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would have made Jack Ma one of the most powerful people on Earth, placing a staggering degree of leverage over China’s economy into his hands. And here he was in Shanghai, talking about wanting to slash financial regulations and expand the use of cryptocurrencies and risky forms of credit (which he personally would profit from). So of course China cracked down on him. It wasn’t a question of suppressing his personal opinions, it was part of a concerted antitrust campaign—one that would soon hit the Alibaba Group with a historic $2.8 billion anti-monopoly fine, force it to break into six different “units” with their own CEOs, and force the Ant Group to break Alipay’s loans function off into a separate business. As Tech Buzz China journalist Rui Ma (no relation) writes, “The real question is how [Alipay] was allowed to get so powerful in the first place.”
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you have to ask yourself: which is worse, being too harsh on billionaires and their activities, or not harsh enough?
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there are ways in which China’s approach to so-called “entrepreneurs” and the corporations they create beats the U.S. approach. For another example, consider education. In 2021, the Chinese Communist Party introduced an ambitious policy known as “double reduction” in which, as the New Yorker reports, “companies that taught a K-12 core curriculum were restricted from prioritizing profit, going public, or raising foreign capital.” It was an extinction-level event for private education and tutoring firms, which had previously played a major role in the Chinese educational system and encouraged fierce competition among students to sell their services. (One company’s ads reportedly read “Come, and we’ll tutor your child; don’t come, and we’ll tutor your child’s rival.”) Almost overnight, one such company “let go of sixty thousand of its staff,” while others pivoted to entirely new business models, teaching skills for hobbies and recreation like “calligraphy instead of calculus” or even moving into fashion design. As one would-be mogul ruefully posted to WeChat, “the era of private tutoring has ended” in China. Meanwhile, the other half of the “double reduction” consists of sweeping reforms to public education, most notably cutting down homework requirements that were deemed burdensome.
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the model Noam Chomsky identified: “defund, make sure things don’t work, people get angry, you hand it over to private capital.”
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In the English-speaking press, there has been a lot of ink spilled over Chinese economic “authoritarianism” and the plight of the poor abused billionaires. There has also been a lot of ink spilled over China’s seemingly never-ending stream of technological marvels: the giant solar farm shaped like a panda, the world’s fastest bullet train, the magnetic rail gun, the helicopter-like “flying taxi” prototypes, and so on. But for ideological reasons, few commentators make a connection between the two: that China is capable of these technological feats, at least in part, because it is economically “authoritarian” and keeps its billionaires on a short leash.
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Elon Musk personally stepped in to stall California’s high-speed rail plans in 2013, when he announced plans of his own to develop a “Hyperloop”—essentially a giant pneumatic tube like the one in your local bank drive-thru, but for zipping cars back and forth at high speeds. The Hyperloop was always a silly idea, and its few practical demonstrations looked awful. But it accomplished its actual goal, which was to delay any high-speed rail from being built for over a decade and keep people locked into the idea of car ownership as the dominant mode of transport.
✏️ Interesting. Hyperloop wasn’t a bid to put in his own method of rail.. he blocked high-speed rail to keep people locked in to car-ownership. 🔗 View Highlight
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In a recent article for Foreign Policy, deputy editor James Palmer asked the critical question: “Did China Get Billionaires Right?” He summed up the state of the world’s two biggest economies like this:
In much of the world, the defining characteristic of billionaires is impunity: the ability to ignore laws, social norms, or borders through the sheer force of wealth. U.S. billionaires do all they can to evade their responsibilities to the state—or to actively subvert the government for their own ends. Capital, and the laws protecting capital, shields and fortifies them. It’s usually only when their wealth itself turns out to be fraudulent, as with FTX founder Sam Bankman-Fried, that they face jail time.
In China, however, every billionaire’s fortune is built upon a thin foundation: the goodwill of the CCP. At every turn, the ultra-rich, especially since Xi took power, are reminded that their wealth exists at the sufferance of the party—and that it could all be taken away. Careful not to draw attention to themselves or seem to challenge the party’s right to “lead everything,” billionaires’ position in China is inherently precarious.
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corruption in the CPC; that’s well-documented. China also has the awful distinction of executing the most people of any country on Earth, including for non-violent drug crimes. Its human rights abuses against the Uyghur minority— although cynically seized upon by anti-China politicians like Marco Rubio who couldn’t care less about human rights—are still real and horrifying. Working conditions in many Chinese sweatshops and factories are abominable, just like the European factories and sweatshops of the 19th century that Karl Marx railed against. Perhaps not by coincidence, the Chinese government has even cracked down on Marxist students and banned websites dedicated to Maoism—a curious action for a supposedly communist state. Feminist activists, too, have been imprisoned for things like reporting on the MeToo movement or handing out stickers. Other restrictions on public speech and artistic expression are equally impossible to defend, like the ban on supernatural horror films and all forms of pornography (including eating a banana in a way authorities deem too “erotic”). For that matter, allowing billionaires to exist at all, even heavily regulated, shows that China hasn’t quite got the hang of communism yet.
✏️ Concise list of arguments about why China isn’t exactly great.. but as always, two things can be true. You can be terrible and still do good things. Oof, that’s a tough one actually. followup 🔗 View Highlight
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like with Cuba’s literacy programs, it would be a mistake to say that nothing China does is praiseworthy because some things it does are inexcusable.