This is the fourth article in a series of FreedomFest 2021 articles. FreedomFest 2021 is created by PhD.Mark Skusen, An economist and presidential researcher at Chapman University in California. This year’s venue is Rapid City, SD (State of God), not far from Mount Rushmore.This article covers a panel discussion on freedom (or lack of freedom) in communist China. Panel members include Li Zhao Schoolland, Director of External Relations, Asia Pacific, Acton Institute, Techno-futurists and George Gilder, co-founder of the Discovery Institute, As well as authors and moderators Joshua Philip Epoch Times.
Philip: Is China participating in the free market? Is the Chinese market really free?
Gilder: It is as free as the US market, but it is moving in the wrong direction. The number of IPOs in the past year is three times that of the United States. Until recently, they were part of the US global technology empire (standards, packet economy, infrastructure, etc.). Alibaba is the flagship company. None of this has anything to do with the CCP. In 1988, I visited China with Milton Friedman. His suggestion to the Zhongtong government is to “control the money supply”, and my suggestion is to “let a billion flowers bloom”-I believe this is what happened. I predict that when mainlanders start to imitate overseas Chinese, Hong Kong will begin to take over the mainland. Despite the excesses of the CCP, Jack Ma’s shame, etc., China is an absolutely important part of the world economy. If we try to decouple from China, we will destroy ourselves.
[Cvrk: Gilder is quite obviously a “China hand” and long-time acolyte of the Henry Kissinger school of “opening China” at the direct expense of the West. His response was quite emotional in that regard.]
Schoolland: The Chinese market is not free at all. State capitalism owns all natural resources, banks, etc. All enterprises, big or small, must include a non-productive CCP bureaucratic entity whose sole responsibility is to monitor the “ideological purity” of specific enterprises. [She gave an anecdote about how a business owner was granted permission to crowd-source fund projects, but a CCP bureaucrat changed the policy, and the owner was executed for “exceeding his authority.”] Shanghai’s second largest cryptocurrency trading platform was shut down for operating outside the ChiCom central bank system. They are good at using the market to exploit others to promote personal growth.
Philip: Lenin invented the term “state capitalism”. One problem with state capitalism is that Chinese companies do not have to show profits, so they can win business at lower prices than other companies. In addition, compared with foreign companies, Chinese companies have a domestic advantage due to favorable supervision.
Gilder: Communism does not work. The proposition you are conveying is theft, subsidies, etc., comparable to the industrial revolution in the United States. In my opinion, the CCP knows nothing about business development. All the growth comes from private companies such as Alibaba and Tencent. It is crazy to think that this can be seen as “communism worked in China” in some way. Despite the presence of state-owned enterprises controlled by the CCP, the fastest growing country in the world (China) has achieved success. The CCP now only comes in after the company has succeeded. Starting with Deng Xiaoping (“getting rich is glorious”), the CCP got rid of the shackles of private enterprises and the result was explosive growth. Unless you are a CCP bureaucrat, you cannot participate in Chinese politics. If there is no democracy, people will not be engrossed in politics. The Chinese try to produce capitalism without democracy, while the United States tries to produce democracy without capitalism. China has created a capitalist economic miracle by using American standards, tools, and operating systems. We are now forcing them to stop it.
[Cvrk: The notion that the “Chinese economic miracle” just magically happened is absurd. It was people like him who facilitated giving away the store to Beijing in the mistaken belief that bringing Communist China into the international system would somehow “democratize.”]
Philip: Is there any connection between the CCP and the Chinese business community?
Gilder: The U.S. government has close ties with U.S. companies [attempting to claim a moral equivalence].
Philip: How does intellectual property play a role in Chinese companies?
Academy: All countries that followed the United States became rich; all countries that followed the Soviet Union became poor. This is the lesson the CCP learned before 1972. The CCP chose to follow the American method, but refused to give up any CCP control measures. In order to control a place like Hong Kong, including Hong Kong’s vibrant economy, the CCP will do whatever it takes. They know the power of the market, so they want to benefit from it (the party, not the people). Use and steal intellectual property as much as possible to provide business advantages. Unlike the West, small businesses are encouraged. Entrepreneurs are suppressed in China. Everything is to maintain the CCP’s control in China.
Philip: One of the reasons for the decoupling with China is the oppression and persecution of Zhongkang, as well as the layoffs of Deng Xiaoping’s economic policies by Zhongkang. How do we deal with decoupling?
Gilder: I am opposed to slave labor. China is steadily replacing slave labor with capitalist labor. Taiwan is the center of the global technology economy. Taiwan and the mainland are a large economy, and Taiwanese businessmen invest a lot in the mainland. If we try to interfere, it’s like ChiComs interfered with our Native American reservation policy.
Schoolland: They violate human rights, slave labor, religious persecution, etc., which are the foundation of their society. We must go beyond the so-called success of the Chinese economy and see on what basis it is built.
[Cvrk: Gilder’s remarks were an insult. He is of the school that opening China would magically “democratize” the CCP over the decades, and while noting that that strategy failed, he wrings his hands and claims that “economic destruction” will result if we decouple from China now. Has he ever visited the ghost towns that were once manufacturing and production centers in the Upper Midwest that he effectively helped make happen? Despicable.]
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