tag:blogger.com,1999:blog-13974296645733775.post3820896157403012449..comments2023-08-19T12:02:43.740-04:00Comments on An Immigrant's Evolving Perspective: Truth and Steel in ChinaXujunhttp://www.blogger.com/profile/05534267282303815433noreply@blogger.comBlogger3125tag:blogger.com,1999:blog-13974296645733775.post-20168838896616837252009-07-31T01:20:18.560-04:002009-07-31T01:20:18.560-04:00"The institutional cause of China's crony..."The institutional cause of China's crony capitalism is the lack of checks on power. As such, political reform is more and more urgently called for. Without political reform, the great achievements of China's economic reform might one day be destroyed by social upheavals caused by wealth polarization."<br /><br />And what is the institutional cause of crony capitalism in the U.S. that has led to the collapse of the financial system and economy, and which will lead to huge tax bills for American taxpayers going forward? Is political reform also called for? What kind of reform will prevent lobbyists and special interests from protecting their tax breaks and their industry exemptions?<br /><br />My point is that if a 2 party democratic system, free media, rule of law etc. does not prevent crony capitalism from happening in the US, why should polital reform in China prevent crony capitalism there?<br /><br />Regarding wealth disparity, $3m RMB for a GM of a steel company is less than US$400,000. This is small change compared to the tens of millions that U.S. CEO's make. Have you considered the income gap between American CEO's and ordinary workers? This is much higher than at most Chinese companies, where outrageous salaries for CEOs are not widespread.<br /><br />The real problem in China is that there are too many workers, resulting in depressed wages. <br /><br />Would privatization help? Well for the workers that remain, yes. To become "modern and efficient", privatized SOE's need to lay off poorly producing workers, retain a smaller more productive workforce, pay higher wages to both workers and managers, and earn a higher return to capital for the investors. <br /><br />This is somewhat different from how it is done in developed countries, where many manufacturing businesses will have reached the limit of efficiency with existing workers (diminishing returns). So instead, they will close down the factory, lay off all the workers, pay the hatchet man managers very well to fire people, and move the factory production to lower cost environments, like China, giving tax breaks for all the losses to the investors. <br /><br />Our economic and political system is made to favor those with capital to invest.<br /><br />State owned enterprises, while inefficient from a use of capital standpoint, are clearly preferred by some workers, as they get job security.<br /><br />What is a better "social good" - job security for what may be inefficient workers (as under the SOE system), or better return on capital (whereby the investors will reward more productive workers and managers with higher salaries?) If investors earn $50 million from their investment, is not paying $400k to the GM who manages the enterprise the least they can do? Should they pay the GM less? <br /><br />Article 14 of Charter '08 calls for privatization of all state owned enterprises. cui bono?perspectiveherenoreply@blogger.comtag:blogger.com,1999:blog-13974296645733775.post-61514903034825016182009-07-29T13:51:36.878-04:002009-07-29T13:51:36.878-04:00Connection between money and power, seriously, is ...Connection between money and power, seriously, is there any place that can actually avoid that? <br /><br />No policy is implemented overnight in China, as you should know. If this policy can achieve its goal: dampen the escalation of netizen outrage, then it is a great success.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-13974296645733775.post-15574504033263874932009-07-29T11:00:57.185-04:002009-07-29T11:00:57.185-04:00Interesting to find such a perspective, Xujun. I t...Interesting to find such a perspective, Xujun. I think there is far more to be learned about our world through reports like this rather than relying on the television talking heads.Anonymoushttps://www.blogger.com/profile/04513058592327921546noreply@blogger.com