Working Paper: NBER ID: w17687
Authors: Joseph Fan; Randall Morck; Bernard Yeung
Abstract: Despite a vast accumulation of private capital, China is not embracing capitalism. Deceptively familiar capitalist features disguise the profoundly unfamiliar foundations of "market socialism with Chinese characteristics." The Chinese Communist Party (CCP), by controlling the career advancement of all senior personnel in all regulatory agencies, all state-owned enterprises (SOEs), and virtually all major financial institutions state-owned enterprises (SOEs), and senior Party positions in all but the smallest non-SOE enterprises, retains sole possession of Lenin's Commanding Heights. This manuscript introduces the chapters comprising the NBER volume Capitalizing China (Fan and Morck, eds. 2012), which examine China's high savings rate, banking system, financial markets, financial regulations, corporate governance, and public finances; and consider policy alternatives the CCP might consider if its goal is China's elevation into the ranks of high income countries.
Keywords: China; Market Socialism; Economic Growth; CCP; Capital Allocation
JEL Codes: G0; H11; J47; K0; N25; P2; Y2
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| CCP control over career advancements in SOEs (M51) | governance structure (G38) |
| CCP control (E61) | economic outcomes (F61) |
| CCP oversight (G34) | misallocation of capital (E22) |
| political connections (D72) | financial viability of SOEs (G32) |
| governance structure of SOEs (L32) | corporate governance and financial reporting (G38) |
| corporate governance and financial reporting (G38) | transparency and efficiency of SOEs (L32) |
| CCP control (E61) | economic growth (O49) |
| CCP's adaptability (P11) | sustainability of economic growth (O44) |