1
Q
What is state capitalism?
A
An economic system in which the state undertakes economic activities
2
Q
Which are some characteristics of state capitalism?
A
- Heavy presence of state-owned enterprises
- Selective use of industrial & trade policy
- Close relations between the business / commercial sector & the state
3
Q
What are state-owned enterprises?
A
Business entities established by central & local governments, whose supervisory officials are from the government
4
Q
What are state-controlled enterprises?
A
Business firms whose majority shares belong either to a government or to a state-owned enterprise
5
Q
Which are some strategic sectors within state capitalism?
A
- Oil
- Power / energy
- Telecoms
6
Q
How are state-owned enterprises favored?
A
- Preferred access to bank capital
- Below-market interest rates
- Debt forgiveness
- Favorable tax treatment / exemption
- Capital injections when needed
- Curtailing of competition
- Government procurement projects
7
Q
Why is state capitalism likely to endure?
A
- Finance relies on banks (state banking sector dominates the market)
- Useful for government policy (technology, raw materials, growth)
- Influence of politicians (State-owned Assets Supervision & Administration Commission [SASAC])
