Bill Bonnar looks at the challenges and contradictions of one of the most powerful economies in the world, China.
Earlier this year it was announced that China had overtaken Japan as the world’s second largest economy with the prediction that it would overtake the United States as the world’s largest economy within the next 20 years. Just as Britain became the world’s superpower in the 19th century to be replaced by the United States in the 20th century there is little doubt that China will assume this role in the course of this century, In fact, that is the title of the best book on China written from a Left standpoint; ‘When China Rules the World’ by Martin Jacques; former editor of Marxism Today. Yet there is astonishingly little debate on the Left as to the nature of the Chinese system or Chinese society.
Generally speaking Left opinion internationally tends to embrace the following; between 1949 and 1978 the Chinese Communist Party oversaw the greatest socialist transformation in history and since 1978 has overseen the greatest capitalist transformation in history; and usually leaves it at that. The problem is that both comments are fundamentally flawed. Was the establishment of the Peoples Republic in 1949 really about the building of socialism and have developments since the launch of ‘the four great modernisation’ in 1978 really been about the establishment of capitalism.
The Forgotten Revolution
This year marks the 100th anniversary of China’s forgotten revolution. In 1911 a mass movement led by Dr Sun Yatzen overthrew the monarchy, which had ruled China for millennia. The aim was to establish China as a modern republic, end China’s neo-colonial status and reverse the defeats inflicted by imperialism on the country since the mid-nineteenth century. This revolution wasn’t defeated but rather drifted, along with the rest of the country, into a period of civil war and general chaos.
This was exacerbated by the Japanese invasion of the country in 1931 and a renewed civil war in 1945 leading to the final victory of the Communist Party in 1949.
The Communist Party was a strange creature. Unlike the Bolsheviks in Russia a generation earlier this was a rural based mass movement already millions strong; more like a broad based national liberation movement that an urban based political party. And it was from the very beginning a coalition of dispirit forces; in fact it described itself as the head of an alliance of the working class, peasantry and national bourgeois. Two tendencies quickly emerged which for the benefit of shorthand will be described as Maoists and Capitalist Roaders; the names they had for each other.
For the Maoists, led by Chairman Mao, the establishment of the Peoples’ Republic was about the establishment of socialism. This would be an essentially rural vision of socialism, driven as much by ideology as economics and would lead within the foreseeable future to a new communist society. For the Capitalist Roaders, led particularly by Deng Zhou Ping; the above was basically nonsense. The establishment of the Peoples Republic was actually about the completion of the 1911 revolution. China couldn’t proceed to socialism, let alone communism, because it had never first had capitalism. For the previous century China had been essentially a kind of post feudal society drifting through war and chaos. If capitalism did exist it existed on the margins of the economy; in fact China had more in common with the some of the vast colonies of imperialism; bolted onto the capitalist system but not really part of it. For this faction China needed first to undergo a period of capitalist transformation, which would accelerate economic and social development and move China from a predominately rural to a predominately urban society. Both factions regarded themselves as Marxists and often argued their case in Marxist terms.
Between 1949 and the death of Mao in 1976 Chinese politics was essentially a battleground between these two factions. In 1966 the Maoists gained the upper hand and launched the Great Proletarian Cultural Revolution. The Communist Party was denounced as an agent of capitalism and largely bypassed, millions of young people were recruited to the Red Guards and the project to create communism was started. It didn’t last long and as the country descended into chaos it was reigned in and by 1970 the status quo resumed. When Mao died in 1975 the Capitalist Roaders gained full control of the party, carried out mass purges of Maoists and in 1978 launched their own vision of the future; the Four Great Modernisations.
The Four Great Modernisations
These modernisations were to take place in industry, agriculture, science and technology and the armed forces with the aim of propelling China into a modern, economically advanced and urban future. Looking back at these aims over the past 33 years, the government would point to what it would consider to be staggering success in three of the four modernisations. The Chinese economy has been transformed from one centred on agriculture to one based on industry and manufacturing. In fact, manufacturing output in this period has increased almost 500%. Accompanying this has been a revolution in the application of science and technology with literally tens of billions of pounds invested in this area. In terms of the armed forces there has been similar levels of investment turning China into the equivalent of a world military superpower. If there has been a failure it has been in the area of agriculture where a combination of lack of investment, privatisation and the movement of people from countryside to towns have made China increasingly dependent on food imports.
Does the above justify the statement; ‘since 1978 the Chinese Communist Party has overseen the greatest capitalist transformation in history’. If this is so then it is a kind of capitalist transformation without precedent.
Consider the facts. This has been a capitalist transformation with no extensive privatisation. In China, all what used to be called the ‘commanding heights of the economy’ remain firmly in state hands. Even the enormous growth in manufacturing has been through the growth in massive state owned manufacturing companies. This means that overwhelmingly the Chinese economy remains under state ownership. China also is very much a planned economy with the state as the principle organiser and regulator of economic life.
Where has private ownership developed? This has been in four areas; agriculture, foreign investment, new economic zones and the growth in small to medium size businesses. Let us look at them individually. The privatisation of agriculture with the break-up of the old commune system has been very unsuccessful. The Chinese countryside remains poor and underdeveloped, there has been no real expansion of the agricultural sector while the massive movement from countryside to town has meant that the proportion of this private sector set against the growth of the rest of the economy means that this is very much a declining sector. This has and is creating serious problems, as China is now a major net importer of food. Foreign investment is not widespread and represents a tiny proportion of the Chinese economy. Foreign companies complain bitterly on how difficult it is to invest in the country while it is clear the Chinese Government does not actively encourage such investment. As for the dreadful New Economic Zones, again there is evidence of a decline in the importance as the economy develops elsewhere. The real spectacular growth in the private sector is in the rise of small to medium size businesses, which now overwhelming constitute the private sector in China.
From the above a picture emerges as to the current nature of the Chinese economy. It remains an economy firmly centred on state ownership and control organised through a process of centralised planning. The private sector, although significant, represents a minority sector of the economy. Therefore, although the Chinese economy has many capitalist features it is difficult to classify it as a conventional capitalist economy.
The Communist Party dominates China at every level although its role confuses many commentators in the West including on the Left. The key to understanding the role of the CPC is to understand the role of the state in Chinese society. In China the state has an almost reverential status. It is the structure, which contains Chinese history and civilisation, is the embodiment of Chinese statehood, the guarantor of stability and the vehicle for progress. In the century before the Communist Party came to power, Chinese history was a story of war, civil unrest, famine, foreign intervention, defeat and chaos and all of these were seen as a symptom of the absence of a strong state. Today the state and the Communist Party are so intertwined as to be, in effect, the same thing. That is why, calls in the west to overthrow communist rule or to move to a multi-party system are largely meaningless to most Chinese. Overthrowing the Communist Party would mean the overthrow of the state, a prospect that most Chinese would approach with horror.
That is not to say that the Chinese political system is not in need of radical reform but this reform will happen within the system and will take two forms. The first is a process of decentralisation of power from the centre and top to the regions and cities that make up this vast country. There is already much evidence that this is happening as China makes the transition from a rural to an urban society. The second is on the issue of civil rights. Chinese politics can, in part, be characterised by a lack of basic rights. Whether it be individual rights, rights in the workplace or the rights of local communities; this has become one of the main political battlefronts in Chinese politics. When China was overwhelmingly a rural society there was a combination of rural conservatism, an autocratic political system and security forces which were almost a law unto themselves. The demand for civil rights was both muted and actively repressed. As China has been transformed in the past 30 years, reform has become a central political issue.
What of the future? As stated earlier, China, this year, surpassed Japan as the second largest economy in the world. More importantly, it passed another milestone. China is now an urban society as defined by a society where more than half the population live in towns and cities. And this process is accelerating. What are the challenges facing this fast evolving society. They can best be summed up by the following issues; economic growth, resources, environment and political reform.
The first of these is economic growth. Since 1978 China has obtained average annual growth rates of 9%. It is difficult to see how this can continue. Yet there are real implications if this cannot be maintained. Every year millions of Chinese people move from the country to the towns and cities. This means that the economy must create millions of new jobs every year. A slow down could see the creation of mass urban unemployment and a major source of conflict. The second is to do with resources. China lacks many of the resources to fuel its massive economic expansion and is heavily dependent on imports. It is already a significant net importer of food and raw materials and future expansion will depend on the security of these imports.
On the question of the environment the picture is very contradictory. On the one hand the massive economic growth has resulted in an equally massive growth in pollution and environmental damage. On the other, China has countered this by diverting massive resources into environmental protection; China spends more money in this area than the rest of the world put together. The last is in the area of democracy. China needs to embark on a democratic revolution based on civil rights and devolved government and to move away from an increasingly outdated autocratic political system.
How should socialists view China? Revolution is about the transformation of society for the better through the replacement of a previous socio-economic system that had acted, in Marxist terminology, as a fetter on the productive forces of society. The revolution of 1949 was the culmination of a revolution begun in 1911 to establish China as a modern republic and to reverse the defeats suffered at the hands of imperialism. The changes brought about since 1978 have been about the social and economic transformation of the country into a modern, urban society. We should view both in positive terms. In particular, this latter transformation is bringing immense new social forces into existence with demands around democratic rights, political reforms and protection of the environment. The future of China is being fought out today. Many, no doubt, would be happy to see it transformed into a fully-fledged capitalist society but that is by no means certain. There are still powerful forces at all levels of society who still see the future as socialist.
This article was originally published in Frontline – an independent Marxist review from Scotland. It is reproduced here with the kind permission of the author.