Even though they call China a communist country but in their paper today (New York version), the New York Times lauded capitalism for making China the second biggest economy.
Quoting the main protagonist of the article, Wu Jinglian, Li Yuan goes on to say that private companies in China are under assault.
How are they under attack? They cite two reasons.
The first reason is taxes (and regulations to some extent). The article opposes the move by China to improve its’ social security system just because it would erode corporate profits by 2.5%.
Forget that it would improve the lives of countless Chinese citizens; you can’t just tax corporations!
Let’s look at how NYTimes editors feel about taxing American corporations to fund social security. Almost all of them support the move. There have been countless editorials supporting the moves to improve Social Security.
But apparently, Chinese people don’t have the right to live with the same dignity.
Another way China is allegedly attacking private enterprise is via regulations. The article cites the mandate to register with the Government and pay taxes when you sell products online as an example. Adding that it would increase taxes on those companies and even force them to offer employee benefits.
Can you imagine such an injustice? Businesses having to offer employee benefits, what an outrage!
The article goes on to say that it was due to ‘ambitious’ proposals like universal healthcare that China has to fork more money from private companies. So seemingly, the NYTimes believes healthcare is a right so long as you are not a Chinese citizen.
The writer decries tax increases in China but makes no mention of the unfair trade deals that benefit Chinese companies. The countries that are part of China’s Maritime Silkroad initiative have surrendered their autonomy. Their agreements with China stop them from taxing Chinese companies no matter how much profit they make.
As China erodes corporate profits by 2.5% to pay for health care and social security, it is opening up of billions of dollars in trade deals with foreign nations. But neither the author Liu Yuan nor the protagonist Wu Jinglian mentions it in the article.
Again, the New York Times editors support it in the United States. They have heavily criticized Trump for cutting the red tape and have even called for greater corporate restraints.
Apparently, what’s good for the goose isn’t good for the gander.
So for some reason, Times’ editors support one thing in America but oppose it in China. Why that is, I will come to later.
The article gives the impression that somehow private businesses in China have no production power and give up their business authority to the state. The private sector controls nearly 66% of all Chinese jobs and 90% of new jobs. They have thus greater control over the market than the state.
With control over most of the country’s workforce and with the worst labor laws, the article claims private enterprise in China is under attack because they might be forced to offer employee benefits.
When the Supreme Court of the United States ruled against unions fighting for workers’ rights, the New York Times criticized the decision. But if China does exactly what the New York Times wants in the United States, it is an attack on free market principles.
Sale of Shares to the State
The second example that the article cites as an attack on private companies is the lack of sources of funding. It claims that as China tries to wean its’ economy off borrowing, private companies cannot raise capital. The only window left to them is selling a stake in their firms to the state.
They mention this claim as a trend but exactly how many companies have sold a part of their share to the Government? 46.
Out of the millions of private businesses in China, 46 sold a few of their shares to the state thus it is a trend. As a matter of percentage, I think I could find more American companies whose executives are having an affair with raccoons. Would that mean there was a growing trend of US executives cheating on their spouses with raccoons?
China has made it hard to get loans hurting the banks. Fewer loans mean the banks have lesser control over the economy.
But why would the New York Times support private Chinese companies?
Part of the reason is just foreign policy. Chinese businessmen tend to be willing to leave their native market for the American one. As a result, they get very close to the American officials and appear keen to liaise on all fronts.
Just as corporations mainly control the policies of the United States, private Chinese enterprises could do the same. More than anything, the Chinese state is trying to stem their control over the economy. That is what irks the likes of the New York Times.
After years of doing the contrary, the New York Times is willing to credit capitalism for China’s success without mentioning the role its’ manipulation of currency markets and the intellectual property thefts have played.