After reading a newspaper article titled “The penny drops in China”, and reading about how hundreds of billionaires have suddenly been relegated to the grey zone, where people who lose their high-level protection from the Chinese Government suddenly lose all their rights, even to the right to trial. 5 years ago all I heard was good things about China. I heard from bewildered people who toured China speak of the sheer magnificence of the cities, the massive numbers of buildings being built at once in Shanghai, how the people have suddenly turned into a prosperous, great nation. They won so much, and did so much, by building the largest hydroelectric dam in the world, by winning the largest number of gold medals in the Olympics, by hosting the Olympics in a fashion grander than anyone else in the world has seen (with a few ‘imposter problems’) and building some of the world’s tallest buildings. China seemed to be the invulnerable sleeping dragon, who has awoken from its sleep since the last dynasty passed. Showing off its might and strength to all those who did not know of it. The people awed.
Little did they know, China with all its might and resources, was still vulnerable for some reason. Suddenly, the recession came, and news spread of millions of people losing their jobs. Hundreds of thousands of companies collapsed and their executives charged with fraud. It shows how much little has been done to solve the fundamental problems that plagued the foundations of capitalism on which the Chinese state economy so heavily relies on. After a brief few decades of flirting with capitalism, China will now realize that with great power comes great responsibility. If you want capitalism to make you rich, you must also trust it will make you poor. In an effort to stem popular unrest caused by the economic collapse, the Government continued to arrest and detain high level execs to please the public, angered by the loss of jobs caused by their mistakes, and to prevent the media from broadcasting any news that may cause the public or foreign investors to act against the favour of the Government. However, the Chinese society, and the world too is starting to realise this a little more at a time. The recession has started to reveal some very disturbing realities about this world.
When Deng Xiaoping visited the US in 1979, it was generally a sign to all the China is finally throwing its doors open to the world. Deng promised and implemented economic reforms and relaxation, and from then on China started to tend towards a free market. What in essence was view by the world as a shift to capitalism was actually just a lack of enforcement by the Chinese Government. The Chinese Government, in good times and in bad, was always a Communist government, and history has never told of a successfull communist government. Few have managed a certain degree of success, but at the cost of serious repercussions during periods of economic collapse. Capitalism won’t work without a democracy, because the fundamental idea of capitalism and free trade is that the people, and not the government who decides how valuable your goods are.
But people went along with it and said China was different, in that it was made of a society accustomed to doing business. But if a person cannot easily set up a company in a country and honestly report their income to the government and be taxed in a fair manner, businesses would not survive in the form that they thrived in in other more successful countries like South Korea, Taiwan, Japan and Hong Kong: all of which have adopted representative governments.
Will a recession finally force the government to transform into one that is more conducive to capitalism?
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