GOOD MORNING FROM LONDON
A feature of Western media reporting of China is that the News Must Be Negative. China must be in Trouble. China is facing “Big Problems”. China faces “Financial Collapse. Two recent events highlight this weakness in the West’s misreporting of China.
The context is that China cannot succeed. It is a Socialist country run by a Communist Party and China cannot be more successful than the West in creating prosperity for its people. Two recent events highlight this basic flaw. First, Beijing brought in new regulations to prevent after-school tutoring companies from operating for-profit and banned foreign investment. Second, this took place just weeks after further Beijing regulation restricted the money-raising activities of China’s Did Chuxing, the ride-hailing company recently listed in New York.
These two events are positives, not negatives. These are two examples of the Party controlling the activities of two Chinese capitalist companies. The feature of China’s encouragement to Capitalists – to use their initiative, creativity and energy to help promote economic development in China today – is that Capitalism is not rampant, freewheeling and in control. Capitalism is encouraged but on terms laid down by the Party and not Capital. The guarantee of long term success in China depends on the permanence of the Party. And foreign capitalists recognise this – hence the surge of Wall Street Investment in China – JP Morgan. Goldman Sachs, Blackrock to name just a few.
The West was wrong when it assumed that China’s entry to WTO would lead to more economic rights in China which, in turn, would lead to political rights which, in turn, would lead to the reduction in power of the Party. The West, again, is wrong in seeing Party intervention to curb China’s Capitalists as Bad News. In fact, it is Good News.