Political Economy of State Capitalism: A Snapshot on China’s State Capitalism

Abstract

This study examines the political economy of state capitalism with particular reference to China’s state capitalism. Relying on qualitative method of data collection through the use of secondary sources of materials, the study argues that China’s economic growth in the past decades has been both enabled, nurtured, conditioned and constrained by global capitalism and at the same time the successful Chinese growth model under state capitalism has heightened global competition, and accentuated the inherent contradictions of capitalist development in other countries, including many advanced economies. The paper reveals that China’s state capitalism employs market practices, capitalist incentives and prudent macro-economic regulation, while performing quite well in aggregated economic terms. It concludes that the existence of an organized market rely largely on a set of institutional foundations that are created, legitimated, regulated and periodically modernized under the umbrella of a political authority such as a state so as to establish various rights and duties attributed to different notions of property.