No such thing as ‘state capitalism’ in China

Certain Western officials and scholars have repeatedly criticized China for implementing “state capitalism,” claiming that China encourages its state-owned enterprises (SOEs) to monopolize resources and stifle the growth of foreign investment. Based on what they believe to be unfair competition practices, they have called for restrictions on overseas investment by Chinese SOEs. However, their claim is totally untenable. First, China is marching on the road of socialism with Chinese characteristics, instead of implementing “state capitalism.” The country adheres to the basic economic system with the public sector remaining dominant and diverse sectors of the economy developing side by side as it suits the country’s development level and serves the interests of the Chinese people. The Chinese government has carried out the SOE reform, made efforts to solve the financing problems facing small and medium-sized enterprises, and encouraged and guided private investment in sectors not prohibited by laws. The country has gradually deepened various reforms, which have yielded positive results. The market economy is growing to maturity in China, where the relationship between state-owned and private companies will become more harmonious, and the people’s welfare will be further improved. Second, China does not support domestic companies’ pursuit of oligopolistic interests, and treats foreign and domestic companies equally. More and more multinational corporations are willing to set up their regional headquarters as well as research and development centers in China because the Chinese government has long been committed to creating an open, transparent, and fair market and legal environment and to strengthening the protection of intellectual property rights. The increasing openness of the huge Chinese market has become the primary determinant of multinational corporations’ investment in the country.In terms of foreign trade and cooperation, China does not deliberately pursue a trade surplus, and has made great efforts to increase imports, which has been unfortunately hindered by certain countries’ export controls. China has actively carried out cooperation with other countries in key areas such as nuclear power, high-speed railways, space exploration, and petrochemicals, while a number of private Chinese companies have been denied access to certain non-sensitive industries in certain “free countries” for no reason. Criticizing China for implementing “state capitalism” and calling for restrictions on the overseas development of Chinese SOEs reflect that certain people are still reluctant to recognize the rapidly growing economic power of emerging markets and developing countries such as China. While trying to hinder China’s development, they fail to realize that China is the main engine driving the world’s economic development, and has been contributing more than 20 percent to the world economic growth annually for quite a long time. The train of the world economy could not run fast without China. Their attempt to hinder China’s development by hyping up “state capitalism” does no one good, and is bound to fail.