Is China the New Crony Capitalist of the East?

For the Motion

Compiled By: Shweta Ahire Ashish Dadhich Krunal Bosamia 1

Flow of Presentation
Shweta Ahire - Introduction to China & its Economy - What is Capitalism & Crony Capitalism Ashish Dadhich - China from Core - Economy of China Krunal Bosamia - Crony Capitalism in China

Eastern Side
Russia China India South Korea North Korea Japan Burma Indonesia Mongolia

China The Red Dragon

Formal Name Peoples Republic of China

Capital Beijing
Head of State President Hu Jintao

Land Size Third largest country after Russia & Canada

Population 1.33 billion (Census 2010) Currency Renminbi (Yuan) Political Parties The Communist Party of China (CPC)
Source: www.cia.gov
4

Highlight on Economy of China

GDP (PPP) - $11.316 trillion (2011 est.) Per Capita (PPP) - $8,394 (2011 est.)

HDI 0.687 (2011)

Labor Force 815.3 million (2010 est.)

Inflation Rate 4.2% (Nov. 2011)

Source: www.cia.gov

What is Capitalism ?
Economic System Characterized by the following:
private property price mechanism freedom of enterprise competition

What is Crony Capitalism ?

based on the close relationship between businessmen and the state.

the success of business is dependent on the favoritism

China from Core

It doesn't matter whether a cat is white or black, as long as it catches mice. Deng Xiaoping

A single party
Feudal autocracy & a weak tradition of democratic legality Freedom of Speech

Judicial System

How is China successful

Do you think only Capitalism is leading them way to World Economy ?

If yes, then United States of America

Some Facts about China

China after 1980 has grew tremendously Worlds Second Largest Economy GDP of almost double digit Largest Exporter of the World

Taking power from West to East

10

Economy of China
GDP composition by Sector (2010 est.) Agriculture 10.2% Industry 46.9% Services 43% Exports - $1.581 trillion (2010 est.) Number of Enterprises - State-owned enterprises : 1,92,000 - Collective enterprises : 4,56,000 - Private enterprises : 19,80,000
Cont..

Source: www.cia.gov, www.china.org.cn

11

..Cont

Top Companies in Each Sector

Top 500 Chinese Companies were more profitable than Worlds Top 500
Source: www.china.org.cn
12

In China why almost every one wants to be the member of Chinas Communist Party (CCP) ?

13

Crony Capitalism in China

Flow Chart explaining how China is governed

National Peoples Congress is the most powerful organ of the state

Source: www.bbc.co.uk
14

 All the companies are SOEs

Source: www.chinadaily.com.cn

15

Princeling in China
Name Wang Jun Jiang Mianheng Zhu Yanlai Li Xiaopeng Company Citic Group China Unicom Chief Executive at Bank of China Huaneng Power International Inc. China Power International Development Nuctech Unihub Global Networks,

Source: www.ntdtv.com.cn
Relation Son of Vice Chairman Son of General Secretary CCP Daughter of 5th Premier of PRC Son of Chairman Standing Committee NPC Daughter of Chairman-Standing Committee NPC Chairman of CPC Son of Vice Premier of PRC
16

Li Xiaolin

Hu Haifeng Wei Yunsong

..Cont

Lucrative sectors of the economy are reserved 2/3 of formal finance is reserved for SOEs

2/3 fixed assets in country is owned by 150 SOEs

1/2 of the revenue is contributed by SOES

2/3 of the Equity in Publicly listed companies

Source: www.forbes.com

17

Cronyism
List of Fortune 400 China

SOEs increase their revenue by 20% to 30%

No. of Chinese billionaires increased from 128 to 146

80 to 100 million still on waiting list

Over 90% of 1000 richest people are official or members of CCP

Source: www.forbes.com

Cont..

18

 Thank you.

Strategy without tactics is the slowest route to victory. Tactics without strategy is the noise before defeat. - Sun Tzu

19