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Flashcards in State Capitalism Deck (7)
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What is state capitalism?

An economic system in which the state undertakes economic activities


Which are some characteristics of state capitalism?

-Heavy presence of state-owned enterprises
-Selective use of industrial & trade policy
-Close relations between the business / commercial sector & the state


What are state-owned enterprises?

Business entities established by central & local governments, whose supervisory officials are from the government


What are state-controlled enterprises?

Business firms whose majority shares belong either to a government or to a state-owned enterprise


Which are some strategic sectors within state capitalism?

-Power / energy


How are state-owned enterprises favored?

-Preferred access to bank capital
-Below-market interest rates
-Debt forgiveness
-Favorable tax treatment / exemption
-Capital injections when needed
-Curtailing of competition
-Government procurement projects


Why is state capitalism likely to endure?

-Finance relies on banks (state banking sector dominates the market)
-Useful for government policy (technology, raw materials, growth)
-Influence of politicians (State-owned Assets Supervision & Administration Commission [SASAC])