China is a crony capitalism built on systemic corruption and raw political power.
Property rights are not secure, a politically connected entrepreneur, with the full backing of the coercive power of the state, could simply expropriate the value from ordinary people.
4 kinds of capitalism:
(1) state-guided capitalism: government sets industrial policies and directs investment
(2) oligarchic capitalism: empowers and enriches the few at the expense of the many
(3) big-firm capitalism: accentuates the dominance of big firms and suppress innovation
(4) entrepreneurial capitalism: small and innovative businesses drive growth
On the surface, it does not seem to matter whether Chinese capitalism is entrepreneurial or state-led.
But it does matter:
(1) social opp--arrangements for health care and education--contracted during the fast GDP growth period of the 1990s.Rising illiteracy is probably the most monumental legacy of the policy model of the 1990s.
(2) personal income per capita grow much more slowly than GDP per capita
(3) it is well established that China today is among the most unequal societies in the world. Certain groups or individuals are privileged over others to grab a larger share of the economic gains.
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