Argentine President Milei’s recent address at the Davos Economic Forum sent shockwaves worldwide‚ particularly among developed nations. He vehemently criticized socialism and collectivism‚ asserting that these attractive ideals often mislead people‚ providing a pretext for ultra-left politicians to seize power and manipulate the economy. Historical evidence suggests that adherence to leftist socialism and collectivism leads to economic hardship and societal suffering. The recession presents a rare opportunity for democracies to demand structural changes in China that will separate the state from business.   Milei contends that embracing economic freedom‚ grounded in private property rights and the abandonment of state intervention‚ fosters economic growth and prosperity. He identifies Argentina’s economic challenges as stemming from an expansive welfare system‚ irresponsible fiscal policies stifling private initiatives‚ and a plethora of bureaucratic obstacles. Argentina boasts the largest welfare system in the developing world‚ encompassing utilities‚ transportation‚ and retirement. For instance‚ the government subsidizes electricity consumption‚ resulting in a nominal monthly bill of merely five cents. (READ MORE from Shaomin Li: The Sickness and Outlook of the Chinese Economy) Argentina is not alone in this uncontrollable state expansion. All developed economies face the same problem of a bloated bureaucracy‚ unsustainably high welfare‚ and inflationary policies. Thus‚ Milei’s speech is a much-needed wake-up call for Western capitalism that is creating Dr. Frankenstein’s monster in virtually every developed nation. Capitalism exists in many forms‚ and some of them do not deliver economic development but are ridden with corruption and poverty. While bad capitalism may be in many forms‚ good capitalism‚ the types that deliver growth and prosperity‚ all have the following four building blocks. First‚ a fair and effective rule of law; second‚ a well-protected system of private property rights; third‚ a market of free exchange; and fourth‚ an effective system of incentives‚ i.e.‚ low taxes. In the West‚ the leftist policies are undermining the rule of law and distorting the market; high taxes and welfare reduce people’s incentive to work. Milei told the world that restoring good capitalism requires small government or even no government intervention‚ where individual property rights are protected‚ and people exchange freely in the market. In a perfect world‚ he was right.  But there is one country in this world‚ China‚ which is the opposite. Not only has the government not shrunk‚ but it continues to expand and has more and more control over society and the economy. Moreover‚ the CCP’s model of control over the country is not inefficient and has high levels of welfare‚ as Milei portrays. While the world is focusing on how Milei’s speech shook the West‚ many observers conveniently ignore the most powerful threat to free market capitalism — the Chinese Communist Party. China’s problems are not the socialist path that Milei criticizes. China is a CCP-led capitalism. In terms of the intensity of competition‚ China is actually very market-oriented; for example‚ in consumer goods and services‚ competition is cut-throat. So‚ the problem is not that the Chinese economy under the CCP’s powerful rule is inefficient and wasteful or lacks competition. (READ MORE: Why Has the CCP Banned Demonizing America?) The problem is that the Chinese Communist Party manages the whole of China as a giant corporation‚ which I call China‚ Inc.‚ with the CCP as the management and the general secretary as the CEO. The CCP can mobilize the resources of the entire country to compete as a company in the world market. China is the only country in the world that practices this model.  If we use sports as an analogy‚ in a capitalist country that abides by the rule of law‚ the free market is an arena where individuals and enterprises are the athletes in the arena‚ and the state is the referee. This model can be extended to the international market‚ where investors and companies are athletes‚ and governments still play the role of referees through the WTO‚ the United Nations‚ etc. Of course‚ they may also act as coaches for the athletes in their home countries. However‚ governments must refrain from being athletes who compete in the market for business. However‚ through China‚ Inc.‚ the government is an athlete competing in the international market. With the huge resources of the government and the high flexibility of enterprises in the international market‚ China‚ Inc. is predatorily competitive. Private companies in other countries around the world‚ no matter how big‚ are no match for it.  The way in which China‚ Inc. dominates an industry in the world is that it first assigns high priority to the industry‚ mobilizes resources from the entire country to support it‚ bars foreign competitors‚ acquires the most advanced technologies‚ legally or illegally‚ and mass-produces to improve efficiency and to achieve low costs‚ and finally‚ dominates the world’s market. China‚ Inc. has successfully dominated the world markets of telecom‚ EV batteries‚ solar power‚ and high-speed rail. The most recent case is the EV industry. The CCP invested heavily in domestic EV makers and invited Tesla to China so that the Chinese firms could learn from it. It hired talent away from Tesla‚ and some even suspected that it sent agents to work in Tesla as workers. Then‚ the CCP imposed restrictions on Telsa’s market in China. If Tesla had accidents‚ the state’s propaganda department would highlight them in media and fan criticism‚ but when domestic maker BYD’s batteries exploded‚ the state banned reporting. With the support of the CCP‚ BYD has become the largest EV producer and exporter in the world. Elon Musk recently commented‚ “If there are no trade barriers established‚ they [the Chinese car makers] will pretty much demolish most other car companies in the world.” Asked about Musk’s comments‚ the Chinese foreign ministry said that it was unaware of the reports but advocated “maintaining a fair‚ just‚ and open business environment.” What the CCP official really means is that it wants all governments to open their markets‚ stay out of business‚ and allow China‚ Inc. to take their markets freely! This‚ of course‚ is not sustainable for the rest of the world. From this perspective‚ leaders of democracies around the world‚ including Milei‚ need to think carefully: If the world’s developed democracies become small governments‚ how can they stand up to China‚ Inc? (READ MORE: China’s Li Keqiang Is Finally Free) If they allow China‚ Inc. to roam freely in the world market‚ before they can restore “small government and no intervention‚” they will be demolished by it. Unfortunately‚ most do not even know how the CCP runs the country and the real threat of China‚ Inc.   (To help the democratic world understand and effectively counter China‚ Inc.‚ I have written extensively about it.)  The flipside of China‚ Inc.’s unified command is its susceptibility to CEO errors. Now‚ its CEO‚ Xi Jinping‚ has made a series of policy blunders‚ pushing the Chinese economy into a recession. The recession presents a rare opportunity for democracies to demand structural changes in China that will separate the state from business.   Shaomin Li is a Professor of International Business at Old Dominion University and the author of The Rise of China‚ Inc.: How the Chinese Communist Party Transformed China into a Giant Corporation. The post China Is One Giant Corporation … And It Cheats appeared first on The American Spectator | USA News and Politics.