The Ultimate Crony Capitalist State: China – The Princelings and the Proletariat

We have written often about China and the cronyism which seeps into every corner, every nook and cranny, of the Chinese economy. It is The Ultimate Crony Capitalist State.

In this excellent report from Bloomberg News, the “princelings” of China, the sons (mostly sons) of leading revolutionaries during the Mao days are examined. They have amassed immense wealth over the past 30 years. Theirs is a guilded aristocratic life which was largely attained via the manipulation of the state and its sponsored corporations and projects—”public/private partnerships” to the extreme. Crony capitalism.

(From Bloomberg)

In the 1980s, they were chosen to run the new state conglomerates. In the 1990s, they tapped into real estate and the nation’s growing hunger for coal and steel. Today the Immortals’ grandchildren are players in private equity amid China’s integration into the global economy.

Twenty-six of the heirs ran or held top positions in state- owned companies that dominate the economy, data compiled by Bloomberg News show. Three children alone — General Wang’s son, Wang Jun; Deng’s son-in-law, He Ping; and Chen Yuan, the son of Mao’s economic tsar — headed or still run state-owned companies with combined assets of about $1.6 trillion in 2011. That is equivalent to more than a fifth of China’s annual economic output.

Click here for the report.

5 comments
Shawn Eng
Shawn Eng

Do free markets insulate us from the human rights abuses of our "trade partners?" Maybe more free trade would have ended slavery in the Confederacy. Maybe more free trade would have ended the Third Reich and Imperial Japan's expansionism. The day Communist China sinks an American aircraft carrier, you'll see how fast libertarians and conservatives bail on the free trade globalists.

Aidan Haggerty
Aidan Haggerty

The cronyism in China is still there; it's not a free country. In some way, I wonder if the United States is developing a similar pattern with the bailout and regulations.....

Scott Martenson
Scott Martenson

The more protected one is from free markets and competition the more wealth concentrates. If our dictators in Washington truly wanted wealth spread around, the "solutions"they impose are 180 degrees from what would accomplish their stated goals. .