Concepedia

Capitalism in China: A Centrally Managed Capitalism (CMC) and Its Future

Management and Organization Review · 2010 · 259 citations · 32 references

TL;DR

China’s economy is increasingly governed by a centrally managed capitalism in which the party‑state controls personnel, organizations, and capital while delegating fiscal and administrative powers to diverse corporations. The paper speculates on possible future ideological paths for China, weighing western democracy, mature socialism, and an enlightened authoritarian Xiaokang, and examines routes toward an indigenous democratic ideal of Datong. The proposed transition occurs in two stages: first, the party‑state shifts from Marxist ideology to prioritizing economic growth and social stability; second, it grounds its legitimacy in a Confucian‑inspired Xiaokang framework that values enlightened leadership and moral institutions. The author concludes that China is already undergoing a two‑step shift toward Xiaokang, having ruled out western democracy and mature socialism as viable options.

Abstract

While China continues to develop capitalistic capacities, the party-state has increasingly tightened control of the economy and synchronized political and economic stratification – a tendency towards a centrally managed capitalism . Under centrally managed capitalism, the party-state commands the economy by controlling personnel, organizations, and capital in both political and economic arenas. At the same time, it delegates fiscal and administrative authorities to multiple and diversely formed corporations to compete in the marketplace. I further speculate on future ideological alternatives: a western-style democracy, a mature-stage socialism, or an enlightened authoritarianism – Xiaokang (小康 moderate prosperity or well-off society). After eliminating or casting doubt on the former two, I argue that a two-step transformation towards Xiaokang is under way. In the first step, the party-state leadership gradually decouples its position from Marxist ideology of communism and socialism, and moves towards the maintenance of economic growth and social order. The second step then allows the legitimacy of party rule to be based on indigenous Confucian ideology that emphasizes enlightened leaders, moral institutions, and social relations (i.e., Xiaokang) . Finally, I explore the feasibility and paths towards an indigenous ideology of democracy ( Datong : 大同 – universal harmony).