China is the New Crony Capitalism of the East

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Is China the New Crony Capitalist of the East?

Compiled By:Shweta Ahire

Ashish DadhichKrunal Bosamia

For the Motion

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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 Corporate

Pirates

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Eastern Side

Russia China India South Korea North Korea Japan Burma Indonesia Mongolia

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China – The Red Dragon Formal Name – People’s 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

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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)

Highlight on Economy of China

Source: www.cia.gov

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What is Capitalism ?

Economic System Characterized by the following:

private property

price mechanism

freedom of enterprise

competition

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What is Crony Capitalism ?

based on the close relationship between businessmen and the state.

the success of business is dependent on the favoritism

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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

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

If yes, then United States of America

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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

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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

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Top Companies in Each Sector

Top 500 Chinese Companies were more profitable than World’s Top 500

Source: www.china.org.cn

..Cont

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In China why almost every one wants to be the member of

China’s Communist Party (CCP) ?

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National People’s Congress is the most powerful organ of the state

Flow Chart explaining how China is governed

Source: www.bbc.co.uk

Crony Capitalism in China

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All the companies are SOE’s

Source: www.chinadaily.com.cn

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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 Committee NPC

Li Xiaolin China Power International Development 

Daughter of Chairman-Standing Committee NPC

Hu Haifeng  Nuctech Chairman of CPC

Wei Yunsong Unihub Global Networks,

Son of Vice Premier of PRC

‘Princeling’ in China Source: www.ntdtv.com.cn

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Lucrative sectors of the economy are reserved

2/3 of formal finance is reserved for SOE’s

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 Publicly listed companies

Source: www.forbes.com

..Cont

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List of Fortune 400 China

SOE’s 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

Cont..Source: www.forbes.com

Cronyism

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Thank you.

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

- Sun Tzu