On the 5th Anniversary of Tiananmen Square: Where is China going?

A detailed analysis of the process of urban reform and the resistance of the working class.

Introduction

Five years ago, the heroic movement of Chinese students and workers was bloodily suppressed by the Bureaucracy. After decades of totalitarian rule, the youth of China revolted against Stalinist tyranny.

These young people were not fighting to restore capitalism, but were groping in the direction of political revolution. In the massive pro-democracy demonstrations in Tiananmen Square, the students deliberately sang the Internationale, in order to make it clear to the world that they were in favour of socialism.

This was precisely what filled the ruling elite with panic, expressed in the ruthless suppression of the movement. Deng had to use backward peasant troops, brought to Beijing from the provinces to crush the students. Even so, according to official sources, 110 officers and 1,400 soldiers refused to participate in the slaughter, an absolutely unprecedented phenomenon.

The tragedy of Tiananmen is that the student movement occurred before the Chinese workers had begun to move. Nevertheless, the student demonstrations did find an echo among the workers, who were experiencing the effects of inflation, inequality and corruption connected with the headlong rush towards a "market economy." The representatives of the workers appeared late on the scene, by which time the terrified regime had recovered its nerve enough to send in the army.

After a period of brutal repression, with mass arrests, beatings, torture and executions, the spirit of revolt has begun to revive. This year has seen a revival of dissident activity. The authorities feared that the anniversary of the Tiananmen massacre would be marked by a new wave of protests. But this time it is likely that the protagonist will be the working class.

In the period leading up to the fourth of June, offices and factories were told to keep three members of staff on duty 24 hours a day, ready to deal with strikes or disruptions.

In the event, the anniversary passed of quietly. But the ferment of discontent is still building up, and sooner or later must find an outlet. The students learned a harsh lesson in 1989. The best of them have correctly drawn the conclusion that the only force in society capable of overthrowing the Bureaucracy is the working class, and have begun to try to organise in the factories:

"The first protesters in 1989 were students and university-educated professionals. They showed little interest in stirring up the workers, who joined the protests spontaneously and late. These days, although the dissident organisations are still run by educated people, their strategy is to mobilise workers in fields and factories." (The Economist, 28/5/94)

The imperialists shed crocodile tears over Tiananmen and hypocritically declare their support for "human rights" in China. But the record shows that these people are quite prepared to back repressive and dictatorial regimes, provided they stand for private property, and do not threaten the profits of the banks and monopolies.

We celebrate the courage of the Chinese workers and youth in a fitting manner-providing a Marxist analysis of China, and showing that Tiananmen Square was only an anticipation of the far more tremendous revolutionary events which impend in China and internationally.

The Awakening of China

"Quand le Chine s'eveillera, le monde tremblera," said Napoleon-"When China awakes, the world will tremble." The fate of China is a decisive factor, not only for the future of Asia, but of the entire planet. For Marxists, the Chinese Revolution of 1949 was the second greatest event in the history of our times, after the October revolution of 1917. For the first time in history, the multi-million masses of China, the former pack-animals of imperialism, entered the arena of world history.

The Chinese Revolution of 1949, unlike the Revolution of 1925-27, was not a revolution on the classical lines of 1917. It began where the Russian Revolution ended, that is, as a totalitarian, bureaucratic one-party state. Having based himself on the peasant army (the classical base of Bonapartism) Mao Zedong manoeuvred between the classes to construct a state in the image of Stalin's Moscow.

China emerged from the Revolution as a deformed workers' state (a regime of proletarian Bonapartism) no different to Russia in all the essentials. Nevertheless, there were some significant variations. Despite colossal advances, China remains a predominantly agricultural country. Whereas in Russia, the peasantry has virtually disappeared (the collective farm workers regard themselves as rural proletarians) in China, there is a huge peasantry of up to 800 million living in 4 million rural villages. China has a long history of peasant wars. This fact really provides the key to the whole of Chinese history. Traditionally, a peasant war would lead to the overthrow of one dynasty. Then the leaders of the peasants, upon reaching the towns, would be absorbed into the ruling class of mandarins and form a new dynasty.

This process went on for thousands of years, and only came to an end in 1949.The great Taiping rebellion of 1850-64 was just such a peasant uprising. More importantly, the Chinese Stalinists themselves came to power on the back of a traditional peasant war, which lasted for over two decades. Trotsky had originally thought that the leaders of the peasant Red Army, when they came to power, would fuse with the bourgeoisie and betray their peasant base, as happened many times before, thus preparing the way for a period of capitalist development.

This did not happen, mainly because of the peculiar balance of forces that emerged after the Second World War. Imperialism was unable to intervene against the Revolution. On the other hand the weakness and extreme rottenness of the national bourgeoisie, which, after decades in power, had not solved a single one of the tasks of the bourgeois revolution (they had not even succeeded in uniting China) meant that capitalism offered no way out. As predicted in advance by our tendency, Mao rapidly abandoned his plans for joint rule with the bourgeoisie and his perspective of "a hundred years of capitalism," and nationalised the economy.

A Regime of Proletarian Bonapartism

History knows of many examples where one class or caste carries out the tasks of another class. We saw this phenomenon in the classical period of the bourgeois-democratic revolution, both in Germany, where the Junkers under Bismarck carried through the unification of the nation, and in Japan, where the feudal regime, as a reaction to the pressure of more advanced imperialist states, began the process of industrialisation and modernisation. But in all cases where this happens, society pays a price.

The normal historical process takes place in a mangled and distorted form, like an infant which is born deformed. The price the workers must pay where a different social stratum usurps its historical functions-whether Stalinist bureaucrats or guerrilla leaders-is a new revolution to get rid of the bureaucratic regime and establish a new regime of workers' democracy, the only type of state (or, more correctly, semi-state) which can begin the transition to socialism.

Marx and Lenin explained that the workers need a state to overcome the resistance of the exploiting classes, and to organise production on a democratic basis, under the control and administration of the whole working class. But it would be a semi-state, a very simple structure, dedicated to its own disappearance, which would begin to wither away from the very beginning. Such a state was the Paris Commune and the Russian workers' state in the period after the October Revolution, based on Lenin's four conditions:

a) Free and democratic elections, with right of recall of all officials.

b) No official to receive a wage higher than a skilled worker.

c) No standing army, but the armed people.

d) Gradually, all jobs in the state to be done by everyone in turn. When everyone is a "bureaucrat" in turn, nobody is a bureaucrat.

In 1949 this did not take place. The Chinese Revolution took the form of a Stalinist regime from the outset. This was determined in advance by the existence of a mighty deformed workers' state on its frontier. Unlike the revolution of 1925-27, when the proletariat played the leading part, this time the working class played little role. In effect, the Stalinists used the peasantry as a battering ram to crush the bourgeoisie. They took power in the name of the working class, but the working class remained mainly passive. Mao feared the independent movement of the workers and did everything in his power to prevent it.

The stalinised "Communist" party hardly existed in the towns and cities. According to Marshal Nie Rongzhen, commander of the Red Army in the North, there were only 3,000 Party members in Beijing when they entered it in 1949, and only 8,000 in Shanghai, the bastion of the Chinese proletariat with 9 million inhabitants. Far from encouraging the workers to rise in support of the Red Army, when they were met by delegations of striking workers, the Stalinist generals promptly executed them.

Far from the working class running the state, the same old Mandarin state remained intact, under the control of the new Maoist ruling caste. The Red Army chiefs were absorbed and assimilated by the Mandarin officialdom that had ruled China for millennia. The result was not a healthy workers' state, but a peculiar variant of proletarian Bonapartism, which did not prevent the leaders of the "Fourth," Mandel, Pablo and the rest, from hailing it as a healthy workers' state!

Despite all the monstrous bureaucratic deformations, the destruction of landlordism and capitalism in China was a gigantic step forward. It permitted the unleashing of the huge potential of the Chinese economy. In the space of a few decades, thanks to the nationalised planned economy, China became transformed into a powerful industrial state, with a large and educated working class, and an army of scientists, engineers and students. The rapid modernisation of a formally backward, third-world economy, with very little industry, semi-feudal relations in the countryside, enslaved and humiliated by foreign rulers, into a powerful industrial state, is, in itself, sufficient justification for the Revolution.

At the present time, China is already the world's third largest economy. With 1.2 billion inhabitants, it dwarfs all the other powers of Asia. There are 30 provinces in China which are as big or bigger than most Asian states. For example, Greater Shanghai alone is three times bigger than Singapore, and growing at least twice as fast. The province of Sichuan has 110 million people, which would make it the 8th biggest country in the world.

In absolute terms, China long ago outstripped Britain, her old imperial master, as an industrial nation, and has now undoubtedly overtaken Germany in volume of industrial production. Of course, taking into account population size, China still lags behind, but even the bourgeois economists say that, if current rates of growth are maintained (which will not be the case) China would have an economy equal in size to the present economy of the USA by the year 2005.

Spectacular Advance

In the last period, the Chinese economy has experienced an unprecedented rate of growth: around 12-13% per annum. Last year it grew by 13% overall. However, the "special economic zone" of Shenzhen near Hong Kong grew more than twice as fast, at 30%. This is just one indication of the unequal rates of growth which are creating all sorts of new contradictions. While agriculture lags behind, industrial growth has gone out of control, reaching an annual rate of no less than 33% in January 1994. This provoked fears of "overheating," forcing the authorities to put the brakes on. Even so, industrial growth is still in the region of 19%, a figure undreamed of in the West.

The present spectacular advances of the Chinese economy give us a glimpse of the colossal productive potential that would be released under a genuine regime of workers' democracy. They are only possible thanks to the successes of the nationalised planned economy in the past. The bourgeois try to play this down, but their own statistics argue against them.

Recently, a bourgeois economist compared China with Brazil and India. With the not unexpected exception that there are more cars and TV sets in Brazil, he found that China came out best on all the important indices. Its economy is growing faster, its statistics are more accurate, and even in living standards, it was either better, or at least making better progress. Thus, child mortality rates for every 1,000 under 5 has improved from 210 in 1960 to 85 in 1975 and 38 today. The equivalent figures for India are 235, 195 and 125, and Brazil has moved over the past 30 years from 175 to 65 now. According to the World Bank, the percentage of people in China living at or below subsistence level has fallen from 33% in 1970 and 28% in 1980 to only 10% at present.

The successes of the nationalised planned economy led to enormous advances, in spite of the corruption, swindling and mismanagement of the Bureaucracy, and the insane policy of autarchy pursued by Mao as a Chinese variant of "socialism in one country." The Chinese Stalinists' regime was more stable than that of their Russian cronies because they had set out from a far lower base. The methods of bureaucratic planning (what the bourgeois like to call the "command economy") can get important results in an economy where the main task consists in building up heavy industry-a relatively straight-forward task. But as the economy becomes more complex, it enters more and more into conflict with the straitjacket of bureaucratic planning. The bungling, waste, inefficiency and corruption cancels out the benefits of the plan.

The madness of Maoist autarchy did terrible damage to the economy. The so-called "Great Leap Forward" of 1958-61 was a crude bureaucratic attempt to force the pace of China's industrialisation by developing small-scale cottage industry. That adventure led to a collapse and a famine that killed millions of people.

Corruption among state officials occupies a long and "honoured" position in the history of the Chinese state, where "palm-greasing" was a way of life among the Mandarins. This tradition was taken over, virtually unchanged, by the Stalinist Bureaucracy, where the totalitarian regime, freed from all democratic control and accountability, enabled it to reach unheard-of limits, which threatened to wipe out the gains of the planned economy altogether.

In the period 1966-76, Mao attempted to place limits on the rapacious greed, of the officials by a campaign of terror, in which he leaned on the masses to strike blows against the Bureaucracy. Nevertheless, despite all the demagogy of the "Cultural Revolution," which certain self-styled "Trotskyists" compared to the Paris Commune, power remained firmly in the hands of the Maoist Bureaucracy.

The so-called "cultural revolution" represented a peculiar Chinese variant of the tactics used by Stalin to attempt to control the corrupt officialdom. The Stalin Constitution of 1936, which formally guaranteed "democratic rights," while in practice real power was concentrated in Stalin's hands, acted, in the words of Trotsky, as a "whip against the Bureaucracy." The difference was that, whereas Stalin tried to whip the corrupt officials into line using the GPU, Mao could permit himself the luxury of mobilising sections of the masses for this purpose. This reflected the different class balance of forces in China, where the Bureaucracy possessed a powerful social reserve in the peasantry.

Inevitably, this attempt to control the Bureaucracy failed. The only way to prevent the evils of corruption and bureaucracy in a nationalised planned economy is by means of the democratic control, participation and administration of the working class at all levels of industry, society and the state. Independent trades unions, a genuinely free press, owned by the state but controlled by the working class, complete freedom of criticism at all levels, these are the "sine qua non" of a workers' state from day one.

Mao's attempt to control the Mandarins by terror did not, and could not solve the problem, but it did disrupt production and sow chaos for a number of years. The hooligan antics of the so-called Red Guard, beating up intellectuals, destroying works of art, burning Tibetan temples and denouncing Beethoven and Shakespeare as "bourgeois reactionaries," have been sufficiently documented, as has the grotesque cult of Mao. However, more dangerous from the stand-point of the ruling caste was the risk that, in leaning on the masses, and making demagogic appeals to the workers and youth to attack the bureaucrats and "capitalist roaders," Mao was playing with fire.

Of course, it was never the intention of the "Great Helmsman" to give power to the workers. To make a reality of the anti-bureaucratic slogans, it would have been necessary to form soviets-workers' councils. But that was very far from the mind of the Chinese Bonaparte. All along, real power was in the hands of Mao and his camarilla, which manipulated the movement in their own interests. If it got out of hand, they could dissolve it, using the usual instrument of Bonapartism, the multi-million peasant army.

At a certain point, the adventurism of the Mao clique was too much for the Bureaucracy. In all likelihood, by this time the old man was mad. That seems to be the inevitable result of a totalitarian regime. It is not an accident that both Stalin and Hitler seem to have ended up insane, or that so many Roman emperors were lunatics. Madness is closely identified with the loss of a sense of reality.

In their triumphal processions, it was the Roman custom to place a slave at the side of the emperor, whispering in his ear the words "remember that you are only a man." In any kind of absolutist regime, where the Leader, with the unlimited power of life and death in his hands, is surrounded by a clique of sycophantic courtiers, who constantly tell him only what he wants to hear, eventually the insanity of the totalitarian system expresses itself in actual madness.

In all probability, the Russian Bureaucracy murdered Stalin. Probably the same fate fell to Mao. Either way, his death came at a convenient moment, and immediately after it, a ferocious struggle broke out, after which Mao's widow and supporters were arrested and put on trial. The rise to power of Deng Xiaoping, denounced by Mao as a prominent "capitalist roader," was an expression of the reaction of the Bureaucracy against the storm and stress of the "Cultural Revolution," a desire to return to bureaucratic "normality" and the serious business of ordering society-and filling their pockets.

Autarchy Abandoned

After the death of Mao, the ruling clique under Deng abandoned the old policy of autarchy and staked everything on participation on the world market. >From a Marxist point of view, this was a progressive development. In the modern epoch no country can isolate itself from the world market, not even a sub-continent like Russia or China. Lenin and Trotsky were in favour of trading with the West, and even of granting important concessions to capitalist firms to set up factories in Russia. However, the basic levers of the economy would be kept firmly in the hands of the workers' state, and the conditions of the workers in the foreign-owned factories would be protected by soviet law.

In the event, the offer was never taken up. The imperialists could never reach a deal with the Russian workers' state which threatened their system. They were determined to destroy it, not trade with it. The situation with the deformed workers states was different. Despite the fundamental antagonism between imperialism and the deformed workers' states, the latter did not represent the same kind of threat as the healthy workers' state in the time of Lenin and Trotsky.

Even in Mao's lifetime, Nixon began to develop relations with China, as a counterweight to the Soviet Union. These relations have been enormously intensified since. But whereas in Russia at the time of Lenin and Trotsky, participation on the world market and concessions to the foreign capitalists were temporary measures, aimed at consolidating the workers' state, until the Revolution in the West would come to their aid, the Chinese Bureaucracy under Deng have actually been moving in the direction of capitalism.

The opening up of the Chinese economy to world trade after 1978 was obviously the turning point. This is one reason for the rapid advance of the Chinese economy, as opposed to the frightful collapse in Russia, where participation in world trade has slumped by more than half. However, this has its limits.

The attempt of Deng and his faction to solve the problems of the system by moving in the direction of capitalism has been enthusiastically received in the West, where the multinationals smell big profits. However, despite the optimistic predictions of some of the strategists of capital, the outcome of Deng's reforms is not a foregone conclusion. For the imperialists, the Chinese market seems to be a glittering prize, at least potentially. Before the War, China was a semi-colony, dominated and exploited by a number of imperialist powers. The conflict between Japan and the United States over China was one of the most important elements in the Second World War.

There can be no question of going back to the situation when China was a weak and divided semi-colony of imperialism. There is no question, for example, of the repetition of the aggression of Japanese imperialism which hived off the coastal areas before the War. The predatory Japanese imperialists destroyed Chinese factories and sent them back to Japan as scrap metal. This was the main reason why the Chinese bourgeoisie under Chiang Kai Shek did not capitulate to Japan, which they would otherwise have done. Now even mighty Japan would be too weak to take on China in a military sense.

The victory of Stalinism in China has radically changed the balance of forces in Asia. China is rapidly emerging as a super power in its own right. It has the most powerful armed forces in Asia, and a mighty economy. At present, imports and exports represent 20% of China's GDP. Exports amount to about 170 billion dollars. China is now in tenth place in the world trade league tables, about 2.5% of the total, which is not bad for a relative newcomer, when you consider that Britain's share is only 4.5%. And the Chinese People's Liberation Army (PLA) is the most formidable military force in the whole of Asia. The PLA currently has three million soldiers, armed with modern weapons. The authorities plan to reduce these numbers. But even after the cuts, China will have ten times more soldiers than Japan.

In the recent period, China has launched an enormous programme of weapons modernisation, which involved the purchase of US$1.8 billion worth of Russian defence equipment in 1992 alone. From 1988 to 1993 China increased its total military expenditure by 98% (US$7.5 billion). By these means, the ruling elite purchases the loyalty of the PLA general staff, while simultaneously increasing China's international power and prestige.

From the Opium Wars 150 years ago, China constantly lost territory and suffered the humiliation of foreign occupation and oppression. Now all that is history. With the temporary decline of Russian power, China is now the main regional superpower. The other countries, including Japan, cannot challenge the might of modern China, which is flexing its muscles, and already making its own territorial demands, for example in relation to the Spratley Islands in the South China Sea, also claimed by five other South-East Asian nations.

As a Western observer commented: "The prospect of a reinvigorated China, emerging from the Cold War armed with modern combat aircraft like the SU-27, Kilo-class conventional submarines, and possibly even an aircraft carrier by the turn of the century, has alarmed almost all neighbouring Pacific nations." These are not idle fears. Aircraft carriers and submarines are not weapons of defence!

Bureaucracy Still in Control

The move towards capitalism has been undertaken under the tight control of the old Stalinist Bureaucracy. The dictatorship of the "Communist" Party (in reality of Deng's clique ruling through the Stalinist apparatchiks) is absolute. They have no intention of relinquishing power or of sharing it with bourgeois upstarts. In fact, the only reason they have encouraged capitalist elements was precisely to keep themselves in power. The fall of Stalinism in Eastern Europe and the USSR convinced the geriatric Chinese leaders that, in order to stay in power, two things were necessary: to ensure economic growth and increase the production of consumer goods, and to keep an iron grip on the state, suppressing all forms of dissidence.

The present mess in Russia was partly the result of the stupidity and miscalculations of the Bureaucracy and in particular Gorbachev, who did not originally intend to go towards capitalism. Gorbachev's idea was to stimulate production by loosening the bonds of bureaucratic control which were strangling the economy. He had the delusion of combining Stalinism with democracy, not realising that the two things are completely incompatible. What Gorbachev had not anticipated was that the movement towards democracy would immediately provoke a massive movement of the oppressed peoples of Eastern Europe for independence from Moscow. This eventually led to the break-up of the USSR, with calamitous consequences.

The Chinese Bureaucrats took one look at events in Eastern Europe and Russia, and decided that they would never go down that road. The bloody clampdown in Tiananmen Square underlined this fact. This was possible in China because the Bureaucracy still had a big reserve of social support in the peasantry and the peasant Red Army.

Deng's policy resembles that of Bukharin in the 1920s, which, if it had succeeded, would have led to the restoration of capitalism in Russia even at that time. Basing himself on the so-called "strong peasant" (i.e. the kulaks) Bukharin advanced the slogan "enrich yourselves." In the Spring of 1992, Deng made a tour of the most successful "special economic zones" in the south-Guangdong and Shenzhen, and made a speech praising the reform programme, and urging people to "liberate their minds" (an oblique attack on Maoism) and repeating the slogan "to get rich is glorious," which is almost identical to Bukharin's language.

However, just as it was not Bukharin's intention to bring about capitalist counterrevolution in Russia, so, in all likelihood, Deng did not intend this for China, either. Deng, like all the other Stalinists, is an ex-"Marxist" who long ago forgot whatever elements of Marxist theory he might have known. With no theory or perspective, and motivated by narrow national and caste interests, he is a superficial and vulgar empiric, who stumbled on the idea that the way to preserve the rule of the Bureaucracy was by encouraging the development of capitalism, under the firm control of the state, which would remain in the hands of the ruling caste, which in turn would be ruled by Deng's camarilla.

There is an old Chinese proverb: "A man who rides on the back of a tiger finds it difficult when it is time to dismount." Deng's intention was to overcome the impasse of the bureaucratic regime by leaning on capitalist elements, while jealously preserving the power and privileges of the ruling caste. But, like the sorcerer's apprentice, in conjuring up market forces, he found they had a life and a will of their own. The declared policy is to build "socialism with Chinese characteristics." China was declared to be in a "primary stage of socialism," and in order to construct a socialist economy, it was necessary to use non-socialist, i.e. capitalist, methods.

In China, as in Russia, the nascent bourgeois, which is rapidly gathering strength, will not be satisfied with the present position, but will want to take power into its own hands. There will be conspiracies to establish a fully fledged capitalist regime. This can provoke upheavals and crises, which, at a certain stage can prepare the way for big movements of the workers and peasants. An open split in the Bureaucracy after Deng departs could open the flood gates for the accumulated discontent of the masses.

In a healthy workers' state, where power is firmly in the hands of the working class, as was the case in Russia in the 1920s, it might be possible and necessary to make even considerable concessions to capitalist elements, as in the New Economic Policy. But in a monstrously deformed workers' state like China, where power is in the hands of a corrupt and degenerate ruling caste, the bourgeois elements can present a serious threat to the existence of the nationalised planned economy. This was not foreseen by Deng. As one bourgeois journalist recently commented: "Today, 16 years after Deng Xiaoping's ascent, it is far from clear that even Mr. Deng himself saw how far his programme of economic reform would eventually lead." (The Economist, 4/6/94)

Paradoxically, the Chinese Stalinists have succeeded where the Russians failed precisely because the movement towards capitalism has been kept firmly under state control. However, there is a contradiction here that cannot last forever. The Bureaucracy constantly interferes with the market, introducing all kinds of distortions. Sooner or later, the demands of the market will enter into conflict with the demands of the politicians. When that moment arrives, despite Mao's famous slogan "Put politics in command!" it will be the market, and not politics, that decides.

We see this even at the present time. The central government is alarmed at the way in which the "special economic zones" such as Guangdong are acquiring excessive autonomy and is desperate to stop other regions going the same way. But the growing inequality between the regions compels the poorer inland regions to follow the example of the richer coastal areas. A bourgeois journalist recently drew attention to the contradictions between the regions, and between the latter and the central authorities:

"Beggar-my-neighbour policies-tariff and import controls at provincial borders, tax breaks for local businesses-are becoming a way of life. Provincial governments are hungry for investment in infrastructure while they speculate in property and invest in light industries and service businesses that they hope will bring quick returns. Taxes are handed over grudgingly, if at all; the ratio of central government revenue to GNP has dropped from more than 30% at the end of the 1970s to 19% today. It remains to be seen whether the national tax reforms enacted at the beginning of this year will succeed in giving more control over China's purse-strings back to the central authorities." (The Economist, 4/ 6/ 94).

How Far Has Privatisation Gone?

At first sight, the movement towards capitalism in China appears to have acquired an unstoppable momentum. Land reform, the setting up of a stock exchange, the abolition of price controls, the special enterprise zones, etc. Eagerly following the advice of the Leader, sections of the Bureaucracy have proceeded to enrich themselves at the expense of the state. Members of the ruling families are building business empires in Hong Kong, beyond the reach of the Chinese taxman. The number of state-owned Chinese companies listed in Hong Kong has risen from seven to 47 in the past two years. They now account for 7% of market capitalisation, and the number of Hong Kong companies owned by Chinese state-owned companies has risen from 400 two years ago to 1,000 now.

Some of this involves actual theft of state assets, which is achieved by all manner of fraud and sharp practices. Among the worst offenders are relatives of the ruling circle, including Deng Zhifang, the youngest son of Deng Xiaoping. Thus, a section of the Bureaucracy is in the process of transforming themselves into capitalists.

The exact amount of the economy that has been privatised is not entirely clear. The figures reproduced in the West are confusing, frequently referring to the part of the economy that is "market-oriented," whatever that might mean. This is said to account for half the industrial output and as much as 75% of total output, on some estimates. However, these figures should be treated with caution. Carried away with enthusiasm for prospects in China, the bourgeois is inclined to present the movement towards capitalism in too rosy a light, and with a less than scrupulous regard for the facts. Thus, in the figure mentioned here is included, along with private companies, a large number of "collective" firms, which are not privately-owned, and which may, or may not, end up as such.

In 1979 there were officially no Chinese working in privately-owned businesses. This reflects the Stalinist madness of nationalising everything, which does not make sense, least of all in a backward economy like China. Small businesses, corner shops, small cafes, bars, hairdressers and the like are better left in private hands, until the development of a more advanced service sector renders them redundant. Yet in Bulgaria they even nationalised the boot-blacks!

At present the official figure for those working in the private sector is 30 million. "Township and village enterprises" (TVEs)-light industrial groups with "shared and often informal ownership"-employ another 90 million and account for over a third of China's industrial output. It is clear that many of these enterprises are small, and in many cases would probably be in private hands even in a healthy workers' state. It is also clear, even on these figures, which probably overstate the relative weight of the private sector, that the state still controls the dominant part of the economy, and that the movement towards capitalism, while it has gone quite far in China, is still far from completed.

There are said to be ten million share-holders, which seems to be a lot of people. But in a population of 1.2 billion it is an infinitesimally small number. To give a clearer idea, the present membership of the Chinese Communist Party is put at 52 million, or 4.3% of the population. Of these, 30 million are "cadres" i.e. full-time officials or managers of state-owned firms. This means that only a third of the officials, at most, have any stake in the private sector whatever, and less than a fifth of Party members. As far as the general population is concerned, over 99% have no shares. The overwhelming majority thus have nothing to gain from privatisation, while a tiny minority are becoming millionaires. This is not a very broad base for the implantation of a stable capitalist regime in China.

The Position of the Peasantry

The development of capitalist tendencies has been accompanied by a rapid increase of inequalities between town and country, between poor peasants and kulaks, between workers in the new zones and the nationalised sector, between workers and the nascent bourgeois. The rapid pace of industrial growth, far from lessening these contradictions, serves to exacerbate them enormously. The period before 1989 was also characterised by rapid growth and inflation. That led to the explosion of Tiananmen Square. That is why the Bureaucracy is trying to put the brakes on the economy.

Already last year Beijing was attempting to rein in the overheated economy. Credit has been squeezed. The speculative boom is collapsing and the pace of industrial growth has moderated somewhat. However, the credit squeeze has hit mainly the big state owned firms, while the non-state collectives, which have accounted for most of the recent growth, have continued to borrow. As a result, the inequality between different sections of industry has grown even bigger, further aggravating the contradictions.

In addition, the relative economic slow-down has still not been reflected in a fall in the consumer price index-the decisive factor for the masses in town and countryside. A year ago, producer price inflation stood at 50%, a colossally high figure for a country which for 40 years had virtually no inflation. Since then the increase in prices has lessened, but inflation has hit the mass of the population, and only a small minority is in a position to make up for it through increased wages.

This also has the effect of increasing inequalities between town and country, and between different regions and sections of society. The state-owned sector, which grew by 14% in the last quarter of 1993, had a growth of only 2.2% in the first quarter of 1994. Millions of state workers have not been paid for months. Unemployment is rising. Despite this, it is not likely that the government will reach its target of 10% inflation for this year. At the same time, the need to prevent the collapse of large state-owned enterprises will lead to an increase of the budget deficit, aggravated by the general tendency to withhold payment of taxes, corruption and theft.

While at one extreme a minority is making fabulous fortunes, at the other living standards are falling fast. A key question, as always in China, is the fate of the countryside. Mao came to power on the backs of a peasant army, and the vast majority of society, unlike Russia, consists of peasants. Potentially, the existence of a huge peasantry of 800 million provides a broad social base for capitalist restoration. However, above all for the peasant, the question of the social regime is a concrete one.

The peasant does not understand the intricacies of "town" politics, or care much about them as a rule, insofar as they do not put in an appearance in the person of the tax collector. But if political changes in the urban centres do not allow him to live, the peasant's customary long-suffering passivity can rapidly become transformed into the most violent and elemental revolt.

Rural incomes, which rose rapidly in the 1980s, are now, at best, stagnant. In a desperate attempt to stem inflation, the central government has capped farm prices. At the same time, the prices of factory goods sold to the rural population continue to rise. The peasant watches with gritted teeth how the rich idlers in the cities get richer, while the villages sink ever deeper into poverty.

To add insult to injury, corrupt local officials pay for the peasant's hard-earned produce in IOUs which he knows will never be paid. The industrial slowdown and increasing unemployment means that the flow of remittances from his brothers who have emigrated to the cities to work in factories, in booming Guandong and Fuijian provinces are drying up. In addition, corruption and crime mean that a lot of this money disappears before it gets to its destination.

The smouldering anger in the villages is already beginning to boil over. There are reports of protests and riots. In June 1993, there were many reports of uprisings in the Sichuan region, where large numbers of peasants protested against high taxes and prices, and above all against the corruption of the leaders. Contemporary, a Hong Kong China-watching journal, re-ports that 44 rural post offices have been ransacked in the past year by angry farmers. But the most serious threat to stability in the countryside comes from the ever increasing process of class polarisation in the villages.

Like Stolypin in the period after the defeat of the 1905 revolution, Deng has tried to base himself on the "strong" peasant. Deng's "family responsibility system" abolished the collective farms, making individual families the basis of production, and allowing part of the crop to be sold on the open market, thus opening the door to increasing disparities in income between families with different possibilities. A minority of peasants have done well out of the reform, but the vast majority have seen their living standards brutally cut. The only alternatives facing millions of poor peasants are to remain in the village and face actual hunger, or to flee to the towns in the hope of finding work and a bowl of rice. Frequently, even this proves to be an illusion. According to the World Bank, between 100 and 150 million displaced rural workers are on the move in China

The possibility of a revolutionary upheaval in the countryside does not escape the Western China-watchers, as the following extract shows: "The great past challenges to authority in China-the Taiping rebellion of 1850-64, the communist revolution itself-came from the countryside. To judge from the urgency with which the Communist Party has been calling for rural "stability" this past year, it appears to be seriously worried that rural dissatisfaction might once again boil over into insurrection." (The Economist, 4/6/94).

The Working Class

The growing unrest in the villages is accompanied by the first stirrings of a movement among the workers. It is difficult to get accurate information about strikes, but there have been persistent reports of industrial unrest. The movement in 1989 was dominated by students. The workers came on the scene very late. But in the recent period the regime seems more concerned about the activity of dissidents in the industrial sphere. The independent union movement is very small at this stage. But trade union dissidents are ruthlessly persecuted and gaoled, indicating that the authorities fear their potential.

Inequality, inflation, crime and all- pervasive corruption is stoking up enormous discontent among the peasants and workers. Conditions in the factories of the "special zones" are reminiscent of the novels of Charles Dickens. One bourgeois writer compared the condition of the workers in Wuhan to those in Chicago in 1880.

In the previous period, the workers had reasonable legal guarantees for health and security. Now all that has been eliminated, in the rush for profit. According to official statistics, which undoubtedly underestimate real situation, there were a record 12,358 industrial disputes and nearly 20,000 deaths related to work incidents in 1993.

The Financial Times of 21/3/94 reported: "Increasing government concern over labour unrest; restless workers in loss-making state enterprises facing closure are seen as a threat to public order." Conditions in privately owned foreign enterprises were, if anything, worse still. A Chinese union official accused foreign employers of "randomly and openly" violating workers' rights:

"They prolong workers' hours, cut or deduct their wages arbitrarily, neglect safety and sanitary requirements and even humiliate workers. One employer even locked his worker in a dog cage."

The Beijing-based China Electronic News reported recently that there were more than 10,000 labour disputes last year. Many occurred in the Shenzen special economic zone, adjacent to Hong Kong, which has attracted a flood of peasant labour to work in small processing concerns.

On May 21st, the People's Daily quoted Ren Jianxin, director of the Party's committee on public order, as saying that "since the beginning of the year, the public-order situation has become extremely grim." Zhiang Lin, an activist of the clandestine Labour Alliance, claims that Shenzhen is "ripe for revolution." He is quoted in The Economist of 28th of May as follows:

"The speed of economic development has brought about severe social contradictions. Shenzhen has the most corrupt government in the country. So far, there are plenty of opportunities to make money. If those opportunities diminish, people will take up political opposition."

It may be objected that such a source is bound to exaggerate the potential for social unrest. But sections of the strategists of international capital who have no such interest have arrived at similar conclusions. A report produced by one of the big international banks, and intended exclusively for the boardrooms of the multinationals, last August carried the following warning:

"A major potential source of problems for the Chinese administration is the widening income distribution gap between the coastal areas and the inland areas; between the new class of entrepreneurs and private-sector workers and their state enterprise counterparts; between rural masses and urban dwellers. Associated with this to some extent is the growing sphere of corruption, which is widely known to exist at many levels of society. Income and wealth disparities could, if they get out of hand, lead to social and political unrest." And the report goes on:

"State industry reform could lead to massive layoffs as state-owned enterprises are forced to stand on their own commercial two feet. This, together with the demise of the state-industry-provided "iron rice bowl," could also engender poverty and social unrest."

Fearful of an uncontrolled movement of the workers, the official state-controlled All China Federation of Trades Unions began a drive in February to double union membership this year in foreign-run factories and joint ventures. Less than 30% of companies in which foreigners are involved are unionised. Despite the very small numbers of people involved in opposition trade union groups, the government is worried about the possibility that they will begin to get an echo among the workers. The Financial Times of 11/4/94 quoted a western official in Beijing as saying that "the thing that worries the government at the moment is that conditions are ripe for recruiting new people."

The report continues: "These concerns appear to be especially acute where the labour movement is concerned.

"The authorities showed little tolerance recently when labour activists petitioned them to be allowed to establish a non-government group known as the "Association for the Protection of Labour Rights". The organisers were summarily detained and their request dismissed. The last thing Beijing wants at this traumatic moment for state industries, with thousands of workers being laid off or placed on subsistence wages, is the emergence of an overtly political organisation like Poland's Solidarity."

The conditions of the workers, especially in the booming new areas of the special economic zones are strikingly similar to those of the Russian workers at the turn of the century, when a big influx of foreign capital caused a stormy growth of industry in a few centres, and a mass of raw peasants were thrown from the land into the seething melting-pot of large-scale industry. The language of the leaders of the Labour Alliance is also reminiscent of the early socialist pioneers, as even the above-named Economist article points out:

"The Communist Party, which itself came to power (?) through a similar strategy, may have observed this change with consternation-particularly since the slogans of the Labour Alliance, the main dissident organisation, are strangely reminiscent of those of the party in its early and genuinely socialist days: an end to special privilege, a limit to excessive powers, protection for human rights, and a fair distribution of wealth".

Despite their somewhat vague formulation, and the apparently modest nature of these demands, what this shows is that the most advanced elements of the Chinese workers and youth are groping in the direction of the programme of political revolution. There is little doubt that if even a relatively small tendency existed, that stood on the basis of genuine Marxism, together with the best traditions of the Chinese proletariat, its ideas would find a ready audience in China even now.

Capitalist Restoration not Complete

Contrary to the illusion, carefully fostered in the West, that the process of capitalist restoration is all but complete, and that everything is proceeding smoothly, that is far from the case. The old regime was notoriously corrupt. But the present situation is far worse. There is rampant corruption at all levels, from the Party leaders, and more especially their children-the "princelings"-down to the smallest local Party secretary. Hence the demand for a "limit to excessive powers, an end to privilege and a fair distribution of wealth." Unconsciously, the Chinese labour dissidents echo Lenin's four points. The attack on privilege is an attack on the foundations of the bureaucratic system itself.

Like Mao and Stalin in the past, Deng is desperately trying to stamp out corruption by repression. There are anti-corruption drives, with mass public trials and summary executions, sometimes involving "cadres." Official papers occasionally rant against the "big monkeys." But, since the fountainhead of all corruption is the Bureaucracy itself, it solves absolutely nothing.

"The depth of corruption within the party is impossible to gauge but easy to guess at-just count the stolen limousines with smoked-glass windows that cruise the boulevards of China's cities. So completely has the culture of money saturated the party that anything done in the name of wealth-creation, save for the crudest bribe-taking, seems permissible. How, for example, to judge the minister who, ordered to hive off a state-owned conglomerate, simply quits his government job after naming himself head of the company?" (The Economist, 4/6/94).

This is only the tip of the iceberg. In reality, corruption is much worse than before, although not as bad as in Russia at the present time. This is an inevitable consequence of the movement towards a "market economy." Capitalism means corruption. This can have a profound effect on the attitude of the masses. The corruption of the old Stalinist regime was one of the reasons for its loss of support. But now the situation is even worse. This will inevitably provoke a reaction. There have been reports of people ostentatiously wearing Mao badges. This is a reflection of a reaction against the present state of affairs, and an anticipation of future developments.

The Bureaucracy will not agree to democratisation, because they understand-especially after the experience of Eastern Europe-that any move to loosen the bonds of authoritarianism will lead to an explosion. They would face the anger not only of the workers and peasants, but also of the oppressed national minorities. Because of the overwhelming domination of the Han, the national question does not occupy such a prominent place as in the former Soviet Union. Nevertheless, it remains an important element in the calculations of Beijing.

After the death of Mao, they came very close to open civil war, which would have had the most terrible consequences. Now, the enormous growth of inequality between the different provinces has seriously aggravated all the contradictions. We must not forget that there is a tradition of local warlordism in China, which virtually led to the breakup of China between the Wars.

The ruling elite fears, not without reason, that any weakening of central state control would produce a disaster. This is one of the main reasons that they reject out of hand all the proposals and pressures of imperialism to "respect human rights." In any case, these pressures are entirely hypocritical, and more related to protectionism than to any concern for the plight of Chinese political prisoners.

The growth of capitalist tendencies will give a powerful impetus to centrifugal tendencies. The complete establishment of capitalism in China could even lead to the breakup of China. The experience of Yugoslavia is a terrible warning. The brutal oppression of the Tibetans, Moslems and other national minorities has caused a profound hatred towards the Han Chinese majority. However, only an eighth of the population belong to national minorities. As in Pakistan, the regime has deliberately sent members of the majority nationality to these regions, in order to dilute the population.

Thus, it will be difficult for regions like Xinkiang to break away from China. Nevertheless, big movements of the national minorities are inevitable, if Beijing were to move towards "democracy." For that very reason, the ruling elite avoids it, as the devil avoids holy water. State repression has been stepped up. In 1989, there were 370 death sentences, of which two thirds were carried out. In 1992, there were 1,891 death sentences of which at least 1,079 were carried out.

At present, the old gang of Stalinist geriatrics still maintain a tight control over the situation. However, after Deng's death, the whole equation can rapidly alter. Capitalist tendencies are most powerful among the younger layer of bureaucrats, the children and grandchildren of the elite, who have no relation whatever to the traditions of the past. However, not all the bureaucrats want capitalism. One section which has done well out of the reforms is in favour, but others yearn for the security of the past and are worried about the growing contradictions which threaten their system. Capitalist industry is mainly new industry.

Most of the big firms have not been privatised. The heads of the big nationalised plants look enviously at the wealth of the nascent bourgeois elements. They want the same for themselves. Some would like to transform themselves into private capitalists, on the lines of Poland. But so far the top bureaucrats have resisted going to the end, and this group exercises an iron grip on the state in general, and the People's Liberation Army in particular. Decisive sections of industry remain in the hands of the bureaucracy.

So far, the budget deficit has been kept at a manageable level-only 3-4% of GDP, as opposed to 10-20% in Russia and 50% in the Ukraine. However, pressure for subsidies from the big nationalised firms will compel the government to increase the money supply, thus increasing inflation.

The need to hold inflation in check has forced the authorities to restrict credit and attempt to freeze prices. This threatens big state-owned firms with bankruptcy, which would mean mass unemployment for the workers and loss of power and privileges for the factory managers:

"Officials have been under enormous pressure on prices. Painful reforms of state enterprises-a number are simply being allowed to wither on the vine-are causing hardship for thousands of workers who have lost jobs or are working part-time on reduced wages." (Financial Times, 17/3/94).

This will undoubtedly cause a fierce reaction on the part not only of the workers but a section of the bureaucracy whose interests are affected.

With their usual empiricism, the bourgeois has gone overboard in relation to the perspectives of the Chinese economy. Some have even predicted that, on present trends, China will overtake the USA. According to some estimates, China's net imports by the year 2002 will be worth US$639 billion, as opposed to US$521 billion for Japan, and China's GDP will be US$9.8 trillion compared to 9.7 trillion for the USA. This would make China the biggest economy in the world! However, this is unlikely to occur because of the whole series of contradictions.

Where is China Going?

As usual, the bourgeois "experts" proceed in an entirely empirical manner, merely extrapolating on the basis of present trends, as if the process were proceeding in a perfectly straight line. But life is not like that. Not long ago, the same people confidently predicted that Japan would soon overtake the USA. This did not occur, which does not prevent them making the same mistake in relation to China.

It is not possible to predict with certainty what will happen. There can be an explosion of the working class, and even a peasant war as a result of the crying contradictions among different layers of the peasantry. Likewise, the contradictions between different sections of the Bureaucracy can lead to an open conflict, and even civil war. Lastly, if Russia should revert to some kind of neo-Stalinist regime, this would determine the outcome in China.

In general, the confidence of imperialism in the capitalist future of China is premature. Capitalist structures have not yet been firmly implanted in China. An official of the State Planning Commission recently wrote an internal memo, painting a black picture of the situation:

"The national unified, open, orderly and competitive market system has yet to shape up...Market infrastructure lags behind ...Monopoly, cheating, unbridled pushing up prices and unauthorised levying of administrative charges [are all contributing to inflation]." (Quoted in the Financial Times, 17/3/94).

Unlike Russia, the capitalist elements in China have received considerable assistance from imperialism in the form of investment. A big part of this comes from the overseas Chinese and some of it consists of illegal speculative investments from mainland bureaucrats, channelled through Hong Kong. American, Japanese and European manufacturers are scrambling for a slice of a fast-growing market, and seek to take advantage of extremely low labour costs.

In a table of 38 countries, China was in 36th place for labouring costs in the manufacturing sector. For example, the monthly wage of a worker at the Volkswagen plant in Shanghai is equivalent to three hours wages at the Wolfsburg plant in Germany, and 50% less than in Poland. Foreign investment undoubtedly acts as a powerful lever for the development of capitalism in China, but in so doing creates further explosives contradictions.

Beijing intends to make the yuan convertible within five years. However, the relative weakness of the Chinese currency in relation to the US dollar and the yen will be a further source of inflation, which will increase in the proportion that China expands its participation on world markets.

European and American businessmen return home, having been lavishly wined and dined by the Chinese hosts, their mouths watering at the prospect of huge profits; "If every Chinese consumed the same as the average Australian, we would double our world trade!" This kind of comment brings to mind similar remarks made by British manufacturers one hundred years ago. "If all the Chinese added one inch to their shirt-sleeves, the cotton mills of Lancashire would have work for a generation."

Nowadays, the Chinese posses reasonably long shirt-sleeves, but it does little for the cotton mill of Lancashire, since they produce shirts better and cheaper in their own factories. And herein lies a major contradiction. If China were to develop as a capitalist industrialised nation, it would be a formidable competitor for the West.

The very successes of the Chinese economy create new sources of conflict. Already there are rumblings in the USA about the future risk to America posed by cheap Chinese imports. The hue and cry about "human rights" and "labour rights" is merely a dishonest expression of this. If China becomes a serious force on world markets, it would be met inevitably by a protectionist counteroffensive.

Already China's increased participation in world markets is provoking the reaction of the imperialists. In January the USA trade representative, Mickey Kantor, accused China of massive cheating and transshipment of clothing and textiles exports, and slashed its textile and apparel quotas for next year by 25 to 35%.

The New York Herald Tribune of the 18/1/94 wrote indignantly: "Illegal transshipments of Chinese textiles to third countries, where the products are relabelled as being made in the third country, has become the hallmark of the Chinese textile industry, which is now overshipping its $4.68 billion quota to the United States by an estimated $2 billion or more per year. Another $2.2 billion in Chinese silks have been coming into the American market without quotas because when trade agreements were made in the past, silks were not the high-volume commodity they are now."

Under the terms of the three-year pact forced on China by Washington, the rate of growth of Chinese exports to the United States will be slowed, with no growth allowed in 1994 and about 1% growth per year thereafter. This means that over the three years China's exports would be about $700 million, or 13% less than they would have been had the old agreement been extended.

The overseas Chinese and the imperialists will invest in China so long as they see that China is moving in a capitalist direction. The moment that the process shows signs of going into reverse, they will pull out. The problem is that they will have to leave their factories behind! As one bourgeois investment analyst put it: "The big risk is that one morning you wake up and find they have announced that everything owned by foreigners in China has been nationalised. Such an event could be caused either by another cultural revolution, or by the Chinese perceiving that they would gain more than they would lose by such an act."

These lines are a clear indication that the most far-sighted representatives of capitalism do not at all rule out the possibility of a reversal to neo-Stalinism in the next period. They are particularly concerned at what could happen after Deng leaves the scene. Now 89 years of age, he has been variously reported to be suffering from prostate cancer, and also to have been afflicted by a stroke.

The Role of the Individual

As in Russia the Bureaucracy is profoundly divided in relation to reform. There is an openly pro-capitalist wing which is represented in the Politburo Standing Committee (the real centre of power in China) by the economics minister, Zhu Rongji and the chairman of the National People's Congress' (the "parliament") Qua Shi. The traditional Stalinists ("conservatives") are represented in the leadership by the prime minister, Li Peng, and by Jing Zemin, who, apart from being the general secretary of the "Communist" Party, is State President and overall head of the armed forces. In the middle stands Deng Xiaoping, the Bonapartist "strong man" who, playing off one faction against another, has concentrated all power in his hands. But Deng is old and infirm. He cannot last much longer. His death would bring all the contradictions in the Bureaucracy to the fore, with unforeseen consequences.

Historical materialism does not at all deny the role of the individual in history. It merely explains that individuals are not absolutely free agents, as idealists imagine, but must operate on the basis of given social and economic conditions which are not chosen by them and which operate according to laws created independently of the will of men and women. Once we understand these laws, we are in a position to arrive at a scientific analysis of the real scope and significance of the actions of the individual player on the historical stage,

Only a hopelessly mechanical "Marxist" could fail to appreciate, for example, the role of Stalin in the degeneration of the Russian Revolution. Of course, the political counterrevolution did not depend on one man. That is ABC for a Marxist. With or without Stalin, if the Revolution remained isolated in a backward country, reaction was inevitable, sooner or later, in one way or another. This, however, does not exhaust the question. In politics as in warfare, the question of "sooner or later" and "one way or another" is not at all secondary, and can be decisive.

In the first period Stalin had no idea where he was going. He did not want the defeat of the Chinese workers in 1927, or the German workers in 1923 and 1933. Yet his policies guaranteed defeat in each case. This, in turn, meant the further isolation of the Revolution in Russia, which was the real material basis for the victory of the bureaucratic counterrevolution, which Stalin had initially neither anticipated nor desired. Furthermore, the monstrous form which the counterrevolution took were certainly affected by Stalin's personal character and psychology.

The death of Lenin in 1924 may be included under the category of historical accidents. Nevertheless, as Hegel pointed out, necessity often expresses itself through accident. Lenin's colossal personal prestige, in itself, would not have been sufficient to prevent the political counterrevolution. His widow Krupskaya pointed out in 1926 that "if Vladimir Ilyich were alive, he would be in one of Stalin's prisons." At that time, this was probably an exaggeration. Had Lenin and Trotsky not been incapacitated by illness, it is entirely likely that the German workers could have come to power in 1923.

Had Lenin lived a few years more, the process of degeneration would have been delayed. This would have meant a fundamental difference above all to the Chinese Revolution of 1925-27. The victory of the Chinese workers would have completely cut across the process of bureaucratic counterrevolution, changing the entire course of history. That is the importance of the role of the individual in history.

Of course, there is no question of comparing Lenin with the ex-"Marxist" Deng! However, it would be entirely mechanical not to see the profound effect which the death of Deng would have, under present circumstances. In the same way, after the death of Mao, the rival wings of the Bureaucracy were on the brink of civil war. Now the contradictions are still sharper.

The old guard have grudgingly accepted Deng's reforms, but look with suspicion at the growing power and independence of the nascent bourgeois elements. However, many of these people are, like Deng, old and infirm. The pro-capitalist elements are stronger in the lower echelons of the Party hierarchy and in the provinces, where the local bureaucrats are growing increasingly restive at central state controls and taxes, and jealous at the success of the wealthier "special zones."

Given the enormous intensification of contradictions at all levels of Chinese society, the death of Deng will immediately sharpen the conflicts between the different wings of the bureaucracy. This could be the signal for social upheavals, which could put political revolution on the order of the day. It tends to be forgotten that the Chinese proletariat is one of the most powerful in the world. Theoretically, it is not excluded that the Chinese workers could come to power under these circumstances, even before a mass revolutionary party was formed. Such a development would transform the entire world situation placing socialist revolution on the order of the day internationally.

The process of capitalist restoration is not at all fixed, but extremely fluid, and full of contradictions. They can go so far, and then provoke a massive reaction, a combination of strikes, peasant revolts and upheavals of the oppressed nationalities. With a correct programme and perspective, China even now would be on the eve of a political revolution.

However, if the Chinese workers do not succeed in taking power, the perspective would be one of frightful chaos and anarchy, and possibly even the break-up of China. More probably, it would end in bloody civil war, and the establishment of an even more monstrous Bonapartist military police state of either a neo-Stalinist or bourgeois variety.

It will be necessary to follow the process closely, through all its stages, paying attention to the concrete peculiarities of the situation in China, with its special traditions, which must be taken into account. Above all, it is necessary to find some way of reaching the advanced Chinese workers and youth. China now stands in the vanguard of the world revolutionary process. A hundred and fifty years ago, Karl Marx predicted that a revolution in China-by which he meant a bourgeois revolution-would mean the end of capitalism in the West.

The monstrously deformed regime that emerged after the 1949 revolution could have no appeal to the workers of Europe, Japan and the United States. But the experience of the last 45 years has utterly transformed the situation. The powerful Chinese proletariat, once it took power, would never tolerate the re-establishment of a corrupt, bureaucratic totalitarian regime. A modern, democratic healthy workers' state in China, which would make an appeal to the workers of the world, as the students of Tiananmen attempted to do in a confused way, would transform the entire situation internationally.

A genuine Marxist tendency in China would fight against the restoration of capitalism, while at the same time advocating a return to the policies of genuine Marxism-Leninism, and putting forward the perspective of a political revolution which would put an end to the nightmare of Stalinist totalitarianism and open a new and glorious chapter in the history of China, Asia and all humanity.