China After Mao: The Rise of a Superpower

by Frank Dikötter

95 of the top 100 private firms belong to current or former party members. Capitalism is about capital: money is an economic good subject to rules on rates of return and profit margins. But in China capital has remained a political good, distributed by state banks to enterprises controlled directly or indirectly by the state in pursuit of political goals. A market, moreover, is based predominantly on the exchange of goods between individuals. How can ownership of these goods be protected without an independent judicial system based on the separation of powers? For years, critics have decried while admirers have applauded the supposed ‘transition’ towards ‘capitalism’ in the People’s Republic. But if this book proves anything, it is that without political reform market reform cannot exist. The argument over whether trade can or should be ‘free’ misses the key point, namely that a market without the rule of law, backed up by an independent judicial system and a free and open press, is not much of a market at all. There is no economic freedom without political freedom. Politics determines the nature of economics, not the other way around.