China and Statism
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China is politically communist with a regulated capitalist economy. Regulated means that the individual capital to create more wealth is allowed, but the excess and exploitation found in western capitalism is controlled. Governments do not create wealth, they distribute the wealth of others, albeit often unfairly, but government didn’t invent the combustion engine, penicillin or the light bulb.
When Communism Met Capitalism
Following Mao’s death in 1976, two years later Deng Xiaoping overturned just about every policy Mao had implemented and abandoned the class struggle. He created a “Socialist Market Economy” which wasn’t a free market as we know it, but state regulated capitalism often referred to as statism. Gorbachev’s economic reforms (perestroika) during the last days of the USSR also tried to implement limited private enterprise and private market initiatives, but too little too late.
In just over thirty years after Mao’s death, China surpassed the U.S. to become the world’s leading exporter in 2009 (BBC), with a GDP of 11.1% (Reuters). In that thirty three year period China lifted an estimated 500 to 600 million people out of poverty (World Bank Group) and despite western restrictions on Chinese firms, in 2025 it’s GDP was 5.1%. Britain’s GDP was 1.4%.
China didn’t abandon capitalism, it embraced it and made it work for the country and not just the individual. The price paid is living in a police state. China makes no attempt to boast of democracy and freedom of the individual, it’s collectivised and patriotic to a level unheard of in Britain since WW2.
Living in China
China subsidises essentials such as basic foods, transport, utilities, accommodation … so that even those at the bottom aren’t left out. As people progress with promotions or wage rises they want to buy more such as a computer, foreign foods or a car. These are classed as non-essential items and are heavily taxed. This tax helps subsidise the essential basics for everyone.
Conversely, in the west people are subjected to market forces. As prices rise it produces more poverty as people are priced out of the consumer market. This is what you’re seeing now in the soaring cost of living and is the visible and ugly side of laissez faire capitalism.
The point being made is that China has proved that regulated capitalism works and the USSR proved that a society without capitalism didn’t work. China’s success shows that capitalism is a reliable tool for generating wealth, but provided the state remains its master rather than its servant.
Standard textbook mythology.
Hardly out of a textbook, I was there. Which part of it don’t you agree with?
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