Where is China going? – Part Three

The march towards capitalism is not a simple straightforward process. There are opposition voices within the bureaucracy, but more importantly capitalist development has created a massive working class and this is now being expressed in the growing level of strikes.

The following text is the speech given by Fred Weston summing up the discussion held on China at a meeting of the International Committee of the International Marxist Tendency in January of this year.

China: a bourgeois regime defending capitalism

A question was asked: what kind of regime do we have in China? I think we can say that it has become a bourgeois bonapartist regime. By this we mean that the process of capitalist restoration has reached a qualitatively higher stage. Although the process has not led to the complete elimination of state-owned property, we have reached the point where the process has been consolidated. Again it is not enough to say this, because it is also a question of where it comes from, its roots. Normally in a bourgeois bonapartist regime you do not have elements within the party of that regime discussing socialism. Therefore, we have to take into account the past. But at the same time it is a question of deciding the balance of forces and how far they have shifted.

An analogy can be made with Trotsky’s approach to the bureaucratic degeneration of the Soviet Union. Initially he did not give a straight answer. He gave quite a long detailed answer, with lots of “buts”. It was only in 1933 that Trotsky drew the conclusion that the degeneration was complete and that from then onwards reform was no longer possible. Only a revolution could have restored genuine workers’ democracy. We are facing a similar situation here. The Chinese regime has become fundamentally bourgeois because it is defending capitalism, but within it there are remnants of the old regime.

The question of Taiwan is an interesting one, because from the point of view of the economy there has been a large degree of fusion between the two countries. There has been huge investment of Taiwanese capitalists in China and as one comrade pointed out, there are 600,000 Taiwanese in Shanghai. Amongst the first of the foreign capitalists to invest in China were the Taiwanese.

The problem is that there is also the United States that is not happy with the idea of Taiwan and China fusing. In the past Taiwan was a bulwark of capitalism backed by US imperialism. But the fact that China has become capitalist doesn’t solve this problem that easily. Even on a capitalist basis there are big conflicts, as we discussed, between the USA and China. America would not look at all kindly on any attempt on the part of China to take back control of Taiwan.

Trotsky in the Revolution Betrayed described how he thought the process of capitalist restoration would take place in Russia. His fundamental analysis proved to be absolutely correct, but for example he thought that privatisation would start with the land. But in Russia after 1991 they found it very difficult to privatise the land. In actual fact the situation in Russia was one of collapse of the economy.

However, if we look at the process in China it is following very, very closely what Trotsky predicted. He said they would start with the land, and yes, they have not privatised it completely, but they have given something like 100-year leases to families, and they have broken down the collectives, and the farms are run on a capitalist basis.

Then he said they would start with the small and medium industries but that they would hold onto the big ones. This is what Trotsky said and this is what the Chinese bureaucracy has been doing.

Trotsky said that it would not be easy to find owners for the big state companies, and that they could remain in state hands for a generation as they prepared them to become fully-fledged private companies at some stage. And this is Trotsky talking about the restoration of capitalism.

On the question of credit it is true that they have kept control over the banks, but in the recent period they have allowed foreign capital into some of the banks, and they are preparing to take measures to privatise the banking sector as well. They are bringing that into line too.

In the past 10 to 15 years, we have seen China survive a series of international economic crises. The Chinese currency is still not convertible. They have maintained a degree of control over foreign trade, although they have been gradually loosening up. Maintaining these controls would not be elements in themselves to define the regime. In actual fact it would probably be correct even for a bourgeois regime in China to try and hold on to these to protect its own developing capitalism. The main point we have to stress is that state control of foreign trade is loosening up and they are preparing to adhere fully to WTO requirements. On the convertibility of the currency we will see what they will do with that, but it is inevitable that at some stage in the next period they will have to make the Chinese currency fully convertible.

On the question of the regime I think that as the economy develops further and the working class develops further the regime at some point will be forced to open up, even on the question of repression. It is interesting that a comment in the Guardian talks about “autocratic capitalism”. That is how they define it.

It says: “The most disturbing thing about autocratic capitalism may not actually be its purported stability, but its inherent instability.” It says: “the problem with this system is that a sudden drop in economic prosperity creates intense disorder with no free political institutions to absorb the shock. This can easily lead to revolution and wars. It has before. China may well continue to rise for along time and the drop in prosperity may not be an immediate prospect, but when it comes it will be safer for China and the rest of the world if the Chinese had the freedom to express critical opinions, vote out the rascals and find ways to cope with the crisis that rests on popular consent.”

What they are basically saying is this: if you try and keep control purely through repressive measures sooner or later there is going to be an explosion and you could lose control. Now this is basically applying to China the model they have applied everywhere else, i.e. bourgeois democracy. What they mean by this is that we can have a bourgeois democracy, with trade unions, with leaders that we can corrupt, with an opposition that has some kind of credibility that can come in and take over when the others have been discredited – this is the idea that they are trying to sell.

But what will force them to open up I think is a movement of the working class. The working class will demand their rights. They will demand the freedom to express themselves and to organize.

On the question of a “Maoist” wing, I think that the situation is this. At the top of the regime, amongst the people who count, you do not have Maoists. They are defending capitalism. They have removed the Maoists as a matter of fact over a period. But because of the history of the party there are Maoists within it. What is the likelihood of having a Maoist in an organisation of 60 million? Very high I would say.

There are obviously people in China in the party that are discussing along the lines of a return to the old system that existed under Mao [see Increasing domestic criticism of Beijing's pro-capitalist course]. There are probably different types of Maoists. There is probably that layer of older people who look back to the “good old days” when everything was under control. But that individual that was quoted, who produced a leaflet and went to prison for it seems to be somewhat different from these older types of Maoists.

The point is this: in the conditions of China today how would any “Maoist” wing act faced with a serious slump or a major upturn in the class struggle? If their conclusions were that something has to be done to stop the movement towards capitalism, how could they turn against the capitalist wing? They could only do it by leaning on the working class.

In a certain sense, it is what Mao did: in order to strike blows against the pro-capitalist wing he had to lean on the masses. The problem was that he realized that to go too far down that road meant risking losing control of the mass movement which would have meant that the workers would go beyond the Maoist leadership and demand control, genuine workers’ power. So Mao had to pull the movement back in, de facto giving an advantage to the pro-capitalists.

Present day “Maoists” in the lower layers of the party, if they did move in that direction, and there was a massive working class moving along the lines of a French May 1968, would be pulled along in a revolutionary movement. Some of the people who today hark back to Mao may think that Maoism means this, and some may remember the Cultural Revolution as just such an event. Therefore any movement to “return to Mao” would not simply lead to a return to a bureaucratically planning economy. It would not mean moving back towards Maoism but forward towards workers’ democracy.

A conflict of this kind is there in the future, ahead of us. I think that in the face of a mass movement of this kind we would probably be looking at a split within the party. With a Maoist party maybe developing from a section of the present party. After all, in Russia, although it is not a photocopy, different parties have emerged that are lead by people who were all in the same party, the CPSU. Different bourgeois parties emerged from the old Communist Party of the Soviet Union, representing different interests – the “winners” formed several bourgeois parties and the “losers” formed Communist Parties.

Of course the present Russian Communist Party was formed in a situation of defeats with a demoralized working class. But could you imagine at least one Communist Party coming out of these 60 million members of the Chinese CP linking up with a mass movement of the workers in the cities and the factories? It would be a rather different Communist Party to the present Russian set up.

On the question of the working class and the movement of the working class I have other more significant statistics than simply the number of “protests”. It is not always clear what kind of protests they are. They are not broken down. Some of the protests have been by peasants who have been pushed off the land because of urban development and some of them have been protests against terrible pollution. Here I have some figures on actual labour disputes.

Around 30 million workers from the state owned enterprises have been laid off since 1998. Of these, according to official government statistics, 8.7 million have not found new jobs. Of course that means that over 20 million have. But the number of labour disputes of all kinds rose by 12.5% in 2000, and by another 14.4% in 2001, to reach 155,000. In 1999 there were close to 7,000 collective actions as they call them, which usually were strikes or go-slows, with a minimum of three people taking part, involving over 250,000 people.

Now of course that, relative to the population, may be small, but it represents an increase of 900% since 1992. Since 1999 the number of collective disputes has been increasing by about 20% per year. Actually those who drew up these figures are surprised. They ask themselves how come the figures are so small considering what is being suffered by the workers? They point out that the workers were facing destitution, i.e. losing their state jobs, and therefore losing all the benefits that went with them and yet strikes have remained relatively low.

The answer they give is that the regime has developed a national social security system now, i.e. the state is taking on what the state companies used to provide. For example, the percentage of the state budget spent on social security went up from 1% in 1997 to 6.3% in 2002. What the regime is doing is using some of the resources to try and provide some kind of buffer to soften the blow. And of course, so long as the resources are there they have got some room for manoeuvre.

Of course, in the future things won’t remain like that. But as you can see from the figures there is a growing level of strikes and this is just a small indication of what is to come. The economy is growing, jobs are being created, and this provides a certain stability. However, they have got to maintain something like 8% annual growth just to stand still, to absorb all this surplus labour coming in from the rural areas.

In China to have a major crisis it would not necessitate a slump; even 5% growth, instead of 9-10%, for 2 or 3 years would pose a big problem. Huge tensions would then emerge in the cities and this new working class which is being created would then start to move in a serious way.

As you can see from the facts and figures we are analysing a 20 to 30 year period here, and really coming to terms with the developments of this period. We have started this important discussion now and we must produce more material on China in the next period. Just as we have developed our analysis of Venezuela and Latin America as a whole, so must we develop our analysis of China.

For the last 20 or 30 years the Chinese workers have seen the process constantly moving towards capitalism, step by step. The prospect that all that had been achieved in the past could be undone, that what they conceived as “socialism” could be undone must be difficult for a lot of people to grasp. But what will bring many workers and youth to draw the necessary conclusions is and will be the very experience of capitalism. They will see what it really means. In fact this process has already begun in China.

This is the case in Eastern Europe as well. There are layers there who are already thinking things through. The first reaction is to say “that it was much better before, we had pensions, we had public education, we had health care. We didn’t have this poverty on the streets and these terrible conditions….” They will see that capitalism brings, yes, huge development but also huge contradictions and terrible poverty and terrible conditions.

In Russia there was a slump, a deep and terrible slump. But in China the economy has developed enormously, which is a very positive thing, because it is developing the working class. In Russia when the economy was in a state of collapse the workers felt powerless. Even strike action seemed senseless when the factories were either closed or simply not producing anything.

In China things are different. Any serious strike movement would severely affect the capitalists because there is a boom. The Chinese capitalists are increasing production and demanding longer hours because they need to meet the needs of the market. So although the consciousness in a certain sense has been thrown back, on the other hand, objectively speaking the working class has never been stronger. All this will help to make things clear in the minds of the most conscious workers and youth in China.

January 2006

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