Free «The Political Perspectives of Capitalism in China» UK Essay Paper

Free «The Political Perspectives of Capitalism in China» UK Essay Paper


The development of capitalism and globalization poses a problem for the democratization processes in the developing countries. China can be a vivid example for studying the political perspectives of capitalism. The country with the socialist political system had integrated the capitalist economic principles reaching significant results of economic development. Nevertheless, the expansion of private sector leads to the democratic revolution in the country. In this controversial condition, it is important to study the groups of interests that exist in the Chinese society and their relation to the democratization of the state. The article questions whether the economic changes in China can become a catalyst for the political democratization of the state.

The Development of Capitalistic Economic System in China

The economic model that governed the development of the Chinese society in the twentieth century led to the occurrence of the strong private sector, which played an important role in the economic growth of China providing required products, workplaces, and taxes for the government. Despite the initial orientation towards the public model of the economy, the Chinese demonstrated a productive difference from the path followed by another socialist political model – the Soviet Union. Compared to the USSR, the Chinese government understood the importance of integrating the private business into the public sector of the economy. The concepts of employees’ motivation and encouragement that existed in the capitalistic model were successfully realized in China. As a result, the phenomenon of the Red Hat capitalism occurred in China when publicly owned companies were subordinate to private managers. The state authorities and communist public organizations supported that process due to the provided economic benefits, which eventually led to the allowance for the capitalist economic model in China according to the Constitution.

At the same time, the question about the perspectives of democratic development in China due to the expansion of capitalism remains relevant. Since the capitalistic approach to business is common in the country, it is recognized as one of the factors that can lead to the affirmation of democratic political views. The main political risk for China relates to the possible existence of the labor unions in the democratic society. Due to the fact that the Chinese economic development relies on the exploitation of labor, labor unions can reduce the economic and socio-political stability of the country.

Nevertheless, the study of the socio-political processes that happened at the end of the twentieth century shows that the expansion of capitalism in China did not cause the development of democratic institutions. According to Kellee S. Tsai, the current situation does not allow the capitalists to orient mainly on the development of democracy (4). Most of them understand the benefits of existing political system and the barriers which they will face if the democratization of the society takes place. In any way, it is important to summarize the trends in the Chinese society to distinguish the long-term perspectives of democratization

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The Position of Business and Society in China

In her book, Tsai gives a complex model of the relation between the different business sectors and the perspectives of the Chinese social democratization (108). According to her, there are four basic groups that have particular interests in the democratization. The assertive business has an intention to promote democratic views in the state by organizing social activities and demonstrating the confrontation with the state authorities. Mainly, this group includes the businesses with strong financial and organizational basis. In fact, the majority of the companies in China do not belong to the first group. Since they are still publicly owned, the private businessmen do not obtain full access to the financial resources. The second group of interest grudgingly accepts the existing socio-political system. These companies do not obtain required resources to begin the confrontation with the state. At the same time, improved access to the resources would allow them to openly oppose the government. The third group is loyal to the existing system due to the heavy dependence on it. These companies benefit from the low legal barriers to business, the absence of labor wages regulation, and the low requirements to the workplace standards. The promotion of democratic principles in the politics would definitely harm the interests of this group. The last group includes the avoidant companies that prefer to focus only on the economic processes and that are not interested in any political activity. Their main objective is to survive in the changing competitive environment.

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The striking difference in interests inside the single political class allows making a conclusion about the possibility of the socio-political crisis in the future. The only factor that can stabilize the current situation is the strong support of the state authorities. In order to understand the condition of current relations between groups and government, it is also necessary to study the thoughts of the society regarding this question; it is vital to interview the employees which represent the workforce of every sector.

The Chinese employees have dreadful working conditions, low average wages level, and no political support of the workers’ interests. The absence of labor unions does not allow the workers to protect their rights legally. At the same time, the existing socio-political system is the only opportunity to guarantee the increase in the number of workplaces for the employees. The domestic and foreign investors consider the situation with the labor exploitation to be attractive for business due to the reduction of production costs and the growth of profitability. Unfortunately, the employees are forced to accept the terms of work in order to save their jobs, which are critically important for their survival.

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The Perspectives of Democracy in China

The attitude of business and society about the democratization of China may differ significantly. Nevertheless, the main argument is that the democratization will not bring economic or social benefits to any players in the short-term perspective. However, the long-term objectives can lead to the different conclusion. On the one hand, the society is interested in the democratization of the political institutions. On the other hand, the risk of the existing economic model destruction forces them to avoid active political actions on the reduction of the economic risks.

However, the business owners have to compare advantages and disadvantages of the existing model. First of all, the absence of labor regulations allows the companies to increase profits in the cooperation with the public sector. Compared to democratic states, China has a low level of production costs. It increases the attractiveness of Chinese economy for the domestic and foreign investors. The authoritarian political system has created the vast array of opportunities for the development of the business. Currently, it should receive a full support of private sector in China. The provision of private property rights, the absence of labor wages regulations, and the reduction of taxes for the business show that the state is ready to consider the compromising conditions to reduce the possibility of the new political crisis in China. The growth of opportunities for private business will not deteriorate the political situation in the future.

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However, Tsai states that the Chinese private sector understands the drawbacks of the existing system (193). In the less developed regions, the private business still faces the limitations of the “restricted market opportunities, fiscal predation, and other bureaucratic inconveniences” (Tsai193). The authoritarian pressure on the less developed regions can cause the political crisis in the separate segments of the state economy. Although the big business groups are able to lobby their interests in the government, the small business has to face the negative aspects of the authoritarian economic model.

As a result, two potential scenarios of the capitalistic development in China are possible. On the one hand, the state authorities can support the policy of the regulative mitigation over the private sector, which will lead to a certain level of democratization for business only. On the other hand, political and economic pressure on the business in small regions will lead to the unstable business situation and the reduction of the socio-political stability in the less developed regions of China. For example, current taxes can force many businesses to closure. The absence of products’ supply and the reduction of consumption in the regions can encourage the society to demand political rights.

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In general, the majority of strong players in the private sector of China support the existing situation. Even if the business achieves success due to the gradual changes of state control and manages to use them for the development of social policies, it is difficult to predict whether these actions will relate to the democratization of the society. Unfortunately, the strong classes are interested in the exploitation of workers and thus the situation will not change rapidly.


Despite the certain contradictions between the government and the private sector in China, all the players are interested in the maintenance of the current political system. The reduction of pressure in the private sector shows that the government is ready for compromising decisions to maintain the political stability. At the same time, even if the private business accumulated resources to change the political system and overthrow the communist government, the new political order would be artificially democratic. The exploitation of workers is the main factor that contributes to the economic prosperity of China, and it is difficult to believe that the private business will discard this practice for the sake of abstract ideals of democracy.

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