Asia accounts for roughly 45-50% of the global economy, with China making up about
18.5%. China’s equilibrium rate of growth per annum of 10% massively exceeds that of
Western, democratic nations with the UK resting at about 2-3%, comfortably, per annum.
Economies in Asia and the West are more common than they are different with capitalism
being the dominant system of economic governance. The intersection between private and
public sectors however, is where we see the most considerable difference in China and the
UK for instance.
In the UK, the government and the Private sector operate separately, guided by
fundamental liberal principles, in order to ensure the free market of ideas, innovation and
organic economic activity. The Private sector is able to influence policy through lobbying
and connections, yet there are declared limits to how close the two spheres can get. In
China, the reality is starkly different. The Private and Public sector act in unison. The
largest corporations are either state owned, or controlled by monopolistic dynasties that
reward politicians for policy that directly benefits them. Irrespective of whether China
actually operates under a capitalist or communist regime, this relationship between business
and government is what makes the true difference. What this relationship does very well, is
facilitate coordination between both sectors to achieve strategic goals, and thus grow the
economy quickly. This relationship however, is highly destructive. In Asia, connections
trump competency. The economy is therefore open to manipulation, inefficiency and the
most tyrannical forces seizing control and opening the floodgates of corrupt practices.
A requirement of this intersection between public and private sectors is the presence of the
authoritarian regime that exists within China. Holding free elections and existing within a
democracy would make it impossible for China to keep power this concentrated. So what
happens when China does the reverse, and strengthens their authoritarian regime?
As global geopolitical tensions rise, China will be looking to strengthen their global
standpoint – this means strengthening the authoritarian regime, meaning large corporations
will inevitably develop tighter links with the party. The result of this will eventually become
unsustainable and catastrophic for China’s future. The owners and controllers will resort to
even more lousy forms of governance. Wealth inequality will become so painfully stark that
it could divide the country. Distribution and suppression of competition will become such
problems that the private sector will struggle to operate prosperously. Overall, the result
will be the engraving of divisions that could be powerful enough to galvanise political
opposition to the Communist party. China will be in no place to defend itself globally if its
internal politics are divided to the extent that could be caused by the strengthening of
Perhaps Fukuyama was on the right lines with the ‘End of History,’ and the doctrine of
liberal, western, democratic values will triumph in the end. Let’s hope so.