Tag Archives: Communist

Chinese Communism and America’s Free Traitors

Some thoughts on how some misguided libertarians have been lured into supporting the enemy of everything they claim to cherish. Reposted from Strike the Root 


Say it is a dictatorship, but we want to be associated with it. Say it is worthwhile being associated with the devil, as Churchill said, in order to defeat another evil which is Hitler. There might be some good argument made for that. But why pretend that Russia was not what it was?
~ Ayn Rand, testimony to HUAC, 1947


America has been lulled into the proud and pleasant delusion that Ronald Regan defeated communism a generation ago and that with the fall of the Soviet Union, our nation faces no external threat more serious than cave dwelling extremists with a homemade WMD. The age of nation-state geopolitics and the fear of strategic nuclear warfare seem buried, as the entire world embraces “free trade.” Yet, somehow, while we were celebrating the fall of the Berlin Wall, we missed those tanks emblazoned with red stars rolling over democracy advocates in Tiananmen Square.


Communism remains alive and well in China, though the dubious looks I often get from those I warn about it make me feel like Harry Potter yelling, “Valdemort is back!” I know my admonitions sound shrilly discordant against the chorus of media pundits praising the efficiency of Chinese “state capitalism” and the politicians who daily prophesize Beijing’s “peaceful rise.”


However, if you harbor any doubts about the nature of Beijing’s dictatorship, your must read “5 Myths about the Chinese Communist Party (CCP)”, an excellent article in Foreign Policy by Richard McGregor. The former Beijing bureau chief for the Financial Times begins:
If Vladimir Lenin were reincarnated in 21st-century Beijing and managed to avert his eyes from the city’s glittering skyscrapers and conspicuous consumption, he would instantly recognize in the ruling Chinese Communist Party a replica of the system he designed nearly a century ago for the victors of the Bolshevik Revolution.


Or just take Premier Wen Jaibao’s word for it when he says, “We must make best use of the socialist system’s advantages, which enable us to make decisions efficiently, organize effectively, and concentrate resources to accomplish large undertakings.” For Wen, market forces are just another weapon in the Communist Party’s arsenal of economic policies, a powerful tool when conducive to Party goals and one to be repressed when deemed inconvenient or dangerous.


Most Western writers, corporate executives, and politicians (including the ubiquitous Mr. Kissinger) experience China through carefully managed meetings in fine offices, restaurants, and nightclubs in modern Shanghai and Beijing. From those venues, it’s pretty hard to imagine that the Hammer and Sickle still rules with an iron fist. As a Chinese dissident friend of mine explained, “There are two views of China: the one where the CCP has tortured you with an electric baton because you support freedom and the other one.”


You can find the real China if you look. Visiting a Chengdu College last year, I was greeted by the Communist Party Secretary who runs a parallel administration dedicated to ensuring the political correctness of faculty and the students. Traveling in Yunnan with a charity, I dined at a fine restaurant while Party members who run healthcare explained, between many rounds of drinks, that China has no money to help kids who need heart surgery. That’s progressive thinking from a socialist dictatorship that has accumulated trillions in foreign reserves while growing their military and security apparatus faster than GDP.


Big Chinese companies also have political minders – picture Tim Curry’s role in “The Hunt for Red October” – while loyal Party members run the “joint partnerships” that multinationals like GM must use to access Chinese markets. No surprise that Cadillac sponsors a film called “Birth of a Party” (how ironically fitting) praising the Chinese Communist Party’s 90th anniversary.


With China’s leaders fully committed to Marx and Mao, we have to wonder what’s with that “vibrant market economy.” It is a lot less of a market than most Americans think. When Hu Jintao says that the Chinese Communist Party “loves capitalism,” file it with: “China’s currency is fairly priced” and “Tibetans love China.”


Despite the horde of small Chinese firms feeding, remora-like, off slain Western economies, real financial power remains in the hands of huge State-Owned Enterprises (SOEs). The top 20 firms in China are SOEs, as are all the big banks, the major energy and resource firms, the telecommunications firms, the big aircraft, auto, and ship builders, and even China’s largest retailer.


Further, though the stock of many of these firms is publicly traded– and probably in your 401(k) – the Central Organizing Committee of the Communist Party appoints the CEOs and runs the show. This control extends to many seemingly private firms since everyone who is anyone in China is either a member of the Party or beholden to it. As Richard McGregor explains in The Party, “The idea that the boards really run companies is basically as credible as the constitutional guarantee of free speech and religious freedom in China. It does not happen in reality.” Worse, the state sector is growing in what’s called “Guo Jin, Min Tui” (“The State Advances and the People Retreat”).


Sadly many of America’s strongest defenders of freedom have come to worship a logical Möbius Strip that twists the support of economic liberty into a rationale for funding totalitarians. Libertarian media and think tanks aggressively defend the “right” of multinationals to nourish China’s dictatorship via “free trade” no matter how much contempt Beijing shows for human rights, how much damage their mercantilism does to our economy, and how obviously they prepare to attack Asian democracies and gear up for eventual conflict with America.


While profiting off the back of labor coerced by others has been a successful business tactic since “free trade” England ran its mills on the cotton of American slavery, conducting business with criminals is no ethical “right.” Funneling commerce and capital to an avowed enemy of our most cherished principles is more like being an accessory to crime.


Ironically, the mercantilist trade of 19th Century America subsequently crushed both England’s mills and its economy. Now as “free trade” America meets a similar fate, the freedom-loving Cato Institute celebrates the communist victory by proclaiming “the world should rejoice in China’s becoming the world’s largest exporter.”


As Lenin was said to have remarked, “The capitalist will sell us the rope with which we will hang them.”


Greg Autry is co-author of Death by China and serves as Senior Economist with the American Jobs Alliance

Still Commies After All These Years

It being International Worker’s Day and all it seemed like a good time to review the anachronism that is the Chinese Communist Party. In the Western World, particularly in board rooms, the halls of academia, and shallow business bestsellers it has become popular to repeat the favorite CCP propaganda line that Deng Xiaoping sent China on an irreversible path toward a modern, free market economy. Many Americans who’ve toured Shanghai and Beijing think they are seeing an open economy with a vibrantly growing private sector. Of course, like a lot of things that come out of China these days, the facade of Capitalism quickly falls apart upon closer inspection. This isn’t real Chinese capitalism like you’d see in Taiwan or Hong Kong.

(photo – Greg Autry, 2010) 

Some Facts:

The State Sector Accounts about HALF of China’s GDP – According to most economic analysis State Owned Enterprises are responsible for between 45-50% of China’s economy. Consider this recent testimony to the US China Commission by Andrew Szamosszegi

Far from privatizing, the State Owned portion of the economy has been INCREASING in recent years as corrupt officials use their inside track with China’s huge State Owned Banks to corner all the ready capital. Moody’s analytics calls this process a “two-speed economy.”

The size of State Owned Companies is increasing far faster than private firms as the government sheds its smaller, non-profitable enterprises and concentrates resources in heavy industrialized firms. These big SOEs also attract $billions in U.S. joint venture capital from the likes of General Electric and General Motors. Meanwhile the size of private firms has hardly progressed at all. On average SOEs are 13x bigger than China’s nominally private firms.

China’s response to the economic crisis was to dump even more money into the state sector driving a process the Chinese call “Guo Jin, Min Tui” (国进民退) or “The State Advances and the People Retreat.

Maoism and old fashioned Marxist-Leninism has been enjoying a renaissance in China, as evidenced by the spectacular rise of hardline communism advocate Bo XiLai to a position where he threatened the very security of the state. Even members of the intellectual elite have embrace the “New Left.”

In China it has always been hard to draw a firm line between an SOE and private firm or even tell how involved the Party controlled military is in a business. Huawei being a notorious example of that.


Finally, let’s look at the reality of what are some of the good, ‘ol fashioned Communist firms:

All of China’s Big banks

All Important Resource Companies

All Big Military Suppliers

China’s Biggest Airlines

China’s Biggest Retailer  – yes, ironically even China’s biggest retailer isn’t WalMart, but a State Owned Chain who has used its connections to make life hell for the American firm and other Western competitors.


This List Doesn’t Lie
When some buddy of yours cracks “China’s economy is more open than America’s” or the next time you get stuck in a plane seat next to a meathead in a suit  who just bought some blather by Thomas Friedman in the airport “book store” and starts praising the “new”, “modernizing”, “liberalizing”, and “efficient” Chinese economy, hand that fool this list and ask them “Is this what a vibrant Capitalist Economy looks like to you?”


Top 20 Chinese Firms (according to Fortune Global 500) :

1. Sinopec (CNOCC) – State Owned oil company

2. China National Petroleum Corporation (PetroChina) – State Owned oil company

3. State Grid Corporation – State Owned utility

4. Industrial and Commercial Bank of China – State Owned bank

5. China Mobile – State Owned telecom provider

6. China Railway Group – State Owned railroad

7. China Railway Construction – State Owned railroad builder

8. China Construction Bank – State Owned bank

9. China Life Insurance – State Owned issuance (Nationalized, the “real” China Life is in Taipei)

7. Bank of China – State Owned bank

10. Agricultural Bank of China – State Owned bank

11. Bank of China – State Owned bank

12. Dongfeng Motor[1] – State Owned car company

13. China State Construction Engineering – State Owned construction firm

14. China Southern Power Grid – State Owned utility

15. Shanghai Automotive – State Owned Car company

16. China National Offshore Oil – State Owned colonial style oil exploration firm

17. Sinochem Group – State Owned Chemical company

18. China FAW Group – State Owned truck and bus firm

19. China Communications Construction – State Owned telecom construction

20. Baosteel – State Owned steel founder

It is often tricky to figure out that a firm like China Life, China Telecom, or Shanghai Auto is State Owned because the Chinese run a scam they call an “IPO” and sell powerless, minority shares in these opaque state monstrosities to naive Western investors and unscrupulous mutual fund managers. If you’ve got some sort of “Global Growth Fund” or “Asian Opportunity” B.S. in your 401k, you’re probably loaded with this crap. The fact is that these are nothing like public companies. Their CEO’s are appointed by the Central Organization Department of the Chinese Communist Party, not by the token board of directors and your shares have exactly zero real voting power. When the CCP decides your shares are worthless, they will be. Check out “The Party” by Richard McGregor for the whole horror show on this.

If you go to the Fortune site, you can just click on each firm in the list and look down to see if its ownership is “50% or more government owned.”

Even most large nominally “private” firms are headed by a Party member or even the princeling grandkid of some old Commie who slogged through the Long March with Mao and his harem. They all work together in one of the world’s most closed good ‘ol boys club behind their great wall of Guanxi (关系). By the way, don’t let any Chinese tell you that word means “friendship.” The literal translation is more like: “to block a connection” and in the real world of Chinese business Guanxi most often used to define a social network setup to screw outsiders;  and that’s exactly what the Communist Party’s Guanxi system has been doing to the West for a generation.

While the luxury loving leaders of the “People’s Republic” do trample all the well meaning, albeit naive, qualities of Marxism – like wealth redistribution and social equality – the China body politic remains pure Leninist, with the usual back room dog fights, purges, censorship, propaganda and a brutally repressive police state.

Bottom line: When it says “Communist” right on the label, it probably is.


Greg Autry serves Senior Economist with the American Jobs Alliance and is co-author (with Peter Navarro) of Death by China: Confronting the Dragon – a Global Call to Action. He blogs regularly with Navarro on the Huffington Post.


[1] Note: Noble Group of Hong Kong omitted since it is not a PRC firm, but a legacy Hong Kong company.