Thesis on "China's Authoritarian Capitalism Success or Failure"

Thesis 8 pages (2526 words) Sources: 7 Style: APA

[EXCERPT] . . . .

China Capitalism

China's Opportunistic Capitalist Evolution

With great certainty, the process of globalization is revealing that there are considerable opportunities to be realized in China, whose economy has displayed a serious robustness and growth rate to be positively compared with any western boom. Thus, the capacity for economic expansion is significant even as the challenges to sound practice are heightened. To the point, an approach to economic capitalism which has been adapted to comply with cultural and political realities in China is evident and increasingly dominant on the front of statewide development. That seems to be the overarching finding yielded by the literature review which ultimately formulates a discussion on the prospects shortcomings of realizing this type of capitalist openness within the Chinese consumer, corporate and equity markets. Even still, as the mores of capitalism become a yet more apparent aspect of China's presence on the world stage, the various cultural, political and philosophical ways in which it remains out of step with other aspects of the Western World, calling into question exactly how successful it has truly been at positioning itself as a capitalist nation. Its receptiveness to global competition and especially its increased interest in privatization of its own equity market are suggestive of a real and successful dedication to capitalist principles, but its resistance to a democratization of its political system, an absence of true journalistic freedom and gross inequities in its legal and judicial systems suggest that China remains only opportunist rather than fully committed to the premise of free market economy.

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That said, we do truly find that at this juncture in the proliferation of free trade, China has become a relatively open society with respect to consumer opportunities and options. This is at least true from an economic standpoint, where the formerly obstructive parameters of communist China have actually liberalized in consonance with much of the rest of the industrialized capitalist world. For the consumer, competitive expectations have emerged which denote both a distinct form of cultural patterning where purchasing power is concerned and an evermore flexible and motile retail industry as a whole. Thus, where capitalist enterprisers both global and domestic are concerned, China is flush with opportunities for economic expansion and the fundamental breaching of a new marketplace.

Indeed, one clear aspect of the Chinese economy which is changing quite rapidly is its greater facilitation of competitiveness. A symptom of China's increasingly free-market proclivities, the force of bargaining power now afforded resource suppliers, retailers and, ultimately, consumers, is certainly changing to the expense of the producer, with local contractors now increasingly being forced to acquire supplies at a market value notably altered by more widely distributed resource demand and evident product value. Indeed, the ability for members of the buying public to purchase items at a supply level resolves a question of the impetus for expansion, demonstrating that there is in fact a true call within the public and culture for a continued advancement of capitalist enterprises and the consumer opportunities implied.

Still, the force of free-market rivalry is one that has been stimulated in recent decades and magnified really only in recent years by China's increased efforts at allowing privatization, at encouraging competitive growth and at becoming a major party to the global trade scheme. Certainly, these are some of the forces at play which have allowed for many foreign investors to consider China as a viable and desirable point of entry. Even more to this point, the convenience of its proximity to both mainland China and the western trading community make Taiwan a revealing locale within which this bleeding inward of capitalism has occurred. In concurrence with China, Taiwan has experienced an ongoing expansion in the role that capitalism and free-market competition have played in its global identity.

A report published by Business Week in 1999, boldly reported with glowing endorsement the idea that a certain natural economic science had precipitated China's adoption of capitalist necessities, especially where the demands of consumers have been concerned. The report denoted that "while thousands of state-owned factories still languish with massive debts, red ink, and bloated workforces, maverick entrepreneurs are picking up the slack, generating badly needed jobs and helping Chinese industry approach world standards in sectors ranging from electronics manufacturing to Internet services. The private sector won't solve all of the serious problems left by the old socialist system, which will hang over China's economy for years." (Roberts, 1) the article predicted that China would still suffer from many of the negative implications of socialist stagnation, but that by the necessity of these forces and its isolation in the years following the end of the Cold War, China had come to demonstrate at least the economic premise of free market economy. Moreover, the article would make the argument that China was reaching this juncture out of necessity rather than a change in cultural orientation.

The Roberts article would prove accurate. Indeed, China's economic opening up to the global trade explosion of the new millennium is surely among the biggest stories of this era. Its inexorable rise in prosperity, its increasing influence in geopolitical affairs and its move towards dominance in its economic interactions even with fellow powers such as the United States have ripened the value of its assets, both publicly traded and exclusively held, making it an inherently necessary destination for entrance into massive Asian development markets. The result has been an increasingly receptive global community, which has welcomed China's surge with a seizing of opportunity.

To this end, "private equity firms are looking to become a more important part of the Chinese economy as companies there are looking for experience in become global corporate players." (AP, 1) a consideration of participating in China's massive growth phase from the perspective of a private equity firm accounts in one regard for the increasingly magnetic appeal of the Chinese market, due to the affordability of its resources, the vast potential for growth represented in its enormous public and an asset field which is still a frontier for many western firms due to a long-term resistance of privatization in infrastructural and state-oriented regards.

Certainly, there has been sufficient cause to recognize that China is rife with the opportunity for large-scale capitalist speculation as well as with an interest in allowing foreign investors to take part in developing further its infrastructural capabilities, resource capabilities and service capabilities. Projections leading into 2006 had proved correct, with Bloomberg Financial venturing the assumption that China would "attract at least $6 billion in private-equity investments...as buyout firms raise[d] bets on economic growth." (Cheung, 1) This projection would come on the heels of the previous years eightfold expansion to $3.9 market in 2005. And these figures parallel directly what had thereafter been two solid years of unprecedented Chinese stock market growth, where conditions had been so favorable to investors that owners of private equity funds were finding this an environment especially hospitable as traditionally capitalist nations suffered massive volatility. Viable stocks appearing on the Chinese market would during this time generally be voraciously consumed by a buying public that has shown itself quite a robust atmosphere and a monetary culture more than receptive to the foundational premise of capitalism. As Katherine Ng, managing director of the Hong Kong set Centre for Asia Private Equity Research Ltd. indicated in a 2005 discussion, "Chinese stocks are in such a favorable position that you will find investors can dispose of their shares or holdings very quickly." (Cheung, 1) This would be extremely encouraging to companies seeking opportunities in a country which in 2005 surpassed both France and the U.K. To possess the fourth largest economy in the world, suggesting that the prospects for its future growth have really only begun to be apparent or definable.

Investors in China seem to be aware of a continued likelihood for growth and prosperity, posting a voted of confidence in a sustenance of the current pattern toward capitalist receptiveness. If this perception is vindicated, so too will it be the case for the various western firms that have each year in the last four added their funds to the economy. As a nation that is only today beginning to learn of the consumer-revenue-based benefits of elevating what may prove to be the world's biggest middle-class, China is expanding so quickly and spectacularly that it has had to work hard to establish fiscal and monetary policies that are careful to facilitate but not falsely exploit this growth as has been the case in the United States.

Indeed, "China's reserves are growing by about $20 billion a month as surging exports bring in a flood of foreign currency, forcing the central bank to drain billions of dollars a month from the economy by selling bonds to reduce pressure for prices to rise." (AP, 1) Today, China represents by far the fastest growing contender in a global economic scheme that has to date only really included the United States and the European Union.

As of this spring, 2007, "China has… READ MORE

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