The World Unpacked Party-State Capitalism: China's Communist Party and Rule by Market
Jun 19, 2025
In this discussion, Meg Rithmire, a Harvard Business School professor and expert in China's political economy, dives into the nuances of China's party-state capitalism. She explains how the Communist Party maintains control while engaging with private capitalists, showcasing a delicate balance between state interests and market dynamics. Topics include the lessons from the 2015 stock market crisis, the role of tech firms like Huawei in state objectives, and a comparative look at China's economic strategies versus the U.S. approach to competition and innovation.
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Party-State Capitalism Explained
- Party-state capitalism in China means the CCP intervenes not just for economic competition but for regime security.
- This makes China's political economy unique compared to other forms of state capitalism seen in democracies.
Continuity in CCP-Capitalist Relations
- China's relationship with private capitalists is marked by continuity and tension since the 1950s.
- The CCP has needed capitalists for economic growth but has never fully trusted them.
Limits of Market Discipline in China
- CCP tolerates market discipline only to a point; it resists instability like bankruptcies that limit political control.
- Markets serve as tools to allocate resources but are controlled to avoid disciplining the state or powerful companies.
