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Thread: China’s Biggest Banks Are Squeezed for Capital

  1. #1
    SiriuslyLong is offline
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    China’s Biggest Banks Are Squeezed for Capital

    ...the banks remain integral to the Chinese model of state-directed capitalism, where government-supported firms and projects enjoy preferential access to banks loans at what many analysts say are artificially low interest rates."

    Sound familiar? This is the democrats view of how government is supposed to work, but be reminded that the subject here is communist China.

  2. #2
    SiriuslyLong is offline
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    This is What State-Directed Capitalism Looks Like

    November 23rd, 2010 Zhao Lianhai was recently convicted in a Beijing court of attempting to use a “popular issue” to incite a mob and disrupt the social order.

    What did he do? Zhao’s son was one of 300,000 children that were sickened by chemically-tainted milk powder—his son suffers from kidney stones, other children urinated blood and at least six children died—and so he led a campaign for justice against the company responsible and proper compensation for resulting medical expenses. In China, there is no proper court system to bring civil charges against companies, and so publicly pressuring the central government (read: the Communist Party) is the only means of seeking restitution. And so he did.

    Susan Jakes writes:

    State-directed Capitalism..... That's what Obama and the left want.

  3. #3
    SiriuslyLong is offline
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    The Larger Struggle

    Published: June 14, 2010
    NY Times

    These days we are transfixed by the struggle between BP and the U.S. government. This is a familiar conflict — between a multinational company trying to make a profit and the government trying to regulate the company and hold it accountable.

    But this conflict is really a family squabble. It takes place amid a much larger conflict, and in this larger conflict both BP and the U.S. government are on the same team.

    The larger conflict began with the end of the cold war. That ideological dispute settled the argument over whether capitalism was the best economic system. But it did not settle the argument over whether democratic capitalism was the best political-social-economic system. Instead, it left the world divided into two general camps.

    On the one side are those who believe in democratic capitalism — ranging from the United States to Denmark to Japan. People in this camp generally believe that businesses are there to create wealth and raise living standards while governments are there to regulate when necessary and enforce a level playing field. Both government officials like President Obama and the private sector workers like the BP executives fall neatly into this camp.

    On the other side are those that reject democratic capitalism, believing it leads to chaos, bubbles, exploitations and crashes. Instead, they embrace state capitalism. People in this camp run Russia, China, Saudi Arabia, Iran, Venezuela and many other countries.

    Many scholars have begun to analyze state capitalism. One of the clearest and most comprehensive treatments is “The End of the Free Market” by Ian Bremmer.

    Bremmer points out that under state capitalism, authoritarian governments use markets “to create wealth that can be directed as political officials see fit.” The ultimate motive, he continues, “is not economic (maximizing growth) but political (maximizing the state’s power and the leadership’s chances of survival).” Under state capitalism, market enterprises exist to earn money to finance the ruling class.

    The contrast is clearest in the energy sector. In the democratic capitalist world we have oil companies, like Exxon Mobil, BP and Royal Dutch Shell, that make money for shareholders.

    In the state capitalist world there are government-run enterprises like Gazprom, Petrobras, Saudi Aramco, Petronas, Petróleos de Venezuela, China National Petroleum Corporation and the National Iranian Oil Company. These companies create wealth for the political cliques, and they, in turn, have the power of the state behind them

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