Foreign Policy Blogs

The Emergence of 'Bamboo Capitalism'

This week’s Economist magazine has an interesting cover title,  and articles highlighting the emergence of something I’ve written about frequently here in my Global Markets blog — namely the Chinese state’s spin on capitalism. The Chinese example may be the most successful, but it is not the only — nor, necessarily the best — model of State-sponsored capitalism. Many of our European allies — Britain, Sweden and France for instance — owe a substantial portion of their post-war economic success to state-managed democratic capitalism. More, the United States has and continues to use state-sponsored enterprises with great success. Amtrak, the US Postal Service, FHLMC & FNMA (Freddie Mac & Fannie Mae, respectively) are just a few examples. And for much of the 20th century, the airline and telecommunications industries in the US were government regulated enterprises. Even now, the nation’s two primary pastime sports industries — the NFL and Major league Baseball — enjoy special government-sanctioned anti-trust protections; while most “private sector” utility corporations are still subject to state governance and regulation by so-called public service commissions (PSCs).

Though there were many critics of State-sponsored capitalism early on — and there still is in many quarters — who argued that China’s state-managed version of capitalism was unsustainable, it seems the long-term sustainability of so-called ‘State Capitalism‘  has been proven, and is even gathering steam in unlikely places — India, Cuba, Vietnam and the Middle-East to name a few — with the same great success that Western capitalist nations like ours have experienced using this economic model. Read more on this here...

It is a trend, I believe, that mainstream economists and Market strategists — even the most fiscally conservative Monetarist — needs to take seriously, and perhaps even learn from some of its better principles such as long-term economic planning, more efficiently regulating commodity & futures markets; and minimizing volatility and economic shocks like the one the West continues to schlog through in the wake of the Great Recession. Pay attention: you heard it here first!

Recommended Reading: The End of Free Markets by Ian Bremmer

What Else to Read on States & Capital Markets



Elison Elliott

Elison Elliott , a native of Belize, is a professional investment advisor for the Global Wealth and Invesment Management division of a major worldwide financial services firm. His experience in the global financial markets span over 18 years in both the public and private sectors. Elison is a graduate, cum laude, of the City College of New York (CUNY), and completed his Masters-level course requirements in the International Finance & Banking (IFB) program at Columbia University (SIPA). Elison lives in the northern suburbs of New York City. He is an avid student of sovereign risk, global economics and market trends, and enjoys writing, aviation, outdoor adventure, International travel, cultural exploration and world affairs.

Areas of Focus:
Market Trends; International Finance; Global Trade; Economics