June 20, 2016

'State Capitalism: How the Return of

Statism is Transforming the World'
NY CFR Fellows' Book Launch Series Guest Event: State
Capitalism--How the Return of Statism is Transforming
the World
Speaker:

Joshua Kurlantzick
Senior Fellow for Southeast Asia, Council on Foreign Relations
Presider:

Richard N. Haass
President, Council on Foreign Relations
Description

Joshua Kurlantzick, CFR Senior Fellow for Southeast Asia discusses his new book, State
Capitalism: How the Return of Statism is Transforming the World, with CFR President
Richard N. Haas. Kurlantzick examines the rise of modern state capitalism and its impact on
the global economy. He considers which countries practice state capitalism most efficiently,
the relationship between state capitalism and authoritarianism, how state capitalism can limit
innovation, and whether state capitalism and free market capitalism can exist together.
The CFR Fellows Book Launch series highlights new books by CFR fellows. It includes a
discussion with the author, cocktail reception, and book signing.
Transcript

HAASS: Well, we will get started. Welcome to the Council on Foreign Relations. Im Richard Haass.
And this is part of a series of events which are high on my list of favorite events because it is a book
launch and that suggests a book has been written, which in fact it has, in this case by Josh Kurlantzick
who is a senior fellow here at the Council on Foreign Relations and is our expert on all things

Southeast Asia, although in this case he has taken not a geographic approach, but a functional
approach and is tackling the question of what he describes as state capitalism.
Let me make sure that is shown.
The subtitle isOK, this is a New York City driving exam eye test and I just flunkedHow the
Return of Statism is Transforming the World.
Congratulations.
KURLANTZICK: Thank you. Thank you.
HAASS: So Josh and I are going to talk for a few minutes about the book and then were going to
open it up to you for your questions, your comments, above all your applause and congratulations
because all authors deserve it and need it.
So, Josh, lets start out at the beginning, at the basic just so we understand exactly what it is were
talking about and ultimately reading about, which is, what is state capitalism?
KURLANTZICK: OK. Well, thanks to everyone for coming.
In the book I look at the growth of what I call modern state capitalism over the last 15 years, a number
of prominent, mostly developing countries where the state has exerted greater control of the economy.
And in the book, to differentiate it from states where the state accounts for a significant percentage of
GDP through welfare spending or entitlements, et cetera, I just look at states in which the state has
control or de facto control of one-third of the largest companies in that country.
And that gives these states like China, like Venezuela, a number of these are in the news now, not
always for such good reasons, like Thailand, like Malaysia, Russia, give the state much more direct
leverage over the corporate sector than they would have if the state accounted for GDP through
welfare spending, through defense, et cetera.
HAASS: So this iswe would expect this in places, say, like a Saudi Arabia where you have a cash
crop, a large, extractive industry, but youre writing much more broadly, correct?
KURLANTZICK: Right. I mean, there is quite a wide range in the book. There aretheres two
spectrums. There is the spectrum of state capitalists who are highly inefficient, like Russia in which
the state has captured a significant portion of the corporate sector and has resulted in an extremely
predatory type of pseudo-capitalism, all the way to ones which are somewhat more efficient, on the
end of Singapore, Vietnam, Thailand, and even China which, despite significant problems, is a much
more efficient economy.
And the other spectrum is autocratic to democratic, and there are some overlaps there, but not only
natural resources countries.
HAASS: And are we seeing more state capitalism recently or now? If so, why? And does state
capitalism, how would I put it, does it wax and wane? If you were going to take a long, historical take
on it, have there been previous periods when state capitalism was on rise, and have there been periods
when state capitalism was on the fall?

KURLANTZICK: Well, certainly we have seen different periods. But this is a period that has grown
since the late 90s, early 2000s. So there was another period after the Second World War in which
there was an era of import substitution, statist economics, et cetera.
What were seeing now is a number of trends that have come together. One, you have a number of
countries, TurkeyTurkeys not state capitalistbut Turkey, Thailand, Russia, Venezuela, Malaysia,
others, leaders who are kind of, like, elected autocrats. They were elected in elections that run on the
spectrum of freedom, but they had elections. But they also dont really subscribe to the constitutional
bases of democracy, so theyre elected autocrats. For them, state capitalism is also a means of
perpetuating their power.
Second, you had in the Asian financial crisis and post-2008 financial crisis significant weakening of
the allure of the Western economic model or of the free market economic model.
Third, you have the example of China as a kind of counterweight.
And then fourth, particularly after 2008, a lot of developing countries, I think, also saw that doing new
bank regulations in Europe particularly and other reasons, many of their industries were starved of
possible infusions of capital, and they were looking for other places for capital.
So there have been previous eras, but this is an era dating back to the late 90s, early 2000s.
HAASS: OK. You mentioned what I thought you were going to say, which is 2008 clearly hurt the
alternative model, I guess youd call it more market capitalism as opposed towhat is the opposite of
state capitalism? What do you call it?
KURLANTZICK: Yeah, free market capitalism.
HAASS: OK.
KURLANTZICK: And obviously theres some spectrum, but if you take, say, Hong Kong on one end
and North Korea on the other or something like that.
HAASS: Yeah, that kind of puts you beyond the end zones. Does this suggestI guess maybe Ill ask
the question this way. Are we at something of an apogeei.e., if China were to have some real
problems, and its obviously slowing considerably, does this potentially taint the appeal of state
capitalism, what were going to see then down the road, Brazils got problems, Chinas got problems,
and so forth, that we think maybe state capitalism has peaked and in a few years, you know, you
wouldnt be writing this book?
KURLANTZICK: Well, I think that we are seeing significant problems in all the differentfirst of
all, I dont think the free market model is the alternative. This was the alternative, so now were in two
different potential alternatives.
But China has problems, Brazil has problems, but still Chinas growth rate over the last 35 years is
staggering. And at the same time, a lot of the problems of free market capitalism weve seen reflected
along with other trends, but the growth of populist parties in the West, so both of the models, I think,
have substantial problems.
But the longer that China in particular continues to grow substantially, the more attractive it remains
as a model for other countries. It doesnt necessarily have to grow at the rates as it did before, but just
continuing to grow.

I can talk about, if people have questions, there are significant flaws, theres NPLs piling up. But the
longer that China continues to grow and also become more assertive in promoting its model, it does
HAASS: NPLs mean non-performing loans?
KURLANTZICK: Non-performing loans.
HAASS: OK.
KURLANTZICK: Chinas state banks and state companies still need substantial reform.
HAASS: SOEs. We can kind of make this like a NATO meeting and just use acronyms(laughter)
and all that.
Lets talk about Brazil for a second because its much in the news. Youre about to have the entire
world focus on it. What are we, roughly, six weeks or so, give or take, away from the Olympics?
Youve got the impeachment trial of the president. Youve got corruption on steroids, literally and
figuratively I guess Id say, not bad(laughter) in Brazil. What does that tell us about state
capitalism? Or to ask a question in a more leading way, is it just about inevitable that state capitalism
leads to corruption? Do the two almost inextricably go hand-in-hand?
KURLANTZICK: Probably in the long term, although there are examples, again on a spectrum there
is not a high level of corruption in Singapore and Norway, which I also look at in the book.
I think that Brazil is an interesting example because, one, it shows in the long term that there are
significant problems with state capitalism in terms of graft. They can be avoided, but its very
difficult.
But on the other hand, even though there has been significant graft, there hasnt been significant
pressure in Brazil for a dramatic shift in economic policy. There have been pressures for cleaning up
graft and total disgust, but youre not actually seeing a dramatic swing to pressure for complete
disavowal of the Lula/Dilma policies.
So you have democratically elected politicians who want to respond to public demand for a degree of
state intervention, but theyre sort of stuck in a trap there.
HAASS: So let me circle back in a different way. If you were going to choose the places, either
current or historical, where state capitalism really looked pretty good in terms of overall growth, both
in the collective sense as well as per capita, rising living standards and all that, like, what would be
yourwhats on the short list of places where state capitalism seems to have worked?
KURLANTZICK: It has worked pretty well in Singapore, although I know there are huge human
rights problems. It has worked with the state providing initial capital in Rwanda. It has worked quite
effectively in Norway where they combine state companies with a high degree of free market-type
governance. It has worked somewhat effectively in Thailand and Malaysia. It has worked somewhat
effectively in Indonesia.
And to be fair, it has worked somewhat effectively for a long period of time in China.
HAASS: Now, most of those, but not all of those tend to be more towards the developing side of the
spectrum than mature. So is there an argument that state capitalism might lend itself to developing
economies, but at a point at which, say, GDP per capita is above X, 10,000, I dont know what the
number is, that it no longer makes so much sense?

KURLANTZICK: Yeah, I think that thats an argument, although were going to see it play out in
China, which is the biggest example.
In Singapore, when Singapore basically was divorced from Malaysia, the government needed some
way to launch a range of industries. They were having troubling, they had very shallow capital
markets, no one really wanted to invest in Singapore.
The government used state resources to both attract investment and to provide some seed capital as
kind of an angel investor in a few industries. Now the government has stepped back somewhat, and
thats kind of the model that a lot of other countries are looking for, so thats, like, the ideal model.
HAASS: Would Japan have been a country that at one point you would have described as state
capitalist and has, to some extent, evolved so its less so?
KURLANTZICK: Yeah, probably you would. I mean, the government links are a little bit less clear
because of the ways that the government, the ministries, and the major companies interact or are a
little bit less clear, but yes.
HAASS: And what are the biggest present or historic failures of state capitalism? Where has it clearly
done little or no good for the society?
KURLANTZICK: Well, the most obvious example and the one thats most worrisome because you
have a combination of predatory capitalism with one of the worlds major military powers is Russia.
You have a total failure of using the state to support innovation. You have predation that has crowded
out entrepreneurship. You have Russian elites who have left, and you have a very angry nationalism.
HAASS: What about Venezuela?
KURLANTZICK: Venezuela I would say would be number two, just Venezuela. Although the
collapse of the Venezuelan economy is problematic, its not the same as a potential collapse of the
Russian economy, plus Venezuela doesnt have nuclear weapons, doesnt have a Pacific fleet, et
cetera.
HAASS: I asked you before about corruption and whether there was something about state capitalism
that more or less inevitably increased the odds that corruption would become a significant problem.
What about democracy and human rights? To what extent does state capitalism almost ensure that,
how would I put it, that the political evolution or development of society lags?
KURLANTZICK: Im not sure that the evidence is so clear on that as it is on corruption. If you take
an overlap of countries and the degree of state intervention in the economy with Freedom Houses
Freedom in the World scale, there is not a direct overlap.
There are countries that have historically been state capitalist that are democracies. There are countries
today, even Brazil, which is, for all of its problems, a relatively vibrant democracy. The problems that
are coming out in Brazil you wouldnt see exposed in Russia because there are no institutions to
expose them.
So I think its possible that in the hands of someone like Thaksin Shinawatra, Prime Minister Najib of
Malaysia, and others, state enterprises can be deployed to limit political opposition, but its not an
exact match, its not necessarily so.

HAASS: When economies that are, quote, unquote, state capitalists in their DNA or nature, when
they run into problems, is the tendency to become more state or more capitalist?
KURLANTZICK: I think that that depends largely on the government and it depends largely on the
quality of government.
In Singapore, I think the tendency has become more capitalist, and I think that that is also true in some
other countries.
In China, despite promises by the current government, the tendency, because they have a much greater
desire for control, the tendency is to become more state.
HAASS: That certainly does these days. Youre a specialist on Southeast Asia, so let me combine the
two. What is your part of the world, whats the evidence there? You mentioned before Indonesia,
Thailand, Vietnam now increasingly as probably entering the state capitalist space, so what are we
seeing there?
KURLANTZICK: What were seeing in Southeast Asia, as a region that once was considered both an
economic model and also, in many ways, a model of democratization, has, with a few notable
exceptions, significantly regressed.
And you have in Thailand a military junta which is increasingly meddling in a lot of realms of the
economy. You have in Malaysia real regression democratically and a government thats also
increasingly using state enterprises a kind of political vote banks.
Singapore is an exception, but you now have in the Philippines a new president, and its unclear
whats going to happen, but he has vowed to himself kill alleged criminals. Its not a great statement
for the rule of law. And he also comes from a background that is very much inclined towards using
state enterprises as a political tool. So youve had a meshing there of some pretty worrying trends.
HAASS: Are there certain prerequisites that if theyre there increases the odds a country will go down
this path and if theyre absent it wont?
For example, India is not particularly going down this path, so what is it about India explains the fact
that it has not opted for state capitalism?
KURLANTZICK: Well, India did opt for a highly socialist economy in the past.
HAASS: Yeah, correct.
KURLANTZICK: And so I think one thing that is clear is if you try this and it fails people will go in a
different direction. And so India and Indonesia have opted for less than, say, Malaysia because it had
such significant failures with it.
In addition, I think in a place like India or some other countries that have opted away from it, the
influence of democratic civil society and democratic civil society that has been seen, an interplay
between state capitalism and authoritarian rule in the past, so thats one reason why on India.
But you know, I think theres on one factor. But for those who see going down this road the last 10 or
15 years, I think the model of Chinas success, and Chinas also become increasingly interested in
promoting and success through a range of kind of soft power tools as well.

HAASS: But if a lot of the pessimists thenIm going to open things up in a secondif a lot of the
pessimists turn out to be right about China, that its real rate of growth now is way, way low, and even
that rate of growth is largely because of public infusions of money rather than real economic growth,
then it suggests to me not only might China be in some difficulty, but the model that Chinas been so
responsible for might be in difficulty.
KURLANTZICK: No, I think thats accurate. I mean, I think we have to see that play out. I dont
disagree with that. I think that well have to see how that plays out.
I mean, there has been a high degree of pessimism. I think some of that is warranted. But its been still
a quite impressive model for some time.
HAASS: And lastly, if I were to add up, Id have to think about it, but state capitalist economies in the
world and not, it would seem to me that state capitalism or economies that are so defined or described
would still be less than half of the worlds economies. Simply the U.S. and Europe alone would pretty
much get you to the 50 percent line and a few others would get you above it. Is that fair?
KURLANTZICK: Yeah, thats fair, it depends on the growth rate of China.
HAASS: OK, it all comes down to China. OK.
Why dont I stop? Why dont we open it up to you, our members and guests, to ask your questions?
What we will do, we have this new invention called the microphone, so when it comes around if you
want to raise your hand well give it to you, if youd give us your name and your affiliation and ask a
question of Josh Kurlantzick. That would be great.
I should alsoIve been remiss. Ive not mentioned that this book is published by Oxford University
Press. And even more important, it is for sale approximately 20 yards in that direction, by that happy
gentleman sitting there. But he was feeling a little bit lonely and wishes he had more attention and
more business. This is our version of state capitalism. (Laughter.) We are encouraging you to
participate in the local economy here. OK.
So any hands up? I see two gentlemen in beige suits, so well get the one closer to me and then the one
farther away from me. I dont have my glasses on, I cant take it that far.
Q: Niso Abuaf, Pace University.
This morning on CNBC, none other than Larry Fink of Blackrock suggested that the solution to the
current malaise of very low or negative interest rates is private-public partnership. That sounds like
state capitalism to me in the developed world. I was wondering if you have any thoughts about that.
KURLANTZICK: Sure. I mean, Im not an expert on whats going to solve negative interest rates, but
there are elements of that.
If you go back to Singapore, in the early days there was a very statist model, and then you have now a
situation in which there are some state-public partnerships in a number of industries the Singapore
government believes are crucial to the future, state-public partnerships in building infrastructure,
which is certainly something that we need here.
But the state also forces both state companies and private sector companies to compete quite
intensively, something that you dont get in a place like Russia and that you get only somewhat in
China.

HAASS: Yeah, and depending upon the rules or constitution, say, of a national or regional
infrastructure bank, they might or might not qualify. And if you have public-private, almost the
percentage of public and the percentage of private, both in funding and in who makes the decisions, so
it could also actually be the opposite.
To you, Craig?
Q: Yeah. Thanks, Richard. Craig Charney of Charney Research.
You know, I remember that when Schumpeter was writing in the 1940s, the thought was that the
increasing role of state capitalism would also be a redistributionist and egalitarian force in Western
societies. Im curious what your thought about the beneficiaries of state capitalism today is.
Im struck by the rollcall of countries that you mentioned, which sound to me to be those which have
authoritarian populism as their primary mode of governance. So would your thought be that state
capitalism is essentially a way that elites are reinforcing their privileges, or what?
KURLANTZICK: I think that the role is varied. There are countries that are authoritarian and some
that are hybrid and some that are truly democratic, like Brazil and Indonesia. Theyre not ideal
democracies.
In the worst of them, like Russia, the state is using state capitalism to reward a small group of elites.
In those that are more egalitarian, the state is not only using state capitalism to reward a small number
of elites, but it is trying to address inequality in some ways. Like, for example, in Singapore and when
Thaksin Shinawatra became prime minister in Thailand, for whatever his failings, his use of the
economy was indeed designed in part to reduce inequality, also because that was politically effective
for him.
So I think theres a wide range. I dont think its only being used to reward predatory elites.
HAASS: Someone from this side of the room. Now, wereyes, you have your hand up? Yes, maam.
KURLANTZICK: Hi, Margaret.
Q: Hi, Joshua. Congratulations. I havent read your book, but I look forward to it. But I
HAASS: Margaret, you have to introduce yourself.
Q: Im Margaret Scott, Im a journalist, and Ive known Joshua for a long time.
Im interested in what drew you to this subject. Your last book was a very interesting look at the
challenges and the fragility of democratization. This book is about the state and that state capitalism is
transforming the world.
What drew you to take a look at that? And Im just wondering because as a lay journalist that doesnt
know much of anything, I see the nation state as under threat in the world today or challenged and
capitalism challenged, too. So Im just interested in what drew you to this idea of state capitalism
becoming so much stronger.
KURLANTZICK: Well, I think that this was, in a way, kind of a pseudo-sequel to my previous book
that you mentioned, which it was about the regression of or at least the stagnation of democracy in a
number of developing countries. And its possibly a hope Ill have a trilogy because Im interested in

the combination and not just the regression of democracy or the failure of democratic institutions, but
the ability to take advantage of them by authoritarians and authoritarian populists. So that might be
coming next.
But it basically stems from the previous one. I was interested in how in a number of these countries,
particularly in Southeast Asia, but others, state capitalism was both a predecessor to the rise of these
elected autocrats and then often a tool that they were using to reinforce their rule. But it wasnt always
one or the other.
And there was also these exceptions, like in India where you have the Licence Raj, you had quite a
long period of socialism, you had emergency rule, and yet they were able to escape both of those. So it
sort of came fromin the democracy book, I looked at India as a counter example where democracy
had continued to thrive compared to a lot of other countries.
So the democratic regression sort of led into this, and I wanted to look at the economic side and the
way that it played in.
HAASS: Just so I understand, by the way, youve got state capitalism, youve got market, you know,
economies, and you have some, you know, varying degrees of hybrids. Is there something else, other
than these two poles and hybrids, is there something else out there?
KURLANTZICK: Not that I know of.
HAASS: OK. OK.
KURLANTZICK: I think that the hybrid can vary, like a French hybrid, a Nordic hybrid.
HAASS: Yeah. Thats a(pronounces with an accent)hybrid. (Laughter.)
Steven?
Q: Looking at
HAASS: You have a microphone right there.
Q: Thank you. Looking at what were calling state capitalism or the hand of the state in an economy
where markets exist, theres a difference. If you look at the earlier generation, France you just
mentioned, most of the GDP was coming out of state-owned companies for a very long time. And to
the amazement of the world and, even more so to the amazement of the French, they were growing
even a little bit faster than the Germans, which is not the way the world was supposed to be ordered.
The Italians had something somewhat similar; the Spanish to a slight extent.
And these state-owned enterprises did rather well. They were market-competitive where there was,
you know, not talking about railways, but all in all they did very well and they were the main
instruments of post-war modernization.
And you went over across to Japan, where they did something very similar without owning them. I
mean, who owned Mitsubishi during the great growth phase is a reasonably interesting question. It
certainly was not the government, it was not outside. I think Mitsubishi owned Mitsubishi, and it
raised all kinds ofbut it was a different form of economic organization and state power and state
intervention in markets did an awful lot to propel Japanese growth during the high-growth period.

HAASS: So your question?

Q: My question is, is this latest generation, which China is the leading candidate, comes a lot out of
Japan as well as the ownership, is this going to go in the ways these others did, which led to stable
democracies in a very great way when the odds werent altogether there? Or is this simply another
instrument of, you know, increasingly totalitarian, authoritarian government?
HAASS: What do you think?
KURLANTZICK: Well, thats a lot of questions there. But I think that the world isI agree with the
premise initially, but the world is different in many ways. Its harder for a lot of these state capitalists
to protect their economies in some of the same ways because theyre already signatory to a whole
range of trade agreements that bind them and make them so that many of their state enterprises cant
be protected in that way.
I think that the question of whether China is going to evolve, some of the countries I had mentioned
already are relatively democratic. Whether China is going to evolve, I am not an optimist that this is
going to evolve into a democratic system anytime soon. I think people have gone broke betting that
its going to change dramatically anytime soon.
I do think that there was a role for the state in those economies, and some of the ones that I mentioned
the state has played an important developmental role.
Many of the states have now reached a certain GDP level where the hand of the state is not necessarily
that effective.
HAASS: What about when it comes to innovation? You know, a lot of it comes out of this country and
were not an example of state capitalism for the most part. Is there a disconnect or a lack of correlation
between state capitalism and innovation?
KURLANTZICK: Overall, yes. I think that some of the most effective state capitalists, like Singapore
and Norway and others, have tried to use small portions of state funds to set up certain incubators, use
state funds to promote industries that are going to be important in the future. China has done that as
well, somewhat. But overall, they lack deep venture capital sectors, venture capitalists are afraid of the
government, and there is a problematic correlation between state capitalism and indigenous
innovation.
HAASS: OK. Weve got time for one or two more.
Sure.
Q: Joshua, is there a correlation between the underground economy, informal economy, whatever you
want to call it, and state capitalism? Or is that just some overlap and some not?
KURLANTZICK: From my research, I think that the correlation has more to do with poverty and the
rule of law. So the underground economy in Singapore, I dont actually know about Norway, but I
would be very surprised if Norway has a large underground economy, it is very small.

Whereas in Russia and Malaysia, the two largest sources of illicit capital flight in the world, but at the
same time, some of the others in the top 10 of illicit capital flight are not state economies, theyre
simply very poor countries or countries with a very weak rule of law.

HAASS: I saw hands. Yes, sir?

Q: My best friend who cares about ethics recommended your book. My question is, does ethics play
an important role between the free market concept and state capitalism?
HAASS: Anytime someone recommends your book you dont want to disagree with the premise of the
question. (Laughter.)
KURLANTZICK: Yeah. I think that itsIm not an ethicist. I think that the free market capitalism
and state capitalism are ideas that can be infused and used in the most effective way possible. In the
book at the end I talk about ways to, if countries are going to employ state capitalism, to do so with
effective governance in ways in which the state doesnt predate (sp) on citizens.
I dont think theres anything more or less ethical about either of them, but in either they can be
conformed to ways that are more beneficial to all.
HAASS: Listening to you talk about your book, I get the sense that youre not so much saying this is
necessarily good or bad, it just depends upon the specific variation of certain tendencies, but its
actually a more nuanced sort of argument. Is that fair?
KURLANTZICK: Yeah. I mean, besides the democracy element, I wanted to write the book because I
saw the previous literature on state capitalism as very one way or the other. And I didnt think that was
necessarily accurate.
And I thought that looking at it from a policy perspective, that looking at with such a broad-brush
approach is problematic, especially since there are so many actors making policy decisions involved,
and that it was more nuanced than had been presented in the past.
HAASS: With that, nuance is always a good place to stop. There are copies of the book. Did I mention
that? There are copies of the book for sale.
Look, what youve heard here tonight, I think, is a really, I used the word nuance, a really thoughtful
exposition.
Josh, I think, is a twofer. Hes regional expert, but hes also, with this book and his previous book,
been someone whos producing books that are really idea books. And the previous one on the state of
democracy, this, in some ways, on the state of economies and what are the intellectual directions they
are moving in, and I think hes putting together a really important series of books and of intellectual
work. So I commend anyone here or anyone watching it to it.
I really think that, you know, this series is an important contribution to the field and to the literature.
So I want to again congratulate him on what hes done and urge him to keep doing it.
KURLANTZICK: OK, thank you. (Applause.)
HAASS: Theres a reception in the back. And if I didnt mention it, theres books in the back.
(Laughter.)
(END)
"There is the spectrum of state capitalists who are highly inefficient, like Russia in which the state has
captured a significant portion of the corporate sector and has resulted in an extremely predatory type
of pseudo-capitalism, all the way to ones which are somewhat more efficient, on the end of Singapore,

Vietnam, Thailand, and even China which, despite significant problems, is a much more efficient
economy."
- Joshua Kurlantzick
"Whether China is going to evolve, I am not an optimist that this is going to evolve into a democratic
system anytime soon. I think people have gone broke betting that its going to change dramatically
anytime soon."
- Joshua Kurlantzick
"I think that some of the most effective state capitalists, like Singapore and Norway and others, have
tried to use small portions of state funds to set up certain incubators, use state funds to promote
industries that are going to be important in the future. China has done that as well, somewhat. But
overall, they lack deep venture capital sectors, venture capitalists are afraid of the government, and
there is a problematic correlation between state capitalism and indigenous innovation."
- Joshua Kurlantzick