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1
Is China the New Crony Capitalist of the East?
Compiled By:Shweta Ahire
Ashish DadhichKrunal Bosamia
For the Motion
2
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