An analysis of the class character of the state, the economy and workers’ struggles
The Second Chinese Revolution (1925-27) ended in April 1927 with the massacre of thousands of militant workers and supporters of the Chinese Communist Party (CCP) in the urban centers, perpetrated by the regime of the Kuomintang (KMT) nationalist party. But, dialectically, it had its continuity in the displacement of conflict to rural areas in the south. Conducting a military struggle for survival in this region, the CCP founded the Soviet Republic of China in 1931. This discontinuous territorial zone came under the military control of the CCP, which abolished private property, and was severely attacked by KMT troops. In the face of such repression, the Chinese Stalinist forces carried out the “Long March” to the far North, where they settled in Shaanxi, until a truce was signed in 1936, starting a joint struggle against Japanese occupation (which included the formal dissolution of the then diminutive “Soviet Republic of China”). But the truce, accepted by the CCP in the form of an “Anti-Japanese Front”, did not last. It was broken in 1945, in the context of the military strengthening of the CCP in the post-war period and discontent in large cities with the KMT regime.
Between 1945-49, the Third Chinese Revolution took place, a set of mass confrontations by millions of peasants and workers against the Kuomintang dictatorial regime, which resulted in the victory of the CCP and led to the political defeat of the native and imperialist bourgeoisie, culminating in the construction of a regime whose backbone – the armed forces – was the People’s Liberation Army led by the CCP. Despite the original desire to develop “sovereign capitalism” in the country (so-called “New Democracy”), the CCP was forced to economically expropriate the bourgeoisie between 1949-53, given the risks of sabotage and riot by the capitalists in the context of the Chinese support to the North in the Korean War, and the reluctance of the bourgeoisie to accept the program of “New Democracy”. It can be added that there was enormous pressure from the urban proletariat in favor of the expropriation of industries.
Thus, in an “uphill battle”, so to speak, a transitional society was established in mainland China in the form of the People’s Republic of China, against the original plans of class collaboration and stagism of the CCP leadership. In place of the old bourgeois state, a political system was built in which the CCP exercised firm bureaucratic control, leaving the proletariat excluded from the spheres of power. In other words, a Stalinist regime above socialized property forms, or a bureaucratically deformed workers’ state. In spite of aid given to the North in the Korean War, the PRC was marred with the attributes typical of a Stalinist Bureaucracy, such as national isolationism, for fear of upsetting the imperialist powers as well as opening the door for workers’ revolutions based on proletarian democracy, which might have the potential to inspire the Chinese proletariat.
In 1978, with the change in the leadership of the CCP and the rise of Deng Xiaoping after a series of internal (including armed) conflicts with the Maoist leadership, a course of even greater adaptation to international imperialism began. China began to open up to foreign capitalist investment, later consolidated in the form of “Special Economic Zones”, in which capitalist companies could settle and exploit workers, albeit with the remittance of profits limited by heavy taxes.
In the late 1990s and early 2000s this course was deepened significantly, with China’s intention to be accepted into the World Trade Organization necessitating adaptation to various criteria of a “market economy”, with the privatization of a large number of state-owned companies (although this is far from enough to satiate the imperialists). Today, there is a labor and goods market in China. However it is restricted by the unique role played by the state, not only in its degree of intervention and control, but, above all, by the volume it still retains of the labor force, banking reserves, industries and resources, and in the monopoly of political power in the hands of the Communist Party bureaucracy.
Marxism developed the theoretical conclusion that there can be no change from capitalist to socialist forms of production without a change in the state. In other words, the liquidation of capitalist property and production relations demands the destruction of the bourgeois state. The development towards socialist economic and social relations depends on the conscious and active control of the working class over the most advanced means of production, expropriated from the bourgeoisie. Unlike the bourgeoisie, the working class is not a proprietary class whose relations of production can slowly penetrate society without holding direct state power.
The bourgeoisie, on the other hand, is able to establish capitalist relations and exert influence in a society in which it does not have political power. So it was under feudal monarchies and so it can happen, in an inverse and unexpected way, in societies where workers have already expelled capitalists from political power, but are isolated and encircled by the imperialist system. In the Manifesto of the Communist Party, Marx states that the striking feature of the modern era was that the bourgeoisie had achieved “at last, since the establishment of large industry and the world market, exclusive political domination in the modern representative state”. The bourgeoisie is not satisfied by the economic advances it has achieved in China for some decades, granted by the ruling bureaucracy; it cannot rest until it regains the exclusive control of the state, which currently does not serve it, and the predominance of its companies in the Chinese economy.
We have not identified a triumphant counter-revolution in China, which destroyed the bureaucratically deformed workers’ state that emerged in 1949 and built a bourgeois state in its place. Deng Xiaoping’s “market reforms” did not entail the full liquidation of the social conquests of the revolution, nor of the state created by it. Such reforms, still in force today in the form of so-called “socialism with Chinese characteristics”, did not mean the restoration of the bourgeoisie’s full economic and political domination. However, they did restore several aspects of capitalism, as well as creating different imbalances, in particular the expansion of unemployment, social inequality and the growing influence of bourgeois forces which strengthen tendencies towards capitalist restoration.
Many groups and tendencies on the left who believe that China is a capitalist dictatorship stopped seeing it as a semi-colony, as they did until the 1990s, and began to see it as an imperialist power from the mid-2000s on. This was due to a perception of the growing international role played by China, as well as its strong economic growth, which elevated it to the position of second world power. But these tendencies lack, among other things, an explanation as to how a nation rose from semi-colonial to “imperialist” status without displacing the current occupants of the throne in a conflict of great proportions, and only in a period of a few years. The notion of a gradual restoration of the bourgeois state, without a moment of qualitative change (counterrevolution) means, as Trotsky pointed out, to “run backwards the film of reformism”:
“Against the assertion that the workers’ state is apparently already liquidated there arises, first and foremost, the important methodological position of Marxism. The dictatorship of the proletariat was established by means of a political overturn and a civil war of three years. The class theory of society and historical experience equally testify to the impossibility of the victory of the proletariat through peaceful methods, that is, without grandiose class battles, weapons in hand. How, in that case, is the imperceptible, ‘gradual,’ bourgeois counterrevolution conceivable? Until now, in any case, feudal as well as bourgeois counterrevolutions have never taken place ‘organically,’ but they have invariably required the intervention of military surgery. In the last analysis, the theories of reformism, insofar as reformism generally has attained to theory, are always based upon the inability to understand that class antagonisms are profound and irreconcilable; hence, the perspective of a peaceful transformation of capitalism into socialism. The Marxist thesis relating to the catastrophic character of the transfer of power from the hands of one class into the hands of another applies not only to revolutionary periods, when history sweeps madly ahead, but also to the periods of counterrevolution, when society rolls backwards. He who asserts that the Soviet government has been gradually changed from proletarian to bourgeois is only, so to speak, running backwards the film of reformism.”Leon Trotsky, ‘The Class Nature of the Soviet State’, October 1, 1933.
By our analysis, China remains a bureaucratically deformed workers’ state, in spite of the significant turn to the right by the bureaucracy, particularly in the last 25 years. This turn meant not only opening up areas of the economy for the exploitation by capitalist companies, but, above all, forcibly reducing the importance of the state industrial sector, in addition to an ideological adaptation to the capitalist system. However, the vacillating role played by the state in this opening, the characteristics of the Chinese economy, and an attentive study of the country’s recent history testify that there has been no bourgeois counterrevolution, no qualitative moment to a point of no return in the process of degeneration or restoration of a backward workers’ state, isolated and deformed.
Unlike the countries of the former Soviet Bloc and Eastern Europe, where counter-revolutions triumphed between 1989 and 1991, China and the remaining workers’ states (North Korea, Cuba, Vietnam and Laos) retain significant economic differences with the rest of the capitalist world. For example: the near total state control of the banking system, used significantly to finance state industries; dominant control by the state over the strategic industrial sectors; state ownership of the land, despite its private use in many cases. These differences point to the incomplete and still unstable character of the “restoration”.
Despite the many economic (and also political) concessions to the bourgeoisie, despite the growth of capitalist economic relations, despite the various pro-capitalist circles that have emerged in Chinese politics, despite the presence of bourgeois elements in the CCP itself, decades after the Chinese Revolution, it is still the same state apparatus built by Mao and his supporters that governs China: a ruling stratum composed of millions of bureaucrats who extract material privileges directly from the extensively nationalized sectors of the economy. It is to them that the armed forces are subject; they are still the ones who determine the policies and laws of the Chinese state, despite the great social pressures which impel them to make concessions.
Attacks on what the Chinese proletariat considers to be its fundamental rights cause widespread reaction. Amid numerous strikes and protests, not to mention the emergence of “radical Marxist student groups”, pressure and opposition to the bureaucratic apparatus is constantly accelerating and developing in increasingly defined ways. The formation of parties and mass movements defending a new revolution is only a matter of time. An impressive rate and consistency of economic growth is the only factor preventing these profound contradictions from exploding into a life-and-death struggle. In other words: even though the contradictions within Chinese society increase day after day, the question of the final abolition of nationalized property and of the deformed workers’ state has not yet been resolved by history, it has only been posed.
The bourgeois counter-revolution – the replacement of the workers’ state by an organ of exclusive control by capital – would bring about the destruction of those achievements which still remain (although deformed by the bureaucracy). It is significant that many on the left who point to the supposed bourgeois character of the Chinese state still consider capitalist restoration “incomplete” or “in progress” after so many years. Others are forced to recognize the permanence of countless economic elements that are at least strange to capitalism. It is curious that such a restoration is not seen as “still in progress” in Russia, Ukraine or Poland, for example. For us, this has an explanation: such a restoration is still partial because the state that rules over the Chinese society zigzags between the pressures of the bourgeoisie and the proletariat, adapting empirically to these two fundamental classes, while in formerly mentioned countries, capitalist counter-revolutions already triumphed. In the last decades of bourgeois reaction against the proletariat worldwide, the Chinese bureaucracy has tended to adapt much more to imperialism. However, temporary “left turns” by the bureaucracy, which could include the re-nationalization of sectors of the economy, are not impossible. This would not, nevertheless, change the bureaucracy’s dual character which, in the long run, strengthens tendencies towards capitalist restoration.
The Extent of Transitional Elements in the Chinese Economy
In 2018, the Communist Party of China held a ceremony to celebrate the 40th anniversary of the country’s formal opening to private investment. On that occasion, President and party leader, Xi Jinping, frustrated the most pro-restoration sections of the bureaucracy and capitalists who were optimistic about a new flow of privatizations and economic concessions. Although not threatening the capitalists, Xi pointed out that the CCP does not intend to advance further economic deregulation or to weaken the Party’s role in society and in the economy. Here is an account made by The New York Times:
“Some economists and investors had hoped that Mr. Xi would embrace and improve on Deng’s historical legacy as an economic liberalizer. Instead, Mr. Xi used the speech to defend policies that he had forged over the past six years to make the Communist Party even more powerful, strengthen the state-run sector of the economy while allowing private business to grow, and put China’s stamp on international affairs….
“Summarizing what he described as the lessons from China’s past four decades, Mr. Xi said, ‘First, the party’s leadership over all tasks must be adhered to, and the party’s leadership must be incessantly strengthened and improved.’ If anyone watching still expected that Mr. Xi would seek to moderate his hard line reputation and reveal himself to be a political liberalizer, he used this meeting to send an emphatic ‘no.’ The party’s socialist path, doctrine and policies over the past 40 years, he said, had all been ‘totally correct.’…
“‘No one is in the position to dictate to the Chinese people what should and should not be done,’ he said in apparent reference to demands from Washington and other capitals that China undo some of its protectionist economic policies (even as Chinese negotiators have quietly offered concessions)….
“Given China’s embrace of market economics, China’s leaders have often played down the communism part of the Communist Party. Mr. Xi made clear just how deeply committed he is to the ideology itself — adapted ‘with Chinese characteristics,’ as the phrase goes. In his remarks he exalted Marxist-Leninist principles and even quoted Friedrich Engels to make the case for promoting new forms of innovation in the 21st century. Mr. Xi’s message: China’s headlong plunge into capitalism over the last 40 years was not a repudiation of the Communist Party’s founding ideology, but something possible only because of it….
“Economists and investors have criticized Mr. Xi for giving what they consider too much protection to state-owned conglomerates. But on Tuesday, those critics were probably disappointed by the absence of specifics or shifts in rhetoric. Jack Ma, the multibillionaire founder of Alibaba, the e-commerce giant, was among the 100 Chinese honored by Mr. Xi as ‘pioneers’ of reform. But in his speech, Mr. Xi affirmed the party’s dual approach: supporting the state sector while encouraging private entrepreneurs. And support for the state sector came first.”The New York Times, ‘4 Takeaways from Xi Jinping’s Speech Defending Communist Party Control’, 18 December 2018.
The existence of capitalist elements in a transitional economy towards socialism does not invalidate its transitional character in itself, nor is it against Marxist principles, as it may be necessary to boost the means of production using private capital in a developing industry. This was the essence of the New Economic Policy (NEP) applied by the Bolshevik Party in the USSR in the years 1921-28. Lenin explained the NEP as follows:
“The New Economic Policy means substituting a tax for the requisitioning of food; it means reverting to capitalism to a considerable extent—to what extent we do not know. Concessions to foreign capitalists (true, only very few have been accepted, especially when compared with the number we have offered) and leasing enterprises to private capitalists definitely mean restoring capitalism, and this is part and parcel of the New Economic Policy; for the abolition of the surplus-food appropriation system means allowing the peasants to trade freely in their surplus agricultural produce, in whatever is left over after the tax is collected—and the tax takes only a small share of that produce. The peasants constitute a huge section of our population and of our entire economy, and that is why capitalism must grow out of this soil of free trading.”Lenin, ‘The New Economic Policy and the Tasks of the Political Education Departments’, October 17, 1921.
In 1923, in a report “On Industry”, Leon Trotsky defended the opening to foreign capital as a way of leveraging economic development:
“The experience of the past year has confirmed the fact that the process of State Socialist construction under the new economic policy is quite compatible (within certain by no means narrow limits) with the active participation of private – foreign as well as home – capital in the sphere of industry. Further systematic measures are necessary in order to attract foreign capital to industry in all those forms the expedience of which has already manifested itself up till now: concessions, mixed companies, leasing. A careful study of which domains of industry and which enterprises can be left to foreign capital and on what principles, with advantage to the general economic development of the country, is essential in the formulation of future plans by our leading economic organizations.”Leon Trotsky, “Theses on Industry”, April 1923.
There are similarities between the course set by the Soviet NEP and the current Chinese economic policy, as well as colossal differences. Just as China does today, the USSR sought to attract foreign capital and allowed the opening of private companies, as well as forming joint-ventures (mixed companies). This meant that, during the NEP years, the Soviet Union had an economy with many urban private owners, in addition to a countryside which was mostly privately-owned; and in which the market, through growing commercial capital, was the intermediary of relations between country and city. The NEP undoubtedly boosted the USSR’s growth, but it was never rid of contradictions.
It in no way, however, meant removing restrictions on private capital, or that it could develop with the risk of restoring capitalism. Trotsky argued that the economic reconstruction of Russia, after almost seven years of war, should always be directed, even during the NEP, towards the construction of a strong state sector, which would allow the gradual transition to socialism through economic planning, once the objective conditions were in place. Far from seeing private capital in a “harmonious union” with the state sector, Trotsky saw a competition between them, in which the workers’ state should always “turn the scales” in favor of socialist development so long as the NEP was necessary.
Lenin saw the NEP as a necessary retreat during a longer historical period, until victorious revolutions took place in other countries. Trotsky tended to see it much more critically in the second half of the 1920s (after Lenin’s death), as it generated dangerous contradictions in the prices of basic items and in the relations between the countryside and the city once private industry started to grow. In his speech at the Fourth Congress of the Communist International (1922), on the session dedicated to the Soviet economy, Trotsky pointed to the existence of conflict:
“Whither is the NEP leading us: toward capitalism or toward socialism? This is, of course, the central question. The market, the free trade in grain, competition, leases, concessions – what will be the upshot of all this? If you give the devil a finger, mightn’t it be necessary to give him next an arm and then a shoulder, and, in the end, the whole body, too? We are already witnessing a revival of private capital in the field of trade, especially along the channels between the city and the village. For the second time in our country private, merchants’ capital is passing through the stage of primitive capitalist accumulation, while the workers’ state is passing through the period of primitive socialist accumulation. No sooner does private merchants’ capital arise than it seeks ineluctably to worm its way into industry as well. The state is leasing factories and plants to private business men. The accumulation of private capital now goes on, in consequence, not merely in trade but also in industry. Isn’t it then likely that Messrs. Exploiters – the speculators, the merchants, the lessees and the concessionaires – will wax more powerful under the protection of the workers’ state, gaining control of an ever larger sector of the national economy, draining off the elements of socialism through the medium of the market, and later at a propitious moment, gaining control of state power, too? For we are as well aware as Otto Bauer that economics constitutes the social foundation, while politics is its superstructure. So doesn’t all this really signify that the NEP is a transition to capitalist restoration?
“In answering abstractly a question posed in so abstract a manner, no one can of course deny that the danger of capitalist restoration is by no means excluded, no more than, in general, danger is excluded of a temporary defeat in the course of any struggle. When we fought Kolchak and Denikin, who were backed by the Entente, we incurred the likely danger of being defeated as Kautsky benignly expected from one day to the next. But, while taking into consideration the theoretical possibility of defeat we oriented our policy in practice upon victory. We supplemented this relation of forces with a firm will and a correct strategy. And in the end we conquered. Once again, there is war between the self-same enemies: the workers’ state and capitalism. But this time the hostilities occur not on the military arena but in the field of economy. Whereas during the civil war there was a duel for influence over the peasants between the Red Army on the one side and the White Army on the other, so today the struggle between state capital and private capital is for the peasant market. In a struggle it is always necessary to have the fullest and most accurate estimate possible of the forces and resources disposed by the enemy and at our own disposal.”Leon Trotsky, ‘The New Economic Policy of Soviet Russia and the Perspectives of the World Revolution’, November 14, 1922.
In China’s case, it is evident that introducing market mechanisms and allowing capitalist companies to operate, especially when tutored in joint-ventures with state-owned industries, helped to achieve a great economic and social leap over the past few decades. From 1978 to 2016, the average annual growth in the Chinese GDP was 9.6%, and its economy increased in size by 3,200%. The average annual increase in GDP per capita was 8.5% and the total increase in the period in question was more than 2,100%. From 1978 to 2017, about 740 million people were lifted out of extreme poverty (a drop of 94.4% in poverty in the case of rural areas). This is an unparalleled figure in the history of mankind, for a single country in such a short period of time. A positive aspect of the opening, despite the many contradictions we will later discuss, was that Chinese state-owned industries obtained technology from the most advanced capitalist companies, and began to develop it by themselves.
The counterpart to this growth was the increase in social inequality, corruption among civil servants and the resurgence of an increasingly powerful native bourgeoisie. Native capitalists have, since 2001, been allowed to join the CCP and, thus, have more direct ways of exerting pressure on the state. Emblematic of this was the acceptance of China’s richest man, Jack Ma of the Alibaba conglomerate, as a party member in 20181. There has also been a dismantling of living conditions for most of the working class, with the gradual abandonment of the “iron rice bowl” policy (which guaranteed various subsidies to workers) and a tremendous intensification of precarious working conditions in private companies (working hours much longer than eight, requirements to live in the workplace, strict control of breaks). All of these elements generate powerful tendencies for capitalist restoration, both direct (strengthening counterrevolutionary forces) and indirect (disillusionment of the proletariat with Chinese “socialism”).
In the USSR, there was an attempt by the bureaucracy in the second half of the 1980s to overcome bureaucratic stagnation by reintroducing limited features of capitalist relations (commonly known as Perestroika, or openness). Sections of bureaucracy directly linked to these emergent social forces (and their representatives) quickly felt comfortable enough to support the overthrow of the state economy and stage an armed counterrevolution. During the acute socio-political crises that began in 1989, when the governments of the Soviet Bloc as a whole were delegitimized and the masses sought to put an end to the bureaucratic dictatorship, this counterrevolutionary nucleus took power and reorganized the state along new lines, rapidly dismantling the nationalized economy.
Trotsky’s prognosis of the bureaucracy was confirmed, since it proved to be a heterogeneous formation, prone to being submit to the most varied forms of social pressure. There were those who wanted to maintain the workers’ state for their own parasitic interests and those who wanted to destroy it and fully reintroduce capitalism. An openly pro-capitalist sector undoubtedly also exists within the bureaucracy in China today (despite the censorship surrounding the CCP’s internal debates) and is probably stronger than it was in the USSR in 1989-91.
Where Trotsky and Lenin necessarily saw conflict and danger despite the potential benefits that could be achieved with the concessions by the workers’ state, Xi and the Chinese bureaucracy see only virtues and harmony. They see the construction of “socialism with Chinese characteristics”, and pay homage to bourgeois elements like Jack Ma, who at the next corner will be financing and promoting the counterrevolution. This is one striking differences between a revolutionary Marxist leadership and an unprincipled bureaucratic leadership. For us, this debate is important, in part to demystify the “purist” notion that the workers’ state cannot carry out openings up to private capital in the period of transition to socialism.
Some on the left acknowledge that a workers’ state may make concessions to private capital without implying that this state has become a “bourgeois state” overnight, but consider that somehow China has “crossed the bar”. But what explains the differences between the NEP of the Bolshevik Party (which also had different phases) and the opening promoted by the CCP is the political character of the leadership of the workers’ state, in addition to the duration and depth of such reforms.
A thesis that has been popularized by Martin Hernandez, of the Morenoite International Workers’ League (LIT/IWL), is that there are “three economic pillars” of a workers’ state, and that their absence or incompleteness implies that the state has become a bourgeois state. This has led the IWL to consider China, Cuba and the other remaining deformed workers’ states capitalist. The thesis defended by Hernandez follows the same model previously criticized, of “running backwards the film of reformism”. He claims that the USSR and the countries of the Eastern bloc had already become “bourgeois states” by the mid-1980s under the effects of Mikhail Gorbachev’s Perestroika:
“Martín Hernández takes up Lenin’s criterion and recalls how Trotsky defined the class character of the state in ‘The Revolution Betrayed’: by the ‘social relations of production that the state protects and defends’.”
“To define a state as a ‘worker’s state’, it is necessary to know whether that state protects and defends social relations of production based on the three basic pillars of an economy developing towards socialism: 1) all major means of production and banks are state-owned; 2) the quantity and quality of what is produced is determined not by the market, but by a central economic plan, to which companies are subordinated; and 3) foreign trade is a state monopoly.”
“Martín Hernández’s work shows that, just as it has been in China since 1978 and in Russia since 1986, in Cuba since 1990, the state has been articulating a whole legal and political plot to destroy these pillars. The Central Planning Board was dissolved. Mixed companies between the military and the new rich, and European or Canadian multinationals have spread to all the most dynamic branches of the economy. And companies, both mixed and state-owned, produce for the market and are completely free to trade abroad.”Prologue to “The Verdict of the History” by Martín Hernández, November 11, 2016.
While it is true that the workers’ state must optimally sustain socialized production relations, based on a plan democratically constructed by the workers – a fundamental condition for the transition to socialism – retreats on this path do not necessarily alter the fundamental character of the state. The bureaucratic planning established by the Stalinist regimes has always been far from this. To consider that the “three pillars” cited by Hernandez, if not fully satisfied, imply that the workers’ state has ceased to exist and has become a bourgeois state is, to say the least, arbitrary and schematic.
As we have already seen, Lenin and Trotsky had a different view. If “all major means of production and banks are state-owned” is considered a pre-condition for the recognition of the workers’ state, then we would be obliged to conclude that the USSR during the NEP ceased to be a workers’ state, but that soon afterwards it became one again with the quick economic transformation carried out by Stalin in the late 1920s and early 1930s. The same can be said about the second criterion, “the quantity and quality of what is produced is determined not by the market, but by a central economic plan”. According to Trotsky, this would only be resolved in a dispute, in the economic arena, between the plan and the market. We do not defend these two “pillars” as absolute principles in the dictatorship of the proletariat in a backward and isolated country. They could only be maintained without interruption in the most positive and ideal scenarios for the construction of socialism, in which there were no moments of stagnation in the development of productive forces.
The third criterion, the monopoly of foreign trade, is the most objective of the three, as it is in fact important that the workers’ state control the circulation of goods and investments. This is a principle that we fight for the full re-establishment of in China, along with the re-nationalization without compensation of a large part of the private sector. After decades of growth in which economic opening has already advanced the productive forces of the country, the private sector is in many respects out of control and tends to increase social inequality and the risk of counter-revolution. But despite this, the CCP’s abandonment of the monopoly of foreign trade did not make it the head of a bourgeois state, serving the exclusive interests of capital. It simply meant that the workers’ state gave up an important position in the struggle for the transition to socialism. The loss of such a position does not immediately mean the loss of the war, but a weakening of the conditions of the struggle.
The CCP carries out bureaucratic economic planning, which is restricted due to the reduction of the weight of the state sector in the economy, but which still remains relevant due to its almost exclusive control of the banking system and the enormous weight of state-owned companies. The state is dominant in the banking, mining, construction industry, metallurgy, oil and petrochemicals, aerospace, communication and a number of other strategic areas in ways unparalleled by capitalist countries, and comparable only to other deformed workers’ states. Education, health, sanitation, energy and transport is also dominated by the state sector. With these elements, it is still possible for the CCP to be the chief commander of the Chinese economy, despite its large private sector.
There is no consensus on the nature of the Chinese economy, neither in academic circles nor in the bourgeois press. If we consider companies that have at least 10% state participation or are indirectly controlled, then these make up more than 70% of the Chinese economy. If we consider companies owned exclusively by the State, then they are restricted to something around 15%. If what is considered are the companies with more than 50% state holdings, the sum increases to around 40% of the economy. These figures take into account the amount that the state sector contributes to the GDP, investment capacity and proportion of labor employed, leading to slight variations.
There is little dispute that the four large Chinese state-owned banks (the “big four”) dominate investment in the country. Although one of the concessions made to allow China’s participation in the World Trade Organization was permission for foreign banks to enter the country, they have many restrictions on the creation of branches, and continue to hold a minimal share of the allocation of resources. A brief article on the Chinese banking system from the Banking Encyclopedia (which is critical of the current situation) reports that:
“From the entrance of China into the WTO, the Chinese banking activity has been directed more towards the logic of performance and efficiency, rather than logical tied exclusively to the national planning. Despite this, however, the system continues to be characterized by factors of instability. For example, the activities of foreign banks are blocked by the limitations on acquisition of shares in local banks or by the establishment of branches in a regulatory framework still far from international standards. In the literature, however, is attributed to its lack, like a full opening of the sector to international competition, the merit of having allowed the country not to suffer too much the weight of the recent financial crises and contrary to increase their influence on world financial markets.”‘China’s banking system’, bankpedia.org
One of the most comprehensive studies carried out in recent years on the role of state-owned enterprises in China was that of the US-China Economic and Security Review Commission, ordered by the U.S. government. This study (2011) raises some of the difficulties mentioned:
“Given the growing role of private enterprise in China, there is a natural interest in benchmarking the growth of the private sector versus SOEs. The most natural metric for this type of analysis would be the share of GDP of the private sector versus the share of GDP by SOEs. Unfortunately, given the complications described above, there is no published value for SOEs, only estimates and conjectures. An OECD study using data from 2006 estimated the SOE share of GDP to be 29.7 percent, implying that the non‐state sector is about 70 percent of the economy. Other estimates of the state’s share are higher. In recent testimony before the USCC, Derek Scissors of the Heritage Foundation implied that the state sector accounts for 30‐ to‐40 percent of China’s economy. A lawyer working for a western firm in China estimated the SOE share of GDP to be in the range of 40‐to‐50 percent….
“The Chinese government publishes several statistical measures which can be used to assess the size of state‐owned enterprises relative to other forms of ownership according to various dimensions. In many cases, the measures of SOE activity consider only wholly‐owned SOEs. That is, these SOE measures do not treat entities in which the state ownership share is less than 100 percent, but greater than 50 percent, as being state‐owned. Further, the official estimates often do not track ultimate ownership, thereby ignoring enterprises that are not registered as SOEs or state‐controlled enterprises even when indirect state ownership is present.”Andrew Szamosszegi and Cole Kyle, ‘An Analysis of State‐owned Enterprises and State Capitalism in China’, October 26, 2011.
The study’s findings show the significant weight still retained by the state sector:
“In a world in which central planning has been so utterly discredited, it would be natural to conclude that the Chinese government and, by extension, the Chinese Communist Party have been abandoning the institutions associated with the communist economic system, such as reliance on state‐owned enterprises (SOEs), as fast as possible. Such conclusion would be wrong. Although China’s reliance on private enterprise and market‐based incentives has been growing, and the CCP’s treatment of private enterprises and entrepreneurs has been changing, it would be a mistake to write off the country’s SOEs as dying vestiges of China’s Maoist past or to minimize the current role of the state and the CCP in shaping economic outcomes in China and beyond.
“True, the private sector nominally is responsible for a growing share of economic activity in China. Still, the Chinese government and SOEs remain potent economic forces. Indeed, some of China’s SOEs are among the largest firms in China and the world. They are major investors in foreign countries. They have been involved in some of the largest initial public offerings in recent years and remain the controlling owners of many major firms listed on Chinese and foreign stock exchanges. In short, SOEs still matter”
“This does not mean that U.S. firms cannot make money in China, or cannot sell in China. Many U.S. firms have profited handsomely from the opening of China’s economy. Many U.S. firms have invested in China, sold U.S.‐made equipment in China, and made money in China, in part due to generous subsidies and competition limits put in place by the government. But it is now increasingly obvious that these policies, and the gains they conferred on U.S. firms, were not due to the Party’s conversion to free market capitalism. Rather, a more convincing interpretation of these policies is that they were put in place to accomplish certain very specific aims of the state.”
“Despite the indisputable growth of the private sector in China, and the presence of foreign investment, the state‐owned sector remains important to China’s economy. The observable state sector, which consist of SOEs and the enterprises they directly control, accounts for approximately 40 percent of the Chinese output under reasonable assumptions. If other public bodies, such as urban collectives, public TVEs, and FIEs associated with SOE affiliates are included, the share of the output directly or indirectly attributable to some form of public ownership is likely fifty percent.
“That the state sector remains a force in China should be no surprise. Neither Deng Xiaoping nor the current leadership has sought to eliminate the state sector. As Deng noted in his 1984 speech cited earlier, ‘the socialist sector is the mainstay of our economy.’ While there have been conflicts between those who preferred more rapid reforms and those who sought to roll them back, the current goal of policy is ‘socialism with Chinese characteristics.’ On the economic front, socialism with Chinese characteristics means ‘a multi‐ownership‐oriented basic market economic system, with the public ownership in the dominance’.”Andrew Szamosszegi and Cole Kyle, ‘An Analysis of State‐owned Enterprises and State Capitalism in China’, October 26, 2011.
Another important source we took from was a study by Isabela Nogueira, professor of Political Economy and coordinator of the Laboratory of Studies in Chinese Political Economy, at the Federal University of Rio de Janeiro:
“Despite the notorious statistical problems and the huge amount of mixed capital, it is estimated that the state sector today is equivalent in size to the private sector in terms of industrial production and investment in fixed assets. The share of state and collective property in industrial production fell from 90.2% in 1990 to 27.5% in 2011 (the last year with comparable methodology), while the share of private domestic companies jumped from 5.4% to 29.9% in the same period (NBS, several years). The same trajectory occurred from the point of view of investment in fixed assets: the state and collective share fell from 72.6% in 1994 to 27.6% in 2015, while the private share went from 11.5% to 30.5% (graph). In any case, the strategic position of the remaining state-owned companies, both from an economic and geostrategic point of view, continues to give the Party-State the command of accumulation, as we will point out below.”Isabela Nogueira, ‘State, Capital and China’s emerging capitalist class’, June 11, 2018
The percentages missing in the description of investments in fixed assets are filled by the mixed companies, as is visible in the above graph. These also have state participation, without clarity on the portion involved. The article presents important data, despite the absence of a clearer affirmation of the class character of the state from the author’s perspective. According to her, the state strives for accumulation of capital in different forms, without the predominance of one, which would explain its various zigzags on the question of forms of ownership.
Data from the first study cited estimates that the share of urban labor employed in state-owned companies was 29%, therefore more than in private companies, which was 25.1%. The category of autonomous individuals was next, with 19.2%, while 11% were employed in limited liability companies with some participation by the State (2009 data). The authors of the article conclude that about 40% of China’s workers were employed by the state, when taking into account cooperatives, companies in municipalities and villages, and other public organs.
All of these are important elements of the transition to socialism which remain in the Chinese economy and have an impact on society and politics. The victory of a counterrevolution would throw almost the entire state sector into the hands of the native or imperialist bourgeoisie, drastically worsening the living conditions of the hundreds of millions of workers employed in the public sector, which are far superior to the conditions of employees in the private sector.
In addition, some 40 million state bureaucrats depend on (and parasitize) this gigantic state sector. While some high-ranking bureaucrats have undoubtedly developed close ties and relationships with the new emerging bourgeoisie, the vast majority of bureaucrats would be “wiped out” in the event of a counterrevolution. That is why the state ownership of the means of production is still largely maintained despite the privatizations that took place between the 1990s and the 2000s. The pro-capitalist and openly counterrevolutionary sectors of the bureaucracy would like to become part of the new capitalist class and, to some extent, have already done so for several years. They have taken advantage of the economic opening through various legal and illegal means. But the bureaucracy would fragment and be almost completely wiped off the map if China were to become a “typical” capitalist economy. This does not mean that the openly counterrevolutionary bureaucrats, with the support of the native bourgeoisie and imperialism, could not win. In fact, with each step they get closer to that goal, like a snake waiting for the right moment to strike. Workers, both in state-owned and private companies, cannot count on the action of corrupt bureaucrats. They need to organize themselves to defend what remains of the transitional elements in the economy and take control of the state for themselves, in order to bring about a head to toe reorganization of the economy and society.
Imperialists, especially the United States’ imperialists, pose a constant threat to the Chinese state in various forms. One that has appeared prominently in the news recently is the so-called “trade war” initiated by the US under Donald Trump and continued, with some adjustments, by Joe Biden. This campaign involved the imposition of a tax on Chinese products by the U.S., aimed at reducing the presence of Chinese goods, especially raw materials, in its economy. There was an increase of 25% taxation on steel and 10% on aluminum. A 25% tax was later raised on electronics in general.
Trump, and now Biden, and the American imperialists seek, in addition to recovering the American trade balance, to force China into negotiations for direct purchases from the U.S., and to facilitate the operation of American companies in its territory, without the requirement to share patented technology. One of China’s defenses, in addition to overtaxing American products in backlash, was to force the devaluation of its currency, to make Chinese exports more competitive. Obviously, trade disputes are one path to armed conflict.
In 2017, the U.S. installed the THAAD (Terminal High Altitude Area Defense) missile system in South Korea, allegedly for intercepting missiles launched by the Democratic People’s Republic of Korea (North Korea). But military experts and intelligence officials from several countries have pointed out that the system is capable of carrying out attacks not only against North Korea, but also against the People’s Republic of China. At the time, this caused hysteria in Chinese society and led to a massive government retaliation against South Korean companies, which continues to date.
“Geng Shuang, a spokesman for the Ministry of Foreign Affairs of China, said on Tuesday that Beijing is against the system and that it will ‘resolutely take the necessary steps to secure its defense interests’.
“Last week, South Korea accused China of doing what it called ‘economic retaliation’. Branches of the South Korean department store Lotte in China were closed and the government also announced a ban on the purchase of tourist packages for the neighboring country. ”
“Beijing is the destination for 40% of Korean exports – an estimated total of around US$ 124 billion a year, four times more than that exported to China by Brazil in 2016.”BBC, ‘What is the anti-missile system the U.S. is installing in South Korea – and why is it so controversial’, 8 March 2017.
The United States is no longer secret about preparing for armed conflict with China. The Trump administration banned American companies’ cooperation with Chinese companies in high-tech areas, fearing potential theft of industrial secrets. A BBC report from November 2019 revealed that the Pentagon has been working on plans to undermine economic power and confront China in the event of disputes in the South China Sea, where a third of the world’s ships pass by and where China has installed military bases on artificial islands. (See Bolshevik-Leninist’s article concerning the disputes in the South China Sea).
“At the same time, at the Pentagon, Brigade-General Robert Spalding was leading a team of people trying to formulate a new national security strategy to deal with China’s rise and influence. Spalding left the armed forces and wrote a book called ‘Hidden War: How China came to power while the American elite slept’.
“When asked about the threat that China poses to U.S. interests, General Spalding’s response is stark. ‘It is the most significant existential threat since the Nazi party in World War II’. ‘I think it is a much bigger threat than the Soviet Union. As the number two economy in the world, its reach, particularly through governments and in all Western institutions, far exceeds anything the Soviets could have imagined’.
“The result of Spalding’s work at the Pentagon was the National Security Strategy, published in December 2017. It is considered the main government document, designed to guide all departments, and represents a profound change in approach, according to Bonnie Glaser, director of the China Power Project at the Center for Strategic and International Studies. ‘Now there has been a move away from the war on terror and, instead, competition between the major powers has taken the place of terrorism as the greatest threat to the United States,’ she says.
“The US Department of Defense now believes that facing the rise of China is one of the main military objectives of the United States in the coming decades. The speed with which China built and then militarized a series of artificial islands in the South China Sea, defying international law, has alarmed many people in Washington.”BBC, ‘The concern in the U.S. with China’s advance’, November 17, 2019.
American imperialism will not rest until it can destroy the Chinese workers’ state and transform the country into a semi-colonial American vassal in the Far East. American imperialism must be defeated by the workers at home, through a socialist revolution. But until that happens, it is the task of workers across the world, especially workers in the United States and its allies, to carry out strikes, pickets and demonstrations to defend China against imperialist aggression. Marxists and other militant workers must be united against the imposition of sanctions, military provocation and attacks against the Chinese deformed workers’ state. A counterrevolution imposed by imperialism in China would mean the immediate liquidation of the remaining gains of the Chinese revolution, and an immediate worsening of living conditions for hundreds of millions of workers. This would also make the American government and other imperialist powers more confident to impose attacks on workers at home.
The Conditions and Struggles of the Chinese Working Class
The Chinese working class has grown and changed tremendously in the past few decades. The privatization measures of the 1990s and the merger of small and medium-sized state-owned companies brutally reduced the share of the proletariat employed by the state, and led to a significant worsening of their living conditions. In face of active resistance by workers, the CCP often preferred to carry out compulsory retirements or even layoffs instead of keeping old workers with reduced benefits.
The period between 1995 and 2003 was the most aggressive, with around 50 million workers from state-owned companies losing their jobs in these years. This created an ocean of unemployed workers for private companies to exploit, at a very low cost, and also turned several high-ranking bureaucrats in the provinces into capitalists (this was called “insider privatization”). Meanwhile, the Constitution recognized private property as one of the forms of “Socialism with Chinese characteristics”. All this led to the divide of the working class between state-owned, mixed and private companies that exist today. From the 1980s onwards, there was also a strong migratory movement from the countryside to the cities, often done in a manner considered illegal, since migration to other provinces is controlled by the central government.
The new and larger generation of the Chinese proletariat found much more precarious conditions in the state-owned enterprises. In the private sector, they work under brutal conditions of overexploitation. The so-called “iron rice bowl”, a set of subsidies for workers in social areas (education, health, housing), has been drastically reduced since the 1990s, to the point where none of these services are currently free, although there is still massive funding and dominance of state-owned companies in their provision, which guarantees their access by the majority of the population. Yet, young Chinese workers complain about the difficulty of acquiring an apartment and how university education has become more and more expensive. Despite some improvements in the “iron rice bowl” after 2003, it never fully recovered.
World Bank publishes data for 182 countries, covering almost the entire world population, and China’s position is better than what would be expected from its level of economic development, by any measure. China’s projected life expectancy from its GDP per capita is 73.3 years, but actual life expectancy is 76 years – that is, people in China live more than two and a half years longer than would be expected from the country’s level of economic development. China ranks 72nd in GDP per capita, but 58th in life expectancy – that is, China’s global position in life expectancy is 14 places above the projection. But this data does not reveal the immense inequality of the picture – it does not show the differences between rural and urban workers; and, among urban workers, those of state-owned and private companies.
Workers in private companies often rebel due to very long hours, hellish work routines, disregard for breaks and days off, intense surveillance (including controlling the use of restrooms), very low wages, lack of safety standards (fires are common), frequent accidents, and lack of individual protection from toxic contaminants. China Labor Bulletin is an NGO that receives logistical support from imperialist agencies through the U.S. government’s “National Endowment for Democracy” (NED) program, and which covers labor disputes in China. Despite advocating for a capitalist counterrevolution, the CLB is often forced to recognize that the situation of workers in the private companies is far inferior to that of those in the state sector. A summary published by the CLB in mid-2019 pointed out:
“Urban employees in the private sector earned just 49,600 yuan on average last year, an 8.3 percent increase over 2017, or 6.1 percent in real terms, according to data from the National Bureau of Statistics (NBS) released on 14 May. During the same period, the average annual wage of urban employees outside the private sector reached nearly 82,500 yuan, an increase of 11 percent over the previous year. The NBS defines the “non-private sector” as state-owned enterprises, collective enterprises and companies with overseas investments etc.
“Of the 1,701 incidents recorded on the Strike Map in 2018, 1,246 (73.3 percent) occurred in domestic private enterprises, 11.6 percent in state-owned enterprises, and just 2.9 percent in Hong Kong/Macau/Taiwan/foreign-funded enterprises and joint-ventures. That proportion has remained constant this year with 379 of the 526 collective protests recorded so far occurring in private enterprises.
“The majority of worker protests in the private sector are related to the non-payment of wages, social insurance arrears, layoff compensation etc. and occur in a wide range of industries. Nearly half of all protests recorded in the private sector (167 in total) so far this year were in wide range of service, retail and transport industries, including many in internet-based companies such food delivery giants Meituan and Ele.me that have seen regular strikes this year by drivers protesting arbitrary pay cuts etc. …
“Apart from paying about two-thirds more on average than private enterprises, state-owned and foreign-owned companies generally offer better benefits and more stable employment. However, as the recent lay-offs at US-owned tech giant Oracle show, job security cannot be guaranteed anywhere.”China Labour Bulletin, ‘Workers in China’s private sector earn less, protest more’, 15 May 2019.
The only legal trade union organization in mainland China is the All-China Federation of Trade Unions (ACFTU), controlled by the CCP. Although the organization of strikes and workers’ demonstrations is considered legal, their legality is subject to recognition by the ACFTU or its local sections. Protesting workers generally seek support from unions. In some cases, ACFTU recognizes the strike and supports workers; but in most cases, it seeks an agreement between the company and workers without the need of organizing protests. In other cases, it tries to dissuade workers from taking any initiative at all. Bureaucratic control of the union federation prevents the organization of the proletariat independently of the conciliatory interests of the bureaucracy. This facilitates repression by the police and inevitably leads to the emergence of underground associations and unions.
This was the case with the strike in the private company Jasic, in the city of Shenzhen, in July and August 2018. There were protests, a strike and militant activity starting on July 27, 2018. After many unsuccessful attempts to obtain official recognition from the ACFTU, where they only received denials and excuses, a group of disgruntled workers, fed up with the low wages, poor working conditions and long shifts tried to form an independent union. The company responded to the workers’ request to organize a union by firing them. This sparked two weeks of protests, both by the factory workers in Shenzhen and students who formed a “workers’ support group”. The protests were described as being largely influenced by Marxist and Maoist propaganda. One of the leaders sent an open letter to Xi Jinping explaining the movement’s intentions in the terms of “Mao Zedong thought”, but he never received a reply.
A liberal academic commentator, more worried about the “stability” of the Chinese business environment than in the interests of the workers against the bureaucracy and the new bourgeoisie, showed the powder keg that China can quickly become:
“As Eli Friedman has explained, the lack of genuine representation by independent unions or other vehicles for workers’ interest intermediation has left China vulnerable to an incomplete double-movement. Unable to provide institutionalisation and genuine political incorporation to workers left socially dislocated by the advance of the market, the CCP and the Chinese state are forced to contend with workers’ ongoing mobilisation and increasingly radical activism. In such a context, progress up the product cycle or toward a more consumption-based economy appears unlikely.
“This places Chinese workers in a potentially powerful yet uncertain position and leaves the state with unpalatable and risky response options. Workers can choose to continue with disunited activism in hopes of at least maintaining stasis or perhaps advancing some new social protections. They can work proactively with the state and Party to forge a new role for official unions or, more likely, develop some new template for institutionalisation of class compromise and incorporation of workers into the polity. Or they can press forward with bold unified mobilisation in support of independent unions or other vehicles of representation. The state and Party, in turn, can choose to promote independent unions (which appears incompatible with basic CCP principles and thus ideologically anathema), to remain trapped in a cycle of repression and accommodation in response to workers’ fragmented mobilisation (which risks the rise of a united and destabilising labour movement, repression of which could prove unwieldy at best), or develop a proactive strategy for some alternative form of working class incorporation.”William Hurst, ‘The Chinese Working Class: Made, Unmade, in Itself, for Itself, or None of the Above?’, October 19, 2016.
At the same time, groups of radical Marxist students are emerging, identifying the profound contradictions between Marxism, often wrongly identified with Maoism, and the policy followed by the CCP leadership. Marxist circles at universities have been subject to constant espionage and repression by the Chinese police state, especially when these militants act in support of workers’ struggles:
“At first glance, the position of the students and the authorities should be perfectly aligned. Chinese President Xi Jinping himself, who has recovered some of the slogans from Mao’s epoch – the source of legitimacy of the system -, called for a strengthening of ideological education in Chinese schools and universities. Marxism is a compulsory subject for students in the third term. However, ‘the Marxism that the Communist Party of China teaches in schools isn’t the real one: it is selected and interpreted to adapt it to their own purposes’, says Eric Fish, author of the book ‘China’s Millennials: The Want Generation’. And the contradiction between the ideals of the original doctrine and the reality is obvious. …
“This year, dozens of students from all over the country traveled to the southeast to show solidarity with Jasic Technology’s workers, who were protesting what they considered ‘slave treatment’ by the welding machine manufacturer. In China, labor protests are frequent. In 2018 alone, the Hong Kong-based NGO China Labor Bulletin counted more than 900 strikes across the country in all kinds of sectors, from taxi drivers to mining workers.
“But university students who travel thousands of miles to solidarize with factory workers have become much rarer since joint students and workers’ demonstrations ended up dispersed in blood in Tiananmen in 1989. Beijing decided it was a problem. ‘The combination of worker and student activism was exactly the formula used by the Communist Party to come to power. Therefore, in his experience, now that it is in power it cannot allow it to happen again’, says independent historian Zhang Lifan.
“50 students were arrested in August. And since then, the pressure has increased. As early as last month, Beijing University announced changes in its board: the newly announced rector is the Party’s official in the university; Qiu Shuiping became the new board secretary, an official whose resume includes being the Party’s man in the Beijing section of the Ministry of Internal Security, the Chinese secret service. A week after the last few raids, Beijing University described the activities of the ‘Jasic Workers’ Solidarity Group’ as ‘criminal’, and warned its students that ‘if there are still those who want to defy the law, they will have to face the consequences’.”El País, ‘Marxist students: the new enemies of the Chinese government’, November 20, 2018.
We demand full democratic rights for the working class and its organizations (but not for the counterrevolutionary bourgeoisie). We want newspapers, websites, videos, leaflets and books made by Marxists, militant workers, radical student circles and leftists in China to have full freedom of distribution and discussion. We also demand the right to form new unions and working class political parties and organizations committed to the defense of the gains of the Chinese revolution, smashing the ACFTU and the CCP bureaucracy’s monopoly. As long as this is not possible, we defend conducting underground work to build an independent Marxist party, and unions committed to the defense of collective property. It may be necessary to combine underground work with infiltration in the CCP and in the ACFTU to exploit contradictions that exist within their ranks.
We demand an end to all privileges of the ruling bureaucracy. Each state official, from the province official to Xi Jinping, should receive only the average wage of a worker. Costs with official functions will be paid by the workers’ state, but care must be taken to prevent using state posts for personal gain. It is necessary to reorganize the entire Chinese political structure around workplace, village and city committees. These worker and peasant organizations must review the country’s economy, renationalizing much of industry and commerce and establishing democratic workers’ control through elected representatives from the workplaces, revocable by the assemblies that appointed them. We support all the partial struggles of workers in both state-owned and private companies for salary increases and improvements to harsh working conditions. The new organs of the Chinese proletariat must unify the divided working class through joint struggle.
We demand an end of the use of the police apparatus against those who are fighting capitalist restoration or who are protesting government repression against the working class. On the contrary, we want a popular trial of the corrupt bureaucrats who contributed to the privatizations that devastated the workers’ living conditions. We also want the involvement of the workers ‘state in the international arena in favor of workers’ and anti-imperialist struggles, supporting them financially and also proposing a program that leads to the dictatorship of the proletariat. China cannot reach Socialism on its own: the victory of the revolution is necessary in multiple countries, including the imperialist centers. For the Chinese state to play such an internationalist role, the rise of a Marxist leadership is required.
“The political prognosis has an alternative character: either the bureaucracy, becoming ever more the organ of the world bourgeoisie in the workers’ state, will overthrow the new forms of property and plunge the country back to capitalism; or the working class will crush the bureaucracy and open the way to socialism”. (The Transitional Program, 1938). Large Scale class battles are soon expected to emerge in China. We defend a clear position for the workers: the overthrow of the bureaucratic apparatus and the reorganization of the workers’ state and the economy in the workers’ interest.
In the meantime, counterrevolutionary attempts by the imperialists, the native bourgeois forces, and sections of the bureaucracy (or a combination of these forces) may occur. In this case, we call for the workers to rise up for the defense of the Chinese workers’ state by any means available (propaganda, strikes, pickets, arms in hand). In the eventuality that certain sections of the bureaucracy also stand against the immediate counterrevolutionary threat (for their own bureaucratic interests, ideological alignment or as a result of working class pressure), we would defend a practical unity of action on this specific issue, without at any time abandoning political independence against those who are day by day digging the grave of the Chinese proletariat. Our interest is to defend and expand the gains of the Chinese revolution, not sustain the privileged clique of corrupt bureaucrats who have usurped it.
The fact that a proletarian democracy does not currently exist in China, nor do organs of power of the working class that would allow them to have a control of the economy, is one of the greatest risks to the survival of the remaining gains of the revolution. The bureaucracy rules in its own interest, even if this involves preserving, by its own methods, some of the bases of the revolution that created it and its parasitic existence. A political revolution to establish a proletarian democracy in place of the bureaucratic police regime is essential for the survival and advance of Chinese society towards Socialism. The Chinese working class has a long history of fighting the bureaucracy, from the Shanghai General Strike and nationwide railway strike of January 1967, to the strike wave against Deng’s 1986 “reforms” and the 1989 revolt in Tiananmen Square. In order to be victorious, it is essential to form a Marxist party that brings together the workers’ best elements, under the banner of the political revolution and internationalism, to help organize and guide the Chinese proletariat.
1. The case of the automotive industry and the mobile phone industry
It is illustrative to look at these two cases in order to understand the current state of the Chinese economy: state ownership of all major strategic means of production, maintained and controlled by the CCP bureaucracy, sometimes in joint-ventures with capitalist companies; and an openness to private exploitation in several economic sectors viewed as “non-strategic”. Marxists know that neither of these two systems are in the interests of the workers, who must fight to control production via workplace committees, with elected and revocable representatives, alongside centralized economic planning that takes into account local needs. However, when significant sectors of the means of production have been taken from capitalist hands by a state established by a revolution, this represents a step in the transition to socialism: private property has been eliminated from these sectors. The existence of central state planning, albeit bureaucratic, complements this gain.
The bureaucrat is no less of a boss to the worker than the capitalist in terms of pressure to achieve goals. However, a bureaucrat does not own the property of a company for himself and his offspring. There are countless cases of bureaucrats removed from their positions at times of political upheaval or because of intra-party disputes. In such cases, they are replaced by other figures appointed by the CCP. This is a marked difference between state and private property. For a proletarian democracy, in preparation for the transition to socialism, it would be advantageous to be able to place direct representatives of workers’ commissions and councils in charge of this property, already seized from the capitalists, instead of beginning socialization from scratch. This is no small gain.
While there exist, to a lesser extent, some private enterprises, the Chinese automotive industry is dominated by large state-owned companies. Most of these state-owned companies are in joint ventures with American, Japanese, French and German vehicle manufacturers. The industry has thousands of branches, organized by the models they manufacture. Chinese companies often produce original models and the Chinese state is the major owner in all these joint-ventures.
Since the 1990s, China has gradually appropriated production techniques and foreign prototypes, through both “legal’ and “illegal” methods. This is a complaint that is often made by defenders of the foreign companies’ interests. Recently, the Chinese government has started to demand full access from the brands in relation to their vehicle prototypes. In 2015, for example, Chinese companies began making electric cars, and all international brands had to openly share their “secrets” as a prerequisite for joint-ventures, drawing the ire of capitalist companies. The capitalists know that they do not have the power and control over the production of vehicles, and that they must necessarily associate with a state-owned company and face a reduced share of the profits than if they had full “freedom”… of exploitation. Here is a list of the largest vehicle manufacturers in China (2017 data).
- SAIC (Shanghai Automotive Industry Corporation) – State-owned Company, in a joint-venture with American GM (Shanghai) – 6.9 million vehicles produced.
- Dongfeng Motor Corporation – State-owned Company, in joint venture with several companies, including Honda, Nissan, PSA Peugeot Citroën, Renault and Kia (Wuhan) – 4.1 million vehicles produced.
- FAW Group Corporation – State-owned Company with its own brands, but to a minor extent produces brands of foreign companies (Changchun) – 3.3 million vehicles produced.
- Chang Automotive Group – State-owned Company, in joint ventures with Suzuki, Ford, Mazda and Peugeot (Chongqing) – 2.8 million vehicles produced.
- BAIC Group – State-owned Company which produces passenger vehicles and military vehicles of their own brand. To a minor extent, it has joint ventures with Hyundai and Mercedes. It reports directly to the State-owned Assets Supervision and Administration Commission (SASAC). (Beijing) – 2.5 million vehicles produced.
- Guangzhou Automotive Group (GAC) – State-owned Company, in joint ventures with Fiat, Honda, Mitsubishi and Toyota. (Guangzhou) – 2 million vehicles produced.
- Geely – Chinese private company, which produces in partnership with the Swedish brand Volvo, in addition to its own brands. – 0.78 million vehicles produced.
The next companies on the list would also be state-owned enterprises, Brilliance Auto and Cherry.
Meanwhile, in the production of cell phones, the situation is reversed. There is a state-owned company in China that is among the major manufacturers, the Telecom Datang Group in Beijing. It is a large company, but it is currently maintained only due to the support of the state-owned banks, as the telephone production market began being dominated by foreign companies in the 1990s, and today is the realm of Chinese native private companies:
“Despite the recent slow-down for the constant market growth for years, China has remained the world’s largest smartphone market since 2012. In 2019, smartphone shipments in China reached over 366 million units, accounting for about 27 percent of the total volume of global smartphone shipments. The number of smartphone users in China is projected to reach about 0.78 billion by 2020, while current mobile phone subscriptions as of September 2019 have already reached about 1.6 billion in China. The mobile phone service in China is provided by three domestic telecommunication network operators, namely China Mobile, China Unicom, and China Telecom.
“The large smartphone market in China also led to fierce competition among various manufacturers. Apple and Samsung were leading market players since the beginning of the smartphone trend, but had been gradually losing market share to domestic smartphone makers in China like Huawei, Oppo, Vivo, and Xiaomi. In the third quarter of 2019, while the Chinese domestic brand Huawei ranked first with a shipment volume of about 41.5 million units, the shipment volume of iPhone dropped to approximately 8.1 million units, which was approximately half of the peak of around 17 million, five years ago. The Chinese companies have long left the cheap segment and are producing more and more high-end smartphones with considerable success. They benefited from a rich local smartphone manufacturing and design ecosystem, which allows them to compete with foreign smartphone brands.”Samantha Wong, ‘Smartphone market in China – Statistics & Facts’, April 27, 2020.
While private companies such as Huawei, Oppo, Vivo and Xiaomi have dominated the manufacturing of the devices, the provision of telecommunication services is exclusive to the three state-owned companies mentioned: China Mobile, China Unicom and China Telecom. China Mobile in particular, which retains 70% of subscriptions, is directly controlled by the Chinese central government through SASAC. It is the largest telephone service provider in the world, with more than 900 million accounts. This is an element that is also seen as strategic, not least for the purposes of control and repression by the CCP’s bureaucracy.
Cell phone manufacturers are among the sectors of the new Chinese bourgeoisie that have been most prominent in recent years. The bureaucracy sees them as “allies” of China’s growth. This is exemplary of the bureaucrats’ lack of concern for the working class that is brutally exploited in these factories. It is common for working conditions in Chinese private companies to be even worse than in foreign companies. Even so, this exposes the weakness of the thesis that capitalism is “fully restored” in China. This is not what the capitalists who would like to sell cell phone services believe, nor those who would like to produce and sell vehicles without leaving the significant part of their profits and technology in the hands of the bureaucratic workers’ state.
2. China’s economic presence in Africa and internationally
China plays the role of a superpower in the international arena nowadays. Because of this, many on the left have begun defining it as imperialist. Chinese economic presence around the world has manifested in different ways. Some are completely expected for an isolated workers’ state, which needs to trade with capitalist countries. Due to its gigantic productive capacity, China has become a significant trading partner for many countries.
Another element of China’s transformation into a “global player” is its foreign investment. Contrary to what one might think, this is not something particular to China when compared to other bureaucratic workers’ states in history, which would reveal China’s supposed character as an imperialist country. The Soviet Union existed under a much larger trade blockade than China currently is. But even so, the former Soviet degenerated workers’ state also made investments in capitalist countries. As is the case with China today, most of these investments were not made in nations on the capitalist periphery, but in capitalist centers:
“The practice of establishing financial and trading enterprises in capitalist countries is not entirely new in Soviet economic history, however. The Moscow Narodnyi Bank of London was set up in 1919, the Russo-Iran Bank Teheran in 1923, and the Eurobank in Paris in 1925. The oldest example of a Soviet trading company in the West is the Russian Wood Agency, Ltd. established in London in 1923 with the purpose of promoting exports of raw materials from the USSR. This was the period of NEP, and links to the capitalist West were seen as part of a temporary state-capitalist stage. For almost half a century thereafter the few firms established in the West were considered the exceptions which confirm the rule, namely basic autarky and non-integration in the capitalist world system.
“Since the late 1960s, with the concept of integration in the international division of labour, a radically new policy was inaugurated, first with an offshoot of Soviet financial establishments abroad, soon to be followed by increasing numbers of Soviet trading companies. The foreign investment policy of the 1970s bears witness to the new economic thinking of the USSR with regard to the outside world. Statistics concerning Soviet equity investment abroad are not easy to come by. Neither the USSR nor Western host countries publish comprehensive lists of firms with Soviet participation. Carl McMillan of the Institute of Soviet and East European Studies at Carleton University (Ottawa) identified, as of March 1979, the existence of 177 companies abroad with Soviet ownership participation (McMillan, 1979). In a later study (1987) he was able to locate 116 companies with Soviet ownership participation in 20 Western capitalist countries, while 27 were found in countries of the periphery.
“According to the McMillan investigations, Western Europe account for the bulk of Soviet owned companies abroad. Since the larger share seems connected to financial services or export promotion, it is not surprising to find them located in those countries with the most extensive economic relations with the USSR: France, Germany, Belgium-Luxembourg, the United Kingdom (with London as a financial and commercial center), Italy and Finland. Investments in Japan have been constrained by foreign investment regulations while political uncertainties slowed the growth of investments in the United States. Meanwhile, Canada has served as a springboard to the North American market.
“In the South, investments have been more geographically dispersed. As shown in Table 7.2, Africa is the target of twice as many Soviet or CMEA investments as any other area, with Latin America, Asia and the Middle East sharing the remaining investments. Certain key areas have been particularly attractive: Nigeria and Morocco (in Africa), India and Singapore (in Asia), Lebanon and Iran (in the Middle East) and Mexico and Peru (in Latin America). Together they accounted for nearly half of total CMEA investments in the periphery. In the third world, a greater proportion of Soviet investment went to manufacturing activities. According to McMillan, ‘the establishment of production facilities and related infrastructure or participation in resource-development projects, providing access to raw materials in return for Comecon industrial technology, have been the primary functions to which equity investments have been directed’.”Ellen Brun & Jacques Hersh, ‘Soviet-Third World Relations in a Capitalist World’ p. 218-219, 2013
The focus among the left-wing organizations that define China as imperialist tends to be their investments in Africa. Chinese investment in the African continent has, in fact, grown substantially in recent years. It went from US $1 billion in 2002 to approximately US $ 30 billion in 2016. These investments were made mainly in the form of interest-free loans and development funds, not in establishing fixed assets/facilities. The main Chinese interests, in this case, are diplomatic, with the establishment of “friendly nations” on the periphery of the capitalist system. But still, it is important to reflect on such ventures.
China is now the fifth largest investor in the African continent. “In 2017, France was the top foreign investor in Africa, followed by the Netherlands, the United Kingdom, and the United States. Critically, UNCTAD’s data shows that from 2013 to 2017, Chinese FDI (Foreign Direct Investment) in Africa grew 65 percent, only topped by the Netherlands, for which FDI was up more than 200 percent.”2. More thorough research confirms this scenario:
“Chinese president Xi Jinping visited Senegal in July last year, seeking further cooperation with the previous French colonial territory. Amid a heated debate over China’s increasingly dominant role in the world, this visit – before the 2018 Forum on China-Africa Cooperation (FOCAC) in Beijing –clearly sent a signal to Europe that China does not shy away from entering what is historically Europe’s area of influence, namely Africa. From China, such move is not surprising, as China-Africa relationships flourished at least half a century ago under the mantra of South-South cooperation.
“Even if the history of China-Africa relations is longstanding, they have been mainly political and not necessarily economic. In the last eight years or so, though, China’s economic ties with Africa have ballooned. First of all, China has become the most important trading partner for many African countries. The rather unbalanced nature of Africa’s trade flows with China is well documented in the literature, but this is much less the case for the other major aspect in China-Africa economic relations, namely investment…
“That said, China’s investment in Africa is still at the early stages compared with that of key European countries that have a colonial past in Africa, especially France and the UK. Chart 4 shows that the FDI stocks sourced respectively from the UK and France into Africa are each still larger than the stock sourced from China. The Netherlands also rose to second-top by 2017, which may be explained by the rerouting of investment flows from other countries, but is still consistent with the facts that Europe is a key investor in Africa.”
– “China’s investment in Africa: What the data really says, and the implications for Europe”, by Alicia García-Herrero, Jianwei Xu and Bruegel, July 22, 2019.
China is now the 12th largest international investor in the world, according to Foreign Direct Investment numbers. It is distant from the major imperialist powers, but has surpassed some of their secondary partners. Marxists must combat the paranoia, fueled by the imperialist media outlets, of China “taking over the world”. This is a reaction of the imperialist bourgeois press to the fact that their bosses have lost some of their space in the world economy to other nations. Let us not be deceived. China is nowhere near being a noose that suffocates the economies of the peripheral nations of capitalism, draining their resources and exploiting their workers as a decisive factor internationally. For this reason, it is a mistake to qualify China as an “imperialist power”.
While such foreign investments do not change the class character of the Chinese state or the remaining transitional elements of Chinese economy, it must not be lost sight of, even for a second, that the Chinese government does not manage foreign investment in the interests of the workers. Speaking about the Soviet Union in the 1930s, Trotsky pointed out that: “The politics of the Soviet Union is guided by the Bonapartist bureaucracy. This bureaucracy is first and foremost concerned with its power, its prestige and its revenues. It defends itself much better than it defends the USSR. It defends itself at the expense of the USSR and at the expense of the world proletariat.”3. Xi Jinping’s bureaucracy uses the resources of the workers’ state for the enrichment and prestige of his own clique. The same logic that they apply to Chinese workers, bureaucrats apply to the world proletariat.
Overcoming China’s problems and contradictions depends on socialist revolutions in other countries. This is the opposite of what the CCP’s bureaucracy preaches, relying on their capitalist “friends”, inside and outside of China, and believing in their ability to continue to deceive and repress the workers. The assets and facilities of Chinese companies and Chinese investment should be promptly expropriated and controlled by workers in their own countries, just the same as with imperialist property. This must be our historical perspective. Once in control of industry after a victorious revolution, the workers in African nations will be able to help the Chinese workers’ state in a much more significant ways, especially when it is threatened by imperialism, and to assist Chinese workers in the transition to socialism, for which they need to rid themselves of the bureaucracy that oppresses them. Chinese workers must support this demand from their comrades in other countries, where a revolutionary victory would represent an important step towards the emancipation of the world proletariat and their own struggle against the bureaucracy.
3. The 2019-2020 Hong Kong protests and the defense of the bureaucratic workers’ state
Hong Kong, formerly a British colony, became a special administrative region of China (a status shared with Macau) in 1997. An agreement was established with the Chinese state under the principle of “one country, two systems”. Hong Kong maintained its capitalist economy and Administration, officially autonomous, but with the most important posts either appointed or controlled indirectly by Beijing; mainland China maintained its economic system, still controlled by the Communist Party through the state-owned enterprises.
Hong Kong became what we call a “capitalist enclave” within China. The island gives yet another example of collaboration between the CCP bureaucracy and the international bourgeoisie. It also forms a stronghold for counter-revolutionary attempts. The criminal position of the Chinese bureaucrats, who have allowed the free exploitation of workers by a vicious native bourgeoisie of colonial origin, contributes significantly to discrediting socialist ideas among the Hong Kong working class.
The protests in Hong Kong in 2019 began as a response to a prisoner extradition agreement between Hong Kong and mainland China. We oppose this bill, as it would generalize the extradition of any persecuted Chinese political refugees in Hong Kong, including militant workers and communists who fight against the Chinese bureaucracy and its police dictatorship, and not only the openly counterrevolutionary and imperialist-backed figures.
Such demonstrations were instigated, therefore, by the unquestionable lack of transparency of the Chinese judicial system and their collaborators in the Hong Kong government.
However, the marches were quickly aligned with the interests of Hong Kong’s far-right, a reactionary opposition to the Chinese government’s “class collaborationism” with the Hong Kong capitalists. The organizers of the demonstrations wanted “capitalist independence” for the city, the fall of “Communism” in China, and its replacement with a Western-type bourgeois democracy. Obviously, such a regime would mean full freedom of exploitation for American capitalists, followed by their English partners and other imperialist powers.
The protests raised a list of “pro-democracy” demands: the release of prisoners arrested during the demonstrations, the change of the protests’ characterization as “disturbances”, the carrying out of an investigation into police activity. There were no centralized leaderships, but it is clear that political groups were formed and organized via internet forums. And while lacking organizational centralization, the protests clearly developed a pro-capitalist programmatic orientation. Hong Kong media speaks of a moderate sector, and a “radical” one, which carried out numerous violent actions, peaking in January 2020, including arson attacks on buildings, buses and subway cars (with people inside). The protesters also demanded the resignation of Carrie Lam, Hong Kong’s Chief Secretary of Administration.
The bill on the extradition agreement was dropped due to the pressure of the demonstrations in June 2019. But the demonstrations have since intensified their anti-communist tone. Flying of the colonial flag of Hong Kong became common, such as during the occupation of the Legislative Council on July 1st, when such a flag was raised on the podium. Many American and British flags appeared in the midst of protests. There were also countless expressions of xenophobia against mainland Chinese coming from those “masked in black”, which is how the more “radical” sector started dressing. Bomb attacks were carried out on a Chinese housing complex near the border. Tourists and reporters from mainland China were attacked on the streets by groups of protesters in September and October.
In addition, there was clear infiltration by pro-American interests. The protests’ official organizers are members of the “Civil Front for Human Rights”, a set of NGOs and political organizations, of which the majority receive funding from the American government, through the U.S. State Department managed “National Endowment for Democracy” (NED). With links to espionage agencies, NED funds groups to foster rebellions and demonstrations in the interests of the American government throughout the world. In November 2019, the U.S. Congress passed a “Hong Kong Human Rights Act” to support and provide more funding to the groups organizing the demonstrations. Communists are well aware that when the United States takes such a “benevolent” view towards rebellions and protests, it usually means that they are articulated within the interests of the “American Empire”.
What should be the position of revolutionaries? Repudiation against the CCP’s police regime and against the crimes of its leaders is absolutely legitimate, as is the fight for more democratic rights against the brutality of the Hong Kong police, which includes opposition to the extradition bill. If there had been a revolutionary party with influence among the workers and the youth, it would have been possible to turn the protests into actions of solidarity with the mainland Chinese proletariat, against the bureaucracy and especially against imperialism, demanding the expropriation of the Hong Kong capitalists.
But obviously, this is not what happened. Much like the “umbrella demonstrations” in 2014, the protests became a reactionary movement in face of the hegemony of pro-imperialist and right-wing groups, which has been evident at least since July 2019. Support to a movement claiming to defend democratic rights is subject to the class character of such a movement and its general political perspective, which in this case was directly opposed to the defense of the remaining gains of the Chinese revolution. The marches should therefore be denounced, and workers should boycott and carry out counter-demonstrations when possible.
We oppose the mindset of uncritical support for nationalist and Stalinist rulers, which automatically condemns all and any forms of protest as by default “pro-imperialist”, and call for their destruction by police force. We have nothing but hatred for Hong Kong’s rulers, and we denounce the brutal use of police violence, which is often used against struggling workers. But it is necessary to be clear about the degree of seriousness reached by the wave of protests. At times, the demonstrations came close to a violent overthrow of the government, as in the September 26 event, when protesters surrounded Carrie Lam’s entourage for four hours after a public meeting at the Queen Elizabeth Stadium, before she could escape.
In the case of a violent confrontation between an armed group of demonstrators, with the aim of provoking the separation of Hong Kong, and the status quo, we would defend the latter, despite the nature of the CCP and their Hong Kong allies. This does not mean, however, shielding the Chinese regime as the main culprit for this threat, in the face of its betrayal for not expropriating the city’s capitalists to begin with.
We reject the position of those on the left who praise and support right-wing demonstrations as supposedly “progressive”, including many self-declared “Trotskyists”. They hide the true political and social character of such protests in order to carry out their program of support for any “pro-democracy” campaign, even if dominated by and in the interests of imperialists. Many are repeating the positions they took during the fall of the bureaucratic workers’ states of Eastern Europe and the USSR, when they supported the counterrevolutionary forces such as the Polish Solidarność, and the group around Boris Yeltsin in Russia.
Especially for Marxists in imperialist nations, it is crucial to present firm opposition to campaigns by governments and local reactionaries to use the movement in Hong Kong as a rallying point for efforts of aggression and counterrevolution. Such opposition has, however, been rare among much of the supposedly socialist left, with many groups instead actively marching in international rallies in support of the protests, frequently alongside open reactionaries.
After the defeat of the “pro-China” candidate in the 2020 Hong Kong elections in January, a bloc of parties more directly associated with American imperialism took over, and the protests continued, with a line of “Free Hong Kong from China” (which would lead to its control by the imperialists). The outbreak of the coronavirus pandemic led to a truce as many people were afraid to go to the streets and preferred to follow the social isolation measures.
The only way to defeat this reactionary campaign in a definitive way, and not to simply stall it by bureaucratic/police measures, is to build a strong campaign that links the fight for democratic rights to the defense of Chinese state-owned property; to combine denouncing the crimes of Xi’s bureaucracy with solidarity between mainland Chinese and Hong Kong workers; to unite the repudiation of the city officials with the struggle for workers’ power across China, based on the expropriation of the capitalists. This will be a campaign capable of gathering the city’s proletariat and fulfilling a progressive role in the struggle of the Chinese working class.
4. Coronavirus, bureaucracy and state-owned companies.
It was in China that human contamination by the coronavirus began, which has now become a global pandemic. China was probably one of the most prepared countries in the world to deal with such a threat, as it already had extensive experience with similar epidemics, such as Influenza A (2009) and SARS (2003). There is constant monitoring of infectious diseases by doctors and medical organs. The way in which health institutions and Chinese authorities dealt with the emergence of the virus showed both the worst and the best side of the bureaucratic workers’ state.
One of the first known patients, Wei Guixiam, was treated on December 10th, 2019. On the 16th, several patients had already been admitted to Wuhan Central Hospital, capital of the Hubei province. By the end of December, doctors already knew that it was a new variety of coronavirus, assumed its origin in people who had had contact with local animal markets, and published information to alert authorities, as well as the offices of the World Health Organization (WHO) in China.
Fen, medical director at the Wuhan Central Hospital, posted information on the internet about the new virus, particularly to colleagues in the medical field, through a messaging app (WeChat). She was scolded by her superiors, who told her not to share anything about it. Shortly thereafter, another Wuhan doctor and Communist Party member, Li Wenliang, also circulated messages about the new virus. He was called in for questioning shortly after. Tragically, Li was one of the health professionals infected by the virus, and died on February 7, 2020, at the age of 33. Subsequently, the CCP had to retract the accusation that had been thrown at him of “spreading false rumors”.
In early 2020, the Wuhan health commission notified hospitals of “pneumonia of unclear cause” and ordered any information to be reported to it alone. The health commission then took eight doctors, who had posted information about the disease online, in for questioning. An official at the Hubei Provincial Health Commission later ordered public laboratories that had already independently determined that the new virus was similar to SARS, to stop testing samples and to destroy existing samples. Tests would be carried out only with central government authorization.
On January 21st, the new virus was finally recognized as a serious risk. The main CCP newspaper, People’s Daily, informed the public about the epidemic and Xi’s actions to combat it. Wuhan and three other cities were quarantined, starting on January 23rd, but the virus had already spread to other regions, and even reached other countries, such as Thailand, Japan, South Korea and the United States. China later extended the blockade to cover 36 million people in Hubei province and quickly began building a new hospital in Wuhan, which was constructed in less than ten days, with 3,000 new beds and equipment. From this point on, very strict measures continued to be taken across the country to control the epidemic. This took place during the Chinese New Year celebrations, between January 24th and 30th, which is impressive considering the dimensions of this celebration in the country.
At the time of writing, in April 2020, the pandemic is virtually contained in China, in record time. The combination of very efficient social isolation, with a massive testing policy, has obviously paid off. In addition, the rapid construction of hospitals with the resources of state-owned companies, and the reallocation of equipment and health workers from an almost entirely public system, were responsible for saving many lives. While countries like Spain, Italy and the United States quickly outnumbered China in terms of infections and deaths, abandoned huge populations without health care and still do not see a way out of the pandemic, the Chinese bureaucratic workers’ state dealt much more successfully with this challenge.
The reasons why the CCP sought to hide the problem in the beginning undoubtedly involved political concerns in face of the current moment, from the trade dispute with the United States to the protests in Hong Kong, and the possible impacts on the stability of its regime. However, this has nothing to do with the problems of “Communism”, but with the lack of transparency of government officials who place their bureaucratic prestige above the lives of workers. If security measures had been taken earlier, three weeks earlier than the Chinese government did, perhaps the pandemic could have been brought under control at its inception.
On the other hand, once the crisis proved impossible to be “hidden”, it was dealt with seriously: the planned elements of the Chinese economy, especially its enormous and dominant state-owned companies, demonstrated their superiority over capitalism. The construction of the new Wuhan hospital with such speed was made possible only by the existence of large state-owned companies in Wuhan, which are not predominantly focused on profit. The Wuhan government ordered one of these companies to design and build emergency facilities. This proves that the predominance of the state sector in the Chinese economy, despite huge openings to private capital, is an important gain, which made it possible to face the coronavirus more resolutely.
The allocation of resources for healthcare is part of the “iron rice bowl” policy of state subsidies to workers, which has become much more fragile, despite some minor recent improvements. Healthcare in China is subsidized by the state, often in a large percentage, but is not free. With a workers’ victory over the bureaucratic elite (political revolution), it would be a crucial task to guarantee a free universal public healthcare system, including nationalizing the resources of thousands of private hospitals currently operating in China, which provide a very small number of services (for those who can afford it) and which could certainly be better used if they were at the service of the working class.
As reported by the WHO itself, there was a massive reallocation of resources, with many doctors conducting online consultations, so that people did not have to leave home. Basic food baskets and medicines were delivered at home to tens of millions. More than a million rapid tests were produced per day to monitor the virus, with results coming out in less than 4 hours. In total, more than 40,000 health workers have been displaced from other regions to Hubei. China’s state-owned healthcare system employs around 89% of all urban workers working in this sector (2011 data), including thousands of doctors, technicians and nurses who have been mobilized for this effort. This does not even include companies from municipalities and cooperatives that are also controlled by the state. Public hospitals accounted for 85% of all visits in 2017. Today, China still does not have a healthcare system capable of covering everyone (especially in rural areas). But healthcare is largely provided by the state:
“According to statistics from the National Health Commission, at the end of 2017, there were more than 18,000 private hospitals in China, accounting for 60 percent of the total number of hospitals. The number of private hospitals exceeded that of public hospitals, but there were only 490 million visits, less than 15 percent of total visits. Yang accorded this to a lack of trust in private hospitals. ‘Especially for complex diseases, patients’ first choice is a major public hospital, where specialists work. In addition, most private hospitals are not covered by medical insurance, and patients have relatively heavy financial burdens.’ Currently, public hospitals still play a dominant role in China. In contrast, private hospitals are in a weak position, limited by a lack of resources, poor medical insurance coverage and weak brand image”.Zheng Yiran, “Future of private medical institutions looks promising”, September 21, 2018.
We reject the reactionary narrative that blames China for the coronavirus pandemic, and that promotes racism and xenophobia against the Chinese people in various parts of the world. Had the disease arisen in any other country in the world, the slow detection and subsequent tragedy would probably have been much worse. At the same time, we do not accept the narrative of a supposedly “exemplary” or “prompt” response by the leaders of the CCP. Flaws emerging from the bureaucratic deformation of the regime existed, as it sought to intimidate those who warned of the problem early on. But above all, we highlight the superiority of the elements of transition to socialism, which still exist in the Chinese economy and society, despite being corroded by bureaucracy, to face major crises like this. While hundreds of thousands of deaths have already been caused in Europe, the United States, Brazil and elsewhere, China (the most populous country on Earth) has managed to stop the death toll at around 4,500, and contain the spreading of the virus.
5. The nationalities and the case of the Uighurs
The Han ethnic group makes up 92% of the Chinese population, with minorities of Uighurs, Tibetans, Mongols and others. These groups suffered historical oppression by the Han majority for centuries before the 1949 revolution. The Chinese revolution, although bringing development to these nationalities and their regions as they were assimilated into Chinese territory, did not end this oppression. Although the CCP played a progressive role in defending a secular regime and modernization against religious castes, this was done in a coercive and violent manner, not through convincing and persuading the working class to overcome the religious and nationalist ideologies.
Subsequently, no effort was made for a legitimate integration of the nationalities without the imposition of Han superiority. This policy ended up backfiring, as in many cases it led to the radicalization of sections of these peoples, who now support more aggressive iterations of reactionary movements.
The Uighurs, for example, are a nationality of Turkic ethnic origin to which more than 11 million people in China belong, mainly in the autonomous region of Xinjiang. They are a people of Muslim religion for the most part. Since the Chinese revolution, there has been support for driving Han immigration to Xinjiang as a way to counterbalance separatist pressure. Today, the population is made up of 45% Uighur, 40% Han, 6.5% Kazakh and smaller numbers of other ethnicities.
The most prominent movement for the separation of the Uighurs today is the “East Turkestan Liberation Movement”, an umbrella front for several different groups. The main ones receive imperialist funding in a variety of ways, such as the Uighur Congressional Party, which receives funds from the American government’s National Endowment for Democracy (NED), and the East Turkestan Exiled Government, based in Washington and with close relations to congressmen. In the 2000s, the Uighur East Turkestan independence flag was also raised by the Islamic Party of Turkestan, an organization with ties to Al-Qaeda and which has carried out more than 200 terrorist attacks.
In 2017, the Chinese government initiated a program of “re-education camps” for Uighurs in Xinjiang. Officially, the camps are called “Vocational education and training centers”. The Chinese bureaucracy claims that their aim is to integrate individuals into society and combat the influence of Islamic terrorism. However, there are numerous reports of cases of violence within these centers. We must be cautious, because there is a lot of imperialist propaganda disguised as concern for human rights. Obviously, the imperialists are only concerned with human rights in countries where they want to carry out invasions or coups d’état, as an excuse, never in their own territories or allied countries, where they tend to be among the greatest transgressors of such rights.
But the figures, which are not disputed by Chinese authorities, leave no doubt as to the character of ethnic persecution making up this policy. Up to a million Uighurs have been imprisoned for varying periods over the past three years, including many minors. No “war on terrorism” can justify a policy of mass incarceration like this, only the police character of the CCP’s bureaucratic dictatorship. Again, this will only breed hatred in a generation of Uighurs, who will associate this policy with “Communism” and it will add fuel to the fire of counterrevolution.
We do not advocate for any people to be forcibly assimilated into the Chinese state. We oppose prejudice and persecution against nationalities, whether by individuals or by the state. Mass repressive measures must be denounced by Marxists as crimes of the bureaucracy, which will have the effect of demoralizing socialism and pushing large section of the ethnicity into the arms of reaction.
At the same time, the movements for the separation of these regions must also undergo scrutiny. The imperialists often use the cause of national independence demagogically. This has also been the case with the major independence movements in Tibet, a region of more than 3 million people. The major movements which promote religious leader the Dalai Lama as the region’s legitimate ruler (whether they are sincere in defending this or do so with the intention of imposing any type of regime against China) have received ideological and financial support from U.S. intelligence agencies. If independence is achieved under the Dalai Lama’s rule, it will lead to the strengthening of counter-revolutionary political and social forces against the interests of both Chinese and Tibetan workers and peasants. This is also true for the independence movements in Xinjiang, both the ones led by the “democrats” (supported by the imperialists) and the ones led by the Islamic fundamentalists.
In imperialist countries, government and media condemnation – often not of the verifiable national oppression taking place but instead of absurd and baseless exaggerations and fabrications built on top of this – of Chinese “genocide” against the Uighur people has been unceasing. But when the perpetrators of decades of anti-Muslim “war on terror” murder and oppression abroad and at home, the defenders of Israeli colonial apartheid against 4.8 million Palestinian Arabs, when these people suddenly declare that their hearts bleed for an Islamic ethnic minority in China – Marxists must recognize this campaign for what it is. This program outcry against China through the guise of humanitarian concern for a nationally oppressed minority has nothing to do with helping the Uighur people and everything to do with escalating political, economic and military aggression with the Chinese deformed workers state, a goal which will help only the schemes of the imperialists. And so for Marxists in the imperialist nations, while making clear our opposition to national oppression, it is vital to expose and oppose the true purposes behind this campaign.
Our program is for the establishment of a Socialist, secular and independent regime in regions such as Tibet and Xinjiang, as part of a political revolution in China. This slogan makes it clear that we defend the right of such people to self-determination, but that such right is dependent, in this case, on a rejection of reactionary ideologies and of collaboration with imperialism. Once a regime like this is established, it would discuss whether or not to join a federation with China, and under what conditions. It is a perspective that opposes, in the first place, a fake “independence” that serves as an imperialist spearhead against China; and secondly, against the prospect of forced assimilation to the Chinese state.
- Since this article was published, Ma has become embroiled in a political and economic crackdown by the state
- ‘Global foreign direct investment is down, but not in Africa’, Al Jazeera, June 13, 2019
- Leon Trotsky, ‘Balance Sheet of the Finnish Events’, April 1940