Private vs Public Sector in China - Changes from 2003 to 2013
Sole Proprietorships - China has 42.2 million Proprietorships (Single) which is 74.6 % of the Total. Their Registered Capital is 2.2 trillion, which is 2.4 % out of the total registered capital of all companies. Average Capital/Proprietorship = 0.05 million. As expected, Sole Proprietorships though so numerous own only 2.8% of the Nation's Capital.
Foreign Companies - China has 0.44 million Foreign Companies which is 0.8 % of the Total. Their Registered Capital is 12.1 trillion, which is 13.0 % out of the total registered capital of all companies. Average Capital/Foreign Firm = 27.4 million. He finds that in 2013, Foreign Firms own 13% Capital employed in China.
Next he compares this with the situation 10 years earlier.
Private Firms - China had 3.3 million SOEs which was 10.5 % of the nearly 31.2 million companies.
Proprietorship Firms - China had 23.5 million which was 75.4 % of the total. The same proportion as in 2013!. They employed almost 1% capital.
Foreign Firms - China had 0.29 million Foreign Firms which was 0.9 % of the total - same as in 2013! Their Registered Capital was 21 % in 2003. Over the last 10 years the capital employed by Forign Firms has dropped by 8% points to 13% now in 2013. A drop of nearly 35% in their proportion within the National Total!
Essentially we can conclude that out of the proportion of Total Capital of all firms, Domestic Private Firms (both types) have seen their Proportion of Capital increase by a massive 24% (from 16% to 40% approx). This has occurred at an expense of Public-SOE firms whose proportion in the Total capital has decreased by nearly 16% (from 63% to 46% approx) and it is a result a reduction in Foreign Firms whose proportion in Total Capital has dropped by 8% (from 21 % to 13%). As is common knowledge we see that SOEs have lost considerably but not substantially. They seem to be retaining control of almost half the National Economy and stabilising at that high level.
Scott Kennedy notes 3 further points:
Some other interesting facts about the Chinese Economy.
SOE Sales - While the SOEs own 46% of the Total Capital of Firms, their sales are substantially lower. They sell only 25% of the product output of China.
Global Accumulations - China's Integration into and Appropriation by Global Capitalism
As regarding exports, many argue that China's Trade Surplus is unfairly and wrongly biased in China's favor. They say that in many cases while China imports parts, it exports the finished product. The export price of the Branded product is much much higher than the prices of the parts.
Let us see this through the example of of iPhone assembly operations in China. The parts of an Apple iPhone reach China from the US and neghbouring countries. It is valued at around $163. China assembles these parts for a cost of only $7!! These iPhones are then exported to the US where say this model sells for around $400. The export of this iPhone from China will be valued at the final sales price of $400 and not at $170!! So while China earned $170 - $163 = $7, its trade figures reflect a trade surplus of $400- $163 = $227!! This happens in many cases where the finished product is exported from China. This is also/ primarily a way for the se Large Corporates to show no profit in the US and nso pay o taxes in the US. These corporates get away without paying taxes and these profits are transferred to Tax Havens (No-Low Tax countries.
Local Accumulations - Local Capitalism at Play in China
LAND - It is estimated that close to a close to 4 million Chinese farmers lose their land every year to their local governments who are in league with Real Estate Land Mafia or expanding industries. This is partly to generate funds for the Local governments who face a hard budget constraint since their revenues were slashed during of reallocation-redistribution of Centra-Local Tax Finances in several rounds of Fiscal Policy Alterations. And it is partly a corrupt rent-seeking exercise. It is said that each acre of land of land is purchase from the Chinese farmer at a cost of around $18,000 and sold tothe builders or industrialists at a price of $720,000!! An increase by a factor of 40. Or a profit margin in the region of 4,0000%. Once must clarify that these are only approximate figures and more than anything they vary drastically from region to region. For example, resale prices in Pearl River, Wenzhou and Yangtze delta will be much higher than at other locations.