loathe to do that. We would rather put a call center in Ireland than consider putting one on the Indian Reservation. We would rather out source our most precious assets than reach down to our struggling farmers and give them a reason to pass on the familly farm because little Johnny does not have to move to the big city.

China's main ports are driving the economy but look at the terrain of that place on a map. There are huge infrastructure opportunities that they have not enough begun working on.

If we lead the world in green technology China will surpass us but that is a good problem to have. What if clean available solar was cheaper?

[alkemical]

If America focused on it's infrastructure (power, Internet, high speed rail, and green technology) we could create our own growth internally but we are loathe to do that. We would rather put a call center in Ireland than consider putting one on the Indian Reservation. We would rather out source our most precious assets than reach down to our struggling farmers and give them a reason to pass on the familly farm because little Johnny does not have to move to the big city.

China's main ports are driving the economy but look at the terrain of that place on a map. There are huge infrastructure opportunities that they have not enough begun working on.

If we lead the world in green technology China will surpass us but that is a good problem to have. What if clean available solar was cheaper?



Ody,

I've often said we should shake the econ markets by changing the rules. If the US can use it' geographical knowledge of what to make for what climates/geo's, etc - I think we could flip things on it's head.

But I've not found people who are willing to make that vision, a reality.

So, i've been promoting DIY solutions that fit this "model" that I want to propagate.

[Odysseus]

Ody,

I've often said we should shake the econ markets by changing the rules. If the US can use it' geographical knowledge of what to make for what climates/geo's, etc - I think we could flip things on it's head.

But I've not found people who are willing to make that vision, a reality.

So, i've been promoting DIY solutions that fit this "model" that I want to propagate.

I think, economically, America is being played and nothing short of a miracle is going to change our direction. We are, for a lack of a better comparision, Serfs arguing in our respective fields.

The potential to flip everything is in plain view just like the tools to build paradise but what I learned from the last election is that the people in power are going to stay in power and nothing that you, me, the people are anything is going to change that. We under a kinder imperialism and if we are to make a better living we need to learn the unwritten rules before changing anything.

I have watched China for years and the changes that place has made are staggering. I love their business savvy and am floored that American leaders are not more responsive to the long term focus that China has. I do not understand US and China relations. I don't think very many people actually do.

[alkemical]

I think, economically, America is being played and nothing short of a miracle is going to change our direction. We are, for a lack of a better comparision, Serfs arguing in our respective fields.

The potential to flip everything is in plain view just like the tools to build paradise but what I learned from the last election is that the people in power are going to stay in power and nothing that you, me, the people are anything is going to change that. We under a kinder imperialism and if we are to make a better living we need to learn the unwritten rules before changing anything.

I have watched China for years and the changes that place has made are staggering. I love their business savvy and am floored that American leaders are not more responsive to the long term focus that China has. I do not understand US and China relations. I don't think very many people actually do.


I want to learn more about china.

Re: Tools/Power - I'd like to introduce competing systems/ideas to "drive adoption".

[Odysseus]

I want to learn more about china.

Re: Tools/Power - I'd like to introduce competing systems/ideas to "drive adoption".

I want to learn more about China as well. I just wish global stability would co-operate long enough.

I like good business sense wherever it is found. China did not listen to American consultants and went a different direction. It was similar to what Bill Gates did to IBM.

[alkemical]

http://cryptogon.com/?p=20159

Via: Grainnet: Agriculture Secretary Tom Vilsack issued Jan. 25 the following statement on the reported sale of 2.74 million metric tons of U.S. soybeans to China in the 2011-12 marketing year: “Today’s sale of 2.74 million tons of U.S. soybeans to China is the single largest daily soybean sale since USDA began issuing daily sales [...]