ALL Bets are off on China adopting to Western values. Mr Xi Jinping, announced to the world this week, that his needs more power; or rather unlimited power. He plans on changing the already written constitution so he can rule for the entirety of his life and legally unopposed as President of the People’s Republic Of China (PRC).
Instead of integration, and adopting a collective society with others, he either wants to dominate his entire country in dictatorship or as he offered to the world at the last autumn congress “a new option for other countries” applied with “Chinese wisdom and a Chinese approach of solving the problems facing mankind” A dictatorship of one’s own country is nauseating and abhorrent, but the latter is far more unthinkable. How has China gone astray on what many were considering as great progress to a free world?
One could think that after Britain ruled Hong Kong for over 150 years, ending in 1997, that China would have organically developed into a more Westernised society.
To a certain extent, it has, GDP has grown exponentially since the death of Mao Zedong in the late 70’s and submergence of the communist party or rather is the sleeping lion of which has now being awoken. The socialist market economy of the PRC is the world’s largest economy by nominal GDP valued at 11.2 trillion USD in 2016 and world’s largest economy by purchasing power by IMF’s standards.
As a result to advantages that economic prosperity brings to the many, each day, thousands of people are being brought out of poverty, due do more open competition, property rights and access to trading platforms. More than 500 million people were lifted out of extreme poverty as China’s poverty rate fell 88 percent to 6.5 covering 1981 to 2012.
While public listed companies are the backbone of China’s economy which are supported and encouraged without expectation by the state, private companies, or organisations which provide more asymmetry of information are often discouraged with heavy regulation, compliance by state involvement and surveillance.
This can be seen with Current regulation issues faced by equity crowdfunding. Two Chinese economists state in their paper which analyses the applications of blockchain technology, that the standard of qualified investors, quota of investment, regulation of crowdfunding platforms, regulation of illegal fund-raising, detection of fraudulent fundraising, and opposition to money laundering detailed in the Securities Association of China SAC 2014 present fundamental concerns for the state.
However, the Chinese government has proposed “encouraging people to do business creatively and drive innovation” and see the potential in the blockchain technology, perhaps it could serve the state effectively?
The surveillance can be seen in everyday life, let alone for listed companies. For example, The first email sent from China in 1987 was “Across the Great Wall we can reach every corner in the world.” Only a few individuals in power of the total 560 million users have this access.
China has therefore presented a change in ideology, the communist regime did not submerge and be replaced by a western one as many considered, but they did, however, keep one western element- the virtues of capitalism which is what the state use to increase their financial and social power. However, as Milton Friedman said, “Capitalism is not a sufficient condition for freedom, it is a necessary condition for freedom.” Meaning that capitalist is one necessary element of freedom but it does not provide freedom, that of itself.
We live in interesting times
Zhu and Zhou Financial Innovation (2016) 2:29 DOI 10.1186/s40854-016-0044-7