This is a translation of 중국의 사회성격과 노동계급 Ⅱ-3. 중국의 지배적인 국가소유 체제 After AI’s translation, we proofread it. There might be errors. All comments are welcome.
China's birth as a workers’ state/ “New Democracy”: Chinese Class Cooperation/ Class collaboration of Bureaucracy and “socialism in one country”/ Stalin's Check on China: Seeds of Sino-Soviet Conflict/ Fantasy of “Class Coexistence”/ Political consciousness of the United States and the Kuomintang/ Realization of ‘Permanent revolution’/ Outcome of the Revolution/ Three Ways to Improve Productivity/ 1) The First Way to Promote Productivity: Helping Developed Countries by Revolution/ Productive force and Permanent Revolution/ Failing of Follow-up Revolution in Advanced Capitalist Countries/ Sino-Soviet Conflict and Breakdown of Economic Cooperation/ Mao’s Evaluation of the Sino-Soviet Conflict/ Isolated China/ 2) The Second Way to Promote Productivity: ‘Great Leap Forward Movement’/ Catastrophe, Mao's downfall and Right Turn/ Policies of Liu Shaoqi and Deng Xiaoping Leadership/ The Cultural Revolution of Mao Zedong Faction/ Deified Authority/ China in a state of panic: Background of the ‘Cultural Revolution’/ Changes in the ‘Three Kingdoms’ relationship/ China Helping the U.S.-made Blockade of the Soviet Union/ Mao's Death and the Power of the Pragmatic Faction/ Road to ‘Reform and Openness’
II. Changes in Chinese society as a result of 'reform and opening up': China's social character as a deformed worker state has not changed
3. China’s Property Relationship: Still Dominant State Ownership System
1) Nationalization of Key Industries and its Proportion
‘State Ownership Dominates the Chinese Economy’/ The Growth of State-Owned Enterprises/ Percentage of state-owned enterprises in the top 500/100/
2) Nationalization of the Financial sector such as Bank
State-Owned Banks of China/ The Purpose and Operation of the Banks of China/ Securities, Insurance and Other Financial Sector
3) Foreign Investment
China's Foreign Investment/ Uncomfortable Imperialism/ List of Imperialist Nitpicking and the Left Advocates: ‘Debt Trap Theory’/ China’s Motivation for Overseas Investment: ‘One Belt, One Road’/ The Difference to Imperialist Aggression/ African and Latin American Infrastructure Construction/ The Formation of China-Friendly Public Opinion/ The Myth of the ‘Chinese Debt Trap’
4) International Comparison of Public Enterprises
Summary and Conclusion of II-3
The delay of the world revolution and low levels of productivity plagued modern China, which was founded by 1949 revolution. For decades, China has experienced intense pains. As a result, 'capitalist concessions' were forced.
China's productivity has grown significantly due to the capitalist concession policy called "Reform and Opening-up." As the widespread poverty was almost resolved, the living standard of the working people improved remarkably. However, during that period, pro-capitalist forces in China have grown significantly, including "emerging capitalists, pro-capitalist factions in bureaucrats, a large number of people who tasted the sweetness of capitalism, and imperialist finance capital that penetrated China." As a result, The charater of Chinese worker's state was greatly eroded in quantity. This time, society is leaning to the right and in danger of a capitalist counter-revolution.
However, the social character of modern China, formed by the Russian Revolution in 1917 and the Chinese Revolution in 1949, has not yet changed qualitatively. China is still a state-owned political and economic system.
We examine the point through 'national core industries, finance system, overseas investment, and comparison of public enterprises by country'.
1) Nationalization of Key Industries and its Proportion
China’s key industries such as ‘electricity, communication, road, railway, port, construction and transportation,’ strategic industries such as ‘oil, aerospace and military,’ and financial industries such as ‘bank, securities, and insurance’ are all owned by the state.
“Through reforms over the past 30 years, state-owned enterprises have experienced numerous changes. However, state-owned companies have enjoyed many privileges by taking advantage of their special status in the Chinese economy, thereby forming a monopoly status. In particular, state-owned companies have used their existing superior status to operate exclusively in industries that occupy important positions in the national economy, such as oil, natural gas, telecommunications, electricity, tobacco, coal, aviation, finance, and insurance. Currently, most of the major companies in China's monopoly industry are central state-owned companies, and the combination of natural and administrative monopolies is hindering the technological progress and innovation of the industry.”—Contents and limitations of reform of state-owned enterprises in China 중국 국유기업 개혁의 내용과 그 한계점, International Labor Brief, March 2012
‘State Ownership Dominates the Chinese Economy’
It is indisputable that China's core industry is state-owned. However, the evaluation of the proportion of state ownership varies slightly depending on the researcher's standard and evaluation year. However, almost all studies acknowledge that "state ownership dominates the Chinese economy," with only slightly different specific figures.
Korea Institute of Taxation and Finance 2010,
“Total operating income of state-owned enterprises in 2009 was 24.2 trillion yuan, up 5.5% year-on-year, and the proportion to total GDP was about 71.1%”—Chinese state-owned enterprise reform research report 중국 국유기업 개혁 연구 보고서, Korea Tax and Finance, June 2010
Bank of Korea in 2014,
“In 2013, the total sales of Chinese state-owned companies were about 47 trillion yuan, reaching 82.1 percent of GDP (56.6 trillion yuan).…Most large companies, including 82 state-owned companies in the world's top 500 companies, are state-owned companies”—Status and Prospects of China’s State-owned Enterprise Reform 중국의 국유기업 개혁 현황 및 전망, Bank of Korea, November 2014
Bank of Korea in 2017,
“China’s state-owned enterprises play a pivotal role in major industries with land and financial support: total assets (131.7 trillion yuan) and total sales (45.9 trillion yuan) of state-owned enterprises recorded 177.0% and 61.7% of GDP, respectively"—China's economic structure and institutional changes and constraints 중국경제 구조 및 제도변화와 제약요인, Bank of Korea, August 2017
JoongAng Newspaper 2019,
“The GDP of socialist China should be viewed differently from that of the West. In China, state-owned companies account for 63% of GDP. Western companies aim to maximize profits, but Chinese state-owned companies aim not to maximize profits but to expand the welfare of the people.”—Why is China calm despite the lowest growth in 27 years, 중앙일보, November 27, 2019
As such, according to research institutes and research years, the proportion of GDP in sales of Chinese state-owned companies is at least 61.7% (the Bank of Korea 2017) to a maximum of 82.1% (the Bank of Korea 2014). This shows that China can never be put in the basket of capitalism.
Typical capitalist countries, the United States and the United Kingdom, are in very contrast to this. According to the Bank of Korea above in 2017, the total assets and total sales of Chinese state-owned companies are 177% and 61.7% of GDP, respectively. However, the total assets of US public corporations are 2% of GDP, and the total sales of the UK are 1.56% of GDP (Korea Tax Research Institute, May 2010).
The Growth of State-Owned Enterprises
With the dramatic growth of the Chinese economy, the size of state-owned enterprises has also grown even more. “Since the launch of the National Self-Defense Commission in 2003, the total assets of state-owned companies in 2017 have doubled to 160.5 trillion yuan (about 2.73 won) over the past five years (Understanding of reform of state-owned companies in China 중국 국유기업 개혁에 대한 이해, KB Financial Group Management Research Institute, April 2018).”
Total assets and the proportion of fiscal income of state-owned enterprises
Percentage of state-owned enterprises in the top 500/100
When abbreviated to the top 500 companies, the nature of state ownership is more clearly expressed.
“The number of state-owned and government-invested companies out of China’s top 500 companies was 331, accounting for 66 percent of the total number of companies, and operating income was 22.93 trillion yuan, accounting for 85 percent of the total.”—Contents and limitations of reform of state-owned enterprises in China 중국 국유기업 개혁의 내용과 그 한계점, International Labor Brief, March 2012
Going to the top 100 companies, it becomes dramatically clearer. State-owned enterprises account for nearly 90 percent of sales.