China apologists often claim that China is no longer communist, but such claims are complete nonsense, reflecting an incredibly selective and superficial analysis of what the reality is in China. For one thing, the ruling party is the Chinese Communist Party (CCP). And the name was not chosen arbitrarily. It is a communist country.
Apart from the CCP, there are 8 minor parties, but these parties have to concede to the ruling role of the CCP, meaning it would technically be illegal for one of them to plan or even suggest that they should replace the CCP as the ruling party. So politically, China is 100% communist.
As for the economic system, with the state controlling more than half of all companies, it can hardly be considered capitalist.
Most media and many economists mistakenly claim that the Chinese Communist Party (CCP) controls only a limited share of the economy, citing the percentage of firms directly owned by the state. But focusing narrowly on state-owned enterprises (SOEs) hides the much broader reality: state control extends through multiple layers of ownership, networks, and connections, reaching the majority of China’s corporate sector.
Of 40 million registered firms in China, about 391,000 are 100% state-owned (SOEs), 629,000 are at least 30 percent state-owned, and nearly 867,000 have some level of state ownership. Altogether, the capital of firms with state stakes accounted for about 68 percent of the economy in 2017.
State owned firms can own significant shares in other firms, extending the states reach. Scholars have identified 978,609 firms within three degrees of separation from an SOE and more than 3.5 million firms indirectly tied through joint ventures. Among the top 1,000 private owners in China, 78 percent are state-connected, 63 percent directly and 14 percent indirectly.
If mixed-ownership models are included, where SOEs hold a 30 percent stake or maintain indirect equity ties, the total number of state-connected firms ranges from 600,000 to 3.5 million. SOEs also use enterprise groups to spin off subsidiaries, list them on stock exchanges, and bring in private capital while retaining state control.
This state dominance has accelerated. Between 2000 and 2019, the number of private owners directly connected to the state nearly tripled, while indirect connections grew even faster. By 2022, 71 percent of Chinese companies on the Fortune 500 list were state-owned, rising to 84 percent by asset size. By 2021, 54% of China’s largest firms were state owned.
Hellbound and Down 