Find out why China is the new crony capitalist of East

1. CHINA THE NEW CRONY
CAPITALIST OF THE EAST
By- Abhishek
Banswar

2. EASTERN SIDE
–
 CHINA
 MONGOLIA
 INDIA
 NEPAL
 INDIA
 PAKISTAN
 KAZAKISTAN
 JAPAN
 RUSIA
 BURMA

3. CHINA -THE RED DRAGON
 Formal Name- People’s republic of china
 Capital – Beijing
 Head of state – President Xi Jinping
 Land size – Third Largest country after Russia and Canada
 Population – 1.35 billion (world population clock, Dec. 31,2012)
(19.08 % of world population)
 Currency – Renminbi (Yuan)
 Political parties – The Communist Party of China (CPC)

4. HIGHLIGHTS ON ECONOMY
OF CHINA
 GDP = $8,227,102,629,831 (8.22 trillion ,world bank,2012)
GDP growth rate 7.8 % (2012)
 Per capita Income - $8,394 (2011 est.)
 HDI – 0.687 (2011)
 Labor Force – 815.3 million (2010 est)
 Inflation Rate – 4.2 % (nov, 2011)

5. WHAT IS CAPITALISM ?
An economic system based on a free
market, open competition, profit motive
and private ownership of the means of
production. Capitalism encourages private
investment and business, compared to a
government-controlled economy. Investors
in these private companies (i.e.
shareholders) also own the firms and are
known as capitalists.

6. WHAT IS CRONY CAPITALISM ?
A description of capitalist society as
being based on the close relationships
between businessmen and the state.
Instead of success being determined by a
free market and the rule of law, the
success of a business is dependent on the
favoritism that is shown to it by the
ruling government in the form of tax
breaks, government grants and other
incentives.

7. CHINA FROM
CORE
 “It doesn’t matter whether a cat is white or black , as
long as it catches mice.”
- Deng Xiaoping
(“chief architect” of the Chinese economic reforms)
 A single party
 A Feudal autocracy & a weak tradition of democratic
legality.
 Freedom of speech.
 Judicial System.

8. SOME FACTS ABOUT CHINA
 China after 1980 has grew
tremendously
 World’s second largest Economy.
 GDP of almost double digit.
 Largest Exporter of the world
 Taking power from West to East

9. ECONOMY OF CHINA

GDP-Composition by sector (2012 est.)
Agriculture-10.2%
industry-46.95%
Services-43%

Numbers of Enterprises
State-owned enterprises : 1,92,000
Collective enterprises
Private Enterprises
: 4,56,000
: 19,80.000
(Source:www.china.org.cn)

10.  Exports- $1827.66 Hundred Million (may,2013)

11. TOP 10 CHINESE COMPANIES

12.  Top 500 Chinese companies were more than world’s Top 500

13. HOW CHINA IS GOVERNED
 National People’s Congress is the most powerful organ of

14. “PRINCELING” IN CHINA
NAME
COMPANY
RELATION
Wang Jun
Citic Group
Son of Vice Chairman
Jiang Mianheng
China Unicom
Son of General Secretary
CCP
Zhu Yanlai
Chief Executive at
Bank of China
Daughter of 5th
Premier of PRC
Li Xiaopeng
Huaneng Power
International Inc.
Son of Chairman-Standing
Commettee NPC
Li Xiaolin
China Power International
Development
Daughter Of ChairmanStanding Committee NPC
Hu haifeng
Nuctech
Chairman of CPC
Wei Yunsong
Unihub Glibal Networks
Son of Vice Premier of
PRC

15. CRONYISM
 Lucrative sectors of the economy are reserved.
 2/3 of formal finance is reserved for State-owned Enterprises
(SOE).
 2/3 fixed assets in country is owned by 150 SOE’s
 1/2 of the revenue is contributed by SOE’s.
 2/3 of the Equity in publicity listed companies.
 SOE’s increase their revenue by 20%-30%.
 NO. of Chinese billonaries increased from 128-146

16. Cont.
 80-100 million still on waiting list.
 Over 90%-1000 richest people are official or members of CCP(Chinese Communist Party).

17. WHAT WORLD SAYS  About 90% of China's billionaires are the children
of high-ranking government officials, says the
Wall Street Journal.
Almost all of China’s richest people have
made their money in state-dominated sectors
such as property and construction, resources,
heavy industries and telecommunications.
 A rarely noted fact is that 80 percent of the
poverty reduction took place during the first
10 years of reform from 1979 to 1989 - before
the rise of the Chinese corporate state model.

18. CONT.

Since the rise of the corporate state, China has gone
from being the most equal society in all of Asia to the
least by distribution of wealth. By any internationally
accepted measurement, inequality in China is worse
than India, America and possibly even countries such as
Brazil. The net incomes of more than 400 million
people have stagnated in the past decade, and absolute
levels of poverty have actually increased in the same
period. While SOEs have increased their revenues by 20
percent to 30 percent each year, mean household
incomes have increased by a paltry 2 percent to 3
percent.
- John Lee

19. CONT.
 In China, the “class” system operates on several
levels. At the top of the socio-economic scale are
the “princelings,” children of important party
officials, who have become multimillionaires by
trading on their contacts. Then there are
bureaucrats, who enjoy attractive lifestyles
funded by the people’s taxes and sometimes
bribes. Transparency International puts China
joint 78th out of 178 countries in its 2010 ranking
of perceived corruption. State-owned enterprises,
meanwhile, benefit from monopolies or
oligopolies and pay minimal dividends. The
fruits of their economic activity are therefore
largely enjoyed by those who run them.
- Hugo Dixon

20. CONT.

Almost all of China’s richest people have
made their money in state-dominated
sectors such as property and
construction, resources, heavy industries
and telecommunications. This could be
through preferential access to the best land
(that has, in many cases, been illegally
seized from citizens) for property
developers, privileged access to belowmarket rates of capital, or through special
access to the best capital or equity in listed
SOEs.

21. THANK YOU