This article by Workers World Party founder Sam Marcy appeared in WW on June 3, 1993, when the bourgeois media were attacking China on the anniversary of the Tienanmen Square events. It continues to have great relevance today.
Once again, China is shaking the world. This time, however, it is not experiencing a great revolutionary convulsion like the Peiping Rebellion of the 1850s, the May 4th Movement, The Canton and Shanghai Communes of the late 1920s, the establishment of the People’s Republic of China, or the Cultural Revolution. These events shook the capitalist world to its foundations and inspired revolutionary struggles of oppressed people all over the world.
The latest development, while it is shaking up U.S. imperialism, is of a very different type [and] may in the long run be of decisive importance.
A surge of production
It has become plain in the last few months that there has been a phenomenal surge of production in China. Capitalist accounts here tell us that China’s economy is likely to expand at a rate of 13 percent this year, after a similar growth rate in 1992.
It is alarming the bourgeoisie here. They express concern over the plague of inflation, which of course would erode the economic gains. But why would the bourgeoisie here worry about that? The truth of the matter is they are far more worried that China has demonstrated its capacity to produce in great quantity and can compete to some extent with Western capitalism in the production of certain goods, if not services.
China’s growth rate has come to the fore in the capitalist press just at a time when the Clinton administration is to decide whether to allow Chinese imports on the same basis as before, or utilize a provision of the Jackson-Vanik law that gives the president authority to ban them by imposing onerous restrictions.
New method shows much bigger economy
The New York Times disclosed on May 20 that a new calculation of the world economies catapults China into third place in world production, exceeded only by the U.S. and Japan. It is, of course, a remarkable feat.
Under the new method, based on the purchasing power of a country’s currency at home rather than its value on international exchanges, China’s gross domestic product in 1991 was calculated at $1.66 trillion, as against only $370 billion using the old method.
Why the sudden change in methodology? Was it to do China a favor?
Under the new method, if China needs loans from the IMF or the G-7 imperialist nations, the interest would be based on a different formula. Now that China is no longer categorized as one of the poorest countries, it is not eligible for certain kinds of debt relief.
The imperialists are quite disturbed by China’s ability to expand its production at such a fast rate.
Different from Gorbachev’s reforms
China’s economic growth is based upon the introduction of capitalist reforms similar to those introduced in Eastern Europe and the former USSR. This can scarcely be disputed.
The difference, according to Chinese sources, is that the reforms are working and that the growth in production is the biggest boon to the Chinese people since the revolution triumphed in 1949.
However, it is important to differentiate China’s reforms from the way capitalist practices were introduced in the USSR. It is now seven years since Mikhail Gorbachev began to experiment with market reforms. The result has not been a socialist modernization of the industrial and agricultural apparatus but a dismantling of socialist projects in industry and in agriculture. Indeed, it has resulted in a breakdown, a vandalizing, of the achievements of socialist construction in an effort to bring about a restoration of capitalism.
In China, however, as best as we can see from here, there has been a rapid development of industry, a tremendous surge in the construction of hundreds of industrial projects, rather than the dismantling of existing socialist projects with a view to privatization, as has been going on in the former USSR.
However, China’s industrial growth is being carried out openly and unabashedly on a capitalist basis. And it is going forward at a very rapid rate, even exceeding the objectives of China’s economic planners.
Production under capitalism, except when it is interrupted by crisis, natural disasters or war, can and does rise to phenomenal heights, exceeding all previous modes of production. Raising production is not a huge, let alone formidable, problem under capitalism. The problem lies in the antagonism between private ownership and the social character of production.
Since the bourgeois counter-revolution, however, a rise in production has not been achieved in what was the USSR. Just the opposite. This is because the objective of the reformers there is not to increase production but to privatize the existing means of production, and there is tremendous opposition to that. The difference must be kept in mind.
Struggle over trade
During the [George H. W.] Bush administration, an opinion piece in the New York Times by Leslie Gelb communicated a threat to China that it was vulnerable to having its coastal provinces detached from the rest of the country. These are the areas where the free-market “special economic zones” are located. The threat was meant to force China to accommodate to the U.S. on matters regarding “human rights”–a code name for allowing counter-revolutionary activity.
However, Bush was opposed to tightening trade restrictions on China, notwithstanding the uproar by the Democratic Party faction in Congress. [Bill] Clinton, on the other hand, attacked Bush’s stand on China during the election campaign and called for new restrictions on trade.
Now Clinton finds himself in the same position as Bush. He has changed his position and is opposed to giving so-called human rights pre-eminence over trade with China. Once again, economics determines politics and not vice versa.
Class character of China
The growing influence of the capitalist market in China has occasioned economists and political leaders on both sides of the Pacific to give consideration to a class definition of China’s social structure and state. For instance, last year the Congress of the Communist Party characterized China as a “socialist market economy.”
It is well known by all students of Marxist economics that the two terms are incompatible with each other. China has had a planned economy. How well or poorly it has been doing is not the issue. The fact is that it instituted a planned economy soon after the revolution’s triumph in 1949. The kernel of a planned economy has persisted through all the struggles and turmoil since.
A capitalist market economy is not planned, but is spontaneous, unpredictable, chaotic. The capitalist class everywhere is lyrical about the freedom of the market, about how it sets free prices and production. But this should not be taken as literally true. Monopoly capitalism restricts capitalist trade and production….
A market economy by definition is generally understood to be the very opposite of a planned economy. The two terms are incompatible with each other. But that does not necessarily exclude the possibility of their coexistence within the framework of a national state for a period of time.
In fact, such a situation was created in the years closely following the Bolshevik Revolution. Under far different circumstances than exist today in China, the capitalist market was reintroduced for a time, even as plans were laid for the building of a socialist economy.
GATT enters the debate
The question of the class character of China’s state and of the reforms has undoubtedly caused a great deal of debate in China. Nor is it of theoretical or political significance in China alone. For instance, the organization known as the General Agreement on Tariffs and Trade is by no means an innocent bystander watching the debate in China. GATT is an organization set up by the imperialists that includes 105 countries. It says in so many words: If you want to trade with any one of us, you have to abide by certain rules that we set.
Under GATT’s rules, devised some years, ago, China, the USSR, Eastern Europe, Cuba, the DPRK, Vietnam and a few other countries could not become members unless they agreed to certain restrictions. Such as free trade.
China is undoubtedly trying very hard to meet those restrictions and get into GATT. An article in the Wall Street Journal of March 3, entitled “Chinese Entry into GATT Is Stalled by Thorny Socialist Market Economy,” explains that the officials of GATT, servants of the seven imperialists, have asked China to describe precisely what it means by “socialist market economy.” Part of the debate in China over this term is precisely over how to meet the restrictions of GATT. [Editor’s note: GATT morphed into the World Trade Organization, which China joined in 2001.]
Thus the struggle over the class characterization of China’s economy and state is not solely a debate among so-called doctrinaire communists, it reaches into the summits of the capitalist government as well.
Agriculture since the communes
If China is to be called a socialist country, what about the class character of the agricultural system? China has a vast population of peasants and a minority of workers. In the early 1960s, after collectivization, the commune was established as the unit of agricultural production. Farm work was elevated to collective labor, and private ownership of the land was abolished.
The dismantling of the communes in the 1980s signified that agriculture in the main returned to private ownership….
Either because of crop failures, natural disasters, or the inability to sustain themselves on the farm, peasants in China are now flooding into the cities in a manner similar to that in many Third World countries. This has made it possible to employ millions in industrial projects.
One may say that what is going on in China is a period of industrialization similar to that in England in the last century. The millions who were dispossessed from the land made cheap labor in industry possible and profitable. Marx described the horrors of early industrial development, including the employment of women and children for long hours, in his illuminating chapter in “Capital” on primitive accumulation.
A planned economy?
China’s collectivized and nationalized property in industry has become weakened as a result of both the privatization of agriculture and the institution of capitalist reforms.
Is China today a planned economy in the sense that the basic elements of production and consumption are planned and that the operations are pursuant a given plan?
The answer at the present time is no. The introduction of bourgeois reforms inhibits full-scale planning, so that to a large extent it is becoming a commodity producing economy. The larger the special economic zones, the larger the capitalist reforms, the more China becomes a commodity-producing economy and not a planned socialist economy.
However, China’s history since the beginning of the 19th century has been full of convulsions as it has attempted to free itself from imperialist domination. It has also fought to remain a centralized national state with a degree of autonomy for the provinces. Were each province to decide for itself how and what it would produce, a planned economy for the state as a whole would be impossible.
Immediately before and during the Tienanmen Square days, China appeared to be in danger of disintegrating into warlordism. This was overcome and the decentralizing process that threatened to emerge was eliminated. That was a victory of socialism.
The question of how far the Chinese government can go with the capitalist reforms will certainly be up for review, notwithstanding a constitutional provision meant to make the reforms a permanent feature in Chinese society.
One fact has certainly emerged: the millions who left the rural areas for the great cities of China and were absorbed into the proletariat have given the Chinese government and Communist Party the opportunity to strengthen the socialist character of the state. The growth of the proletariat is the objective factor most needed for the building of socialism.
It’s important that the process of production be carried out in the spirit of socialist construction. The calculations of the bourgeoisie are that as a result of their widening influence in the special economic zones, they will ultimately overwhelm the socialist sector in China. They believe that the socialist sector, lacking the material conditions necessary for its growth, including skilled labor and specialists, will be stillborn. The alternative, they say, is massive material assistance from the imperialists, and this will undo socialist construction.
For the moment, the Party seems to be united on going forward with the reforms because they are bringing results deemed indispensable at the present time. Without a doubt, a generation of young people, a new breed of Tienanmen Square elements, is being accommodated politically to this situation. But the inevitability of a capitalist recession, especially if it stems from a worldwide capitalist crisis, is bound to create a classic confrontation between the socialized and the bourgeois sectors.
The question is how significant is the proletarian revolutionary element, what is their influence in the higher councils of the Party? Even if they are tiny and weak now, the objective basis for their revolutionary growth is assured.
As Frederick Engels explained in Socialism, Utopian and Scientific (part of his book Anti-Duhring), the great philosophers of the 18th-century Enlightenment–Voltaire, Rousseau, Montesquieu, Saint-Simon–reflected the disillusionment with the old order and tore to shreds feudal ideology with their brilliance and wit. On the other hand, socialism is the ideological offspring of the growth of the proletariat.
China had its own Enlightenment period that undermined feudal ideology. The period in which the proletariat comes forward with its own ideological approach has been more protracted, given the necessity to fight imperialism on all fronts and a more obdurate and stultified feudal system.
Nevertheless, with all its ups and downs, China is moving toward socialism. The efforts of the imperialists to stop it by force and violence have failed over the decades, and their efforts at economic strangulation will also surely fail. The road to socialism in China, like everywhere else in the world, may be difficult, but it is assured.