Pekingology The New Realities of Party-State Capitalism in China
Jan 28, 2021
Meg Rithmire, a Harvard Business School professor specializing in China's state capitalism, delves into the complexities of this evolving model. She discusses the transformation of China's capital markets and the effects of historical events like the 2015 stock market crisis. Rithmire examines how state entities increasingly influence the private sector, raising questions about corporate governance. The conversation also addresses the balance between state control and innovation, and the implications for domestic and international security in a rapidly changing landscape.
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Early China Visit Puzzle
- Meg Rithmire first visited China in the early 2000s during its rapid growth phase before WTO accession and the 2008 Olympics.
- She observed a puzzle of huge economic growth despite lacking expected institutions like property rights enforcement.
New Paradigm: Party-State Capitalism
- Party state capitalism in China differs fundamentally from traditional state capitalism seen in democracies like India or Brazil.
- China's state control focuses less on economic growth and more on political and social objectives unique to its party-state system.
State as Minority Investor
- After the 2015 stock market crisis, the CCP began buying shares in many listed firms, effectively becoming significant minority owners.
- This state investment allows the party to influence corporate governance and stabilize market prices indirectly.
