China is far from being a market economy, and more likely to be an economy riddled with hypercontrol, interventionism and currency manipulation. (Photo : Getty Images)
Last Dec. 8, newly elected U.S. President Donald Trump posited that “China is not a market economy,” contravening his country’s promise to treat China as such. That may have been one of the few instances President Trump was right.
According to an opinion article in the New York Times, China is far from being a market economy, and more likely to be an economy riddled with hypercontrol, interventionism and currency manipulation.
Written by Yi-Zheng Lian, since the beginning of China’s rise as an economic powerhouse, the Chinese Communist Party (CCP) has been systematically infiltrating the private sector and now operates inside more than half of all nonstate firms.
Where It All Began
In 1927, when the communists were suffering severe losses in the fight against the Kuomintang government, Mao Zedong and his associates created a systematic military hierarchy that would mimic the structure of the CCP.
The intention was to to instill a fighting spirit that would boost morale and ensure that party’s top order would cascade all the way down to the lower ranks.
The result was an insertion of party branches at the company level. This included party cells at the platoon and squad levels. As a result, a disorganized and unruly peasant army became a force to be reckoned with.
21st Century Adaptation
Similar to the party cells in the formidable Red Army, party units began sprouting within private sector companies, and such groups were expected to fulfill the CCP’s interests, says Yi-Zheng.
According to 2015 official figures, 52 percent of all nonstate firms in China have party cells. Aside from this, similar cells have been also reported in foreign companies, and even foreign NGOs.
Yi-Zheng warns foreign businesses and foreign governments of the implications of dealing with Chinese companies with CCP party cells.
The Constitution of the CCP requires all members to “adhere to the principle that the interests of the Party and the people stand above everything else, subordinating their personal interests to the interests of the Party and the people.”