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> Xi at running an economy, no one can Good thing he doesn't micromanage the economy then. PRC private sector responsible for 60% of gdp, 70% of innovation, 80

> Xi at running an economy, no one can Good thing he doesn't micromanage the economy then. PRC private sector responsible for 60% of gdp, 70% of innovation, 80% of urban employment and 90% of new jobs. CCP+SEOs does some direction, but most of PRC run on market forces, while (IMO) top down / centralized priorities are more competently directed than inept, seeing as PRC is rapidly closing gap in myriad of industries, so much so that others are centralizing and restarting industrial policies in response to PRC moving up value chain. At least US sees enough PRC potential to rationalize massive unilateral tech sanctions because centralization was winning. See similar response when US had to slap JP semi when their centralized approach worked too well. Reality is, for strategic sectors with high moats, centralization always wins because you can't rely on private sector and capitalism to maintain market lead when the board would rather do stock buy backs. And sometimes centralization requires solid dose of corruption and political connection to align resources with strategic goals that private sector is not capable of tackling.

brutusborn 4y ago
How does corruption and political connection align resources with strategic goals? My first thought was that it would make alignment worse since each agent is optimising for person gain, not for national gain.
- dirtyid 4y ago
  See Yuen Yuen Ang's model that unbundle corruption, TLDR is PRC bureaucrats are mostly involved in "access money", i.e. elite "exchanges" to get things done (basically lobbying in the west). When aligned with CCP bureaucrats incentivized to hit performance KPIs according to development goals, whereby getting shit done increase access to to greater tiers of corruption / personal gain, it forms a system where corruption is aligned with competency and state interests. CCP officials have to be very good at getting shit done to get promoted to get access to the big graft bux. They want to do well in their tier3 city postings where they can graft thousands and be promoted to tier1 city where they can graft millions. That frequently involves patronage networks with other competent performers. Years ago this was also noted by Yukon Huang, former World Bank director for China, Russia, and Former Soviet Union Republics, where he observed that PRC is the only country where increased corruption is correlated to increased growth - a paradox according to classical development theories. Essentially everywhere else corruption leads to inefficient allocation because corruption always almost not aligned with state interest. There elite are more just strait up involved in "grand" theft because the system is not aligned to make corruption contingent on realizing state goals. Of course at some point the corruption becomes so much that it affects social fabric, hence Xi's anti corruption drive that some think may have gone over board with respect to development because wheels stopped being greased due to fear/paralysis, no one want to do anythign for little reward or worse.

brutusborn 4y ago

How does corruption and political connection align resources with strategic goals? My first thought was that it would make alignment worse since each agent is optimising for person gain, not for national gain.

dirtyid 4y ago
See Yuen Yuen Ang's model that unbundle corruption, TLDR is PRC bureaucrats are mostly involved in "access money", i.e. elite "exchanges" to get things done (basically lobbying in the west). When aligned with CCP bureaucrats incentivized to hit performance KPIs according to development goals, whereby getting shit done increase access to to greater tiers of corruption / personal gain, it forms a system where corruption is aligned with competency and state interests. CCP officials have to be very good at getting shit done to get promoted to get access to the big graft bux. They want to do well in their tier3 city postings where they can graft thousands and be promoted to tier1 city where they can graft millions. That frequently involves patronage networks with other competent performers. Years ago this was also noted by Yukon Huang, former World Bank director for China, Russia, and Former Soviet Union Republics, where he observed that PRC is the only country where increased corruption is correlated to increased growth - a paradox according to classical development theories. Essentially everywhere else corruption leads to inefficient allocation because corruption always almost not aligned with state interest. There elite are more just strait up involved in "grand" theft because the system is not aligned to make corruption contingent on realizing state goals. Of course at some point the corruption becomes so much that it affects social fabric, hence Xi's anti corruption drive that some think may have gone over board with respect to development because wheels stopped being greased due to fear/paralysis, no one want to do anythign for little reward or worse.