Thursday, May 18, 2006

Not Quite Capitalist Yet

I've been on a Xinhua news kick of late. Yes, it is the propaganda mouthpiece of the Chinese regime. It needs to be taken with a grain of salt, of course, and its difficult to distinguish between 'news' items and 'opinion.' Nonetheless, the picture that emerges is not necessarily one of unabashed capitalist roots cracking the concrete foundation of the socialist state--the dominant view in the West, particularly in the business press.

Take for example this article on capital taxation in China. The Deputy Director of tax research at the Ministry of Finance, Liu Shangxi, had this to say:

"Interest tax plays a role of narrowing residents' income gap by using the collected money to improve low-income people's lives," said Liu....China launched interest tax on Nov. 1, 1999, in a bid to expanddomestic consumption.


Contrast that with Republican mantra, summed up in the WaPo:

Republicans hope the legislation, which extends existing tax cuts on dividends and capital gains as well as changes to the alternative minimum tax, will give their party a boost heading into the midterm congressional elections in November.


Yes, contradictions abound in China's political-economic system. Wait, maybe that does make it capitalist after all.

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