The Current Status of Capitalism in China

About thirty years ago, China created the special economic zone of Shenzhen.

It is near Hong Kong and is one of the few places in China where the

government has not restricted business.

When Shenzhen was created, it flourished with new businesses because

entrepreneurs only had to comply with a few laws. They were allowed to

compete freely, and were not controlled in any way by China’s government.

This true capitalism created a massive city of millions of people willing to

work for very little money, which has caused a number of foreign businesses

to set up factories in the area because the costs of production are so much

lower than any other place.

Unfortunately, the economic prosperity is no longer bringing

in entrepreneurs at the rate it once was. A recent study has shower that over

the last five years, the population creating new businesses has dropped seven

percent. This trend is not only seen in Shenzhen, but in many other cities, at

least five other cities appear to be following the same trend.

This trend is correlated to two main factors. Shenzhen is running out of

land, and China’s businesses are taking some of the employees that once got

the best pay within the special economic zone. To find out more, read

The Economist’s article: The Spirit of Enterprise Fades.

These facts mean that there is an increasing amount of competition from

both inside China, and from global markets. This competition will not only

cause businesses within the special economic zone to lose employees to

areas within China, but they will also be forced to compete on a global market

that they are not used to because of their lack of investors.

The playing field will soon be leveled with these economic changes. This

could dramatically change the foreign and economic policy of many countries

when they find that their largest companies may be moving their production to

new locations around the globe.

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Single-Party Democracy

In a recent New York Times article, Roger Cohen compares the economic effect of the differing family structures of China and the U.S. Cohen points out that the one-child policy makes children special in the family structure and thus the attention and investment in children is far greater than in the U.S. The article lauds China’s fast growth and says that it won’t stop anytime soon. While the negatives of China’s growth structure such as current housing bubbles are acknowledged, the article as a whole boosts China’s political decisions for their promptness. Intrestingly, this article comes at a time when there is rising resentment for the ineffectuality of the government in the face of the economic recession in America. Cohen says that the seemingly oxymoronic term “single-party democracy” has the potential to be the “most important political idea of the 21st century.” Although the Chinese government is extremely controlling, recent assortments in the form of nongovernmental organizations that work with the Chinese government.

The article touches on the comparative degress of perceived political effectuality and the economic progress in terms of family (social demographic effefct). Because China's government is centralized and does depend on the people's vote in daily matters, China, in the wake of a disaster, can act quickly instead of the slow political beaucracy of the American political scene; this leads to a trust that the government can acomplish change, although a faith that the government is neccesarily doing the right thing is not guranteed (this manifests itself in China's dismal human rights record). It is extremely important to note that this article is in fact an op-ed, meaning that Cohen's opinion permeates each paragraph as opposed to a simply, objective stating of the facts. It is clear throughout the article that Cohen is impressed with China; he glazes over any negative aspects of China's growth. He cites the stable family culture -- usually in the nuclear family form with Confucian values of filial duty -- as the grounding force which allows for rapid growth and acts as a "moral compass" in the face of modernity.

Click here to read the entire NYT article.

 

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Cohen, Roger. "Single-Party Democracy." The New York Times. The New York Times Company, 21 Jan. 2010. Web. 22 Jan. 2010.