Agree with the fact the economy is growing, but current figures communicate the growth is not supportive as expected....

To be Socialist may be it requires time.....

I'm not an expert on the subject. But I would like to say mine opinion. China has always been a great country from both a cultural and a technical-scientific point of view. The Chinese inventions have significantly advanced all of mankind (inventions: compass, gunpowder, printing, spaghetti, etc.). I believe and hope that the Chinese ruling class will be able to ferry, in a non-violent way, the country towards a democratic system. Furthermore, I believe and hope that the Chinese will manage to fairly redistribute the wealth so that the poorer classes will increasingly improve their standard of living. Europe has always traded with the Chinese world (the Silk Road), and I believe it will continue to do so and that "the Chinese competitive prices" will become less and less competitive. In fact, as Chinese trade union rights will be recognized and the use of "clean" energy will be increased, the prices of Chinese goods and services will be increasingly "less competitive". I believe instead that it will be increasingly difficult to compete on a technical-scientific level.

The most recent data shows that the China’s economy will exceed its official targeted growth of 6.5 percent for 2017 and it is less than recorded in last year (6.7%). But , with my point of you a key problem for the China’s economy is how to make transition from an export and government investments led economy toward one driven by household consumption .

Respected sir, I will follow your Question, I think, I could not make any contribution towards the subject discussion.

With Kind Regards,

Jahangir

State capitalism. Can be easily transferred to private capitalism; best example: Soviet Union.

Socialism in the Soviet Union reached its power by 1953, when Stalin was alive. Just I want to note that under Stalin:

a) the country had political and economic sovereignty

b) there was no corruption

c) had its own money emission, allowing the development of the economy at a tremendous rate

d) was the best free education system in the world

e) free medical care

(f) the guaranteed right to work and so on.

That socialism that was in the Soviet Union after the death (and most likely after the murder) of Stalin, it was an imitation of socialism with disgusting properties, which eventually led the great country to a catastrophe in 1991.

At first the trotskyite Khrushchev distorted the essence of socialism and gave power to the party nomenclature of the republics, which did not answer for anything. It was with the party apparatus that Stalin tried to fight, but he could not defeat this apparatus. Stalin wanted to give power to good business executives, but did not have time, he was killed in the threshold of the great reform that was being planned in 1953. After Stalin's death, there was still the opportunity to continue developing the country in the right direction. Lavrenty Beria, the ingenious manager, wanted to do this, without which Stalin would never have won a war. It was the evacuation of industrial enterprises from the occupied territories to the East that enabled them to win the war, which Hitler could not have imagined in a nightmare, since it was impossible to do so. However, this was done by Beria. Then it was Beria who was responsible for the production of all types of weapons: tanks, aircraft, guns and so on.

Since 1943, Beria supervised the nuclear industry, it was thanks to his crazy energy that the atomic infrastructure was created that allowed the creation of an atomic bomb in August 1949, that is, only 4 years after the war. Thus, Beria saved the country from a catastrophe that could certainly happen. There are confirmations that the United States was not allowed to organize an atomic bombardment of all the major cities of the country.

It was Beria who created the missile infrastructure, which allowed Gagarin to be sent into space on April 12, 1961. You can see how huge labor productivity was in the last period of Stalin's and Beria's life. Yes, Beria was killed on June 26, 1953, that is, three months after Stalin's death. However, if Beria were alive, he was going to build a very effective State Capitalism with a very effective sovereign economy and the world's best social protection of people. But the story went another way unfortunately.

Thus, the collapse of the Soviet Union began after the death of Stalin and Beria. I write all this because it was China who learned all the lessons from this history and built a very efficient economy, which the United States is so afraid of. What Beria wanted to build, Deng Hsiao Ping built in China and sometimes they say that Beria could become the Russian Deng Xiao Ping. China is on the right track, it's not pure capitalism and not pure socialism, it's probably State Capitalism, but with a Chinese accent. In any case, today's Russia has a very good example for imitation - this is today's China.

Dear Barbara Sawicka,

Could you tell us a little more about "... exposed the growing differences within this group" and about "... increasingly explicit use of BRICS by China to implement their particular interests" in order to understand your thoughts correctly or just give any link to which you refer.

"... In the presence of the Communist Party, the current market economy in China can be easily reconstructed and used as a springboard for the successful construction of a completely different economy, namely, the mobilization-type economy. Under the conditions of a high level of the teamwork inherent in the national mentality of the Chinese people, this “mobilization project” can be very successful and lead to a substantial restructuring of the political and economic picture of the world. ..."

Article Dozy-chaos end of the human civilization, Journal of Ultra S...

Dear Dr. Vladimir,

WOW... That´s new for me! Very good to know.

Thanks for sharing your valuable toughts and the link.

All my best wishes.

Prof. Hess

I have no ample expertise on this matter. However I can say that these are policy changes to apply capitalist approach within communism, that has kept alive communism in China. System should be in accordance to the nature of the human species and society. And China is successful in implementing in its policies and plans. Kindly see the link: http://links.org.au/node/1355

Maybe we can also check with the political system.

https://www.youtube.com/watch?v=s0YjL9rZyR0

This question was exactly the one we raised (with Bjorn Alpermann) in our book on the food markets in China. The question was "how to define a market in China and how is it working"? We chose the agro-food markets (including agro-industries) because we could start the analysis at the peasant level and move up to the final consumer. In the book, 9 markets are analysed (grains, beef, sugar, cotton, bio-fuels, etc.). In the conclusion, we come back to the point of the functioning of the market and how to qualify markets in China, using a previous article from Fligstein et al.

The references for the 2 documents are:

Augustin-Jean and Alpermann, The Political Economy of Agro-Food Markets in China. The Social Construction of the Markets in an Era of Globalization, Palgrave 2014.

Fligstein, N. and J. J. Zhang (2009) ‘A New Agenda for Research on the Trajectory of Chinese Capitalism’, Management and Organization Review, 7(1): 39–62.

We especially study the role the state and its agencies are playing in the organisation and management of the market, and we try to compare with the different form of capitalism (see Hall and Soskice, and all the literature on this issue). The conclusion is that China is not really capitalist, but it is more developing a different form of market in which the state will remain prominent. I can send you the conclusion of the book or separate chapters. I have also analysed the functioning of the sugar market in journal articles.

Dear Vladimir Valentinovich Egorov,

I would like to discuss your phrase "... In the presence of the Communist Party, the current market economy in China can be easily reconstructed and used as a springboard for the successful construction of a completely different economy, namely, the mobilization-type economy. Under the conditions of a high level of the teamwork inherent in the national mentality of the Chinese people, this “mobilization project” can be very successful and lead to a substantial restructuring of the political and economic picture of the world. ..."

If I have understood correctly, you belive “mobilization project” to be very successful for the future of China. However, it was the Stalinist "mobilization project" like Industrialization that once made the Soviet Union a powerful power. True, then the country had complete sovereignty, than now in Russia, when the Central Bank is a branch of the US Federal Reserve System. Does your phrase mean "this" mobilization project "can be very successful ..." that the mobilization project should be urgently adopted in Russia as a rescue in order to finally make the country an economic power again as under Stalin? Why is Russia still waiting and suffering? Why do not they change the article of the constitution on economic sovereignty, whom are they afraid of?

I would not strictly support the formulation"mass mobilization". But I would emphasize that market forces and the State can combine to promote development. The market forces in USSR (or in China during Mao) were not working at all. This is what I have written in a more recent article (under publication) related to food standards and international trade:

"this article has shown that one of the reasons for that is the way China has been able to combine a great variety of instruments and strategies to reach specific objectives. This is most

visible in the case of ractopamine, when the failure to prevent the implementation of the

standard was, for a part, compensated by the takeover of Smithfield by Shuanghui – although

it is officially a private company. This is a consequence of the fact that the economic sphere and the government and party spheres in China are not neatly separated. In more theoretical terms, the three cases showed that, due to China’s specific economic organization, the lines between incumbents, challengers, and governance units are often blurred, which, at times (but not always) allowed it to combine international negotiations with business strategies. Since the rules of the markets are established by a conjunction of public and private actions, the ability to interact in a coordinated way in these two fields does provide an advantage – and

the possibility to bend the rules of globalization".

If you want to quote it somewhere, I will give you the precise references (the paper has been accepted but not yet published). I hope that clarifies?

Dear Sir,

A part of the answer is in S. N. S. Cheung’s paper 'Will China Go ‘Capitalist ?' (The Institute of Economic Affairs 1980 ; reprinted in his book 'Economic explanation') ; Cheung is Chinese born, raised in USA, he is probably one of the best economic thinker still alive (ask Stiglitz : he will testify) ; and he is the only (only one !) pupil of Coase (who else ?) ; so if you want to know if China is 'capitalist', you should before understand what 'capitalism’ is or means... to do so, I think that you should go back to Coase's 1937 paper (nature of the firm), have a look at the end of his 1960 paper (problem of social cost) ; if done, then go to Cheung's 1983 (contractual nature of the firm) and also maybe his 1970 paper (structure of a contract) to enlight Coase's 1960 paper. In the beginning of the eighties Cheung was back in China (in Hong-Kong), so he was in the pudding with strong theoretical tools.

Well, 'capitalism' is a contractual form made of, and by, 'firms' (vs ‘markets’, I mean real markets, markets with bargaining, not ‘supermarkets') ; and firms are contractual forms, nexus of contracts based on the wage form ; 'capitalism' is an accumulation of commodities produced by commodities ; and a 'commodity' is also a contractual form (see Cheung's 1983 paper on the definition of 'transaction costs’, especially at page 7). It's the reverse of the wage form, so 'firms' or 'commodities', it's the same from different points of views.

After this, 'communism', 'socialism’ etc. are words only : Lenin was happy with the wage form, the firm etc. ; and then it's no surprise that the (so called) 'communist system' have fallen so easily ; the same in China (but Mao was not Lenin) ; if you focus on macroeconomics, you miss the microeconomic or contractual problem (but the real macroeconomic problem is then political, so you’r right after all) ; the basic problem is the 'accumulation' of capital, and 'capital' have two faces : the real one (tons of commodities) and his 'fictive' face, the capital as a financing (or financial) power over production (claiming rights on production, property rights).

But the capital is based on the labour market : capital is labour, as a commodity. If a labour market appears, it's because direct exchanges on products markets are shrinking. The labour market (or the factors markets) supersedes the products markets. Contractual forms are changing and ‘firms’ are taking power on market economic activities (or non market, like ‘research’ for ex., see 'Trump vs climate change research' on this). More ‘property rights’ means more ‘firms’, this simply means less ‘bargaining power’ for producers and consumers. Less producers facing consumers on direct markets. This si very simple…

The proof of capitalism in China is not only the tons of useless commodities that they spurt, it’s also in the design of their cities : the old traditional parts are now almost completely destroyed, and it's not only 'houses’ and ‘shops’ but also contractual forms and local (bargaining) markets that have vanished ; and ‘labour' is stored in towers.

Marx is dead, Mao is dead, Illich is dead, Coase is dead, but Cheung still (?) lives in south China and I wonder what he thinks of all this mess… He is very old and far from the ‘prize’ he deserves before all the ‘Nobels'.

Have a nice day and go bargain for products (not commodities) with your local dealers if you still can, if it’s not illegal yet ; best regards, JPJ.

Dear Scientists,

You did much more than I could imagine when I elaborated this question.

Thank you very much. You all have exhausted the first item.

There is, nevertheless, some parts that were not explored. Could you say something about, please?

2- Is it sustainable, or a Kuznetz cycle is snooping on?

3- Should the world be worried about that for the next 5/10/15 years?

4- Is there a way to avoid, in case of a new global recession?

Thank you and all my best wishes for all of you in 2018.

Prof. Hess

@Jean-Pierre. N.S. Cheung published his article in 1983, at a time reforms only started. I think now, the article is outdated because the shape of the Chinese economy has changed a lot. Furthermore, the definition of capitalism based on the transaction costs (based on the classic definition of Coase) is also too restrictive. For example, in the case of China, there is a problem with the definition of "property rights", and it is extremely difficult to know exactly what is private, what is collective, what is public (with the Western definitions of the terms). Also, capitalism cannot only be defined in economic terms, it is also an historical (and geographical) experience. It has long been shown that there are diversities in capitalism (American, German, French, Japanese capitalisms are different, for example -- see Hall and Soskice, Boyer, etc,). More recently, Boltanski and Chiapello have tried to define a third form of capitalism for France (the new spirit of capitalism, 2000), etc.

I also cannot see your proofs of capitalism in the way Chinese cities are built or are changed (I could give you some examples from Guangzhou).

I have no problem with the theory of transaction costs, but to use it to define capitalism just does not work because capitalism is much more than an economic theory.

Dear Gennady Fedulov,

What can happen in China, can no longer come from Russia. You can not enter twice in the same river. Modern Russia is simply morally incapable of this: it claims to be honest and fair. The future mobilization project, if it happens, will not be either honest or fair in relation to the rest of the world. It will be the same communist nightmare that the West feared and which he recklessly expected in the past from Russia.

I'm lucky by having the chance to go every year to China to work with students and colleagues. It's different there. Every thing is bigger. Friendships are deep feelings and a guest is a "KING". Chinese people are proud, helpful and modest as well. Most parents of the students remember how it was when they were hungry....Today they are confident and are working hard towards the future, mainly for their only child. Politeness has a sense as we have been told while frequenting the Kindergarden. The students know about Konfuzius. Who knows about Pestalozzi in Switzerland that he was collecting abandoned children in the streets of Burgdorf in Switzerland and was learning them for free in rooms of the castell how to read and write and how to behave?

While crossing parts of the steppes in Inner Mongolia, I met a young boy alone (not over 10 years old) in the middle of nowhere, watching for some cows. He started the following conversation with me in broken English:

"Where are you from?" (Switzerland).

"Do you have computer there?" (occasionally yes. )

"Then give me your e-mail address, so we will be able to chat....." (I had to go my way, still not knowing if this boy has somewhere a bed to sleep....., but for sure he has access to a computer....somewhere, and he uses it.

Reto Jörg Strasser, Prof.emeritus for Bioenergetics In Switzerland, China, South Africa and South Kora, and still on the road with fun.

Dear Louis Augustin-jean ;

A short reply : you write 'capitalism is much more than an economic theory' ; exact as 'the proof of the pudding is in the eating' ; but there is only one 'capitalism' all over the world, the same wage form everywhere, even if you have some differences ; for example, in his 1983 paper, Cheung describes 'piece rate contracts' in China. But it's on the marge.

'Capitalism' is an economic phenomena, so you can describe it as you want, you'll still miss the point, the witch is economic or contractual ; I can't write much than in the previous post (I've made little changes) ; have a look at Cheung's paper, you will not be disappointed.

I have not been in China and I see through images, texts and movies or via direct (catastrophic) accounts ; the fact that private property is different is not important yet : there is a big financial capital and a large labour market, that is enough ! If you don't want to see 'capitalism' as one big thing, this is your problem ; 'there is none so blind etc...' Salutations, JPJ.

@Jean-Pierre. "I have not been in China and I see through images...". May be you should. It is not possible to characterize the economic system of China through an article written over 30 years ago. I went to China for the first time in 1985, and many things have changed since then.

One example coming from my in-laws in Guangzhou. They live in what used to be a village (now in urban Guangzhou). They cultivated rice and the land was organized as a collective. Life was difficult and rice cultivation did not bring much money which was shared among the members of the collective. Today, if you go there, you will see buildings, houses, companies and a vibrant economy. But do you think the former economic system has changed? No, it has not. The land still belongs to the collective. They rent the land to companies and individuals. And the money is still shared among members. With this money they bought flats elsewhere, and now they have a very comfortable life. They travel in foreign countries and actually they make much more money through the collective than through their salaried work -- when they have one (the cousine of my wife was the accountant of the collective until last year).

You can say that the collective becomes capitalist. But this would not be true. The reality is that the former economic system has combined with the new, market economy. This is only one example, but it can be multiplied. You said the definition of property rights are not important for the definition of capitalism? I don't think Stephen Cheung would agree with that. Capitalism is an economic phenomena, but since it is not an economic theory (different from, let's say, neoclassical theory), it takes many forms and many shapes. The "minimal definition" provided by Boltanski and Chiapello is that: " Of the different characterizations of capitalism (or, today frequently, capitalisms) over the last century and a half, we shall employ the minimal formula stressing an imperative to unlimited accumulation of capital by formally peaceful means" (p. 4). The capitalist system separates people who owns capital from people who sell their labour force (wage earners). This definition, very simple, is very different from yours (and equally valuable, I believe), but the main point here is to find out who is really the capitalist in China. Would it be the "collective", in the example I provided earlier? I could go on and on, but I prefer to stop to this paradox.

China is using the expression "Socialist Market Economy". I think this is the right expression to characterize its economic system.

Dear Louis Augustin-jean ;

You write : 'You can say that the collective becomes capitalist', well this is true ... 'But this would not be true', I'm not convinced ! ... 'The reality is that the former economic system has combined with the new, market economy', the former was widely based on the wage form (and Mao was probably trying to avoid this), so it was 'capitalist' in his essence - this is what I was trying to teach to you up there ; what you call 'market economy' is an empty box : what kinds of markets do you have in mind ? What is to be sold ? What can you price ?

You write : 'You said the definition of property rights are not important for the definition of capitalism?'

No, this is the contrary : property rights are part of the firm, but it's the formal-legal structure of the firm ; their determination is in the web of contracts that is building the firm and so, in the labour market. Capitalism means 'socialisation of means of production' (see Tocqueville's second book on this), this is contra intuitive (Marx wrote somewhere that he was trying to save private proprety ! Astonishing... but true) ; so what is 'private' or 'public' is never clear, and this is everywhere : maybe a little bit more evident in China, but no real difference. This is a part of the 'formally peaceful means' in Boltanski and Chiapello's definition.

You write : 'The capitalist system separates people who owns capital from people who sell their labour force (wage earners). This definition, very simple, is very different from yours'

No : it's exactly the same (but there is a problem of communication I think) ; the separation (alienation) is between the (direct) producer and the (direct) consumer ; it's due to transaction costs, and the commodity embodies such transaction costs : try to bargain in a supermarket ('I just want half of what is in the box') and you'll be out of the building very quickly. Inside, you are far away from the producer.

You write : 'the main point here is to find out who is really the capitalist in China. Would it be the "collective", in the example I provided earlier?' ;

It's possible : the 'collective' becomes a 'society', that's all ; the cooperative form is just a particular firm based on a particular shape of contracts between an association of producers ; based on the wage form, it becomes a classical firm after a while.

'China is using the expression "Socialist Market Economy"

Another empty box !

I give you the last word you want it, avec mes amitiés, JPJ.

@JP. Sorry, I completely disagree with you. There is a problem in China to define property rights. It is difficult to know what is public and what is private because the two are embedded. Also, "collective" is not the same than "cooperative" -- the two notions are completely different (there are also cooperatives in China). And no, the "collective did not become a society", not at all. People are not shareholders of the collective, they cannot buy or sell their share of the collective, they cannot transfer it, they don't have the property of the collective (the state has, and it delegates it to the collective). As long as you don't transfer your Hukou, you belong to the collective.

In other places, people are using public assets as private assets to make business. In the end, it is not possible to differentiate what is public and what is private (especially when private people have invested their money in the public venture). Somehow, you could say that the private sector does not exist in China -- to some extend, this is an exaggeration, but It is quite true. The State has a say for nearly all businesses, even when they are officially private.

I understand you don't know much about China. You could read some interesting stuff by Jean Oi ("local state corporatism"), Victor Nee (more liberal), as well as some of the bibliography indicated in the conclusion of my book. Others have spoken of "state capitalism". Then, we could talk in a more fruitful basis.

And sorry, but no... China is not capitalist; it is a mixed economy, a "socialist market economy", as the Chinese claim -- and they are right on that point. For the definition of "market", "market economy" and so on... this is not really the place to engage in this debate, but I can send you back to the literature, starting from Fligstein's "architecture of the market" and Robert Boyer/Hollingsworth 1997. There is a very good chapter on the different definitions of market (written by Boyer). You can also read some of my papers on the sugar market, and you will see how markets are defined and how they work in China.

I think that China is a very special country. You are right this it is not "pure communist" and not "pure capitalist", but is a kind of mix.

Contrary to Russia, it has started its transition to market economy not as "big bang" of fast reforms (that brought a high fraction of population in Russia to misery by destruction of savings during hyperinflation in 1992, made few super-rich by dishonest privatization and destroyed most of the industry), but as a slow process, governed by its communist party. China enjoyed 10% GDP growth for more than 2 decades when Russia started to have positive (and only 1 digit GDP growth) only after 2000, and mostly due to oil price rise.

As for sustainability of China, it indeed faces many environmental problems today, like high air pollution in cities. But communist party cares also about it, by planning to substitute coal for natural gas.

China was the world’s largest economy in 1820 – and is the second largest economy today

When President Monroe looked beyond the United States in the 1820s, he saw a vastly different world than the one we see today: the Greeks had just begun to revolt against the Ottoman Empire, Brazil declared independence from Portugal and the world’s first modern railway opened in England, where the first industrial revolution was already underway. Meanwhile, China, where the Qing dynasty approached its third century of imperial rule, held the largest share of global GDP. Two-hundred years later, global economic leaders and tech experts gather in China against the backdrop of the Fourth Industrial Revolution. China is now the world’s second largest economy (and the largest if measured in PPP terms), having fallen behind from the late 19th Century onward as several industrial revolutions compounded in the Western world. But China began an unprecedented economic catch-up in 1978.

China has a clear path forward

By 2030 China is expected to be the world’s largest economy once again. As the overview shows, obstacles await, such as facilitating domestic consumption and lower savings, reducing debt levels, reforming the SOE sector and realising a balanced and healthy rise in prosperity with growing living standards for all. Yet the country is on its way to reclaim its position as the world’s largest economy amid the Fourth, not the First, Industrial Revolution.

https://www.weforum.org/agenda/2016/06/8-facts-about-chinas-economy/

Excellent education on the giant roles of China in the BRICS. Thanks professors Barbara, Subhash, Yuri, Louis, Joffrin, Reto, Vladimir, Gennady and others. Best regards

Dickson

A different viewpoint of

mobilization-type economy. as it has its own issues

Historical Progress and the Dead End of the Mobilization Economy

A. P. Butenko Pages 61-82 | Published online: 19 Dec 2014

In connection with the failures in the reorganization of the Soviet economy, increasingly frequent attempts have been made recently not only to rethink the path traversed by the Soviet economy and the difficulties it has experienced but also to clarify its place within the historical process as a whole. This is not accidental: even as it deals with the very concrete questions of Soviet history, our social thought has again and again encountered general problems whose lack of resolution simply blocks further progress. "Anyone who tackles particular problems without first resolving the general ones," wrote V.I. Lenin at one time, "will inevitably ‘stumble’ upon these general questions at each step without being aware of it. But to stumble blindly upon them in each particular case means to condemn one's policies to the worst vacillation and lack of principle" (V.I. Lenin, Polnoe sobranie sochinenii, vol. 15, p. 368). We shall try to keep this methodological principle in mind in analyzing the historical interaction between Soviet politics and economics.

China is a nationalist country, a selfish nationalist country where people are treated like the farmer cum soldiers of the Kings of middle ages of world history.

The case of China is a kind of "sui generis" itself...

Thank you very much for the kind insights, fellow scientists.

All the best for all of you.

Prof. A. Hess

I have expressed this elsewhere, but China will establish controlled economies rather than the system of open markets established, often accompanied by steam-boat policy, by the USA. Small economies through Asia will connect subject to Chinese provisions becoming de facto part of a larger core-based economy. Where China will continue to economically expand is another as her political institutions fossalise again and the freeing up of buying potential of her citizens stops.

Dear Stanley, the flaw here is that a capitalist economy is controlled by firms, and not a 'free or open market system' (see Coase and Cheung) ; if you see an 'open market' in the USA, as I've said to Louis up above : 'there is none so blind...'.

Controlled by 'firms' vs ' the State' ? The same : who runs the State in the USA ? Private firms ; then, are those firms really 'private' ?

In China, the problem may be a little different because (as Louis writes) : 'It is difficult to know what is public and what is private because the two are embedded.' But it's quite the same in the USA and elsewhere, in my point of view : what is really 'private' or 'public' is never clear.

Is China's growth sustainable ? It depends on the ways to fulfill the needs and on the consumption that can swallow the supply - the old 'Say's law' problem. In the capitalist economy, overproduction is normal : shops, garbage cans and prisons are always full. This simply means that market forces - the 'price system' - do not work. On this, Schumpeter, following Marx, was right. One can also say that relevant prices have vanished and transaction costs are high, it's the same.

You're right when you mention the geographical expansion, let's say simply imperialism, a way to solve this problem ('continue to economically expand' : sell and buy commodities) ; but it's bounded and war is the next step : the old way to 'burn' commodities, workforce included ! The big 'potlatch'.

I think that China can't fall : it's too big and the old 'socialist' system is maybe not completely dead. But all depends on their ability to self restrain - self control their needs and the workforce. Maybe that Xi Jinping is on this. And maybe that they will go the way (back) to a real non capitalist 'open market system' : less firms and more open or real markets (small shops)... and maybe, paradoxically... more State planned production also : the Plan viewed as a mean to solve the 'Say's law' problem... this simply means : 'forced' consumption (Hayek would not agree, but 'there is none so blind...').

Notice that if capitalist's 'markets' do not really work, like real bargained markets, it's impossible to state where and when there is a 'forced consumption' and where it isn't. An empiricist or 'microeconomic' argument doesn't give us anything and it's better not following most distinguished economists, like Louis, on this (probably that Hayek would agree). If, generally, you can't know exactly what you buy, you can't say that an action is 'rational' or not (Pareto's paradigm). But you can judge witch constraints or transactions costs are 'rational' in social terms, by their effects, that are generally called 'externalities' (an 'externality' is just the visible effect of a constraint, so it's just also a constraint... or a transaction cost, see Coase 1960). Here we are back in politics.

The future of China IMCB ('in my cristal ball') : soft landing with a copilot named 'Trump'... So, fasten seat belts !

Of course the USA position isn't a straightforward Open-Market policy and I'm aware of the Firm theory approach to these matters, but I think I was considering USA's external economic policy. I have a piece on China's economic development on this site, the reasons for it and possible future development.

@Joanna. No, it does not deserve to be termed "economy in transition". The use of the expression would suggests that the economy changes from something known (you can term it socialist economy, command economy or whatever of your liking) to some state in the future that is already suggested in the expression (call it market economy, capitalism, etc.). In fact, people who use the term usually suggest that the final stage will be the pure neoclassical economy of the text books -- which exists nowhere. In fact, the future shape of the Chinese economy is far from clear. The recent evolutions show that China is aiming at reshaping the rules of globalization; the government is not shy to intervene directly in the management of large groups, including private ones. It is powerful enough to limit investments from these groups, request them to divest (or invest) and use its power to avoid the spread of structural risks generated by these groups. To my opinion, this is the trend the Chinese economy will follow in the future -- a new version of the "iron cage" promoted by Chen Yun in the 1980s. In conclusion, if the Chinese economy is "in transition", we know from where, but we don't know up to where. I have already written an article about this theme a few years ago based on my case study of the sugar market (I think it was in the European Newsletter of Economic Sociology)

I have just read the French news today : 'les Américains seraient les champions du gaspillage alimentaire avec environ 450 grammes de nourriture jetée par personne et par jour' ; this means : 'Americans waste 450 g of food per person every day' ;

You call this markets economy ? Future of China ?

Hey Louis, what do you think ?

What ever I think of it, it has nothing to do with the discussion. If you want to talk about the definition of a market economy, or the difference between a market economy, neoclassical economy and capitalism, please feel free to launch a discussion

Thanks Louis ; but you'r muddling different things (neoclassical economy ? Just signs on blackboards) ; real market economy is just the opposite of capitalism (see Coase 1937) ; the question here (CHINA (C of BRICS): Is it Capitalist? ) is linked to this problem : a real market economy is sustainable (see Coase 1960), capitalism is probably not and in the long run, it changes into something else (this is part of your previous answer up here) or it crashes (it turns into war for ex., or 'great depression', another cycle begins and so on).

The question is : what could be a 'general equilibrium' for China, an equilibrium that is not only signs on blackboards ?

Let's leave this difficult problem : it's been a good discussion, thanks a lot Aurelio too.

Dear fellow scientists,

It´s been an incredible discussion. Very insightful and instructive. I thank you all for giving us the invaluable knowledge you are sharing.

All my best for all of you.

Aurélio Hess

@Sabine. I don't think China has a state market economy (or a State capitalism, as many have classified it). and I also don't think it has a strong welfare system. Little by little, China tries to implement welfare measures, but it is far from successful, especially in the countryside. And by the way, nobody never developed to the state of a "free market economy" -- because the market economy is an abstraction, a theoretical tool, not a reality. And in recent years, I don't know any example of countries which developed through a democratic process. If you check Asian development, for example, South Korea was a dictatorship, Taiwan also and Singapore was controlled by Lee Kuan Yew in a strong manner. Japan developed from the Meiji era, then the military control and, after the war, the occupation of the US. Democratization followed development, not the opposite way around. However, I would not state that it is a compulsory pattern. Actually, the link between democracy and development is rather weak and highly debated.

@Sabine. I already answered your question in previous posts. I objected the term "transition" because it suggests that we already know the final stage -- which should be something like "market economy". the market of neoclassical economy, or even "capitalism"(the three referring to different things). But the first two refer to some kind of ideal and theoretical situation which exist nowhere, and the third is an historical experience which defers among countries (American capitalism, vs Japanese capitalism, German, French capitalisms...). It is not even sure China will become capitalist (or is it capitalist? I don't think so). As you said, it followed its own path of development (which is still very fragile actually). Then, "transition" to what? Nobody can answer this question (from what stage, we know, but to what? we don't know). Then, it is better to drop the label "transition". At a different level, I am not objecting to democracy or democratization. I just said the link between democratization and development is not clear and not supported by history (a point even Milton Friedman agreed on).

Dear Dr. Sabine and Dr. Louis,

Very interesting points. You´ve made this discussion even more interesting!

Thank you.

Perhaps the transition is political and social as well as economic, that the USA is being successfully challenged and different systems are coming into place. For a long time the USA's hegemony and its slant on world relations has been accepted, many times to the good, at other times not, now change has begun, gaining impetus. China, India, and even Russia are to some extent evidence of deeper changes expressed economically. Perhaps the USA concept of state upon state interference, one that came out of the 2nd World War, should now be dropped and the world learn by experience in a genuine laissez-faire global environment.