Step Change from China

One world two ways


Wishing you a great Xmas


This piece at the end was released this morning. It is, in my opinion, ground breaking.


We can see that China believes in a managed market economy, finding the excesses of a free market too costly to those nations who practice it. We can see the financial crisis of 2008 as an example or the tech crash of 2001 or the Asian financial crisis of 1998/9 as examples of that.


Some might call the Chinese approach managed capitalism but for one feature – a key feature. Whilst it gives the development of the economy the primary role, the fair distribution of the wealth that is created is also primary.


Business does not pay for all the benefits of educating the nation, the health the welfare and the stability of society. The people pay in their taxes. It is clear from the reaction in the West since 2008 to austerity that this is felt to rest too heavily on the poor, and the wealthy have made too much progress.


Managing the economy requires great skills. The kind of skills demonstrated by Chinese for the last 40 years. They can manage the economy and though we may not like the sound of Party Committees it is from those people who have done the right moves for 40 years.


They establish these committees to avoid walking off the farm.


If the leaders of the companies heed the managers they can become wealthy and successful and enjoy a relatively free and privileged life.


But it is also true that the soe’s ( State owned Enterprises) are not the primary source of new employment or innovation – both key to a stable and thriving China. If the soe’s were left to lead innovation, we might see the problems of the Soviet Union emerging.


So China is pressing the button now for sme’s to go ahead – Small and Medium sized Enterprises. This story is exciting for the young and the entrepreneurial. For Chinese and those from abroad.


The SOE’s are on a different journey one which will find their dividends going to help the vast majority of the people of China.


China is not split between those who believe in private capital and growth on the one hand, and those who believe in redistribution on the other hand.


Their competing presses are held within the Party and resolved through conversation. They do not form the basis of separate attempts to achieve power. They align in a search for a greater, and fairer, economy in China in the long term.


We may learn from their approach. We may not learn their way of Party managed democracy, but we may learn the road to balance is important. Some of the Northern Europe nations walked this path before China.


Wishing you a pleasant Xmas and a Happy New Year





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