this post was submitted on 22 Sep 2025
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I respect and appreciate XHS's insight and analysis but stand by fundamentally disagreeing with their application of "neoliberal" to China. Yes, the Chinese state wants to balance the budget. That is not even a central tenet of neoliberalism, though. What is are privatization, the destruction of state capacity, and the elimination of regulation. From a Marxist perspective, we'd add the dominance of finance and monopoly capital. None of these apply to China. China currently has a planned economy where the market is subservient to the political directives of the state. XHS also frequently claims their trade policy is mercantilist, but I think that misses what Chinese capital investments actually do in the countries where they're made. China is constantly building the transportation and industrial capacity of other countries so that they can become more equal trade partners, which requires exporting to those countries. XHS says that these exports are proof of China's unwillingness to alter its trade relationships away form an export economy to a balanced one. I argue that those exports are necessary to create countries who have the material basis needed to be balanced trade partners. Chinese capital investments produce negative returns from abroad and yet they continue to grow and expand. We can assume this is neoliberal trade economics being carried out very stupidly and contrary to the CPC's stated goals, or we can accept that China is willingly losing money in order to boost the economic and industrial development of the world's most underdeveloped countries, which is obviously needed in order to progress to sovereignty and eventually socialism.
XHS is and has always been correct about their analysis of China's debt problems, need to move to MMT, and need to build much more internal consumption and circulation, and their knowledge about the internal dynamics of China beats everybody on this site by a mile.
Awesome response, comrade. I'll think deeply about your analysis, thank you for your insight. Especially the data on Chinese capital investment abroad returning negative profit is indicative of purposeful anti-imperialist policy. It's good that we can in this instance both appreciate the analysis of other comrades and criticize it from respect.
This is incorrect. In fact, privatization did happen in China. All of the big tech and renewable energy companies you hear about including EV, solar, AI and robotics are all private companies.
However, you are still missing the fact that China had been able to avoid austerity for the most part because of the tremendous exchange of cheap Chinese goods being sent to the Western countries. Many other countries (especially post-Soviet Eastern European countries) also tried to balance their budget but simply did not have the vast labor pool to dominate the export market to matter.
This is the real outflow of China’s wealth - an immense outflow of real resources and labor for decades that could have been spent to improve the lives of the Chinese people. This is the reason why people in the West can enjoy cheap goods.
Always think in real terms and it’ll make sense. Who’s gaining the actual goods and services, and who’s working hard to make them in exchange for a financial asset.
The existence of private companies is not privatization. Privatization is the sale of public goods, services, infrastructure, and enterprises to private, for-profit entities. Under neoliberalism, this becomes the overriding priority of the state that takes precedence over all socially useful functions of the state. There is nothing off-limits in neoliberalism's privatization regime. The bulk of China's economy, especially the "commanding heights" remain under state and party control. This is entirely incompatible with neoliberalism.
I agree with and acknowledge all of the above. That's the nature of being a colonized, developing country. It's not Chinese neoliberalism.
Also, "sound finance" is very much a tenent of neoliberalism, especially so under an economy with significant for-profit private sector. It's the job of the state to ensure that overproduction isn't going to 'trash' (giant trade surpluses). I say its trash because its very similar, if the market fails and there is an excess of say, wheat, in the economy, most socialists would say the Government should purchase it at a floor price and give it for free. Now, instead of giving to your own people, you decide to give to Americans and Westerners just because they can afford to buy it, its done 'naturally' by the market.
Exports under a market economy cannot be considered the same as a central planner deciding to give solar panels to Cuba for free or at cost for ideological or political reasons. It arises from the capitalist wanting to maximize profits.
In such an economy it is capitalist tendency to hoard and to much lesser extent workers tendency to save that give rise to massive Government deficits or build up of private sector (commercial bank) debt.
In a pure state run economy (without commercial bank lending), the state deficits would be naturally much smaller, since prices are flexible downwards without causing unemployment and because a large source of leakage i.e. capitalist tendency to hoard is absent.