Crony capitalism in China and Russia

The political system of China remains the same even as the economy is changing. "For the communist party, capitalism is a tool for remaining in power," said Minxin Pei of Claremont McKenna College, California, at the Aleksanteri Conference on Friday.

Hong Kong

– Western liberals assume that economic change will lead to changes in the political system of China. This has not been the case.

This was the message of Professor Minxin Pei of the Claremont McKenna College, California, as he spoke at the Aleksanteri Conference on 11 November. According to Pei, liberals cannot fathom the communist party of China.

–The party never intended to give up its power. For the party, capitalism is merely a tool for remaining in power.

According to Pei, China has a system of crony capitalism. The party controls the economy and guarantees its position by handing out economic benefits. Freedom in private life has increased, but political control is even tighter. The government has invested considerable sums for example in controlling the Internet.

– Marxist or communist ideology is no longer a driving force in China. Government is based on the survival of the economically fittest. This argument is used to justify oppression.

Pei compared China to Russia. After the democracy of Yeltsin, Putin has restored authoritative government. The Russian government also has large financial resources, and it has used them to build its political power further.

Linda Jakobson, director of the East Asia programme at the Lowy Institute of Sydney, gave a presentation on the energy cooperation between China and Russia. Despite Russia's immense oil and natural gas reserves and China’s purchasing power, the countries cooperate very little in the energy sector. The reasons for this include a dispute on the prices of oil and natural gas.

– Russia wishes to retain a European price level. China, on the other hand, demands lower pricing suitable for its own market.

The theme of the eleventh Aleksanteri Conference was The Dragon and the Bear – Strategic Choices of China and Russia. The conference brought together more than a hundred Finnish and international experts on China and Russia. In addition to Pei and Jakobson, keynote speakers included Professor Chunling Li of the Chinese Academy of Social Sciences and Alexander V. Lomanov of the Russian Academy of Science's Institute of Far Eastern Studies. Li discussed the social structure of China. Lomanov focused on his country's economic model after the global financial crisis.

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Text: Maria Niku
Photo: 123rf
Translation: AAC Global
University of Helsinki, digital communications

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