China Boom CMS

<p>Well, my view is that it isn&rsquo;t going back to the planned economy. Happily, the market competition and opening to the world is maintained, although we&rsquo;re keeping an eye on whether or not China develops more protectionist policies. So far it&rsquo;s still pretty good. But what you see is that the fruits of the boom are monopolized by a class of people who have political power, political influence, and important economic roles. So, the distribution of the benefits in the 80s, especially with the household responsibility system, you just saw the benefits to the rural population were huge, lifting all those people out of poverty, and that&rsquo;s kind of slowed down. The benefits seem more monopolized by people, business people, who&rsquo;ve been able to cultivate ties with political officials at the local level, provincial level, central level. And, of course, many of those business people were originally officials. And then, officials themselves who serve on the boards of these things, they get all sorts of corrupt benefits from their symbiotic relationship with the private capitalists. And the state-owned enterprises, the hundred plus big state-owned enterprises, are very, very powerful. Many of those managers now are in the Central Committee, they&rsquo;re appointed by the Center. We see the Party still, even with companies that are listed on stock markets outside of China -- in Hong Kong, New York, London -- still appointing the leaders of those SOEs. We saw with the telecom companies, they just rotated the executives of the telecom companies. &nbsp;This is another interesting puzzle. If I weren&rsquo;t working on other things now, I think I&rsquo;d want to try to understand how, despite the fact that China has become a vibrant market economy, the Communist Party retains such a strong influence over the economy. It&rsquo;s kind of an interesting puzzle and I think it&rsquo;s the power of appointment that remains very strong very significant. In other words, if all these guys owed their jobs and their salaries and their bonuses and their corrupt earnings to some Party guys, who appoint them, that makes them very deferential, very loyal, they&rsquo;re not going to make any trouble.</p>