Emerging Securities Markets in China: Capitalism with Chinese Characteristics

The nascent stock and bond markets in the People's Republic of China have received considerable attention from the international media, yet the emergence of these markets is poorly understood. China's new “limited stock companies” increasingly answer to a variety of public and private lenders and spenders, who partially own and largely manage the means of production. The government sometimes decides which companies and managers will be rewarded with the benefits of incorporation, and it grabs a lion's share of the newly issued securities. But the result is a slow, government-led move towards a more capitalist form of management and ownership. This kind of jointly funded project – companies that merge public and private ownership, management and responsibility – may become the defining characteristic of China's emerging “capitalism with Chinese characteristics.”