U.S. Scholar: Communist China’s Implementation of State Capitalism Threatens Global Markets

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In an online seminar held by the Center for Strategic and International Studies (CSIS), several experts and scholars reiterated their concern that the Chinese Communist Party (CCP) has in recent years used business channels to reach out to private companies in an attempt to interfere and control them, and that the CCP has distorted the global business market, according to a Feb. 17 report by the Epoch Times.

Western scholars consider the economic system practiced by the CCP to be “state capitalism”. It is an economic system in which the state level dominates commercial activity. Recently, the Chinese Communist Party’s state capitalism has become more and more powerful because of the authorities’ support, and many problems have arisen along with it. A number of U.S. experts and scholars believe that the Chinese Communist Party’s interference with private enterprises not only threatens the global market, but also seriously undermines the international order.

According to Radio Free Asia, Carolyn Bartholomew, chairwoman of the US-China Economic and Security Review Commission (USCC), said at a seminar that not only are Chinese state-owned enterprises now subject to capital security concerns, but even private companies are being forced to make decisions or take actions that favor the Chinese Communist Party because of Chinese interference, and the outside world should have a clear understanding of this.

“I wouldn’t think that because Alibaba is a private company that it would be safe to deal with them and that the Chinese government would never ask them to hand over their information,” said Bartholomew, “It’s unrealistic to think that.”

And before that, the CCP’s financial unit asked companies like Ant Group to share its consumer loan data. There are questions about the Chinese Communist Party’s attempts to expand its digital authoritarianism through its control of technology companies such as Ant Group, and its interference in private enterprise has also made Western countries uneasy.

In recent years, the CCP authorities have established party branches in private companies, even foreign companies, and participated in corporate decision-making as a way to control them.

Wendy Leutert, an associate professor at Indiana University who has long studied China’s state-owned enterprises, said that after Xi Jinping took office, the CCP authorities made connections between Party leadership and corporate leadership positions more frequently, such as by having the Party guide changes to corporate bylaws to comply with Party requirements and by making the Party’s leadership role in corporate decision-making more formal. “The cumulative result of all these measures is that political parties have significantly more control over small and medium-sized businesses.” Leutert said.

And the Chinese Communist Party’s interference in private business is gradually threatening global markets and international rules.

James McGregor, China president of APCO Worldwide and former president of the American Chamber of Commerce in China, said that the Chinese Communist Party’s plan is to make the world more dependent on China while China is no longer dependent on the world and has become more arbitrary, selectively adhering to international norms that benefit it while demanding renegotiation and even ignoring those terms that are unfavorable to them.

McGregor said, “The WTO is like a Sino-foreign joint venture for China. If the rules are favorable to China, they will comply; if they are unfavorable to China, those rules do not exist.” The CCP government relies on a large commercial market to threaten and entice companies from all over the world to follow Chinese norms.

McGregor expressed concern: “Globalization has removed the loyalty of these companies to the United States, and all their key performance is about shareholders and profits. Since China is a bigger market for them than the U.S., these companies are more concerned about dealing with the China government.”

Source: The Epoch Times

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