American and Chinese Governance Converge

This article has an interesting take from January now that Shanghai was smashed by the lockdowns. The convergence with the US and China is clear though, and only those who don't want to see the similarities refuse to acknowledge what is done through SOEs and direct political control in China is passed through private enterprise in the U.S., at once making China more authoritarian but also more limited in its scope versus the U.S. being seeminly more benign but with more totalitarian reach. Although thsi article makes it sound like maybe China is widening its definition of dissent...

Austrian China: Cross-Examining China’s 2021 Cancel Culture

At the same time, bit by bit China is being transformed from a country with a decentralized minimalist government nurturing a culture of entrepreneurship, competition and private sector-driven innovation into a country with an increasingly centralized big government propagating the idea that better governance is the cure to all ills.

...Before we go on to the wider societal issues, just to provide a rough idea, here are a few examples of the kinds of individuals who ended up getting themselves cancelled.

They include public intellectuals such as Gao Xiaosong (高晓松) or Yuan Tengfei (袁腾飞), celebrities from the entertainment industry such as actress Zhao Wei (赵薇), but also increasingly many prominent Chinese entrepreneurs with a social media presence such as Wei Ya (薇娅).

We published an entire post on the Wei Ya case, and it forms a key part of Man Tianmai’s article, as well.

To be clear, this does not mean that these people were ‘disappeared’, as adherents of the ‘China dystopia’ narrative might imagine. Just as in the West, it’s a virtual jail, not a physical one. On the ground this means that victims are blocked from a role as a public figure, be it on social media, on the screen or on the domestic Internet

...In per capita terms, Shanghai also has one of the largest contact tracing teams in all of China (3000+), and perhaps thanks to this, Shanghai has never had a Covid-19 case outbreak where the source of the outbreak could not be pinpointed. The Xi’an contact tracing team by comparison allegedly only had around 300 people for a city with a population half the size of Shanghai, and in the case of the recent outbreak, it failed to identify the source. This failure led to a city-wide lockdown under which workers deemed non-essential were prohibited from leaving their housing subdivisions.

These events left Chinese feeling that something was amiss, and yet, as Man puts it, faith in the state rarely seemed to waver for long. On the contrary, the epidemic reinforced their "religious identity" in every way. The government pointed to the chaos underway in the West, patted itself on the back for its allegedly successful “zero Covid” strategy, and those not directly affected by the resulting chaos for the most part approved.

...Are these Blackrock companies comparable to China’s state-owned enterprises (SOEs)? Perhaps not in all senses, but in many. For Western readers wishing to understand the key differences between China’s economy and that of the West, this point is absolutely crucial. Both are by definition non-competitive and subject to all the ills of central planning. Just like China’s SOEs, Blackrock has de facto direct access to the central bank’s money printing machine and their top staff regularly rotate in and out of government regulatory agencies24. For both Blackrock and China’s state owned enterprises, political considerations are the bottom line, not economic ones. In many US industries, literally every major company is controlled by Blackrock, which necessarily limits the degree of real competition.

...While there are many similarities, there is one huge difference between China’s SOEs and the Western Blackrock companies. Chinese SOEs make up only ~25% of the Chinese economy, a number which pales in comparison to the 50-60%+ share Blackrock enjoys in the US25. In the US and to a large extent in Europe – though less well documented there – Blackrock has become the central planning establishment.