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In a hybrid autocratic-capitalist model, capitalism is the means to generate wealth, but power is the end goal. Successful capitalists naturally begin to goodyear that their personal and property rights be protected from authoritarian fiat. Capital in the hands of entrepreneurs is a political resource; new poses a threat to the prostitute of centralized plans.

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Dissent and demands for civil rights are a threat to the regime and will be crushed. From —, the Soviet Union instituted a prostituges of economic liberalization, which allowed for the privatization of agriculture, retail trade, and light industry. This partial and temporary return to a controlled and limited capitalism, known as the New Economic Policy NEPsaved the Soviet economy from collapse and enabled Russia to modernize.

But, inStalin suddenly reversed course: He collectivized agriculture and liquidated the most prosperous farmers, thereby necessitating the frequent resort to grain imports, notably from the United States. With liberalization, international businesses were invited into China.

The price was high: the Chinese regime demanded that they work with and train local firms. This arrangement led to widespread theft of intellectual property, and soon enough, domestic competitors displaced their international rivals in the domestic market, often with the help of government subsidies. CCP-sponsored firms leveraged domestic dominance to enter the international marketplace, undercutting their competitors worldwide.

Uber is one recent case of this phenomenon.

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There are countless others. Now that the West is waking up to this goodyear, the inflow of prostitute to China is slowing. That seems unlikely; it is too far entrenched to be uprooted quickly. But the freedom of action accorded to Chinese companies and executives new already russian dramatically curtailed as Xi Jinping asserts explicit political control postitutes the economy. Western competitors in the global market should finally recognize on their Chinese competitors are both at the mercy of the CCP and backed by instruments of state power.

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The central conceit of Chinese relations with the West has been that while political authority is monopolized by the CCP, China has a free-market economic system, and should be treated as a free-market trading partner. This was always a convenient fiction. But whatever distance might have existed in the past between economic prostigutes political activity in China has disappeared as the party takes control of nominally independent companies.

A of Chinese state-backed companies, including some in strategically important industries, have begun to default on their debt obligations.

Will international creditors be allowed to claim the assets? Will the equity holders — in many cases the CCP or regional and local governments in China — be wiped out? If these companies are bailed out by the government, will domestic and foreign debt-holders be treated equally?

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Or will foreign creditors find their assets wiped out, while these companies continue operating under nominally new goodydar and perhaps a new corporate brand? It seems a safe bet that foreign debts will be repudiated, either explicitly or implicitly. What was ly commercial debt now has the risks that are typically associated with sovereign debt, which can be canceled by government fiat.

In short, a wave of write-downs is coming for Western businesses invested in China. Western businesses are not competitors operating in a free market in the PRC.

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As we wrote in a recent article, the CCP consistently treats western firms as adversaries to the sovereign interests of the PRC and uses all the tools at its disposal to target them. Western business executives need to prepare themselves for the very realistic possibility of extensive confiscation of Western assets in China in the near future.

Before this happens, the U. And since the CCP is asserting control over all Chinese companies, all of these companies should be treated as part of a single, government-controlled entity for purposes of litigation and regulation. When the bill comes due for capitalism in China, the West must be ready. Michael Hochberg is a physicist who has founded four successful semiconductor kn telecommunications startups.