The Chinese model of state-directed capitalism is coming apart — and it’s unleashing a new authoritarianism.
Ho-fung Hung is Henry M. and Elizabeth P. Wiesenfeld Professor in Political Economy and chair of the department of sociology at Johns Hopkins University. He is the author of Clash of Empires: From “Chimerica” to the “New Cold War” (2022) and City on the Edge: Hong Kong under Chinese Rule (2022).
In a global economy defined by overproduction and underconsumption, American and Chinese corporations are struggling to extract profits from developing nations. Without massive wealth redistribution, consumption won’t return to stable levels.
China did not develop capitalism during the 18th century, despite having a market economy as strong as Britain’s. The raw material for China’s 20th-century capitalist takeoff came from an unlikely figure: Mao Zedong.
Despite the pandemic’s impact, China has a long road to travel before it can surpass US economic power. Inter-capitalist rivalry is driving tensions between Washington and Beijing, not the personalities of Xi Jinping or Donald Trump.
China has long seen high-speed economic growth tied to property investment. That model is now failing.
Proclamations of a New Cold War between China and the US herald a clash between authoritarianism and liberal democracy. But what we’re seeing in the growing rivalry between the two countries isn’t based on ideological difference but on inter-capitalist competition.
Illusions on both the Left and Right about China miss how the contradictions of capitalism are shaping that country’s development.