xi jinping putin Mikhail Klimentyev\TASS via Getty Images

Wag the Dictator

In recent decades, Russian and Chinese conglomerates have gained ever more global economic influence, making them powerful foreign-policy tools for their respective governments. But now Russian President Vladimir Putin and Chinese President Xi Jinping are learning that they are the tools.

NEW YORK – Russian President Vladimir Putin and Chinese President Xi Jinping have each championed a model of authoritarian capitalism (call it “development with a dictator’s face”). But what neither leader seems to have anticipated is that the Russian and Chinese commercial sectors are becoming political forces in their own right, increasingly bringing pressure to bear on policymaking.

Over the past two decades, Russian and Chinese multinational corporations – many of them awash in cash – have become powerful foreign-policy tools for their respective regimes. But they were once seen as modernizing forces that would help open up business and society alike. With energy giants like Gazprom and Rosneft promising to bring commercial values to backward Russia and the newly independent former Soviet states, Anatoly Chubais, a key architect of Russia’s privatization program, touted them as the vanguard of a new “liberal empire.” (Insofar as these firms also bound the former Soviet republics closer to Russia, so much the better.)

Likewise, in China during the presidencies of Jiang Zemin (1993-2003) and Hu Jintao (2003-2013), the rise of banks like the Industrial and Commercial Bank of China and the Agricultural Bank of China, and of energy and heavy-industry firms like Sinopec, Sinochem, and the China Railway Construction Corporation, were seen as harbingers of modernization. Yet today, no one could mistake these firms for the equivalent of an ExxonMobil or a Microsoft. With top executives often parachuting directly into the boardroom from high political office, Chinese mega-corporations have long represented a merger of business and the state.

To continue reading, register now.

As a registered user, you can enjoy more PS content every month – for free.



Subscribe now for unlimited access to everything PS has to offer.