Posted by: bklunk | April 29, 2007

Can You Be “A Little Bit” Market-Oriented?

Liberals tend to say that once a country goes down the market-oriented road it has to keep going. The question is how this will spillover in politics and international relations.

Shanghai’s stock market is making billionaire « Chinese International Affairs

Source: http://www.nytimes.com/2007/04/21/business/worldbusiness/21garden.html?_r=1&n=Top%2fNews%2fWorld%2fCountries%20and%20Territories%2fChina&oref=slogin

China’s stock markets are ever more profitable to the Chinese people. On April 19, Yang Guoiang, owner of the real-estate company, Country Gardens, became a billionaire as it went public that day. Country Gardens was valued at $15 billion. Many others are also making fortunes by investing in stocks. This has allowed for China’s middle class to continue to grow. Today, there are new entrepreneurs in the real-estate branch in the block.

The same would not have been true early in 1990s since the government did not allow companies to acquire public land and sell them. In the late 1990s, the government finally moved to make reforms to the market to allow companies to acquire and sell public land. How will the CCP react to this rising acquisition of public land? Will they set forth new restrictions?

I believe it is too late for them to take such drastic steps primarily because people are gaining a voice and power through the wealth that they are acquiring through the stock market. Besides, the CCP has made it clear that it intends to increase protection of private property rights in the follwing years.

Powered by ScribeFire.

Advertisements

Responses

  1. I agree with your assessment of the current trends in the Chinese economic/political situation. In my opinion, the current system — a liberal economy mixed with little to no personal freedom — is doomed to fail precisely because of the economic liberalization.

    History has shown us that economic prosperity within a growing middle class is what stimulates democracy and keeps it going. The beginning stage of that process is exactly what has happened in China. Economic freedom — or at least more economic freedom than had ever been allowed before — has allowed average Chinese people to prosper, and prosperous people are motivated to fight for a say in the political process. It happened in Europe with the merchant class, and it will happen in China with the educated youth.

    So how will the CCP react? My guess is that they will continue in their efforts to clamp down on potential opposition for awhile, but, in the long run, they will have to adapt in order to survive. Outright revolution is not improbable otherwise. The Party leadership would be wise to realize that its time has passed.

  2. If one were to assess China’s stock market situation now days, they will find that more and more Chinese’s citizens are gaining interest and are investing through the global market exchange. This stock market fever is hitting demographics of all ages, genders, and class, throughout much of China. Because of this crazy frenzy, the market is hitting record highs that have never been seen before in China’s history.

    Interestingly, however, this hike-up in the stock markets have historically not been so prevalent. China’s typical strict oversight, corruption, and large state owned companies, have been the reason as to why their markets have been regarded as repressive. But due to the changes and reforms made by the CCP, the Shanghai market will continue its sky rocket performance, especially in the real estate area. Now that these reforms have taken place, I too believe that the CCP will have a difficult time reversing what they have already instated. (They will however be very observant bystanders)

    Therefore, I see no worries for many of the current investors, but for their sake, let’s hope China continues on this path of economic development.

  3. This is a very interesting issue. I definitely think that this was a good idea, letting the public become involved in the stock market and somewhat free economy. It gives people a greater sense of pride and responsibility and they probably feel that they are contributing to society by selling and trading stock on the national, and sometimes international level. But once the county has allowed individuals the right to buy and sell stocks and for companies to own public land, there is no turning back. You can’t just give something as big as this to the public, and then take it back without there being some major consequences such as a revolution. I think it would be in the best interest of the country to keep allowing the free market idea, and to not take it away from its citizens.


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

Categories

%d bloggers like this: