ABSTRACT
Many terms have been coined to describe the current economic system of China. The official description is, of course, ‘socialist market economy’, which has been the national goal of economic reform since 1993. Unsatisfied with the official description, however, some Western scholars have given different names to the Chinese economic system. Bremmer (2010) classifies China’s system as ‘state capitalism’, in which the state governs the market to pursue national interest. Halper (2010) warns that China is trying to spread the model of ‘state-directed capitalism’, which is virtually the same as ‘state capitalism’, to the developing world. Huang (2008) calls China a ‘commanding heights economy’, because, according to him, the relative size of China’s private sector is still as small as it was in the world’s most statist economies in the 1970s. Prior to these arguments in the English-speaking world, some Japanese authors invented similar terms to depict China’s economic system. Kojima (1997) argued that China was in the transition period to ‘bureaucrat-led financial industrial capitalism’, which would be dominated by large state-owned enterprise groups financed by state-owned banks. Wu (2008) asserts that China’s current system is ‘state-made capitalism’, which is created by the will and plan of the state, and almost all of its benefits are reaped by bureaucrats and their cronies, but she predicts that along with the democratization of the political system, the economic system will evolve into a less state-directed capitalism. Although these authors use different terms, it is obvious that they share a common vision of China’s system that China is (or will be) a capitalist country with strong state involvement in the economy.
