American vs Chinese Capitalism

With capitalism starting to take more of a hold on the Chinese community, there are some growing issues that butt up against its limits given its political structure. Reports are showing that more and more wealthy Chinese are leaving the country to pursue life with better benefits outside of making money. There are also news reports showing a higher discontent level by ordinary Chinese citizens with the fact that even though Alibaba is a Chinese company, they are not allowed to purchase shares. These two examples show that there might be a ceiling in regards to how far capitalism can reach in a communist centric political system.

In the last few years, it has been well documented that there are a large percentage of wealthy Chinese citizens looking to move away from China. This is not surprising. It is because these families have reached a point where the utility of making another dollar is less important than the utility of social or educational benefits found elsewhere. This can be seen as a direct result of the regulations put on the society by China’s communist government. Until the government is able to change some of its social policies (whether it’s education, environment, freedom of speech), this exodus will continue to grow. Maybe the Chinese government is ok with these people leaving as it would create job openings for other Chinese. But when the population sees the trend, they will probably be motivated to move on as a whole, which could be detrimental to the political stability of the country.

This week, Alibaba will be going public. But with investment regulations being so tight for for the non-wealthy in China, they are unable to invest. This is maddening to some, as Alibaba is considered a main Chinese company. This issue could create some unrest within the investing community in China, as the pride of having a company like Alibaba have more of a foreign ownership hurts the pride of the country. The following Bloomberg article (link here) spells out the issue more.   

Both of these issues should be taken as reminders as to the limits capitalism has when operating under a political system like China’s. A country should never want its successful, rich citizens to leave. It should also give the general public the same access to their own companies stock as the wealthy do. Only then will these issues stop.

A special thanks goes out to the American way of capitalism. It is not perfect by any stretch of the imagination. But it does give access to those who desire it most, unlike other countries.

*This is an opinion piece. *