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Another way the CPC retains public ownership is through the banking system. The People’s Bank of China (PBC) highlights one of the most important ways in which the CPC uses the market system to control private capital and subordinate it to socialism. Far from functioning as a capitalist national bank, which prioritizes facilitating the accumulation of capital by the bourgeoisie, “this system frustrates private borrowers.”<ref name=":10" /> <blockquote>"the state exercises control over most of the rest of the economy through the financial system, especially the banks. By the end of 2008, outstanding loans amounted to almost $5 trillion, and annual loan growth was almost 19 percent and accelerating; lending, in other words, is probably China’s principal economic force. The Chinese state owns all the large financial institutions, the People’s Bank of China assigns them loan quotas every year, and lending is directed according to the state’s priorities."</blockquote>The CPC floods the market with public bonds, which has a crowding-out effect on private corporate bonds that firms use to raise independent capital. This also renders state bonds far more valuable than private bonds and the credit deterioration of non-state bonds is worse than state bonds. State Owned Enterprises receive much more preferential treatment from the government due to this model of flooding state bonds and far more valuable bonds into the market, with comparable private bonds declining in terms of value and being unable to compete. In 2018, this is clearly demonstrated after the implementation of more regulations on the shadow banking market, leading to investors flocking towards much more valuable State bonds over private ones. This inevitably creates a feed back look where state bonds have a "premium" and are objectively more valuable than private ones.<ref>[https://en.saif.sjtu.edu.cn/junpan/Credit.pdf The SOE Premium and Government Support in China’s Credit Marke]t - Zhe Geng and Jun Pan - November 29, 2022</ref> By harnessing supply and demand in the bond market, the PBC prevents private firms, domestic or foreign, from accumulating capital independently of socialist management.  
Another way the CPC retains public ownership is through the banking system. The People’s Bank of China (PBC) highlights one of the most important ways in which the CPC uses the market system to control private capital and subordinate it to socialism. Far from functioning as a capitalist national bank, which prioritizes facilitating the accumulation of capital by the bourgeoisie, “this system frustrates private borrowers.”<ref name=":10" /> <blockquote>"the state exercises control over most of the rest of the economy through the financial system, especially the banks. By the end of 2008, outstanding loans amounted to almost $5 trillion, and annual loan growth was almost 19 percent and accelerating; lending, in other words, is probably China’s principal economic force. The Chinese state owns all the large financial institutions, the People’s Bank of China assigns them loan quotas every year, and lending is directed according to the state’s priorities."</blockquote>The CPC floods the market with public bonds, which has a crowding-out effect on private corporate bonds that firms use to raise independent capital. This also renders state bonds far more valuable than private bonds and the credit deterioration of non-state bonds is worse than state bonds. State Owned Enterprises receive much more preferential treatment from the government due to this model of flooding state bonds and far more valuable bonds into the market, with comparable private bonds declining in terms of value and being unable to compete. In 2018, this is clearly demonstrated after the implementation of more regulations on the shadow banking market, leading to investors flocking towards much more valuable State bonds over private ones. This inevitably creates a feed back look where state bonds have a "premium" and are objectively more valuable than private ones.<ref>[https://en.saif.sjtu.edu.cn/junpan/Credit.pdf The SOE Premium and Government Support in China’s Credit Marke]t - Zhe Geng and Jun Pan - November 29, 2022</ref> By harnessing supply and demand in the bond market, the PBC prevents private firms, domestic or foreign, from accumulating capital independently of socialist management.  


Although modern China has an expansive market system, the CPC uses the market to both secure and advance socialism. Rather than privatizing major industries, as is often alleged by detractors, the state maintains a vibrant system of socialist public ownership that prevents the rise of an independent bourgeoisie.
Although modern China has an expansive market system, the CPC uses the market to both secure and advance socialism. Rather than privatizing major industries, as is often alleged by detractors, the state maintains a vibrant system of socialist public ownership that prevents the rise of an independent bourgeoisie.
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