Sunday, December 16, 2012

People-Centric State Capitalism Vs Profit-Centric State Capitalism

The incumbent ruling party of S'pore- PAP, which i often use the term Pro Alien Party is also known as Party Against People by some others. There is validity in being dubbed Party Against People for reasons we shall see.

CN: Characteristic of China's state capitalism by economist Graeme Maxton.
SG: Sinkieland state capitalism style currently based on my observations.

Here we go with the comparisons:

State Capitalism
CN & SG: State controlled or at least state directed (i see this as only commonality).

CN: Profit is less of a motivating factor
SG: Maximise profits at all costs. The heck with safety(public transport) or suppression of sinkie wages with cheaper foreign workers.

Getting Customers
CN: Customer base often provided. eg in rail business, contracts offered only to local companies.
SG: Captive market provided & greed greed greed via massive imports of foreign workers aka customers to maximise profits at all costs. However contracts more fair as offered to foreign companies.

Treatment of Own Citizens
CN: Ensure skills, jobs & wealth are kept at home, not sucked away by foreign-devil employers.
SG: Many skills, jobs, wealth lost as sinkies replaced/displaced by cheaper foreign workers later to be brought back to their home countries.

CN: Technology often provided by state thus removing R&D costs. Or techology 'leached' from foreign companies then localized.
SG: I have no comments about technology but with regards to leaching, Suzhou Industrial Park is good example of chinese local officials 'leaching' & then setting up rivaling industrial park & screw SG.

Grabbing Dwindling Resources
CN: When chinese companies go abroad, state is behind them to gain access to world's resources.
SG: What resources like mines, farmland in other countries have SG govt-linked companies gain? I see them buying shares(buy high sell low) in other foreign companies.

"For China, these are strategic investments, a way to beat their opponents in business & win geopolitical influence at the same time. Western companies say it is unfair competition. The chinese model is not wrong. It is just different. It does not depend on free market & profit to survive."-Graeme Maxton

Rivalry: Chinese model Vs Western model
CN: When chinese state owned companies make bid to build infrastructure in other countries, the state or 1 of its banks will provide low-cost financing, while chinese companies provide low cost labor making it impossible for rival European or US bidders to compete.
SG/western model: Unable to comment on infrastructure since SG govt-linked companies don't seek profits in building infrastructure in foreign countries.

It is apparently clear that the people-centric model is much more sustainable than the profit-centric one. Is common sense for the Communist Party of China to treat its citizens well in order to stay in power.

The tide is turning against Party Against People populated with scholars drawing $M salaries.

I wrote about hidden dangers of cheap (observations again by economist Graeme Maxton) back in May. 6 months later in Nov, some chinese bus drivers hired to work in SG because of cheap wages--> strike

I'm glad it exploded in the face of Party Against People/Pro Alien Party.

- Cheap Chinese Workers? Got Hidden High Price

Deported go back to China, their govt is people-centric to them.

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