Letter from China on the class nature of the Chinese state

An interesting letter from a reader in China, who points out that the dominant mode of production in that country is now capitalism. He asks the question; “following the full market economy then how can we class the current leadership of China, what class are they supporting?”

"Karl Marx all but irrelevant"? These are words used by Columnist William Pesek Jr and many others in relation to the "Chinese phenomenon". Of course, it is true that these people tend to exaggerate the rise of China and the progress of market reforms (i.e. capitalism). What they never point out is that most of the market reforms use the now dwindling state controlled sector as a launching pad, with many managers and CCP members turned capitalists.

Of course the state-controlled companies in China that still exist are hardly operating in the workers’ best interests. In the State Mining Company in Fushun city in northeast China an average worker makes about 900-1000 yuan a month ($120), whereas a high level supervisor makes 6000 a month ($750) and the company manager makes upwards of US$1 million a year. The only way to advance your position in the company is just like any other capitalist run business, kiss up to the boss.

The strategy of the government seems to be one of phasing out totally state run factories but to leave in place, at least for an undetermined length of time, the state control of resources such as oil, coal, etc. At the current rate of expropriation from the people (downright robbery) there will not be much left of the nationalised economy by 2012 other than in the key resources sector.

The banks are not exempt from this process ether. The processes are already underway to privatise the Bank of China and other national banks. Not even much is left of the old rules for joint state/foreign enterprises and new government initiatives are seeking to get rid of any of the remaining rules altogether.

Deng Xiaoping the Chinese "communist" who started the long march to market economy socialism or as they like to call it, “socialism with Chinese characteristics”, said in 1985

"The mainland will maintain the socialist system and not turn off onto the wrong road, the road to capitalism. One of the features distinguishing socialism from capitalism is that socialism means common prosperity, not polarization of income. The wealth created belongs first to the state and second to the people; it is therefore impossible for a new bourgeoisie to emerge. The amount that goes to the state will be spent for the benefit of the people, a small portion being used to strengthen national defence and the rest to develop the economy, education and science and to raise the people's living standards and cultural level." (Deng Xiaoping, Selected Works, Volume III)

Well we can see where Deng's remarks stand just 20 years later. Of course the Chinese government has not - according to its own criteria - ever advocated capitalism, only the “free market”.

I am sorry to quote so much, but it is inevitable, so bear with this as I feel it is important for you to read the history and come up to the present. Deng went on to say in August of 1985:

"In the course of reform it is very important for us to maintain our socialist orientation. We are trying to achieve modernization in industry, agriculture, national defence and science and technology. But in front of the word “modernization'' is a modifier, “socialist'', making it the “four socialist modernizations''. The policies of invigorating our domestic economy and opening to the outside world are being carried out in accordance with the principles of socialism. Socialism has two major requirements. First, its economy must be dominated by public ownership, and second, there must be no polarization."

"As to the requirement that there must be no polarization, we have given much thought to this question in the course of formulating and implementing our policies. If there is polarization, the reform will have been a failure. Is it possible that a new bourgeoisie will emerge? A handful of bourgeois elements may appear, but they will not form a class."

"In short, our reform requires that we keep public ownership predominant and guard against polarization. In the last four years we have been proceeding along these lines. That is, we have been keeping to socialism.” (Deng Xiaoping, Selected Works, Volume III)

It becomes clear that either the reforms have gone farther then even Deng had planned or he was directly lying. I suppose the latter may be true. However, clearly it shows that even by reformist standards China should not be considered socialist by any means. So following the full market economy then how can we class the current leadership of China, what class are they supporting?

China's emerging bourgeoisie and the role of the state

The bureaucracy can never truly become a class of its own, but the Chinese bureaucracy is trying to push these limits. One third of Communist Party members in China are business owners. Privatised factories and other businesses go to Communist Party businessmen and are turned into capitalist corporations.

While I am not advocating that the Chinese bureaucracy has already shifted to the bourgeoisie, I believe it is in a transitional period, that is, in the middle road between a proletarian dictatorship and a bourgeoisie dictatorship. Maybe this is similar to a Bonapartist regime.

In "The class nature of the Soviet State" Trotsky talks about the relation of the Soviet bureaucracy to the proletariat. However this analysis may not be a rubber stamp for China currently. Trotsky's analysis of the Soviet Union was developed on the basis that it had a nationalised planed economy. However China no longer fits into this description as its majority of production is now carried out on a capitalist basis. In other words, since the proletariat is no longer the major economic ruling class then would not the bureaucracy also reflect this?

Trotsky said: "The anatomy of society is determined by its economic relations. So long as the forms of property that have been created by the October Revolution are not overthrown, the proletariat remains the ruling class"(The class nature of the Soviet state).

Since the forms of property that came into being after the Chinese Revolution have been mostly torn down, then that means the proletariat is no longer the ruling class of China. However, it is hard to say that the emerging bourgeoisie completely fills the role of ruling class ether.

The Chinese bureaucracy has avoided the fate of there Russian "comrades" by pre-empting the inevitable. By returning to capitalism it has been able to stave off its own collapse. However with the return of capitalism it finds itself with no base, a body with no legs.

Trotsky explains that the Russian workers tolerated the Stalinists because they did not want the return of capitalism. In China the counter-revolution has been carried out by the supposed “vanguard” of the working class in a manner of gradual and not so gradual reforms (counter-reforms). However, with no legs the body would seem doomed to collapse, but we should not underestimate our Chinese "comrades".

The current strategy for building new legs for the party is tied directly to the building of a new middle class as well as a new and powerful Chinese bourgeois class. This is where the term “Socialism with Chinese characteristics” comes in. They are and have been utilising the so-called socialist system (i.e. Stalinism) for bourgeois purposes. Their idea of socialism is this: “As long as the Stalinist bureaucracy exists, then China is socialist.” In the long run however, the bureaucracy is inevitably doomed, as the legs will outgrow the body. Once Chinese capitalism is strong enough it will have no more need for the constricting and socially unstable bureaucracy. It will grow its own body and discard the old shell.

If China were to have removed all control over its economy in the past it would have returned to a semi-colonial impoverished state since it lacked a strong domestic "progressive" bourgeois class. However, now there is emerging, even directly from the Communist party ranks, a new rich and powerful nationalist bourgeoisie.

Using the nationalised economy to speed up the building of the new bourgeois class was criminal brilliance. It even seems probable that this was actually a planned event within the upper strata of the Communist Party, maybe even starting as far back as Deng Xiaoping.

Paradoxically, it would have been impossible to do all this without the 1949Revolution, as without it the imperialist foreign powers would have continued to rule China today and would have smothered any nationalist bourgeoisie. The reforms of Deng Xiaoping therefore were not as he claimed to fund the socialist transformation, but to start the building of the Chinese bourgeoisie.

It is worth noting the fact that the Chinese government views the market reforms as a "revolution". However this would actually be something like a state-sponsored bourgeois revolution and therefore a counter-revolution as far as the working class is concerned.

The goal of the Chinese leadership is to transform China into a developed capitalist power. In various interviews government officials have even cited the US as a good example of equality and mutual prosperity! Recently they have not even been making much effort to cover up the fact they are trying to follow a model resembling the U.S.

Having said all this, they have no intention of giving up there positions for a more bourgeois democratic model. Capitalism in China is not strong and developed enough for a stable bourgeois democracy. The capitalists need the Chinese bureaucracy to protect their interests. If there were a collapse of the present Chinese government it would throw the whole process of national capitalist development up in the air and could result in a new colonial China due to the much stronger capitalists from abroad such as Japan and US imperialism.

Another thing the emerging bourgeoisie needs is peace. That's why you always here Chinese government officials talking about the peaceful rise of China. If there were to be a war it would severely damage the economic progress and stability of China and would threaten the life of the fledgling bourgeoisie. I suspect they will tolerate Taiwan for a long time to come.

It should also be noted that Vietnam is following the same Chinese model very closely and there is a possibility that North Korea will also jump on board the bandwagon of national-bourgeoisie-building.

How did this happen? What Future?

There are many reasons why all this has happened, but mainly it is because of the deformation of the Chinese so-called “socialist” state right from the beginning. The Stalinist leadership never had very strong socialist convictions; the Chinese Communist party was always a very corrupt party full of reformists. The only reason they instituted the expropriation of the capitalists in the past was because of the huge pressure from the masses. Some of them may even have been genuine two-stageists, i.e. that you must first develop capitalism to its height before socialism is possible.

The throwing away of the Chinese Revolution is possibly one of the greatest catastrophes in human history, together with that of the Russian Revolution. While a degree of market reforms maintained a certain "progressive" role by advancing the means of production, the reinstatement of full scale capitalism in China under the new national bourgeoisie and the oversight of the Chinese Communist Party is a far cry from the advancement that a truly socialist society under workers’ control would bring.

The Chinese workers are very unhappy about everything that is taking place, but they feel very powerless to do anything about it. A good reason the government wants to maintain one party rule is that it would be too dangerous for the capitalists and themselves if a truly revolutionary Communist party existed in China today. For this reason they make any leaders of social movements, strikes, etc., disappear. However, it is surprising to note that they have recently seemed to be more lax with their punishment of anyone advocating bourgeois democratic ideals.

Figures like Mao still represent for the people the socialist ideas that used to exist. Real revolutionary socialist policy would be even more popular. The bureaucracy knows this and is trying to prevent the growth of a revolutionary movement or party by all means, trying to keep the class struggle to isolated demonstrations, protests, strikes and other actions. “Isolated” is the key because alone these acts pose no real threat. This is also the reason for the government’s stepped-up control of all Chinese chat rooms, message boards, and other web censoring and control.

Because of the lack of a revolutionary party if a revolution is to take place in China in the near future it faces a huge task. Without a revolutionary party the proletariat is hard-pressed to actually take power, thus in the most likely case it would end up being diverted down the road of some form of bourgeois democracy, i.e. the consolidation of the bourgeois counter-revolution. However one should not speak out against a revolution, even if it seems likely to fail. In my opinion even bourgeois democracy would be progress compared to what we have in China today, in the sense that there would at least be the right to organise and agitate for a genuine socialist alternative.

Besides this perspective there is always the possibility that leaders of the proletariat may emerge during the process of the revolution and there could be the formation of a revolutionary party during the course of the events themselves. Another possibility is that some members from the Communist Party under this situation would realize the default of their party and take a revolutionary leadership role.

We should refrain from being constantly pessimistic and instead be optimistic about the positive possibilities. One thing is sure; we should not underestimate the intelligence or spirit of the Chinese workers or peasants. Despite all the hard work by the bureaucracy, a revolutionary situation in China is on the horizon and I am confident the Chinese workers are up for the task.

October 16, 2005