BIG IDEA | ‘Global investors are shocked to have discovered that China is run by Communists.’

‘The most lucid and logically coherent explanation also happens to be the simplest: Take China’s Communist Party at its word.’

‘Global investors are shocked to have discovered that China is run by Communists.’

• ‘China’s leaders are making abundantly clear where they stand on the tension between private profits and social wellbeing.’

‘These sudden regulatory shifts have thrown asset managers across the world into a frenzy of effort to understand and explain how prospects for investors in the second-largest economy have changed.’

• 'The most lucid and logically coherent explanation also happens to be the simplest: Take China’s Communist Party at its word.'

‘For decades, foreign investors have told themselves a comforting story.’

• ‘China was no longer truly Communist, after late paramount leader Deng Xiaoping embraced markets in the late 1970s and kicked off the country’s spectacular economic rise.’
• ‘The wealth and growth generated by capitalist techniques had converted the government and people.’
• ‘While the ruling party continued to wrap itself in the rhetoric of Communism, its members knew they were paying lip service to a bankrupt ideology, or so the thinking ran.’

‘The era of such creative ambiguity is over.’

• ‘With a true believer holding the reins of power, there can be no doubt that China’s rulers mean what they say.’

‘The distinction with true capitalist economies exists at a deeper, philosophical level.’

• ‘Chinese Communist ideology declares that capitalism is a stage human society will pass through, to be replaced by socialism and ultimately communism.’
• ‘This idea goes back to the writings of Karl Marx, who claimed to have discovered the universal laws governing human history.’

‘Having been relatively poor and backward prior to Deng’s “reform and opening up” era, the Communist Party decided it had been wrong to try to leap straight into the stage of communism, and needed to pass through capitalism first.’

• ‘But, crucially, capitalism is still only a stage.’
• ‘The party’s leaders are the architects of the future, there to look beyond this phase.’

‘Markets, viewed through this metaphysical lens, are mere tools to be deployed as needed by the shapers of history.’