The Trump administration recently announced that it would convert federal subsidies for Intel into equity, giving Washington roughly a 10 percent stake in the chip giant. The decision sparked an immediate uproar. Critics called it “socialism,” warning that government ownership of private firms would sap efficiency and weaken American competitiveness.

Yet this line of attack carries a deep irony. The most fearsome and disruptive companies on the global stage today are not champions of free markets at all. They are Chinese firms—nurtured, protected, and commanded by the Chinese Communist Party (CCP). Their power does not come in spite of state intervention but because of it. China’s ruling Party has effectively turned the entire nation into a single giant corporation, with itself as the controlling shareholder.

Markets vs. Hierarchies — or Property vs. Human Rights?

Economists have long debated whether economies function best through markets — the “invisible hand” of prices — or through hierarchies—the “visible hand” of authority and command. Classical theory says that state intervention leads to inefficiency and decline.

But China has exploded that assumption. The CCP manages the economy as if it were a corporate empire, with the Politburo as its board and Xi Jinping as its CEO. State-owned firms are subsidiaries, private firms are joint-ventures with the CCP holding de facto controlling shares, and foreign firms are merely franchisees of China, Inc. And most profoundly, ordinary Chinese citizens are not treated as free individuals but as “employees” of China, Inc., expected to obey commands without question.

This shows why the real issue is not just property rights but human rights. Even if the U.S. government bought stakes in every company, it could never treat Americans like robots or demand absolute obedience from firms. America’s constitutional framework and civic culture prevent it. China’s model is not about ownership — it is about political control over human beings.

China’s Paradox: Exploitation at Home, Competitiveness Abroad

China’s “national corporation” model runs on two tracks:

1. Strategic industries are protected and promoted. In the industries of energy, finance, telecom, defense, and transport, the CCP shields chosen firms from bankruptcy, pours in subsidies, blocks foreign competitors, and mobilizes state organs to provide everything from propaganda to espionage support. Once nurtured to scale, these firms are unleashed abroad to undercut global rivals.
2. Non-strategic industries are left to brutal competition. In sectors deemed unimportant, the state provides no safety net. Thousands of firms fight it out in the domestic market, with little regulation and no social insurance. This “involution” produces survivors that are hyper-efficient, hardened by cutthroat rivalry, and ready to conquer foreign markets.

The result is paradoxical. At home, Chinese firms are exploited by the CCP and workers are poorly paid. Yet abroad, they are terrifyingly competitive and profitable. With the state absorbing risk and tilting the field, they can dump products below cost, wage endless price wars, and expand recklessly.

So when critics claim that Trump’s Intel stake will undermine America’s competitiveness, the obvious question is: If state intervention always produces inefficiency, why is the world so afraid of Chinese firms?

Case Studies: China’s Corporate Leviathans

CRRC (China Railway Rolling Stock Corporation).
China’s high-speed rail sector once had two firms — China North Rail and China South Rail — fiercely competing at home. The CCP invited Japanese, German, and French companies to enter joint ventures, extracting their technology. Once the know-how was absorbed, Beijing forced a merger of North and South into the behemoth CRRC. Today, CRRC dominates global high-speed rail exports, leaving its Japanese, German, and French teachers in the dust.

CATL (Contemporary Amperex Technology Ltd.).
The electric-vehicle battery giant began as a private start-up but rose on the back of all-encompassing state support: land grants, cheap capital, preferential regulations, and tax breaks. Beijing locked the domestic EV industry into uniform standards that funneled business toward CATL. The result: in a single decade, CATL captured over one-third of the global EV battery market, overtaking Japanese and Korean incumbents.

Other examples tell the same story:

• Huawei, sustained by subsidies and shielded at home, remains a global force in 5G despite U.S. sanctions.
• Solar panels, where massive subsidies drove European and American competitors into collapse within a decade.
• Steel and shipbuilding, where Chinese overcapacity, kept alive by state aid, pushed global prices below cost and bankrupted competitors abroad.

All these cases illustrate the same dynamic: the CCP has used its “low human rights advantage” and China, Inc. to turn Chinese firms into predatory champions abroad.

America’s Limits: Trump Cannot Run the U.S. Like China

The United States simply cannot replicate this system. Trump may talk about running America like a business, but he is bound by the Constitution, Congress, courts, media, and elections.

U.S. industrial policy is temporary and tactical — whether tariffs, subsidies, or supply-chain reshoring incentives. Any of these can be reversed by legislation, lawsuits, or elections. No American president can embed political commissars in corporate boards or treat the public as state employees.

Trump’s Intel stake is less central planning than a businessman’s bet: buy in, watch the stock rise, and deliver returns to taxpayers. It is not an attempt — nor could it be — to turn Intel into a political arm of Washington.

The Global Trend — and Its Perils

Competition today is no longer simply between firms but increasingly between states acting through firms. Many democracies already hold stakes in national champions: France, Germany, Norway, Singapore, Japan. In crises, governments step in, as Washington did in 2008 with General Motors and the banks.

I once argued that democracies should pressure the CCP to abandon the China, Inc. model, which distorts markets and destabilizes the global economy. But that call has not gained any significant traction. Beijing’s model has already reshaped the playing field. Democracies no longer dare to confront it. Instead, they are drifting toward imitation — dabbling in subsidies and ownership of their own.

That is the danger. If America tries to mimic China, Inc., it risks ending up with the worst of both worlds: bureaucratic inefficiency and distorted markets, without China’s ruthless, state-backed competitiveness. In that scenario, America forfeits its strengths while failing to match Beijing’s.

READ MORE from Shaomin Li:

The True Nature of the Chinese Communist Party: A Global Threat

China’s ‘Low Human Rights’ Advantage

Shaomin Li is a professor of international business at Old Dominion University.