Yves here. While Michael Hudson’s wide-ranging and harsh critique of US economic and social practices is thoroughly deserved, and our failings have been compounded by absolutely terrible leadership, I am a little bothered by his fault-free depiction of China. As I am now seeing in Southeast Asia, China’s mercantilist policies have indeed been very beneficial for China. But Southeast Asia, like the US, is suffering the costs of being in a chronic trade deficit position with China, and one that is getting worse.
Remember that being in a chronic (and significant) trade deficit position is tantamount to exporting jobs. In the US, globalization was one of the means (along with union-busting) of weakening labor’s bargaining position. From the Lowy Institute:
The collapse of China’s property sector has reduced associated demand for goods such as steel. It has also put downwards pressure on already parsimonious household consumption, given property’s relatively outsized role as a reserve of Chinese household wealth.
Beijing’s response has been to prioritise the so-called “real economy” and marshal low-cost capital into the manufacturing sector. Lending to the sector has increased exponentially over the last few years. These low-cost loans have augmented the considerable state-endowed advantages already enjoyed by Chinese manufacturers, who operate in a supply-side nirvana. The Kiel Institute recently found that direct and indirect (e.g., cheap land, credit and power) industrial subsidies in China are up to nine times greater than in the United States relative to overall GDP.
The problem for global manufacturing writ large is that the obverse of these subsidies is weaker Chinese consumption.
The problem for global manufacturing writ large is that the obverse of these subsidies is weaker Chinese consumption. Less government spending on social welfare is one obvious manifestation. The corollary is that China is buying fewer manufactured goods from the rest of the world. With weak demand internally, it is bursting at the seams with oversupply. This is becoming startlingly conspicuous in trade figures. Thailand’s trade deficit with China increased from US$20 billion in 2020 to US$36.6 billion in 2023. Malaysia’s deficit grew from US$3 billion to US$14 billion over the same period. Only Indonesia managed a modest surplus off the back of surging nickel and metals exports.
The gamut of affected sectors is much broader than higher-value-added goods du jour such as electric vehicles (EVs). In 2023, China’s President Xi Jinping made it clear that he wanted a “modern industrial system” to extend to traditional labour-intensive sectors such as apparel, toys and furniture. Instead of migrating offshore to lower-cost destinations, the risk is that these operations will remain in China in an increasingly automated form.
And keep in mind, the very low consumption share of China’s GDP (39%) means its citizens are experiencing a lower standard than they otherwise would to support (what is looking like over-) investment and exports.
Published by Liberation Daily from Shanghai on May 9, 2025; a video and report appeared in Tencent News on May 14, 2025
解放日报访迈克尔·赫德森：贸易冲突带来不可逆的影响，特朗普在自我妥协-腾讯新闻 https://view.inews.qq.com/k/20250514A01FVR00
1、如何看待中美贸易冲突的根源？你认为这是经济利益的冲突，还是更深层次的政治和意识形态的较量？How do you view the root causes of the U.S.-China trade conflict? Do you believe it is primarily an economic dispute, or is it a deeper political and ideological confrontation?
It’s much deeper than a trade conflict. It’s a conflict between social systems. The United States is a neoliberal economy dominated by finance capital. Its political aim is to dismantle government regulation and privatize basic infrastructure, and to make financial centers (Wall Street) the economy’s central planner. This planning is not in the economy’s overall interests.
The problem is that this plan polarizes economies between creditors and debtors, and imposes austerity on labor and the rest of the population. So the United States cannot tolerate a successful alternative model. That’s why the United States fought against the Soviet Union after 1917. It looks at China as an existential threat not because of foreign trade, but because it shows a much more successful economic model. And this success has made other countries orient their trade and investment around China instead of on the United States.
So the United States seeks to disrupt China’s development. Trump is using his tariff threats against other countries as a lever to say that he will reduce tariffs if they agree not to trade with China. He is bound to fail, and that makes him hate China all the more.
2、你提到中国的经济发展模式与美国的资本主义制度有根本性的不同。在你看来，这种差异如何影响了中美之间的贸易关系？You mentioned that China’s economic development model is fundamentally different from the U.S. capitalist system. In your view, how has this difference influenced trade relations between the two countries?
The United States has made a choice to permit the financial sector to make money for itself instead of using the financial system to serve the overall economy’s economic growth and rise in living standards. This is what has forced it to outsource its industry to Asia. It has chosen to create a “market” that rewards making gains purely financially, not industrially.
The most important infrastructure in China’s public domain is the Bank of China and its financial system that aims at increasing tangible capital investment to increase productivity and living standards to uplift its population. The U.S. financial system has found its major loan market in rent-seeking sectors. Banks have added to debt leverage bidding up prices for real estate (80% of bank loans), as well as stocks obtaining natural-resource rents and monopoly rents on credit.
The result is a rentier economy with an increasing the cost structure. In Marxian terms, financial revenue is the Sphere of Circulation, not the Sphere of Production. U.S. industry has to pay labor enough to carry housing costs up to 43% of income, debt service (apart from mortgages) another 10 or 15%, plus student education loans ($1.8 trillion), credit-card debt ($1.3 trillion) and privatized health care (18% of GDP). There is no way that employers can pay labor enough to meet these costs of living and be competitive in foreign markets.
3、中美贸易冲突中，美国采取了一系列关税措施。你认为这些措施能否真正解决美国的贸易逆差问题？还是会导致更广泛的经济后果？In the trade conflict, the U.S. has implemented a series of tariff measures. Do you think these actions can truly resolve America’s trade deficit, or will they lead to broader economic consequences?
The aim of Trump’s tariff measures is to create government revenue that will enable him to cut taxes on the wealthiest 10% of the population, mainly the Finance, Insurance and Real Estate (FIRE) sector. But the effect of these tariffs will be to stop much trade altogether.
If the trade deficit shrinks, this will have two effects. Most broadly, it will sharply increase inflation, by the degree to which tariffs are raised. That will squeeze labor’s income, leading to defaults on mortgage debt and personal debt. That will lead to home foreclosures, loan defaults and much less personal income being available to spend on domestic products. Many small businesses will have to go out of business.
The tariffs also will cause breaks in the supply chain of many companies – for instance, auto companies that rely on particular parts that are imported, or pharmaceutical companies reliant on key chemical components. And also, the military arms and high-tech industries that need rare earth magnets and other key raw materials.
So the US economy will be forced into recession and perhaps a longer-term depression.
4、你曾指出，中国的经济制度避免了苏联式的微观管理，允许市场反馈和创新。在中美贸易冲突中，这种制度优势如何体现？You have pointed out that China’s economic system avoids Soviet-style micro-management and allows for market feedback and innovation. How does this institutional advantage manifest in the context of the U.S.-China trade conflict?
China has sought to make its economy flexible – and also independent of reliance on U.S. attempts to monopolize information technology, military arms making and other products. U.S. companies seek a monopoly position, which minimizes competition in order to extract monopoly rents. China is still letting a hundred flowers bloom in order to see what succeeds best.
5、你认为中美贸易冲突对全球经济秩序有何影响？是否会加速全球多极化趋势？What impact do you think the U.S.-China trade conflict has on the global economic order? Could it accelerate the trend toward global multipolarity?
Trump’s trade conflict insisting that the United States must be the winner in any agreement will change the whole world’s trade relations, and do so IRREVERSIBLY. Trump’s act cannot be taken back. The damage is done.
Trump is making the US-China trade conflict into a wedge to try to force European, Global South and other countries to choose EITHER to focus their future trade and investment on the U.S. market – which is shrinking as a result of Trump’s trade war – or else to participate in the most rapidly expanding market in the world, that of China and its Asian associates along the Belt and Road Initiative.
The choice is whether to live in the short run and avoid U.S. trade disruption (and threats of political regime change), or to look at their long-term growth prospects.
But finance lives in the short run, and many heads of foreign governments owe their political positions to U.S. support. So their loyalty is to U.S. geopolitical aims, not to their own populations.
6、在你看来，中美贸易冲突中，哪一方更有可能采取妥协措施？这种妥协可能以何种形式出现？In your opinion, which side is more likely to make compromises in the U.S.-China trade conflict? What form might such compromises take?
China has announced that it is not going to compromise on its principled position. It doesn’t have to, because it has many alternatives to ties with the United States (although there will of course be a short-term disruption).
But Trump already is compromising – with himself. It is as if he has been negotiating against himself since April 2, rolling back his threats to tax Canadian and Mexican auto parts 25%, and also reversing his tariffs on China’s exports of I-Phones and other products that Trump’s key political supporters need in order to keep their businesses profitable.
So the United States will find itself in a weakening position as Trump’s hope to get other countries to join his anti-China coalition fail to gain support – especially his closest political allies and satellites in Europe, and even from Japan and other ASIEN countries.
7、中美贸易冲突对全球贸易格局有何影响？ How is the U.S.-China trade conflict will impact on the global trade landscape?
When the chaos dies down, the effect will be that the United States has isolated itself from the rest of the world instead of isolating China. And its trade barriers will cause price inflation and further polarize the U.S. economy, deepening U.S. de-industrialization and making it even more dependent on other countries that are not following the U.S. financialization ideology.
8、在中美贸易冲突中，你认为有哪些可能的解决方案可以实现双方的互利共赢？这些方案需要克服哪些障碍？In the U.S.-China trade conflict, what possible solutions do you see for achieving mutually beneficial outcomes? What obstacles must be overcome to realize these solutions?
The real question is, who do U.S. policy makers want to benefit? The United States is run by special interests, mainly in the financial sector and in monopolized sectors, not in the public interest. They are willing to see the economy shrink and living standards be squeezed even more, as long as they themselves get richer. That has been the economic trend steadily since 2008, and it will accelerate.
There is only one way for the United States to overcome this obstacle. That is to change its economic system. But economic systems don’t change unless the population is able to empower a government that is strong enough to keep the financial sector from becoming a predatory exploiter of the economy at large. That would require either a new political party, or a revolution.
I don’t see either of these things happening in the foreseeable future. The Republicans and Democrats have blocked the emergence of a third party by a complex maze of election restrictions. That’s why even “progressive” Democrats realized that they have to work within the confines of their party controlled by Wall Street and military neocons. The Green Party behind Jill Stein was unable to even get a slot on the presidential ballot last November here in New York where I live.
I don’t see a revolution. There is little left-wing movement in the United States. What is called “left” or “Marxist” is actually focused on identity politics of ethnicity (racial minorities) and LGBTQ, not the identity of being a wage-earner. And Trump’s clamp down on universities whose students protest against economic injustice or genocide show the power of a new McCarthy period of police state and FBI censorship of the mass media, the press and the educational system.
The result is looking more like a political Dark Age than an alternative to U.S. economic polarization and shrinkage. So I see a slow crash, rising discontent but not a revolutionary situation.
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This prompted a peek at the World Bank Gini data. Over the past 10 years China’s gini ( https://data.worldbank.org/indicator/SI.POV.GINI?end=2021&locations=cn } has dropped from ~44 to 36-7, whereas the U.S. gini has gone from ~33 just before Reaganomics to ~ 41 where it has been stuck for a decade.
At least China is trying.
There is a lot of debate around the figures, as China’s official data is always – well, open to interpretation, but its generally accepted that inequality, as measured by the Gini index, has increased enormously over the past 30-40 years and overtook the US during that period. The more recent dip (and its only a short dip in terms of the long term trend) is probably due to the loss of upper middle income wealth in the property crash and various changes in income calculations. It is also, arguably, due to the Kuznets Curve, which is based on an observation that income inequality tends to even out after countries go through an initial period of rapid growth (I don’t personally subscribe to this myself, but its something you’ll often come across in the literature on the Gini Co-efficient in development economics)..
There is a fairly technical overview in this article (published before China started ‘officially’ measuring it for the World Bank), plenty more on the subject in the usual academic sources.
So in short no, they are not really trying. Apart from clipping the wings of some billionaires who overstepped the bounds, China’s internal tax/welfare policies are generally highly regressive.
Thank you, PK,
In lieu of better statistics, the World Bank’s Gini index indicates that the ‘recent dip’, dating from 2010-2011, is more than ‘a short dip in terms of long-term trends’.
Per this paper it seems Xi has in fact been ‘trying’ for at least 10 years:
«At the 11th meeting of the Central Finance and Economy Leading Group on 10 November 2015, President Xi Jinping stressed that China should strengthen structural reform on the supply front to increase the quality and efficiency of the supply system in the New Normal era. One of the key tasks of this reform is to promote the absorption of excess production capacity. With regard to the real estate industry, “reducing stock (qukucun)” is seen as a critical measure to reach this target.»
Certainly, Xi has not been ‘trying’ hard enough to satisfy Washington. Time will tell whether Xi will satisfy Thailand or his own people, but in the interim, on the world stage he may only need to try harder than Trump or the European sock puppets.
I would very much appreciate more detail on the regressivity of Chinese tax policies (which I do think is critical), and how Chinese advances in infrastructure and health care fail to compensate for the regressivity of its welfare policies.
Given the difficulties in measuring it, changes in the Gini co-officient only really make sense when looked at in long time scales. There are quite a few estimates out there – the World Bank one is based primarily on Chinese official figures, which unsurprisingly paint a positive picture since they started officially producing them – other sources provide widely varying estimates. The current levels are about what you’d expect for an Asian country at this level of development.
A very important point about addressing any Chinese statistical data over the long term, is that there was a very strong incentive in the 1990’s for Beijing to overplay the poverty of China before the 1980’s, in order to prove that their pro-free market policies were working. Very few observers consider the Chinese data from 1950 to around 1980 to be in any way accurate – its very hard to believe, for example, that the average Chinese person was a lot poorer than Koreans in the aftermath of the Korean War, yet this is what ‘official’ figures ask us to believe. China had nuclear weapons, domestic jet airliner projects, and a space program in the 1960′ and 70s – it was not a backward country technologically and had a lot of natural resources. Most of the famines and mass mortality of the period were, shall we say, not entirely of natural origin.
Beijing has been making annual statements about structural reform and addressing inequality for decades. It means about as much as any political statement in any country. Nothing.
The biggest source of tax in China is VAT, widely acknowledged as among the most regressive of taxes. Income taxes are relatively ‘flat’ rated (complex area, as it varies across China). Taxes on various forms of rentier activity (such as property investments) are low. There are massive hidden subsidies to local business interests (i.e. those who are ‘connected’).. The welfare system is largely organised on a provincial level, so is highly variable, but is generally fairly basic, but is good at preventing absolute poverty. The health system is basic unless you are in one of the big cites and have access to one of the major centralised hospitals, there is a reason Chinese travel abroad for treatment if they have that option. State pension systems are highly variable according to your province, but can be very good for rural dwellers (where living is cheap), probably not so good for the urban poor. For people in the middle, financial repression (i.e very low interest rates for saving) is a form of income transfer from ordinary people to business. This is why so many ordinary Chinese rushed into the residential property market, and why so many are hurting now.
Most crucially of all, any country which runs long term trade surpluses is definitionally transferring income from ordinary workers to the export sector (i.e. industrial capitalists). Trade unions are in-house and tamed, protections are very weak, although localised activism (generally tolerated) can be very effective at preventing the worst abuses of workers and pensioners. Its hard to get firm figures on this, but baseline living standards for the bottom 10 or 20% percentile of Chinese are likely significantly better than most other Asian countries of roughly similar levels of development (and probably some wealthier countries, like RoK), but there are still a lot who fall between the cracks, mostly due to the hukou system, which creates a large number of ‘non-people’ as for as local governments are concerned.
Thank you, PK.
I agree that is this is a very important point and likely true:
«there was a very strong incentive in the 1990’s for Beijing to overplay the poverty of China before the 1980’s, in order to prove that their pro-free market policies were working. »
I agree with your statements regarding the the Chinese tax system but what is the portion of Chinese state revenue that comes from these taxes vs other sources such as SOEs? As I understand it, Chinese taxes are significantly lower than most western countries. Seems like comparing apples to oranges when only tax policy is taken into account.
Agree.
“Socialism with Chinese Characteristics” is basically redoing the NEP but up to a much more massive scale for a longer period of time. The point is to grow the economic base knowing it will introduce more corruption and inequality into the system, but believing that the state can control the problems over time as long as it retains the commanding heights of banking/finance, policing, weapons development, etc. Xi’s leadership period did root out corruption and started addressing inequality and regional differentials in development, as well as manage a process to move out of property and infrastructure driven development and shift to an economy where most new entrants will have university degrees (whereas their parents only had 9 years of formal education and their grandparents only had 6 years of formal education).
Chinese use of VAT at a national level and use of primarily land sales at a local level is not supposed to give equal results, its simply the most obvious pathway to quick development, where money has to come from somewhere. Prior to “reform and opening up” a similar dynamic comes up with pricing of manufactured goods by state SOEs. The manufactured goods were priced high relative to their cost of production so that they can produce large profits for the SOEs, which is then handed over to the government. Chinese urbanites used to complain how much money they’re handing over to the government rather than getting as workplace bonuses or higher salaries, while the rural population complained about the high price of manufactured goods while rural production especially grain sales were priced very low.
The VAT is oppressive argument is rather dubious since Chinese VAT rates are quite low by international standards and particularly low on essential goods like food and for small producers. They are also priced into the cost of each product sold to the consumer, rather than calculated at the point of sale. The result is a form of hidden tariff on all imports, since they are likely to be taxed at higher rates compared to domestically produced goods which may receive more favorable VAT rates.
It’s not a perfect system and there are certainly arguments for shifting to more income tax and property tax collection to narrow the social inequality and replace the land sale system. But such a shift would have huge implications on individual income and property values (and future land sales). So while this stuff has been discussed for literally decades, the central government has not pulled the trigger probably due to intensive resistance by local authorities.
It’s easy for people in the rich imperial core to critique how other countries do things, without recognizing that in many cases they come out of the need to achieve development while under severe economic constraints. China is still not a “rich” country and it may never be a “rich” country in a per capita basis if it can be keep its services and essential goods sectors low cost and largely in public hands. As with healthcare, using dollars or percentage of GDP to measure provision of services just doesn’t work much of the time. It’s better to look at indicators like life expectancy, satisfaction ratings on surveys, or availability of low/free services for the elderly and young children.
It’s incredible that China managed to move from a country with least inequality in the 1970s to a country with an outrageous inequality by the 1980s. However, the all in all living standards have improved incredibly since then and if you look at political discourse (aka. Xi’s speeches) there is a growing sentiment that addressing inequality is crucial and there is a “socialist” narrative present … however, imho that has not translated into much action except infrastructure benefits for all. What you see is that instead of raising consumption levels and tackling inequality, people are more expected to sacrifice to develop China into the great civilizational nation.
Median life expectancies in nations remain finally the most significant indicator.
In 2024, the median life expectancy in China was 78.02 years. in 2025, it’s increased slightly to 78.37 years.
https://database.earth/population/china/life-expectancy
A remarkable rise from 1945, when median life expectancy in China was around 35-40 years, and as low as 29 for males. Granted, this followed the Second Sino-Japanese War and the Civil War. Still, the scale of the turnaround is entirely to the CCP’s credit
In 2024, median life expectancy in the United States was 79.25 years, and in 2025, it did increase slightly to 79.40 years. But the overall US trend is static or downwards, in contrast with the Chinese.
https://www.macrotrends.net/global-metrics/countries/USA/united-states/life-expectancy
And US life expectancy of course remains substantially behind other ‘advanced countries’ such as the UK, at 81.6 years, or Ireland, at 82.75 years, or Japan, at 85 years!
The Gini index also obscures what you can and can’t do with money. If you own your home outright, food/utilities/basic healthcare/education/public transport are cheap, then being at the bottom of the economic scale is not quite so terrible. If being rich doesn’t let you buy politicians or local law enforcement, then the wealth is mostly usable on frivolous things like designer handbags, luxury cars, foreign travel, foreign education for kids, etc.
Also the disparity in cost of living in China between first/second tier cities and everything below is really massive. Way more than comparing NYC/SF costs to rural Midwest or deep South, especially since American reliance on cars outside of major urban areas force the cost of a minimally viable living way up unless you try to hack it by going off grid or boondocks out of your vehicle.
According to the Gini Index, Ukraine is one of the most equal countries in the world. If it’s still around when I’m old, I’ll live there!
As you can see on the Military Summary Channel, many live ‘close to the land’. Growing your own food is a viable option. ;)
Re China and its flaws–apparently there is still a great deal of control against dissent on the internet and elsewhere but then Trump would be all for that too if he could get away with it. The American system has evolved into freedom for the oligarchs versus control (via debt peonage and attendant consumerism) for the masses. Now Trump is threatening the consumer side with his tariffs so even our feeble low cost lifestyle (courtesy of imported goods) version of a social contract is threatened.
Or so it looks from here in flyover. It’s probable Trump won’t get away with any of it including the tariffs but perhaps Trump doesn’t care as long as everyone is talking about Trump.
In a previous article posted here at NC the high savings rate among Chinese is attributed to a weak social safety net. A cursory look at online sources indicates that 8% of China’s GDP is devoted to such spending while the OECD average is 20%.
This would seem to indicate a significantly high degree of economic insecurity in China and would account for what in today’s article is described as “parsimonious household consumption”. This strikes me as rather odd in a country governed by a putatively communist party.
But being a member of a society in which compulsive consumerism is incessantly promoted, perhaps I’m viewing this issue through a distorted lens. America after all has been described as a country that passed from barbarism to decadence without an intervening period of civilization.
Yes, the native American population is in agreement. They experienced the violence and ‘forked tongue’ Treaties from the beginning.
International trade is quite a story, containing economic theory vs. economic reality; mixed in with competing dysfunctions – quite a page turner.
Theoretically, the US should have been cutting manufacturing costs to compete with imports 50 years ago; but the reality is that the imports largely came from US companies offshoring their production in order to increase profits from lower wages in other countries, so competing with themselves wasn’t in the companies’ best interests. Also, such an adjustment would create havoc for debt holders trying to make payments and lead to reducing the value of consumption items like homes and autos. The first dysfunctional solution was for the US to cut taxes and increase deficit spending; thus boosting the economy in the short term and creating what looks to be like quite a painful in the long term.
When China became a target for cheap-labor manufacturing, they made the best of it by moving up the production food chain, doing their own research (well they started by borrowing and taking) and development and producing for their own benefit. I agree that China will need to move to more balanced trade, but the country is a nation of savers where their savings just took a big hit in the real estate downturn. When they do start paying their people more and encouraging consumption this will lead to higher inflation that will affect everyone who consumes China’s products. That means inflation will be in our future. What is the role of countries like the US that have been focusing on consumption? Won’t they have to finally cut costs and become more competitive so they have something to offer China more than just holding US debt? According to theory, that is what’s supposed to happen in a market economy, but the reality is that these types of cuts can take a long time to happen. I am not sure how it is going to work out, except that I expect it to be interesting.
The first article comes from the Lowy Institute. This was founded by Frank Lowy who made a fortune in Westfield, a business that builds and owns shopping centres in Australia. Westfield is a classic and very profitable rentier business. It relies on ever increasing land prices to drive up rents and thereby extract more and more money from shoppers.
Naturally the Lowy Institute is going to attack any government that sees real-estate and housing specifically as something needed by the population rather than as a means for people to get rich without actually doing any useful work for the community.
This is ad hominem and a violation of our written site Policies as bad faith argumentation. You need to debunk the argument, not the source. That’s before getting to the fact that you don’t produce any evidence that the Institute is controlled or influenced by Lowy, who is now 94, and the Institute likely now has additional funders.
Some examples that show the flaws even in your ad hom: the IMF research side regularly performs and publishes studies that are at odds with what the “program” side does, particularly quite a few that are anti-austerity. The Institute for New Economic Thinking was founded by Soros, but not only was he skeptical of the initiative, but he has absolutely nada to do with its operation or research.
Second, Chinese residential real estate is OVERWHELMINGLY private sector. Tellingly, a bigger priority has been to try to get existing private projects that were stalled completed: https://thediplomat.com/2025/02/chinas-%C2%A55-6-trillion-real-estate-support-has-yet-to-deliver-heres-why/
Aside from the possibility of some kind of Dark Age for the U.S. it is not all clear to me what China’s economic development model is.
Some questions come to mind:
Is China defacto capitalist or not?
How has China become capitalist?
No theoretical framework that I know of really explains the present Chinese developmental model.
It seems to center around 3 key institutional structures–the CCP, the State, and capitalism
The more authorized story in China seems to be that presently the CCP is attempting to move to a more socialist/market economy and to reign in finance. Xi seems to be signaling a potential break with earlier reform-era patterns of liberalization, marketization, decentralized state reconstruction and global integration.
There really seems to be a genuine need to open up all of our theoretical assumptions to deal with what essentially is happening in both China and the U.S.
In Capitalism, Alone: The Future of the System That Rules the World Branko Milanovic describes the Chinese system as “political capitalism” in order to differentiate it from the “liberal meritocratic capitalism” as exemplified by the US.
https://www.goodreads.com/book/show/44326335-capitalism-alone
It was and still – State Capitalism – with a whiff of up lift socialism bolted on e.g. the nation prospers and not just the top 20% [“liberal meritocratic capitalism”].
Sorry, just so blown away about the term “meritocratic” as it was issued by the author that coined it – dripping in heavy sarcasm. It was them bastardized/mangled to mean the opposite of what it inferred by the same type of ideological mouth breathers posing as economists or top shelf media journalists in paper and broadcast.
Both dems and gop ran with it, save some Idpol variances for the masses in building political base – consumer choice lmmao.
Will the epitaph of these social ideologues be “The Cream Rises to the Top” ….
Nonsense. Deng Xiao Ping was a lifetime communist and his reforms were not in favor of the ‘capitalist road’. These analysts just project their own preconceived notions onto China without pondering the meaning of “Socialism with Chinese characteristics.” For one thing, a Chinese billionaire is not like an American billionaire in any way except for some money metric, and they are kept at arm’s length from politics (although recently a few have been allowed to join the Party).
We can make out China’s development model from China’s Five Year Plans and by economic activity in the world.
First, China runs and owns its Central Bank and sees money and credit as a public utility. Second, China retains ownership of land and the “commanding heights of the economy” and allows private industry for peripherals, such as cell phones (this might change as the digital industries become more and more important). Third, China chooses to invest its surplus dollars in global development as seen in the BRI. Fourth, China is not shy about bringing its poorest citizens out of poverty. Fifth, China is determinedly moving from low value-add industries to high value-add industries, such as EVs and AI. Sixth, China seeks sufficient autarky and import substitution (high-end chips) to be immune to US sanctions and tariffs. Seventh, China is determined to highlight her defense industries to successfully confront military threat from the US. I am sure there is more…
The only time I have seem Prof Hudson criticizing, or speaking dissaprovingly of China is on the way he noticed economics is thought in China nowadays. Aparently Marx’s Capitalism three volumes are out the window and mainstream economics is being the mainstay…
Over sometime China has invited every single school of economics, there is, just to listen and take note. Then decided what parts of all of them it wanted to use as policy, stripped of all ideology. On that note they live in a realist view of global reality – good/bad – and the only question begging is do they as stated just want to be a member of a Multipolarity world or go back down the old road to Empire. Displacing America.
Its interesting in a dark way as some ideologues in the past always banged on about suicide rates say socialist[lol] Sweden vs US et al.
https://nchstats.com/suicide-rates-us/
So my question is how will the narrative of Trumps administration and a obvious incresse in this statistic be managed[tm].
First Opium, then Warlords destroyed China.
They will not allow that to happen again.
USA must go through what was already baked in before Trump 2.0.
The $ must crash.
I don’t understand all this discussion about the level of poverty in China. But then what do these statistics refer to, perhaps to comparisons between agricultural and industrial populations? What we should understand, if there are protests of workers in the leading industrial sectors. If there are contradictions between workers and capitalists. That is the question. These statistics, have no meaning if we do not reflect a real contradiction.
What Yves and most of the commentators miss is that China, the CPC, and China’s leadership fundamentally work with a different set of assumptions, metrics, and procedures than Western people do. Basically, one cannot judge China based on one’s own viewpoints without having spent a lifetime studying China, Chinese language, and Chinese philosophy. Very few in the West are capable of doing so and thus are incapable of understanding what China is doing domestically and internationally. For most, China is at best a mirror and at worst a nightmare.
When Xi Jin Ping speaks of ‘win-win’ negotiations and practices, just take him at his word.
Tedder:
What do you make of the following:
The Guangdong-Hong Kong-Macao Greater Bay Area (GBA).
This region has been characterized as “9+2” linking nine cities in various stages of late-socialist transformation with 2 off-shore economies in the twilight of post-colonial liberalism–if nothing else, two parts capitalism and 9 parts not. Aspirationally it has been characterized as its own Silicon Valley (centered on the technology complex of Shenzhen), its own London (in the Hong Kong international financial complex, its own Las Vegas (in the gaming economy of Macao) and its own Brussels (in the administrative center of Guangzhou), with its polycentric “global workshop,” economy deep into the surrounding province of Guangdong.
Is it now to be a permanent outlier of what has been called contemporary Xiism?
The left has blind spots on certain issues. China is one of them, as they think China is socialist, therefore good. They also have blind spots on immigration and climate change. Probably most here have blind spots on those two things as well.
The left thinks all immigration is good, that immigrants should receive the same benefits and have the same rights as citizens, even illegal or “irregular” immigration. I don’t know that they believe the nation-state is a good thing. They value freedom above everything. They are willing to sacrifice order and the nation-state for unlimited freedom.
They also think the solutions created so far to address climate change – electric vehicles, batteries, wind turbines, solar panels – are all good, and oil and gas are bad. I see all of these things as undesirable, so the focus should be on conservation and efficiency rather than using more resources to build more stuff to take up more space, thereby industrializing everything.
The Monthly review has some good articles on China.
This month has one by Chinese authors about the next stage they are in.
Articles on China in the Monthly Review
https://monthlyreview.org/geography/asia/china/
May 2025
https://monthlyreview.org/2025/05/01/chinas-triple-revolution-theory-and-marxist-analysis/
There’s been a long discussion already and I really wish I knew more about China to provide an educated guess, but there’s one elephant in the room that needs addressing. AFAIK, China’s safety net isn’t impressive, as per other comments here. It’d be trivial for China to improve it and, for example, to provide some sort of benefits for poverty reduction, means-tested or not. This would be excellent to absorb Chinese overproduction, in fact Western saltwater economists of the likes of Krugman are often puzzled as to why China won’t be more merciful to its poor. Everyone knows that China lifted millions out of extreme poverty, but now it seems undeniable that it’s prioritizing geopolitical, economic goals over the wellbeing of its population (to be charitable here). Moreover, it’s economically stupid not to hike domestic consumption if the “West” keeps insisting on driving the world towards another economic slump, with isolationism and pre-WW3 extreme right-wing takeovers. I’ve heard that there’s an Asian prejudice against poverty relief programs, because you’d be giving money to the “lazy” or something; ppl need to work harder and be more self-reliant. But I can’t think that the Chinese population would be so against improving minimum wage, benefits or at the very least working conditions (on the other hand, it only takes a look at Republicans in the US…). The CCP could do a lot to improve the lot of the poor, it chooses not to.
A second elephant, which I think Yves touched upon, is that China isn’t progressing in terms of freedom of expression, I’d chance that since Xi took over it’s even expanding in the other direction. I think there’s a lot that Xi got right, but now there’s no one to tell truth to power or, heck, just to provide clean statistics. That seems like a Maoist crisis in the breeding