The Wall Street Journal's Greg Ip observes America under Trump becoming more like China under Xi

The U.S. Marches Toward State Capitalism With American Characteristics: President Trump is imitating Chinese Communist Party by extending political control ever deeper into economy

 Greg Ip Aug. 11, 2025 at 10:16 am

Recent examples include President Trump’s demand that Intel’s chief executive resign; the 15% of certain chip sales to China that Nvidia and Advanced Micro Devices will share with Washington; the “golden share” Washington will get in U.S. Steel as a condition of Nippon Steel’s takeover; and the $1.5 trillion of promised investment from trading partners Trump plans to personally direct.

This isn’t socialism, in which the state owns the means of production. It is more like state capitalism, a hybrid between socialism and capitalism in which the state guides the decisions of nominally private enterprises. 

China calls its hybrid “socialism with Chinese characteristics.” The U.S. hasn’t gone as far as China or even milder practitioners of state capitalism such as Russia, Brazil and, at times, France. So call this variant “state capitalism with American characteristics.” It is still a sea change from the free market ethos the U.S. once embodied.

We wouldn’t be dabbling with state capitalism if not for the public’s and both parties’ belief that free-market capitalism wasn’t working. That system encouraged profit-maximizing CEOs to move production abroad. The result was a shrunken manufacturing workforce, dependence on China for vital products such as critical minerals, and underinvestment in the industries of the future such as clean energy and semiconductors.

The federal government has often waded into the corporate world. It commandeered production during World War II and, under the Defense Production Act, emergencies such as the Covid-19 pandemic. It bailed out banks and car companies during the 2007-09 financial crisis. Those, however, were temporary expedients.

Former President Joe Biden went further, seeking to shape the actual structure of industry. His Inflation Reduction Act authorized $400 billion in clean-energy loans. The Chips and Science Act earmarked $39 billion in subsidies for domestic semiconductor manufacturing. Of that, $8.5 billion went to Intel, giving Trump leverage to demand the removal of its CEO over past ties to China. (Intel so far has refused.)

Biden overrode U.S. Steel’s management and shareholders to block Nippon Steel’s takeover, though his staff saw no national-security risk. Trump reversed that veto while extracting the “golden share” that he can use to influence the company’s decisions. In design and name it mimics the golden shares that private Chinese companies must issue to the CCP.

Biden officials had mulled a sovereign-wealth fund to finance strategically important but commercially risky projects such as in critical minerals, which China dominates. Last month, Trump’s Department of Defense said it would take a 15% stake in MP Materials, a miner of critical minerals.

Many in the West admire China for its ability to turbocharge growth through massive feats of infrastructure building, scientific advance and promotion of favored industries. American efforts are often bogged down amid the checks, balances and compromises of pluralistic democracy.

In his forthcoming book, “Breakneck: China’s Quest to Engineer the Future,” author Dan Wang writes: “China is an engineering state, building big at breakneck speed, in contrast to the United States’ lawyerly society, blocking everything it can, good and bad.”

To admirers, Trump’s appeal is his willingness to bulldoze those lawyerly obstacles. He has imposed tariffs on an array of countries and sectors, seizing authority that is supposed to belong to Congress. He extracted $1.5 trillion in investment pledges from Japan, the European Union and South Korea that he claims he will personally direct, though no legal mechanism for doing so appears to exist. (Those pledges are already in dispute.)

There are reasons state capitalism never caught on before. The state can’t allocate capital more efficiently than private markets. Distortions, waste and cronyism typically follow. Russia, Brazil and France have grown much more slowly than the U.S.

Chinese state capitalism isn’t the success story it seems. Barry Naughton of the University of California, San Diego has documented how China’s rapid growth since 1979 has come from market sources, not the state. As Chinese leader Xi Jinping has reimposed state control, growth has slowed. China is awash with savings, but the state wastes much of it. From steel to vehicles, excess capacity leads to plummeting prices and profits.

The U.S. hasn’t fared any better. Interventions made in the name of national security or kick-starting infant industries lead to boondoggles like Foxconn’s promised factory in Wisconsin or Tesla’s solar-panel factory in Buffalo, N.Y.

State capitalism is an all-of-society affair in China, directed from Beijing via millions of cadres in local governments and company boardrooms. In the U.S., it consists largely of Oval Office announcements lacking any policy or institutional framework. “The core characteristic of China’s state capitalism is discipline, and Trump is the complete opposite of that,” Wang said in an interview.

State capitalism is a means of political, not just economic, control. Xi ruthlessly deploys economic levers to crush any challenge to party primacy. In 2020, Alibaba co-founder Jack Ma, arguably the country’s most famous business leader, criticized Chinese regulators for stifling financial innovation. Retaliation was swift. Regulators canceled the initial public offering of Ma’s financial company, Ant Group, and eventually fined it $2.8 billion for anticompetitive behavior. Ma briefly disappeared from public view.

Trump has similarly deployed executive orders and regulatory powers against media companies, banks, law firms and other companies he believes oppose him, while rewarding executives who align themselves with his priorities.

In Trump’s first term, CEOs routinely spoke out when they disagreed with his policies such as on immigration and trade. Now, they shower him with donations and praise, or are mostly silent.

Trump is also seeking political control over agencies that have long operated at arm’s length from the White House, such as the Bureau of Labor Statistics and the Federal Reserve. That, too, has echoes of China where the bureaucracy is fully subordinate to the ruling party.

Trump has long admired the control Xi exercises over his country, but there are, in theory, limits to how far he can emulate him.

American democracy constrains the state through an independent judiciary, free speech, due process and the diffusion of power among multiple levels and branches of government. How far state capitalism ultimately displaces free-market capitalism in the U.S. depends on how well those checks and balances hold up.

People who agree to become organ donors risk being aggressively harvested when they might otherwise recover

 

 We're getting more like China everyday.

Push for More Organ Transplants Putting Donors at Risk...
 

... Circulatory death donation is different. These patients are on life support, often in a coma. Their prognoses are more of a medical judgment call.

They are alive, with some brain activity, but doctors have determined that they are near death and won’t recover. If relatives agree to donation, doctors withdraw life support and wait for the patient’s heart to stop. This has to happen within an hour or two for the organs to be considered viable. After the person is declared dead, surgeons go in.

The Times found that some organ procurement organizations — the nonprofits in each state that have federal contracts to coordinate transplants — are aggressively pursuing circulatory death donors and pushing families and doctors toward surgery. Hospitals are responsible for patients up to the moment of death, but some are allowing procurement organizations to influence treatment decisions.

Fifty-five medical workers in 19 states told The Times they had witnessed at least one disturbing case of donation after circulatory death.

Workers in several states said they had seen coordinators persuading hospital clinicians to administer morphine, propofol and other drugs to hasten the death of potential donors. ...

Circulatory death donation used to be largely forbidden. That began to change in the 1990s, when a dying patient asked the University of Pittsburgh Medical Center to remove her life support and donate her organs. The hospital honored her wishes, then spent two years creating guidelines for future cases. Use of the practice gradually spread. ...

Whatever else may be said about Rene Girard, he grasped the big problem even if he miscast it as capitalist, namely Chinamerica

 

 “Everyone now knows that the looming conflict between the US and China, for example, has nothing to do with a ‘clash of civilisations’, despite what some might try to tell us. We always try to see differences where in fact there are none. In fact, the dispute is between two forms of capitalism that are becoming more and more similar,” Girard wrote.

Quoted here.

It's not two forms of capitalism. It's two forms of fascism. 

America became its own enemy long before China did.

Girard defaulted to the priority of religion over economics beginning in 1959.

Chairman Donny says you will own nothing and be happy in your work

 

AMWAY's Steve Van Andel said the highlight of his entire career was China: He and AMWAY got rich as Croesus from the giant sucking sound of your jobs leaving America

July 2017: A look back at Amway co-CEO Steve Van Andel's 45-year career

Career highlight: China

When asked to share a highlight of his career, Van Andel talked of traveling with his dad to China in the early 1970s when he was in his teens.

They spent time walking around Shanghai and Beijing so the elder Van Andel could observe people.

He remembers his dad telling him he was curious about where the Amway business could go in the future.

"I'll never forget being with him and talking with him about it and then 20 years later, I remember cutting the ribbon and opening up China," Van Andel said.

China is now Amway's biggest market, generating more than one-third of its sales.

Abortion has left a "million empty spaces" every damn year since 1973 but we're supposed to view the COVID-19 death toll as cruel somehow

 Million empty spaces: Chronicling Covid's cruel American toll...

 

A reckoning is surely coming, and a million dead from COVID-19 is nothing compared to the utter evil cruelty and complacency of Americans in the face of this unspeakable holocaust of over 60 million.

We're as bad as any of the evil perpetrators of communist democide in China or Russia.

Joel Kotkin has come around, now calls it what it is: Global fascism

In 2018, Kotkin was still tip-toeing around the obvious, but not anymore:

Mussolini’s notion of fascism has become increasingly dominant in much of the world . . .

Mussolini, a one-time radical socialist, viewed himself as a “revolutionary” transforming society by turning the state into “the moving centre of economic life”. In Italy and, to a greater extent, Germany, fascism also brought with it, at least initially, an expanded highly populist welfare state much as we see today.

Mussolini’s idea of a an economy controlled from above, with generous benefits but dominated by large business interests, is gradually supplanting the old liberal capitalist model. ...

fascism — in its corporate sense — relies on concentrated economic power to achieve its essential and ideological goals. ...

China, in many aspects the model fascist state of our times, follows Il Duce’s model of cementing the corporate elite into the power structure. ...

But in the battle between the two emergent fascist systems, China possesses powerful advantages. Communist Party cadres at least offer more than a moralising agenda; they can point to the country’s massive reduction of extreme poverty and a huge growth in monthly wages, up almost five-fold since 2006. At a time when the middle class is shrinking in the West, China’s middle class increased enormously from 1980 to 2000, although its growth appears to have slowed in recent years.

Like Mussolini, who linked his regime to that of Ancient Rome, China’s rulers look to Han supremacy and the glories of China’s Imperial past. “The very purpose of the [Chinese Communist] Party in leading the people in revolution and development,” Xi Jinping told party cadres a decade ago, “is to make the people prosperous, the country strong, and [to] rejuvenate the Chinese nation.”

Kotkin recognizes at least that American right-wing libertarianism is part of the problem, not part of the solution:

the consolidation of oligarchic power is supported by massive lobbying operations and dispersals of cash, including to some Right-wing libertarians, who doggedly justify censorship and oligopoly on private property grounds.

Regrettably, however, Kotkin still does not connect this failure of the old liberal order in the West with the failure of the old moral order which gave it birth and on which it depended. This is because Kotkin still sees things in primarily materialistic terms.

Kotkin is oddly politically correct when he denounces possible recourse to nativism, which blinds him to the nativism which is at the heart of Chinese state capitalism and gives it much of its appeal and strength. He calls for "a re-awakening of the spirit of resistance to authority" in the West, not realizing that it was Protestantism which made that even possible in the first place.

The problem of the West is spiritual, and Catholicism will never be able to rise to the occasion of refounding it as long as globo-homo defines Rome. The whole idea is inimical to the notion of founding a nation "for our posterity".

Welcome to the Global Fascist State, where politics is a crime no matter where you live: China, Venezuela, Iran, USA, France, Britain . . .

Much smaller than first thought to be, the gig economy lies prostrate before the great wall of state capitalism

"The Gig Economy Increasingly Defines Late-Stage Capitalism

Annie Lowrey, Atlantic" 

 

is how Real Clear Markets links to:

The Truth About the Gig Economy

Uber and similar companies aren’t driving huge changes in the way that Americans make a living.

 

Real Clear Markets' libertarian headline writer completely missed the point of the article, which is that the gig economy is as much as 80% smaller than we first thought. A capitalism disintegrating into a chaos of millions of small holders in risky circumstances, careening into the ditch, is a complete myth. The leftists who still long for this resemble no one so much as the Christian millenarians.

Clearly Marxism-light thoroughly infects economic thinking at the popular level in more places than just The Atlantic, blinding us to where we really are, which is in the golden age of fascism. Here tax reform for the individual is an afterthought, a necessary piece of propaganda in the big scheme of things having to do with state capitalism and its myriad forms of corporate welfare. What really matters is the relationship between government and business, protecting their mutual interests.

The West's version is little different from China's. China exercises top down control through the corrupt Communist Party, but we increasingly have the same thing from the bottom up through the unjust hand of Political Correctness, populated through the right schools and the revolving door of Washington where the regulators become the richly rewarded regulated.

The extension and consolidation of control by this globalist fascist system since the Reagan Revolution is responsible for all the failure lately attributed to capitalism by the coddled generations of children of the post-war Baby Boom. It couldn't be otherwise in a world where everything has been organized to feed the corporation through the glorification of the job. You must go to school, you must get good grades, you must get a college degree in order to get hired, you'll need loans to make this happen, and for the car to get to work, and good credit, and . . .. And then they've got you. It's called preying on human nature.

The declarations of independence of our former youth often used to take the form of getting out of Dodge as soon as they turned eighteen. Now those declarations are a mere shadow of their former selves, taking the form of tattoos on that creature that still lives in your basement in his twenties . . . or thirties.

The risk-taking of capitalism has been expunged, and the consequences of rebelling against the new rigidity have been amplified. Stenosis has set in, and if the barbarians finally do overtake us they will find that the bones break easily.     

As the flipside version of Chinese state capitalism, it is fitting that fascist America have a show trial now and again

Like just about everyone else on the left, Joel Kotkin continues to twist himself in pretzels to avoid calling our system what it already is

State capitalism.

It is the socialism of the right, despite what names people may give it. The fascist model in which business and government cooperate now more, now less was not defeated in World War II. The superior American version simply defeated the German one, and eventually also the left's inherently weaker version in Russia.

It has triumphed globally, brought to the fore in America by the libertarian resurgence under Ronald Reagan, imitated by the jealous Euro project, and notably exported to China, where it was eagerly embraced as no threat to Marxism. To the genuine Marxist, remember, free-trade is welcome because it hastens the global revolution. Belt and Road participants, take note.

The experiential groundwork for global state capitalism was laid long ago by the King and Bank of England in their joint enterprise known as the Thirteen Colonies. Everyone imitates this now in principle if not always in particulars. But everywhere it flourishes it is facilitated by the same thing, the central banking systems which coordinate their activities through rules administered under Basel III. The contemporary exemplars of state capitalism fancy that they are substantively a world away from Hitler's Germany, because, well, the Jews. We don't kill Jews, insist these experts at mass abortion and Uyghur mass re-education. 

It's the historical resonances which bother the left in using the phrase, but the underlying facts aren't different in substance. Materialism today means not having to say you're sorry for treating people like depreciated or unappreciated assets. Older workers in the West are routinely tossed aside for being too costly. Potential younger competitors are hamstrung by a culture of costly credentialing prerequisites. When such people become worthless enough, it isn't unlikely that in some places they could stop being considered people altogether (typically where atheism reigns) so that they could be slaughtered wholesale with the same relative efficiency already applied to the unborn. The tech already exists to do this. The only question is when will the people exist who are possessed of enough nerve.   

Here's Kotkin on this so-called "new, innovative approach" which looks like nothing so much as the old Soviet Union, with its hostility centered on the middle class, its dreary blocks of drab apartment buildings, the dim pall of surveillance and conformity lurking everywhere, complete with its own privileged new class in service to the party .01 percent:

Oligarchal socialism allows for the current, ever-growing concentration of wealth and power in a few hands — notably tech and financial moguls — while seeking ways to ameliorate the reality of growing poverty, slowing social mobility and indebtedness. This will be achieved not by breaking up or targeting the oligarchs, which they would fight to the bitter end, but through the massive increase in state taxpayer support. ... [T]he tech oligarchy — the people who run the five most capitalized firms on Wall Street — have [sic] a far less egalitarian vision. ... [T]hey see government spending as a means of keeping the populist pitchforks away. ... Handouts, including housing subsidies, could guarantee for the next generation a future not of owned houses, but rented small, modest apartments. ...  They appeal to progressives by advocating politically correct views . . .. Faced with limited future prospects, more millennials already prefer socialism to capitalism and generally renounce constitutionally sanctioned free speech . . .. [I]ncreased income guarantees, nationalized health care, housing subsidies, rent control and free education could also help firms maintain a gig-oriented [slave] economy since these employers do not provide the basic benefits often offered by more traditional “evil” corporations . . ..  [T]he oligarchy, representing basically the top .01 percent of the population, are primarily interested not in lower taxes but in protecting their market shares and capital. ... The losers here will be our once-protean middle class. Unlike the owners of corporations in the past, oligarchs have no interest in their workers become homeowners or moving up the class ladder. Their agenda instead is forever-denser, super-expensive rental housing for their primarily young, and often short-term, employees. ... The tech moguls get to remain wealthy beyond the most extreme dreams of avarice, while their allies in progressive circles and the media, which they increasingly own, continue to hector everyone else about giving up their own aspirations. All the middle and upwardly mobile working class gets is the right to pay ever more taxes, while they watch many of their children devolve into serfs, dependent on alms and subsidies for their survival.

Obama's fascist Larry Summers credits Chinese state capitalism for its advances instead of its thefts

Here:

“You ask me where China's technological progress is coming from. It's coming from terrific entrepreneurs who are getting the benefit of huge government investments in basic science. It's coming from an educational system that's privileging excellence, concentrating on science and technology,” said Summers, former Treasury secretary under Bill Clinton and an ex-economic advisor to Barack Obama. “That's where their leadership is coming from, not from taking a stake in some U.S. company.”

The American Spectator singles out Michigan for its $16 billion in corporate welfare, but the cronyism trend is up 39% just in the top 10 states since 2015

The story is here, and is more than correct to state:

Unfortunately, crony capitalism is something both parties are willing to get behind. Part of the problem is that voters often approve of these subsidies when the phrase “bringing jobs to the state” is uttered.

We're more like China than we'd like to admit, where state-owned enterprise is the rule. We simply practice state-capitalism-lite.

The data is tracked comprehensively here, updated it appears through 2015. The last time I reported on this in 2015 the top ten crony states alone were up to $96 billion in corporate welfare handouts. Three years later the top 10's cronyism has grown to $133 billion, an increase of nearly 39%.

Free market capitalism this is not.

Since the 1990s 144,000 manufacturing and related jobs lost in Wisconsin due to free-trade agreements

Reported here:

Wisconsin has lost more than more than 68,000 manufacturing jobs since the mid-1990s and the first of several controversial trade pacts with Mexico, China and others took hold.

Additionally, the U.S. Department of Labor has certified about 76,000 Wisconsin workers in various fields as having lost their jobs due to either imports or the work they do being shipped overseas. ... 

Caterpillar has laid off about 600 of its 800-plus workers over the past two years because of a business slowdown. ...

Wisconsin’s heavy manufacturing sector, once one of the country’s strongest, has been taking a lot of punches in recent years. General Motors, General Electric, Chrysler, Joy Global Surface Mining and Manitowoc Cranes have all cut jobs or closed operations in recent years for a variety of reasons.

Hometown companies such as Kohler, the plumbing supply manufacturer; and Trek Bicycles have offshored jobs to India, China and Taiwan.

Meanwhile, Madison, the state capital, will lose 1,000 jobs over the next two years as the 100-year-old iconic Oscar Mayer meat processing plant shuts down. And just east on I-94 in Jefferson, Tyson Foods will cease operations at its pepperoni processing plant, cutting 400 jobs.

New study says trade with China caused severe permanent harm to American workers

From Noah Smith in "Free Trade With China Wasn't Such a Great Idea for the U.S." for BloombergView, who says the public has been exactly right about the consequences of trade with China:

The study shows that increased trade with China caused severe and permanent harm to many American workers:

Adjustment in local labor markets is remarkably slow, with wages and labor-force participation rates remaining depressed and unemployment rates remaining elevated for at least a full decade after the China trade shock commences. Exposed workers experience greater job churning and reduced lifetime income. At the national level, employment has fallen in U.S. industries more exposed to import competition...but offsetting employment gains in other industries have yet to materialize.

... [T]he public might have been wrong about free trade in the 1980s and 1990s, but things have changed. Popular opinion seems to be exactly right about the effect of trade with China -- it has killed jobs and damaged the lives of many, many Americans. Economists may blithely declare that free trade is wonderful, but our best researchers have now shown that public misgivings about these smooth assurances have been completely justified.

Scott Walker talks tough on China now, but used to wear a US flag, China flag lapel pin

Video here.

Pesky symbols.

Why capitalism, communism, socialism and fascism etc. turn out to be culs-de-sac

Seen here:

'Mao famously speculated on the nature of contradictions in a 1937 essay: “The law of contradiction in things, that is, the law of the unity of opposites, is the fundamental law of nature and of society.”'

Free-trade has hollowed out the middle class

So reports Noah Smith, here:

"[T]here is a growing body of research showing that globalization -- and, in particular, the rise of China -- has been the biggest factor hollowing out the American middle class." 

Updated: Global middle class hits one billion in 2014, but has actually declined since 2010

So reported the Times of India here in October:

Credit Suisse's Global Wealth Report 2014 released on Tuesday says that there are one billion adults at present who belong to the middle class - with wealth anywhere between $10,000-$100,000 range.

The Global Wealth Report 2014 itself may be viewed here, from which the pyramid at the left.

Notice the relatively small size of the global middle class, just 21.5% of the world's adults, with the vast majority of these coming first from China, and then second from the Asia-Pacific region, followed by Europe, Latin America and North America in that order, according to the details on pages 24ff.

Update: The inaugural Global Wealth Report in 2010 here actually showed a LARGER global middle class adult population of 1.045 billion then vs. the 1.01 billion today, a 3.3% decline. As a percentage of the world's adult population, the middle class share also has declined, from 23.5% of all adults in 2010 to 21.5% in 2014, a decline of 8.5%.

The irony: The Arab street views the Christian West as as anti-capitalist as itself

From Hernando de Soto, here:

For the poor in many Arab states, it can take years to do something as simple as validating a title to real estate. At a recent conference in Tunisia, I told leaders, “You don’t have the legal infrastructure for poor people to come into the system.” “You don’t need to tell us this,” said one businessman. “We’ve always been for entrepreneurs. Your prophet chased the merchants from the temple. Our prophet was a merchant!” ...

All too often, the way that Westerners think about the world’s poor closes their eyes to reality on the ground. In the Middle East and North Africa, it turns out, legions of aspiring entrepreneurs are doing everything they can, against long odds, to claw their way into the middle class. And that is true across all of the world’s regions, peoples and faiths. Economic aspirations trump the overhyped “cultural gaps” so often invoked to rationalize inaction.

As countries from China to Peru to Botswana have proved in recent years, poor people can adapt quickly when given a framework of modern rules for property and capital. The trick is to start. We must remember that, throughout history, capitalism has been created by those who were once poor.