‘Free Market’ Versus … China – Two Systems at Play

Go Lean Commentary

China is on the verge of overtaking the US as the Number 1 Single Market economy in the world…

Wait, isn’t China a communist state?

Hasn’t communism failed to deliver on its promises to elevate societies that abide by its principles?

Yes, and yes …

But China demonstrates that there is a difference between principles and practices.

China abides by communist principles, but their practice is more aligned with Free Market concepts, especially with their doubling-down in trade, World Trade.

Do we truly consider Hong Kong as a communist state? Far from it; yet it is China; it is part of the “One country, two systems” practice. This means:

… a constitutional principle formulated by Deng Xiaoping, the Paramount Leader of the People’s Republic of China (PRC), for the reunification of China during the early 1980s. He suggested that there would be only one China, but distinct Chinese regions such as Hong Kong and Macau could retain their own economic and administrative systems, while the rest of the PRC (or simply “China”) uses the socialism with Chinese characteristics system. Under the principle, each of the two regions could continue to have its own governmental system, legal, economic and financial affairs, including trade relations with foreign countries. – Source: Wikipedia

This is “two systems at play”. This Hong Kong/Macau reality is the most pointed Lesson from China for a new Caribbean. We can employ the Two Systems-One Country approach so as to introduce Self-Governing Entities with their “own governmental system, legal, economic and financial affairs, including trade relations with foreign countries”.

There is wisdom to this strategy. China elevated itself from poverty to prosperity for 1.3 Billion people in just 40 years. Well done. See VIDEO here:

VIDEO – How China became the world’s second largest economy – https://youtu.be/_sV5P_F3frY

CNN Business
Published on Oct 6, 2015 – More than 500 million people have been lifted out of poverty since China’s economic reforms began in 1978.


See additional VIDEO in the Appendix below.

We must do the same … for a new Caribbean.

This is the continuation of series on Free Markets Versus…; this submission is entry 2-of-6 of the full series cataloged as follows:

  1. Free Market Versus: Communism – Can they both co-exist?
  2. Free Market Versus: China – Two systems at play in ‘Words and Actions’
  3. Free Market Versus: Socialism – Prevalent in the Caribbean
  4. Free Market Versus: Cooperatives
  5. Free Market Versus: Labor Unions – Junior Communists?
  6. Free Market Versus: Common Pool Resources – Simpler Cooperation

In this series, reference is made to the need for a comprehensive roadmap for elevating the societal engines of the Caribbean member-states. We do have a role model in China, to look, listen and learn. The 2013 book Go Lean…Caribbean – a roadmap for the implementation for the technocratic Caribbean Union Trade Federation (CU) – made references (Page 64) to China with this explanation of the technocratic process:

Fostering a Technocracy
# 2 – Economists & Engineers – not Lawyers nor Politicians
The concept of a technocracy remains mostly hypothetical, though some nations have been considered as such in the sense of being governed primarily by technical experts in various fields of governmental decision-making. A technocrat has come to mean either ‘a member of a powerful technical elite’, or ‘someone who advocates the supremacy of technical experts’. Scientists, engineers, economists, and technologists, who have knowledge, expertise, or skills, would compose the governing body, instead of politicians and business people. In a technocracy, decision makers would be selected based upon how knowledgeable and skillful they are in their fields. Even the leaders of the Communist Party of China are mostly professional engineers. The Five-Year plans of the People’s Republic of China have enabled them to plan ahead in a technocratic fashion to build projects such as the National Trunk Highway System, the High-speed rail system, and the Three Gorges Dam.

China uses technocratic practices.

This is the biggest take-away in studying China.

There is so much more for us to learn by studying the Chinese reality of their brand of Free Markets and their brand of Communism, or their hybrid reality in between. In a previous blog-commentary, this lesson was detailed:

No doubt, there is the need to grow the Caribbean economy; we need jobs, entrepreneurial opportunities, better educational and healthcare options, a safer homeland and more efficient governmental services. Since trade policies (chattel goods and intellectual property) affect all of these deliveries, we need to pay more than the usual attention to these discussions. Trade has also been prominent in the news as of late, with the current American Federal government’s (under President Donald Trump) new penchant for tariffs and the UK negotiating a new trade deal as they leave the European Union (Brexit).

So there is the need for a 360 degree view of trade: the good; the bad; and the ugly. The Caribbean status quo is ugly, in terms of trade, there is the need to reform and transform, so as to reboot our society. But we are not the first, (and will not be the last). Let’s see the lessons we can learn from the trade strategies, tactics and implementations of others. We can all benefit!

Let’s start with China; there are parallels to consider. They need to provide for 1.3 Billion people, and so they are embracing market-based economics. In the Caribbean we only need to provide for 42 million, but we are like a fish in the pond; it does not matter how big the ocean is, we are limited to our pond. This is the definition of scope; our time, talents and treasuries must be designed to impact just these 30 island-nations and coastal states. Despite the size, there is the need for efficiency and effectiveness with market-based economic concepts. This is defined in the Go Lean book as technocratic/technocracy:

    The term technocracy was originally used to designate the application of the scientific method to solving social & economic problems, in counter distinction to the traditional political or philosophic approaches. – Go Lean book Page 64.

Is the “One country, two systems” truly effective for Hong Kong, Macau and China? They do have problems. There have outstanding and ongoing political discrepancies between the 2 entities. These all seem to tie to issues of culture and governance, rather than economics or security. See these encyclopedic details:

Title: Hong Kong 

Hong Kong, officially the Hong Kong Special Administrative Region of the People’s Republic of China, is a special administrative region on the eastern side of the Pearl Riverestuary in southern China. With over 7.4 million people of various nationalities[d] in a 1,104-square-kilometre (426 sq mi) territory, Hong Kong is the world’s fourth-most densely populated region.

Hong Kong became a colony of the British Empire after Qing China ceded Hong Kong Island at the end of the First Opium War in 1842.[17] The colony expanded to the Kowloon Peninsula in 1860 after the Second Opium War, and was further extended when Britain obtained a 99-year lease of the New Territories in 1898.[18][19] The territory was transferred to China in 1997.[20] As a special administrative region, Hong Kong maintains separate governing and economic systems from that of mainland China,[21] and its people overwhelmingly identify as Hongkongers rather than Chinese.[22]

Originally a sparsely populated area of farming and fishing villages,[17] the territory has become one of the world’s most significant financial centres and commercial ports.[23] It was estimated to be the world’s tenth-largest exporter and ninth-largest importer,[24][25]and its legal tender (the Hong Kong dollar) is the world’s 13th-most traded currency.[26] Hong Kong hosts the largest concentration of ultra high-net-worth individuals of any city in the world.[27][28] Although the city has one of the highest per capita incomes in the world, there is severe income inequality.[29]

Hong Kong is classified as an alpha+ world city, indicating its influence throughout the world.[30] The city has the largest number of skyscrapers in the world, most surrounding Victoria Harbour.[31] Hong Kong consistently ranks high on the Human Development Index, and has one of the highest life expectancies in the world.[32] Over 90 per cent of its population uses public transportation.[33]Air pollution from neighbouring industrial areas of mainland China has caused a high level of atmospheric particulates in the region.[34] …

Source: Retrieved June 20, 2019 from: https://en.wikipedia.org/wiki/Hong_Kong


Title: Special administrative regions of China
The special administrative regions (SAR) are one type of provincial-level administrative divisions of China directly under Central People’s Government. They possess the highest degree of autonomy.

The legal basis for the establishment of SARs, unlike the administrative divisions of Mainland China, is provided for by Article 31, rather than Article 30, of the Constitution of the People’s Republic of China of 1982. Article 31 reads: “The state may establish special administrative regions when necessary. The systems to be instituted in special administrative regions shall be prescribed by law enacted by the National People’s Congress in the light of the specific conditions”.[3][4][5][6]

At present, there are two SARs established according to the Constitution, namely the Hong Kong SAR and the Macau SAR, former British and Portuguese dependencies respectively,[7] transferred to China in 1997 and 1999 respectively pursuant to the Sino-British Joint Declaration of 1984 and the Sino-Portuguese Joint Declaration of 1987. Pursuant to their Joint Declarations, which are binding inter-state treaties registered with the United Nations, and their Basic laws, the Chinese SARs “shall enjoy a high degree of autonomy“.[8] Generally, the two SARs are not considered to constitute a part of Mainland China, by both Chinese and SAR authorities.

There is additionally the Wolong Special Administrative Region in Sichuan province, which is however not established according to Article 31 of the Constitution.

The provision to establish special administrative regions appeared in the constitution in 1982, in anticipation of the talks with the United Kingdom over the question of the sovereignty over Hong Kong. It was envisioned as the model for the eventual reunificationwith Taiwan and other islands, where the Republic of China has resided since 1949. Special administrative regions should not be confused with special economic zones, which are areas in which special economic laws apply to promote trade and investments.

Under the One country, two systems principle, the two SARs continue to possess their own governmentsmulti-party legislatures, legal systemspolice forcesmonetary systemsseparate customs territoryimmigration policiesnational sports teamsofficial languagespostal systems, academic and educational systems, and substantial competence in external relations that are different or independent from the People’s Republic of China.

Special administrative regions should be distinguished from the constituent countries system in the United Kingdom or Kingdom of the Netherlands. …

Source: Retrieved June 20, 2019 from: https://en.wikipedia.org/wiki/Special_administrative_regions_of_China


Title: Hong Kong–Mainland China conflict
Relations between people in Hong Kong and mainland China have been relatively tense in the early 2000s. Various factors have contributed, including different interpretations of the “One country, two systems” principle; policies of the Hong Kong and central governments to encourage mainland visitors to Hong Kong; and the changing economic environment.

These tensions are expressed as hostility toward mainlanders by radical political actors and ordinary citizens alike. More broadly, it is expressed in a sense of superiority of Hong Kongers over mainlanders, resentment toward mainland-Hong Kong convergence or assimilation, interference from the mainland in Hong Kong’s internal affairs and disappointment over Hong Kong’s declining economic influences. While some mainlanders view Hong Kongers as arrogant, ungrateful, and disloyal, Hong Kongers see mainlanders as rude, ill-mannered, poorly-educated, and dirty.[1][2]

1.0 Background

The sovereignty of Hong Kong was transferred from the United Kingdom to the People’s Republic of China in 1997. The terms agreed between the governments for the transfer included a series of guarantees for the maintenance of Hong Kong’s differing economic, political and legal systems after the transfer, and the further development of Hong Kong’s political system with a goal of democratic government. …

Hong Kong has more international cultural values from its past as a British colony and international city, and at the same time has retained many traditional Chinese cultural values, putting it in stark contrast to the culture of many parts of mainland China, where many international cultural values have never taken root and where many traditional cultural values have evolved.[8] Hong Kong is also a multi-ethnic society with different cultural values in relation to race, languages and cultures to those held by the Chinese government and many mainland residents. As a highly developed economy with a high standard of living, Hong Kong culture has different values in relation to hygiene and social propriety compared to mainland China. Hong Kong-mainland conflict is mainly attributed to the cultural differences[9] between Hong Kong people and mainlanders, such as languages,[10] as well as the significant growth in number of mainland visitors. …

2.0 Incidents

  1. Tour guide Lee Qiaozhen verbally abused mainland tourist
  2. Dolce & Gabbana controversy
  3. Kong Qingdong calling Hong Kongers “old dogs”
  4. Parallel trading in Hong Kong
  5. Anchor babies in Hong Kong
  6. Racial abuse of Hong Kong football team
  7. Siu Yau-wai case
  8. Anti-mainlandisation motion
  9. CUHK democracy wall tensions

Source: Retrieved June 20, 2019 from: https://en.wikipedia.org/wiki/Hong_Kong%E2%80%93Mainland_China_conflict

For our efforts of stewardship in the Caribbean, we look at China and declare the Lesson learned. We know we must optimize culture and governance simultaneously as we elevate the economic engines.

We do want the China kind of growth here in the Caribbean; we do want Free Market-based trade with the rest of the world; we also want a harmonious society. See how this theme – carefully directing societal defects – aligns with many previous Go Lean commentaries; see a sample list here:

http://www.goleancaribbean.com/blog/?p=17515 Changing the Culture & Currency of Commerce
http://www.goleancaribbean.com/blog/?p=17464 Bad Ethos Retarding ‘New Commerce’
http://www.goleancaribbean.com/blog/?p=17284 Way Forward – ‘Whatever it takes’: Life Imitating Art
http://www.goleancaribbean.com/blog/?p=16907 Societal Empowerment – Thoughts. Feelings. Speech. Action.
http://www.goleancaribbean.com/blog/?p=14718 A more Perfect Union – ‘At the Table’ Rather than ‘On the Menu’
http://www.goleancaribbean.com/blog/?p=10216 Waging a Successful War on Orthodoxy
http://www.goleancaribbean.com/blog/?p=13321 Making a ‘Pluralistic Democracy’ – Multilingual Realities
http://www.goleancaribbean.com/blog/?p=5695 Repenting, Forgiving and Reconciling the Past

Yes, we can … do the heavy-lifting to reform and transform.

The underlying motivation of the Go Lean book is to reform and transform the Caribbean member-states. Therefore we need to embrace market-based economics, the way China has. As stated in that previous blog-commentary:

… they [China] only shifted to a market-based economy since the 1970’s, and now they have the 2nd largest single market economy … in the world. While America – the champion of market-based economies – is the largest trading partner for Caribbean member-states, we cannot just be parasites, we must be protégées.

The growth that China has shown is remarkable and repeatable. We can model their successes here in our region; the foregoing article conveyed this:

    China, having raised hundreds of millions from poverty to middle-class status since it embraced a market-based economy.

The CU roadmap is designed to drive change among the economic, security and governing engines. The Go Lean book – see below – describes how and when a new Caribbean can emerge using Free Market economic principles and operate Self-Governing Entities along side legacy systems. This approach calls for new community ethos, strategies, tactics, implementations and advocates to grow the regional economy and make a homeland a better place to live, work and play.

Everyone in the Caribbean is urged to lean-in to this roadmap to make the Caribbean member-states can offer the prospect to our young people that “Yes, they can” prosper where planted here.  🙂

About the Book
The book Go Lean…Caribbean serves as a roadmap for the introduction and implementation of the technocratic Caribbean Union Trade Federation (CU), for the elevation of Caribbean society – for all member-states. This CU/Go Lean roadmap has these 3 prime directives:

  • Optimization of the economic engines in order to grow the regional economy to $800 Billion and create 2.2 million new jobs.
  • Establishment of a security apparatus to ensure public safety and protect the resultant economic engines.
  • Improve Caribbean governance to support these engines, including a separation-of-powers between the member-states and CU federal agencies.

The Go Lean book provides 370-pages of turn-by-turn instructions on “how” to adopt new community ethos, plus the strategies, tactics, implementations and advocacies to execute so as to reboot, reform and transform the societal engines of Caribbean society.

Download the free e-Book of Go Lean … Caribbean – now!

Who We Are
The movement behind the Go Lean book – a non-partisan, apolitical, religiously-neutral Community Development Foundation chartered for the purpose of empowering and re-booting economic engines – stresses that reforming and transforming the Caribbean societal engines must be a regional pursuit. This was an early motivation for the roadmap, as pronounced in the opening Declaration of Interdependence (Pages 12 – 13):

xi. Whereas all men are entitled to the benefits of good governance in a free society, “new guards” must be enacted to dissuade the emergence of incompetence, corruption, nepotism and cronyism at the peril of the people’s best interest. The Federation must guarantee the executions of a social contract between government and the governed.

xvi. Whereas security of our homeland is inextricably linked to prosperity of the homeland, the economic and security interest of the region needs to be aligned under the same governance. Since economic crimes … can imperil the functioning of the wheels of commerce for all the citizenry, the accedence of this Federation must equip the security apparatus with the tools and techniques for predictive and proactive interdictions.

xxiv. Whereas a free market economy can be induced and spurred for continuous progress, the Federation must install the controls to better manage aspects of the economy: jobs, inflation, savings rate, investments and other economic principles. Thereby attracting direct foreign investment because of the stability and vibrancy of our economy.

Sign the petition to lean-in for this roadmap for the Caribbean Union Trade Federation.


Appendix VIDEO – China’s Economic Miracle | The RISE of CHINA Mini-Documentary | Episode 1 – KJ Vids – https://youtu.be/MJLpGiHhr8E

KJ Vids

Published on Sep 11, 2017 –
The Rise of China Mini-Documentary | Episode 1 | China’s Economic Miracle

Two centuries ago, Napoleon warned, “Let China sleep: when she wakes, she will shake the world.”

The rise of China will undoubtedly be one of the great dramas of the twenty-first century. China’s extraordinary economic growth and active diplomacy are already transforming East Asia, and future decades will see even greater increases in Chinese power and influence. In this episode we will look only at the sheer size of China today.

We will then look at it’s threats, challenges and confrontations with America in future episodes.

Watch other episodes of our Rise of China Mini-Documentary:

Episode 2 – China’s Risks and Challenges https://youtu.be/73k3v-AxJvM

Episode 3 – What Does the Chinese President XI JINPING Want? https://youtu.be/nvm0V95yjeA

Episode 4 – The SOUTH CHINA Sea Dispute https://youtu.be/Ea_9CxpF79E

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