Geopolitical Economy Report What is Socialism with Chinese Characteristics? This is how China's economic model works
Dec 11, 2025
Ben Norton, a political journalist focusing on geopolitics and global economy, dives deep into China's unique model of 'socialism with Chinese characteristics.' He discusses how China evolved into the world's largest economy and revolutionized poverty reduction. Norton illuminates Deng Xiaoping's reforms, state ownership dynamics, and the strategy of 'grasp the big, let go of the small.' He also explores the implications of China's industrial policy for global value chains, its green energy advancements, and contrasting governance perceptions. It's a captivating analysis of a complex economic landscape.
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Decentralized Yet State-Linked Economy
- China decentralized economic power to provincial and local governments, increasing local SOE ownership.
- Over 80% of Chinese companies have some level of state ownership or influence.
Use FDI For Technology Catch-Up
- Require joint ventures and technology transfer when hosting foreign firms to climb the global value chain.
- Use market access to extract learning and capabilities rather than remain a low-value exporter.
Planned Upgrading Drives Industrial Policy
- China pursued staged industrial upgrading via five-year plans and targeted consumer goods then high-tech sectors.
- Current priorities include electric vehicles, solar panels and batteries as "new quality productive forces".