Economist Book Review: China’s Crony Capitalism

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We have already mentioned Professor Pei’s new book China’s Crony Capitalism: The Dynamics of Regime Decay, but here’s a little more on it from The Economist.

China is the Ultimate Crony Capitalist State.

(From The Economist)

China has never had a formal privatisation programme. Instead, as Minxin Pei, a professor of government at Claremont McKenna College in California, writes in “China’s Crony Capitalism”, decentralising the rights of control over state property without clarifying the rights of ownership gave those who rule “maximum advantage to extract wealth from society”. Rights of control have been separated from rights of ownership in China—and where ownership is uncertain, control is key.

Mr Pei’s book is quietly devastating. In sober, restrained language, he exposes the full gravity of corruption in China. Presenting a wealth of evidence, he shows that this is not the unfortunate by-product of rapid economic growth but the result of strategic choices by the party. With clinical precision, Mr Pei explains how corruption operates at every level, perverting each branch of the party-state and subverting the political authority of the regime. The party cannot mitigate, let alone eradicate, “crony capitalism” because, since 1989, it has been “the very foundations of the regime’s monopoly of power”, the author argues. The conclusion, he believes, is that far from saving the regime, President Xi Jinping’s anti-corruption drive may accelerate its demise by creating divisions within the ruling elite even as it reinforces strong popular resentment of corruption.

We have not read Pei’s book yet, but we look forward to it.

Click here for the article.