In a recent seminar held by a U.S. think tank, a number of Western scholars expressed their concern about the Chinese Communist Party‘s involvement in private enterprises through commercial channels in recent years. In this regard, Taiwan experts said that the biggest problem arising from the Chinese Communist Party’s involvement in private enterprises is that the “entrepreneur” class of the market economy will disappear, and the “profit” that was originally the result of entrepreneurs taking risks will be transformed into “exploitation”. “This also makes the market economy seem to be back to the “jungle society”.
The Center for Strategic and International Studies (CSIS), a U.S. think tank, held an online seminar on February 16 this year, at which several experts and scholars again raised their concerns, pointing out that in recent years, the Chinese Communist Party has gradually extended the Party’s hand into Chinese private enterprises through commercial channels, and tried to interfere and control the internal affairs of enterprises.
Western scholars also argued that the economic system practiced by the CCP is “state capitalism,” an economic system in which the state dominates business activities, and several U.S. experts and scholars argued that the CCP’s attempts to interfere with private enterprises not only threaten global markets, but also seriously undermine the international order.
The Chinese Communist Party’s interference in private enterprise disrupts the market economy and returns to a “jungle society.
According to former U.S. President Donald Trump‘s argument before the U.S.-China trade war, there are many countries’ subsidies, administrative interventions, and the way private companies operate in the international economy, which makes the international market unfairly competitive, according to the overall economist Wu Jialong.
Such a situation, he said, may be called “destructive forces” because the Chinese Communist Party has destroyed much of the infrastructure of the market economy, norms of behavior, and failure to follow the rules, as if returning to a “jungle society.
“Profit” comes from the fruits of risk-taking, not “exploitation”
Wu Jialong said that the Chinese Communist Party has no heart to really support private enterprises, only after the growth of private enterprises, the Party’s interference will begin to come in, and to provide land, bank loans, policy concessions and other benefits to enterprises, using political influence, so that enterprises accept the Communist Party’s presence, or state-owned enterprises in the shares, as long as the enterprise does not agree, the Communist Party will also intervene in the financial and administrative approval of many.
Talking about why the biggest problem emerged after the CCP’s involvement in private enterprises, Wu Jialong said that the growth of the market economy requires a class of “entrepreneurs” to promote, whose functions are different from those of bureaucrats, because entrepreneurs need to have the four-oriented functions of designing business models, organizing resources, promoting innovation, and taking risks, among which, the “profits” obtained by enterprises come from “Profits” come from the results of risk-taking, not from “exploitation”, which cannot be replaced by financial bureaucrats or state-run enterprises.
Wu further explains that, according to the Austrian Joseph Schumpeter’s interpretation of the word “profit”, “profit” is a reward for the entrepreneur’s risk taking, so the entrepreneur must be encouraged to take risks and innovate, while the Marxist capitalist argument holds that “profit is the result of exploitation”.
Wu Jialong emphasized that the function of entrepreneurs is different from that of state-run enterprises and bureaucracy, where the promotion of relevant personnel must depend on their superiors, and entrepreneurs who cannot successfully run an enterprise may suffer bankruptcy.
“Business model with Chinese characteristics” has come to an end
Wu Jialong said, at present, China pretends to be a market economy, but the reality is that it is a state-run enterprise, state-run business operation, such a “business model with Chinese characteristics”, in fact, has reached the end of the line, now the Chinese Communist Party if not to change such a Perception, behavior mode, the final may make the international community no longer contact with the Chinese Communist Party.
Wu Jialong said, at this Time, countries should think about how to put pressure on the CCP, because it is useless to give it incentives and benefits, but the CCP will think that this mode of operation is successful, “continue to draw the wrong focus (misunderstanding)”, and will be very confident that they can deal with the United States, and other capitalist countries. The only way to undermine the CCP’s confidence in this system is to “let it collapse”.
Taiwan will benefit from the decoupling of the world from the Chinese Communist Party
Talking about the future economic outlook of the world. Wu Jialong believes that the world is now in a transitional stage, countries around the world to adopt the capital withdrawal, production line transfer “decoupling”, such as the United States industries to transfer production lines, production lines have been withdrawn from mainland China, moved to Taiwan, Southeast Asia, or India and other countries. In other words, it was hoped that the Chinese Communist Party could integrate with international capital, but now it seems that such an idea has completely failed. Now, in turn, the innovative technologies, components or equipment developed by various countries will no longer be provided to China, but will be returned, and “the Chinese economy will let the Chinese Communist Party play by itself”.
“As the red supply chain gradually disintegrates, Taiwan will benefit.” Wu Jialong said, in this wave of transition, the global economy will be adjusted, in the past, the reason why Taiwan’s economy will be struggling, mainly because the red supply chain immediately up, Taiwan’s industry also from the original 8-year advantage, only 2, 3 years to support the decline, and now with the red supply chain began to decline, it is estimated that it will also drive Taiwan’s technology industry, stock market growth.
Recent Comments