Discourses on Salt and Iron: A Study on the State Monopoly in China

Abstract

The Reign of Xi Jinping has been characterized as assertive, unapologetic, and autocratic both at home and abroad(So, 2019). His strict control over Chinese companies and cracking down on private high-tech companies have become debated. If we look back economic system of the Chinese Communist Party, we will find that state control of the economy has been the primary trend. One might ask, what are the reasons for the Chinese Communist Party, particularly Xi Jinping’s sensitiveness to private business, and where has the idea of state monopoly over the private sector originated? By highlighting the importance of the historical approach, rather than a progressive one, for analyzing the statecraft in contemporary China methodologically, the present paper tries to address this question by examining the Discourses on Salt and Iron, a famous classic piece recorded by Huan Kuan of the Han Dynasty (202 BC – 220 AD) and its legacy in successive governments. The first part of the paper focuses on the historical background of the Chinese state monopoly, which aims to show the historical event that led to the implementation of monopolistic economic policies and supportive rational arguments for its continuation. The second part sheds light on the continuation of this policy and illustrates how and why this policy is still alive today. By pondering above all, this study argues that China’s main concern in the economy is maintaining the power gap between the authority and private merchants, which is the legacy of traditional Chinese statecraft.