If you go through the American "education" system your thought process will basically be:
China = Communist = USSR = Evil Dictatorship.
Everything is absolute, there's no room for nuance. Of course every country's economy has some degree of state ownership vs private ownership of various industries and each has to work within their own parameters of demographics, geography, natural resources, etc. There is no silver bullet of how to govern. "Communist" is then just a label that you can't form judgements on alone. Hitler named his party "National Socialist German Workers' Party", but was he was not a socialist or a communist as that name would suggest.
"Democracy" is just a label too. For westerners it just mean "voting in elections". However Chinese people overwhelmingly report feeling satisfied with the level of democracy (meaning "does our voice matter?") in their country as opposed to westerners who do not.
I recognise that I may be preempting your next post, but my understanding of assessments of Chinese collapse is that they are less about making a statement about communism, and more about the fact that China suffers from a chronic lack of demand and a propensity to under-consume, and that the government has repeatedly failed to find anywhere productive to put the relevant savings?
Yea I'll try to address that the incredible savings rate of China.
But when I look at China doomerism I do notice two things:
1. I do think the fact that they say "China will collapse" does implicitly refer to the Western idea that only communist/authoritarian states fall. States don't usually "collapse", but they assume China will. No one is saying Japan will collapse because it has 30 years no growth. The "collapse" part must come from the fact that we have multiple communist regimes that have fallen or split into separate countries.
2. I don't think its common knowledge about China's "Mayor Economy" and the extreme decentralization and leeway that polities have to try their own experiments to produce growth.
2. I agree with, and I definitely learnt a lot from from your excellent post. However, regarding 1., the argument as I see it is that there is an implicit resource bargain in place in the Chinese economy - you give us prosperity, we don’t hold a revolution against you (arguably similar to states like Singapore, Brunei etc). Insofar as Chinese failures in management are currently disrupting prosperity (as has arguably happened with the infrastructure crash, and with the fact the attempt to pursue another export boom will likely fail), this is a sign that public opinion may turn against the regime.
Look forward to the next installment! I share some of those "China doomer" concerns you articulate at the end but I am open to other perspectives on that.
You mention Robert Wu and Carl Zha. Not familiar with Zha but I have started to follow Wu. For independent media that centers Chinese voices on China, I would also recommend Drum Tower podcast.
While the abstract says that Chinese eat more calories than North American, this was self reported. I have to say as an American Chinese living in China the past year, that feels way off. However, your point about starvation wages and hunger is still true. Food is plentiful because it is cheap.
1) "The private sector in China provides 50% of China’s government revenue, 60% of economic output, 70% of technological innovation, and 80% of urban employment."
"Industrial production stagnated in the 70s and 80s in the Soviet Union, turning the state to a glorified gas station, dependent by oil & gas exports by the 1980s."
Unlike USSR (and Russia), China isn't a petrostate. It relies heavily on the innovation and ingenuity of its people for its prosperity.
2) "While people like Bernie Sanders says “China pays their people starvation wages”, the average Chinese, although they are much poorer than the average American, still consume more calories than Americans."
It's astonishing how little Westerners understand about Chinese living standards. It's like their worldview hasn't been updated in 10-20 years.
3) "China has political semi-centralization and economic decentralization. The central government sets strategic direction, but local officials deliver results on the ground in the 23 provinces, 4 municipalities, 5 autonomous regions, and 2 special administrative regions. These “mayors” basically have to take head initiatives, and build industrial clusters, thriving economies, more GDP, jobs, and real estate prices. With more GDP, they collect tax revenue, and climb the political ladder."
All of these mayors compete rigorously with each other to attract investment and create jobs and economic growth, just like the CEOs of private companies.
4) "Deng Xiaoping even called Gorbachev an “idiot”. The Soviet Union was dead on Christmas 1991."
Yet despite his failures, Gorbachev is the one who got the Nobel Peace Prize even though Deng had a much larger positive impact. This shows that Western elites often care more about virtue signaling than about policies and governance that actually improve people's lives.
China's greatest challenge lies in bureaucratic monopoly capitalism, which is the fundamental reason why Xi Jinping's administration has spent years combating corruption. Bureaucratic monopoly capitalism was also a major concern for Mao Zedong, and it was one of the primary reasons he launched the Cultural Revolution—though, of course, the methods used during the Cultural Revolution proved to be flawed. China aims to achieve a balance among state capital, social capital, and foreign capital. Bureaucrats are meant to serve by guiding investment directions and controlling the uncontrolled proliferation of capital. They must never collude with, let alone control, capital, as such collusion would severely disrupt the balance among these various types of capital and hinder China's long-term development.
A significant problem in the United States, in my view, is financial monopoly capitalism, and as of now, there seems to be no effective counterbalance to this financial dominance. If you wish to delve deeper into understanding China, I suggest studying the issue of bureaucratic monopoly capitalism. Xi Jinping has made considerable efforts in this area, but the problem still persists in a level.
Haha,;I am reading about "bureaucratic monopoly capitalism" right now! But the way you explained it was excellent.
As for "financial monopoly capitalism" being a problem in U.S., I am not sure if that's true anymore post 2008 great financial crisis. I would have to dig in more to public sentiment and certsin metrics to see if I agree.
Somewhat unrelated to the content of this post but after listening to the linked Silk and Steel podcast I can't help but feel it's a bit sensationalist. Calling the Tiananmen Square Massacre a "protest", titles like "How the US Lost Economic War on China", claiming the United States hates Ukraine(!) — all of these come off as less than reliable to me. Is there something I'm missing?
Yea I think he has cultivated a "Global South/Anti-West" audience so he is becoming more sensationalist. His old podcasts are much better and I enjoyed his interview with Noah Smith.
In general, China has had an autocratic government and allowed a degree of free enterprise for centuries. The central autocrats were happy as long as the business people focused on business and stayed out of politics. Not all that long ago, we saw a number of business people and wealthy celebrities given various types of warnings about getting too big for their britches. Just about all of them stepped back, and many of them are doing quite well though maintaining a lower profile. Inner members of the CCP may be extremely wealthy, but they don't let it interfere with their politics.
All of this seems consistent with Chinese history. One would expect some kind of emperor to embody state power and rings of technocrats managing things. The state would maintain an interest in various critical businesses, much like its historical salt monopoly, but it would allow an otherwise freewheeling economy as long as no one got too big. In some ways, that's good. It's implicit antitrust enforcement.
I'd love to, but neither Britain nor the USA has the level of cultural continuity to do that. For at least 2000 years, China has gone through its cycles of dynastic rise and fall, unification and chaos. It has long had a dominant culture covering a geographically defined and well bounded region.
I suppose I could look back at the Western tradition starting with the Romans, but Europe and the USA, which is culturally, economically and politically European, doesn't have a consistent pattern the way China does. The Roman Empire died with Byzantium and has never been reconstituted. The British Empire may have borrowed ideas and forms from Roman antiquity, but its society was much different.
That was barely more than a century ago. A thousand years ago the English were fighting Vikings and the USA didn’t exist. China was in its Liao or Song dynasty. There isn’t much of a useful pattern.
Nope. I'm arguing that China has a long, well documented history that offers some insight into its past and future situation. European and American history don't show the same regularity.
While you said that Chinese "often" regard their country as a “Socialist Republic” or "People’s Democracy”. I don't think you were very clear on what that actually means, either in terms of how many think of it as "People’s Democracy” vs “Socialist Republic” or what those terms mean. I would expect that shaping operations on China's social media are effective, creating a misleading impression among the average Chinese person that they have more freedom than they do. But I expect any Chinese with nonstandard opinions, or with a lot of life experience outside China, might have a very different outlook. Surely this is worth discussing? (And while I expect people in China to largely overestimate their government, their freedoms*, and average prosperity due to government media control, I expect people in liberal democracies to underestimate their government and their average prosperity due to influencer-dominated social media.)
I also find it strange that you don't mention Xi Jinping consolidating power and making himself chairman for life. Mightn't this have substantial implications, if not for the economy, then maybe for Taiwan and/or policies in the long term? I wonder what your take is on the arrest of Zhang Youxia, and the pretext for it.
Edit: I do recall now, though, that you *did* say China wasn't your area of focus and so, presumably, not your area of expertise. There's a YouTube channel I like called Serpentza, run by a man from South Africa who lived in China for 14 years, who is married to a Chinese person. He made one flavor of video when he lived in China (generally quite positive and uncritical of the government), and a very different flavor after he "escaped" to the west. The latter videos, especially ones made soon after he left, best express his true opinions, and they are very different in tone from what I see in this article. He's much less intellectual than you are, but his on-the-ground experience gives him a certain authoritative weight. He describes the economic system of China very simply: it's capitalist, period. But functioning as a journalist, he was acutely aware of the lack of political freedoms and, IIRC, when another journalist he knew was arrested on flimsy grounds, he started thinking about getting out, and when he did, he feels, he only barely made it.
* Constantin of Inside Russia likes to tell the story of being 10 years old in the USSR and asking his teacher: "if the Soviet Union is the best country in the world, why don't people move here from abroad?" His teacher was displeased, responding "never ask that question again." I suspect most people do not ask good questions, which leads them to have incorrect views.
Hi, I read your article and it was fascinating reading about how Chinese authorities have deployed professional media personnel and state-affiliated institutions to promote their country. However, this is not relevant to the argument I made in my article which was talking about economics.
I am not sure if this was a comment towards the article or just a comment for comment sake. I think this is the former, so apologies in advance if I am wrong haha.
1. I never suggested that China was ideological. My whole point is that post-Mao, they are ruthlessly pragmatic - hence the economic decentralization and political centralization.
2. The Soviet Union and the post 1991 Russian Federation are different beasts.
Soviet Union was ideological and exported ideology and tried to go for pragmatism economic wise when it was too late. The Boris Yeltsin and Putin Russia after 1991 does not care about ideology. Its just an empire that pretends to be a nation-state.
No i wasn’t arguing with the article but I think that arguably China not being as Ideological as the USSR is one of the reasons they took the path they did—leading to the divergences you pointed out in your article
I just discover your substack. I think that I find a good place to follow. Sorry for my English, I am not used to use it. I don't know nothing about China, but I will talk about the little I know.
China is esentially, a pragmatist country that search for cohesion. That cohesion was achieved partially for the land reforms of Mao that divided the land on small sizes to the farmers, but that came with a decrease productivity and death an starving in an inthinkable numbers. After that, Deng and company, learned fromt the URSS, but also from the growing of Wester countries during the XIX and XX.
If we look, we can see how the condition of the workers from 1990 till 2010 (for make the numbers fit) are the more similar to the Industrial Revolution on the XIX (rural migrants), but we can also see how their learned of that and started to introduce some social support for keep that social cohesion. Also, they noticed that couldn't just export, learning, for exemple, for the creation of mass market on the United States in order to guarantee interior growing. They are learning from different ways of behave (means "do" and "not do") on the last centuries searching for cohesion and estability.
Also, we must remind the hard conditions that China has. They have a criticall problem with water, small portions of fecund lands for agriculture and a lack of energy resources. And the most important thing, usually forgotten or too much implicit when we talk about China: China is a fucking monster, 1.500M of people. I think that if China has to have problems in the futur (without including a proxy warwith USA), those will come for this aspects. We can see how they are investing on nuclear and other sources of energy for the future, searching in ways to optimize elctricity and batteries, achieve a privilegiated position on natural resources...
About to whe "politicall form", we can see the PCC as the continuationf of China Empire. Meritocracy is important, managing some regions and proving success before moving forward; but, of course, there is nepotism like in any other instution. Also, there is plurality of factions: Xi, for exemple, has started a growing investment on social issues that doesn't like to other "wings". The big fear of China are internall conflicts, theiy are trying to avoid στάσις.
If you go through the American "education" system your thought process will basically be:
China = Communist = USSR = Evil Dictatorship.
Everything is absolute, there's no room for nuance. Of course every country's economy has some degree of state ownership vs private ownership of various industries and each has to work within their own parameters of demographics, geography, natural resources, etc. There is no silver bullet of how to govern. "Communist" is then just a label that you can't form judgements on alone. Hitler named his party "National Socialist German Workers' Party", but was he was not a socialist or a communist as that name would suggest.
"Democracy" is just a label too. For westerners it just mean "voting in elections". However Chinese people overwhelmingly report feeling satisfied with the level of democracy (meaning "does our voice matter?") in their country as opposed to westerners who do not.
My guess is that it's the word communism and the lack of knowledge regarding the history of each country causing the confusion.
I recognise that I may be preempting your next post, but my understanding of assessments of Chinese collapse is that they are less about making a statement about communism, and more about the fact that China suffers from a chronic lack of demand and a propensity to under-consume, and that the government has repeatedly failed to find anywhere productive to put the relevant savings?
Yea I'll try to address that the incredible savings rate of China.
But when I look at China doomerism I do notice two things:
1. I do think the fact that they say "China will collapse" does implicitly refer to the Western idea that only communist/authoritarian states fall. States don't usually "collapse", but they assume China will. No one is saying Japan will collapse because it has 30 years no growth. The "collapse" part must come from the fact that we have multiple communist regimes that have fallen or split into separate countries.
2. I don't think its common knowledge about China's "Mayor Economy" and the extreme decentralization and leeway that polities have to try their own experiments to produce growth.
2. I agree with, and I definitely learnt a lot from from your excellent post. However, regarding 1., the argument as I see it is that there is an implicit resource bargain in place in the Chinese economy - you give us prosperity, we don’t hold a revolution against you (arguably similar to states like Singapore, Brunei etc). Insofar as Chinese failures in management are currently disrupting prosperity (as has arguably happened with the infrastructure crash, and with the fact the attempt to pursue another export boom will likely fail), this is a sign that public opinion may turn against the regime.
Look forward to the next installment! I share some of those "China doomer" concerns you articulate at the end but I am open to other perspectives on that.
You mention Robert Wu and Carl Zha. Not familiar with Zha but I have started to follow Wu. For independent media that centers Chinese voices on China, I would also recommend Drum Tower podcast.
Did you write that follow up post on China? You could link to it at the bottom of the post if so.
Not yet lol. I should follow up though.
While the abstract says that Chinese eat more calories than North American, this was self reported. I have to say as an American Chinese living in China the past year, that feels way off. However, your point about starvation wages and hunger is still true. Food is plentiful because it is cheap.
1) "The private sector in China provides 50% of China’s government revenue, 60% of economic output, 70% of technological innovation, and 80% of urban employment."
"Industrial production stagnated in the 70s and 80s in the Soviet Union, turning the state to a glorified gas station, dependent by oil & gas exports by the 1980s."
Unlike USSR (and Russia), China isn't a petrostate. It relies heavily on the innovation and ingenuity of its people for its prosperity.
2) "While people like Bernie Sanders says “China pays their people starvation wages”, the average Chinese, although they are much poorer than the average American, still consume more calories than Americans."
It's astonishing how little Westerners understand about Chinese living standards. It's like their worldview hasn't been updated in 10-20 years.
3) "China has political semi-centralization and economic decentralization. The central government sets strategic direction, but local officials deliver results on the ground in the 23 provinces, 4 municipalities, 5 autonomous regions, and 2 special administrative regions. These “mayors” basically have to take head initiatives, and build industrial clusters, thriving economies, more GDP, jobs, and real estate prices. With more GDP, they collect tax revenue, and climb the political ladder."
All of these mayors compete rigorously with each other to attract investment and create jobs and economic growth, just like the CEOs of private companies.
4) "Deng Xiaoping even called Gorbachev an “idiot”. The Soviet Union was dead on Christmas 1991."
Yet despite his failures, Gorbachev is the one who got the Nobel Peace Prize even though Deng had a much larger positive impact. This shows that Western elites often care more about virtue signaling than about policies and governance that actually improve people's lives.
China's greatest challenge lies in bureaucratic monopoly capitalism, which is the fundamental reason why Xi Jinping's administration has spent years combating corruption. Bureaucratic monopoly capitalism was also a major concern for Mao Zedong, and it was one of the primary reasons he launched the Cultural Revolution—though, of course, the methods used during the Cultural Revolution proved to be flawed. China aims to achieve a balance among state capital, social capital, and foreign capital. Bureaucrats are meant to serve by guiding investment directions and controlling the uncontrolled proliferation of capital. They must never collude with, let alone control, capital, as such collusion would severely disrupt the balance among these various types of capital and hinder China's long-term development.
A significant problem in the United States, in my view, is financial monopoly capitalism, and as of now, there seems to be no effective counterbalance to this financial dominance. If you wish to delve deeper into understanding China, I suggest studying the issue of bureaucratic monopoly capitalism. Xi Jinping has made considerable efforts in this area, but the problem still persists in a level.
Haha,;I am reading about "bureaucratic monopoly capitalism" right now! But the way you explained it was excellent.
As for "financial monopoly capitalism" being a problem in U.S., I am not sure if that's true anymore post 2008 great financial crisis. I would have to dig in more to public sentiment and certsin metrics to see if I agree.
Remarkable piece! And thanks for the shoutout. Looking forward to your answers to the challenge at the end.
Thanks for taking on this challenge. Seems like there’s so many misconceptions about what both China and the Soviet Union are, as well as Russia now.
Somewhat unrelated to the content of this post but after listening to the linked Silk and Steel podcast I can't help but feel it's a bit sensationalist. Calling the Tiananmen Square Massacre a "protest", titles like "How the US Lost Economic War on China", claiming the United States hates Ukraine(!) — all of these come off as less than reliable to me. Is there something I'm missing?
Yea I think he has cultivated a "Global South/Anti-West" audience so he is becoming more sensationalist. His old podcasts are much better and I enjoyed his interview with Noah Smith.
In general, China has had an autocratic government and allowed a degree of free enterprise for centuries. The central autocrats were happy as long as the business people focused on business and stayed out of politics. Not all that long ago, we saw a number of business people and wealthy celebrities given various types of warnings about getting too big for their britches. Just about all of them stepped back, and many of them are doing quite well though maintaining a lower profile. Inner members of the CCP may be extremely wealthy, but they don't let it interfere with their politics.
All of this seems consistent with Chinese history. One would expect some kind of emperor to embody state power and rings of technocrats managing things. The state would maintain an interest in various critical businesses, much like its historical salt monopoly, but it would allow an otherwise freewheeling economy as long as no one got too big. In some ways, that's good. It's implicit antitrust enforcement.
I'd love to, but neither Britain nor the USA has the level of cultural continuity to do that. For at least 2000 years, China has gone through its cycles of dynastic rise and fall, unification and chaos. It has long had a dominant culture covering a geographically defined and well bounded region.
I suppose I could look back at the Western tradition starting with the Romans, but Europe and the USA, which is culturally, economically and politically European, doesn't have a consistent pattern the way China does. The Roman Empire died with Byzantium and has never been reconstituted. The British Empire may have borrowed ideas and forms from Roman antiquity, but its society was much different.
That was barely more than a century ago. A thousand years ago the English were fighting Vikings and the USA didn’t exist. China was in its Liao or Song dynasty. There isn’t much of a useful pattern.
Nope. I'm arguing that China has a long, well documented history that offers some insight into its past and future situation. European and American history don't show the same regularity.
While you said that Chinese "often" regard their country as a “Socialist Republic” or "People’s Democracy”. I don't think you were very clear on what that actually means, either in terms of how many think of it as "People’s Democracy” vs “Socialist Republic” or what those terms mean. I would expect that shaping operations on China's social media are effective, creating a misleading impression among the average Chinese person that they have more freedom than they do. But I expect any Chinese with nonstandard opinions, or with a lot of life experience outside China, might have a very different outlook. Surely this is worth discussing? (And while I expect people in China to largely overestimate their government, their freedoms*, and average prosperity due to government media control, I expect people in liberal democracies to underestimate their government and their average prosperity due to influencer-dominated social media.)
I also find it strange that you don't mention Xi Jinping consolidating power and making himself chairman for life. Mightn't this have substantial implications, if not for the economy, then maybe for Taiwan and/or policies in the long term? I wonder what your take is on the arrest of Zhang Youxia, and the pretext for it.
Edit: I do recall now, though, that you *did* say China wasn't your area of focus and so, presumably, not your area of expertise. There's a YouTube channel I like called Serpentza, run by a man from South Africa who lived in China for 14 years, who is married to a Chinese person. He made one flavor of video when he lived in China (generally quite positive and uncritical of the government), and a very different flavor after he "escaped" to the west. The latter videos, especially ones made soon after he left, best express his true opinions, and they are very different in tone from what I see in this article. He's much less intellectual than you are, but his on-the-ground experience gives him a certain authoritative weight. He describes the economic system of China very simply: it's capitalist, period. But functioning as a journalist, he was acutely aware of the lack of political freedoms and, IIRC, when another journalist he knew was arrested on flimsy grounds, he started thinking about getting out, and when he did, he feels, he only barely made it.
* Constantin of Inside Russia likes to tell the story of being 10 years old in the USSR and asking his teacher: "if the Soviet Union is the best country in the world, why don't people move here from abroad?" His teacher was displeased, responding "never ask that question again." I suspect most people do not ask good questions, which leads them to have incorrect views.
not that much
https://open.substack.com/pub/soyonbo/p/direct-connection-or-vpn-how-twitters?r=38fbm3&utm_campaign=post&utm_medium=web&showWelcomeOnShare=false
Hi, I read your article and it was fascinating reading about how Chinese authorities have deployed professional media personnel and state-affiliated institutions to promote their country. However, this is not relevant to the argument I made in my article which was talking about economics.
I don’t think China (or Russia) are ideological. They just have ruling classes that want to hold onto power and spread influence pragmatically
Hi Jericho!
I am not sure if this was a comment towards the article or just a comment for comment sake. I think this is the former, so apologies in advance if I am wrong haha.
1. I never suggested that China was ideological. My whole point is that post-Mao, they are ruthlessly pragmatic - hence the economic decentralization and political centralization.
2. The Soviet Union and the post 1991 Russian Federation are different beasts.
Soviet Union was ideological and exported ideology and tried to go for pragmatism economic wise when it was too late. The Boris Yeltsin and Putin Russia after 1991 does not care about ideology. Its just an empire that pretends to be a nation-state.
No i wasn’t arguing with the article but I think that arguably China not being as Ideological as the USSR is one of the reasons they took the path they did—leading to the divergences you pointed out in your article
Sorry if it came off as argumentative
no worries! appreciate the comment regardless!
I just discover your substack. I think that I find a good place to follow. Sorry for my English, I am not used to use it. I don't know nothing about China, but I will talk about the little I know.
China is esentially, a pragmatist country that search for cohesion. That cohesion was achieved partially for the land reforms of Mao that divided the land on small sizes to the farmers, but that came with a decrease productivity and death an starving in an inthinkable numbers. After that, Deng and company, learned fromt the URSS, but also from the growing of Wester countries during the XIX and XX.
If we look, we can see how the condition of the workers from 1990 till 2010 (for make the numbers fit) are the more similar to the Industrial Revolution on the XIX (rural migrants), but we can also see how their learned of that and started to introduce some social support for keep that social cohesion. Also, they noticed that couldn't just export, learning, for exemple, for the creation of mass market on the United States in order to guarantee interior growing. They are learning from different ways of behave (means "do" and "not do") on the last centuries searching for cohesion and estability.
Also, we must remind the hard conditions that China has. They have a criticall problem with water, small portions of fecund lands for agriculture and a lack of energy resources. And the most important thing, usually forgotten or too much implicit when we talk about China: China is a fucking monster, 1.500M of people. I think that if China has to have problems in the futur (without including a proxy warwith USA), those will come for this aspects. We can see how they are investing on nuclear and other sources of energy for the future, searching in ways to optimize elctricity and batteries, achieve a privilegiated position on natural resources...
About to whe "politicall form", we can see the PCC as the continuationf of China Empire. Meritocracy is important, managing some regions and proving success before moving forward; but, of course, there is nepotism like in any other instution. Also, there is plurality of factions: Xi, for exemple, has started a growing investment on social issues that doesn't like to other "wings". The big fear of China are internall conflicts, theiy are trying to avoid στάσις.