100 Years of CPC: Two Views on the Communist Party of China

"It (Communist Party of China) shall give play to the decisive role of market forces in resource allocation and ensure the government plays its role better, and establish a sound system for macroeconomic regulation”: Constitution of the Communist Party of China; revised and adopted at the 19th National Congress, 2017

From the words of Com. Sitaram Yechury, CPI(M) & Com. PJ James, CPI(ML) Red Star:

A. Excerpts from “Chinese Revolution: Evaluating The 60 Years” - Sitaram Yechury; People's Democracy, 2009; on the occasion of the 60th Anniversary of the Chinese Revolution

…During the course of the last three decades China has made tremendous strides in development that are incomparable with that of any other country in contemporary history. The average annual double digit growth rate during these thirty years has converted socialist China into an economic power house in the world. When China embarked on its reform process in 1978 many had quipped that socialist China requires capitalism to develop. Today in the wake of probably the worst capitalist global recession, the general feeling is that world capitalism requires China to bail it out of this crisis.

How was such a remarkable development possible? Particularly in a period when the mighty socialist Soviet Union was dismantled two decades ago. When all pen pushers of imperialism and the bourgeoisie were busy seeking to nail the coffin of socialism claiming that capitalism is eternal, socialist China continued to build upon its economic successes. Right wing intellectuals pursuing their theories of `end of ideology' hastily attribute China's successes as having nothing to do with Marxism or socialism. Some amongst the Left are equally concerned if China's success constitutes the restoration of capitalism. Some ask: Has Mao's China been jettisoned? Have the `capitalist roaders' taken over China? What is the future of socialism in China?

…Lenin, himself, noted on the 4th anniversary of the October Revolution: "Borne along on the crest of the wave of enthusiasm, rousing first the political enthusiasm and then the military enthusiasm of the people, we expected to accomplish economic tasks just as great as the political and military tasks we had accomplished by relying directly on this enthusiasm. We expected -- or perhaps it would be truer to say that we presumed without having given it adequate consideration -- to be able to organise the state production and the state distribution of products on communist lines in a small-peasant country directly as ordered by the proletarian state. Experience has proved that we were wrong. It appears that a number of transitional stages were necessary -- state capitalism and socialism -- in order to prepare -- to prepare by many years of effort -- for the transition to Communism. Not directly relying on enthusiasm, but aided by the enthusiasm engendered by the great revolution, and on the basis of personal interest, personal incentive and business principles, we must first set to work in this small-peasant country to build solid gangways to socialism by way of state capitalism. Otherwise we shall never get to Communism, we shall never bring scores of millions of people to Communism. That is what experience, the objective course of the development of the revolution, has taught us." (Lenin, Collected Works, Vol. 33, pp.58 emphasis added)

…But, does this mean the restoration of capitalism? To this Lenin answers quite candidly during the period of the NEP (new economic policy) that: "It means that, to a certain extent, we are re-creating capitalism. We are doing this quite openly. It is state capitalism. But state capitalism in a society where power belongs to capital, and state capitalism in a proletarian state, are two different concepts. In a capitalist state, state capitalism means that it is recognised by the state and controlled by it for the benefit of the bourgeoisie, and to the detriment of the proletariat. In the proletarian state, the same thing is done for the benefit of the working class, for the purpose of withstanding the as yet strong bourgeoisie, and of fighting it. It goes without saying that we must grant concessions to the foreign bourgeoisie, to foreign capital. Without the slightest denationalisation, we shall lease mines, forests and oilfields to foreign capitalists, and receive in exchange manufactured goods, machinery etc., and thus restore our own industry." (Lenin, Collected Works, Vol. 32, pp. 491)

To a certain extent, what we find in the post-reform socialist China is, a reflection of the theoretical positions Lenin had taken regarding state capitalism during the NEP period. The main question involved is that of increasing the productive forces in a backward economy to a level that can sustain large-scale socialist construction. Lenin, during his time, on the basis of the concrete international and domestic situation, consistently endeavoured to rapidly bridge the gap between backward productive forces and advanced socialist production relations. The course of this Soviet history of socialist construction, however, took place under different historical circumstances. Encirclement of the Soviet Union, the civil war, the preparations for the second world war by the fascist forces did not allow the Soviet Union a peaceful period necessary for a protracted period of transition towards the consolidation of socialist productive forces. The pace of the socialisation of the means of production had to be hastened for the very survival of the socialism itself. The fact that it did succeed in socialising the means of production through `collectivisation', bore the brunt of fascist assaults during the second world war and decisively defeated them will go down as one of the most remarkable and liberating experiences of the 20th century.

In China today, what is being sought is to attain the conformity between the levels of productive forces and the relations of production under socialism. The advanced socialist production relations cannot be sustainable at lower levels of productive forces. A prolonged period of low levels of productive forces would give rise to a major contradiction between the daily expanding material and cultural needs of the people under socialism and backward productive forces. The Chinese Communist Party (CPC) has concluded that if this contradiction remains unresolved, then socialism itself in China would be under threat.

Following the political turmoil that took place during the cultural revolution and after the dethroning of the `Gang of Four' a serious introspection was begun by the CPC on political and economic issues. In 1978, clearing confusion and incorrect understanding on many political issues and practices, the CPC adopted a comprehensive ideological line that culminated in what they call `one central task and two basic points'. `One central task' is economic development, the `two basic points' are adherence to the four cardinal principles (Marxism-Leninism and Mao Zedong; socialist road; people's democratic dictatorship; and leadership of the Communist Party) and the implementation of reforms and open door policy.

Soon after the initiation of the reform process, in a conversation with Kim Il Sung in 1982, Deng Xiaoping says: "In a country as big and as poor as ours, if we don't try to increase production, how can we survive? How is socialism superior, when our people have so many difficulties in their lives? The Gang of Four clamoured for `poor socialism' and `poor communism', declaring that communism was mainly a spiritual thing. That is sheer nonsense! We say that socialism is the first stage of communism. When a backward country is trying to build socialism, it is natural that during the long initial period its productive forces will not be up to the level of those in developed capitalist countries and that it will not be able to eliminate poverty completely. Accordingly, in building socialism we must do all we can to develop the productive forces and gradually eliminate poverty, constantly raising the people's living standards. Otherwise, how will socialism be able to triumph over capitalism? In the second stage, or the advanced stage of communism, when the economy is highly developed and there is overwhelming material abundance, we shall be able to apply the principle of from each according to his ability, to each according to his needs. If we don't do everything possible to increase production, how can we expand the economy? How can we demonstrate the superiority of socialism and communism? We have been making revolution for several decades and have been building socialism for more than three. Nevertheless, by 1978 the average monthly salary for our workers was still only 45 yuan, and most of our rural areas were still mired in poverty. Can this be called the superiority of socialism? That is why I insisted that the focus of our work should be rapidly shifted to economic development. A decision to this effect was made at the Third Plenary Session of the Eleventh Central Committee, (1978) and it represented an important turning point. Our practice since then has shown that this line is correct, as the whole country has taken on an entirely new look." (Selected Works of Deng Xiaoping, Vol. 3, pp. 21-22)

It is essentially such an understanding that led to a theoretical conceptualisation of the primary stage of socialism. This in fact conforms to what Marx and Engels themselves had stated and what is accepted by all subsequent Marxists: that socialism is the transitory stage between capitalism and communism and hence constitutes the first stage of a communist society. The CPC however has gone a step further to formulate that within this transitory stage, there will be stages depending on the levels of productive forces at the time of the revolution. This was systematically elucidated in the 13th Congress of the CPC. Basically, what it meant was that China, being a backward semi-feudal, semi-colonial country at the time of the revolution, was at a stage where the socialist transformation of its economy will have to be conducted from very low levels. The World Bank, in 1980 sent an investigation team to China which estimated that the per capita GNP in 1952 was US $50, even lower than that in India and only slightly more than one-fifth of that in the Soviet Union in 1928. In a country with the largest population in the world, the effort for a transformation into a modern socialist economy is, indeed, a stupendous task. The CPC estimated that this process would take atleast a hundred years from the time of the revolution to reach the stage of a modern socialist economy. It is this process which they call (is called) `the building of socialism with Chinese characteristics'.

In order to achieve such a transformation, the CPC put forward another theoretical formulation that of building a socialist market economy. By now, it is clear that as long as commodity production exists, there would be a need for a market to exchange these commodities. It would be erroneous to conclude that under socialism the market will cease to exist. So long as commodities are produced, the market exists. The crucial question is not planning versus market but which dominates. Under socialism, market is one of the means for the distribution of the social product. Centralised planning, utilising the market forces and the market indicators, will be able to efficiently develop the productive forces and meet the welfare demands of the people. Therefore, ignoring market indicators leads to greater irrational use of resources which will adversely affect the plan process itself.

What is sought to be created in China is a commodity market economy under the control of the socialist state where public ownership of the means of production will remain the mainstay; by which the CPC means "firstly that public capital predominates in total social capital; secondly, the state economy controls the economic lifeline and plays a dominant role in the national economy". Through this, they seek to prevent the economic polarisation and growing inequalities created by private market economy and ensure the common prosperity of the working people.

…However, new problems are also cropping up as a result of these developments. They are mainly the growing inequalities, unemployment and corruption. The CPC, cognizant of these dangers, is taking measures to tackle these problems. But the fact remains that with the current transformation of the State owned enterprises, there is a net accretion to the unemployed every year. While the State maintains a minimum subsistence allowance and offers re-training programmes for retrenched workers, unemployment is a serious problem.

The main question that emerges is whether these growing inequalities will take the form of the formation of an incipient capitalist class? Lenin, while talking of State capitalism and emphasising the need to rapidly expand the productive forces, also warned of the risks to the socialist State that such a period of transition will bring about. Characterising the process of building state capitalism as a war, Lenin says: "the issue in the present war is -- who will win, who will first take advantage of the situation: the capitalist, whom we are allowing to come in by the door, and even by several doors (and by many doors we are not aware of, and which open without us, and in spite of us) or proletarian State power?" (Lenin, Collected Works, Vol. 33, pp 65) He proceeds further to state: "We must face this issue squarely -- who will come out on top? Either the capitalists succeed in organising first -- in which case they will drive out the Communists and that will be the end of it. Or the proletarian state power, with the support of the peasantry, will prove capable of keeping a proper rein on those gentlemen, the capitalists, so as to direct capitalism along state channels and to create a capitalism that will be subordinate to the state and serve the state." (Lenin, Collected Works, Vol. 33, pp 66)

Similarly, Deng Xiaoping in a talk during his visit to southern China says: "The crux of the matter is whether the road is capitalist or socialist. The chief criterion for making that judgement should be whether it helps promote the growth of the productive forces in a socialist society, helps increase the overall strength of the socialist state and helps raise living standards." (Social Sciences in China, Vol. XX, No. 2, pp. 29)

Further, in 1985, addressing some of the apprehensions of growing inequalities Deng Xiaoping says: "As to the requirement that there must be no polarisation (read growing economic inequalities), we have given much thought to this question in the course of formulating and implementing our policies. If there is polarisation, 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 polarisation. In the last four years we have been proceeding along these lines. That is, we have been keeping to socialism." (Selected Works of Deng Xiaoping, Vol. 3, pp. 142-143)

Clearly, the CPC is in the midst of a serious effort of building socialism with Chinese characteristics. The CPC is endeavouring to rapidly expand the productive forces and, thus, consolidate and strengthen socialism in China through these reforms. On the other hand, as noted above, this very process engenders certain tendencies which seek to weaken or even destroy socialism. As a result, ideas and values alien to socialism will also surface. Imperialist finance capital is there in China not to strengthen socialism but to earn profits and to create conditions of adversity to socialism. They would certainly seek the weakening of socialism or its dismantling in order to earn greater profits. This is the current struggle between imperialism and socialism that is taking place in the theatre of China. And, in this struggle, on the occasion of the 60th anniversary of the Chinese revolution, the efforts to strengthen and consolidate socialism will receive solidarity from us and the Communists the world over.

B. Excerpts from “India’s dependence on imperialist China: “Make in India” ends up as “Made in China” - PJ James; Red Star, July 2020; Section: China’s Transformation as the Largest Imperialist Economy

…No doubt, China’s experience of breaking the imperialist hierarchy inherited from the colonial world order is an exceptional and unique phenomenon. China’s political trajectory as a socialist country for more than a quarter century after WW II, its capitalist restoration following seizure of power by bureaucratic bourgeoisie in the late 1970s and its eventual transformation as an imperialist power are all complex processes that require in-depth analysis…

…Since the beginning of the 1980s, with its catchword of “socialism with Chinese characteristics”, the bureaucratic state capitalism in China began its close integration with private sector orienting state-owned banks toward liberally supporting private businesses. Since the 1990s, there took place a relative shift in this privatisation strategy with more emphasis on FDI inflows that rushed in to take advantage of China’s inexhaustible supply of cheap labour. As the cheapest source of production and as an active participant in the neoliberal international division of labour, this enabled China to increasingly integrate itself with global finance capital. In conformity with the logic of capital accumulation, lucrative real estate, financial markets and other money spinning businesses also flourished as a concomitant. Party-led bureaucratic state was transformed into an apparatus committed to protect the interests of corporate capital at the expense of workers, peasants and toiling people. As estimated by All-China Federation of Industry and Commerce, the share of private sector in Chinese GDP today is more than 60 percent. As of 2018, the entire private sector including both domestic and foreign accounted for70 percent of technological innovation, 80 percent (340 million) of the total employment (783 million) and 90 percent of all Chinese exports.

The bureaucratic state monopoly capitalism of China through various joint ventures between state-owned enterprises and foreign corporate capital went on adapting itself to the most modern and state-of-the-art technologies and in the process succeeded in building up a number of Chinese monopolies exporting capital to almost a hundred countries by the turn of the 21st century and to more than 125 countries as of now. Sino-US bilateral trade during the four decades following capitalist restoration in China had grown by 150 times —quite unprecedented in recorded history — from $4 billion in 1979 to around $600 billion in 2019.   With an average annual GDP growth rate of 10 percent since mid-1980s, China rose to the position of the second largest imperialist power when the 2008 world imperialist crisis erupted. Since then, though the growth rate has gone down, according to World Bank’s purchasing power parity estimates, by 2019 China became world’s largest economy with a GDP of around $27 trillion relegating the US to the second position with around $21 trillion. As its manifestation, in all other economic indicators including global trade volume, China had already surpassed the US. And by leading several organisations, groupings and initiatives such as Shanghai Cooperation Organisation (SCO), Regional Comprehensive Economic Partnership (RCEP), Asian Infrastructure Investment Bank (AIIB), Belt and Road Initiative (BRI), BRICS including New Development Bank (NDB), etc., China is already in an enviable position, as the US hold over many post war neo-colonial institutions such as UN and its Specialised Agencies are rapidly loosening. And in tandem with its growing imperialist political-economic clout, China’s military budget had steadily grown from around $14 billion in 2000 to more than $260 billion in 2019, almost four times that of India!

This transformation has its domestic repercussions. The so called “iron rice bowl” of socialism that ensured food, housing health, education and employment for all has been demolished. All the evils of ‘uneven development’ associated with capitalism and market economy are on the ascendance. Destruction of ‘self-reliant’ and ‘self-sufficient’ communes has led to one of the biggest internal migrations in history that resulted in tens of millions of displaced landless peasants becoming unemployed while a section of them who could migrate to urban centres and special economic zones in coastal areas were subjected to extreme forms of super-exploitation jointly by both foreign capital and emerging Chinese monopolies. In 1980, urban dwelling population was just 20 percent; it reached almost 50 percent in the first decade of the 21st century, a trend that gathered further momentum since then. China’s urbanisation, like its whole course of development, is unprecedented. According to latest Demographia’s World Urban Areas Report, there are now 113 urban centres in China that surpass the one million population threshold. In comparison, only North America and the European Union combined have 114 urban areas that surpass one million people. At the same time, large sections of the population still remain in the country-side at subsistence level. Since a social safety net composed of cost-indexed wages, health care and pensions is totally lacking outside the public sector employment, tens of millions of workers are left without access to welfare benefits or minimum standard of living. Migrant workers in construction sites and unorganised sectors live and work in desperate conditions and are paid below normal rates. As a reflection of the extreme misery and destitution suffered by people, all evils of capitalism such as poverty, price rise, corruption, sex trade, child-begging, homelessness and cultural degradation have also become rampant. And the emergence of a ‘deep state’ and political oppression have now become a corollary of the inevitable social tensions arising from the rigorous dismantling of even the remnants of erstwhile socialist achievements.

The concomitant political-ideological dimensions of this economic transformation found its first formal expression in the 16th Party Congress of Communist party of China (CPC) held in 2002 that formally announced extension of party membership to CEOs of corporate companies. Its outcome was well-reflected in the National People’s Congress (NPC) held in 2018 when large number of the delegates elected were from corporate CEOs and super-rich financial elite and wealthy individuals along with the party bureaucrats who have been the sole beneficiaries of the four decades of capitalist restoration. For instance, almost half of the more than 300 Chinese global billionaires (3 times that in India and second only to the US in 2018) whose wealth has appreciated by around 20 percent a year had their berth in higher echelons of CPC. Overall proportion of millionaires and billionaires in party bureaucracy is relatively high compared with their membership in CPC composed of 89 million out of a total population of almost 1400 million. According to China Rich List released by Hurun, the total wealth held by the top 70 delegates to the 2018 NPC was larger than that with the members of the entire US Congress! China’s Gini coefficient estimated at 0.465, - a statistical measure of inequality in which 0 indicates perfect equality and 1 depicts a situation where all incomes go to one person - is one of the highest in the world. In view of corroborative evidences coming from various other sources, today it is difficult to ignore such data as mere guesstimates associated with usual West-sponsored Sinophobia.

As a matter of fact, the reunification of Hong Kong in 1997 and Macao in 1999, both being nerve centres of global finance, trade and speculation, followed by China’s formal entry in 2001 into WTO, often characterised as the third neo-colonial pillar (the other two being IMF and World Bank) were milestones that speeded up its integration with imperialist market and finance capital. As world’s low-cost production base, this integration enabled China to capture substantial share of commodity markets not only in Afro-Asian-Latin American dependent countries, but even in US, its main imperialist rival for world hegemony. At the same time, this Chinese integration with global market has coincided with the emergence of fast moving ‘frontier’ or new generation technologies such as, digitisation, blockchain, artificial intelligence, biotechnology, robotisation, etc. which were practically insignificant in the 20th century. Closely integrated with the bureaucratic state, many Chinese companies became pioneers in economic innovation and application of these technologies to production at a maddening speed.  Among them Baidu, Alibaba, Tencent (popularly known as BAT) and Huawei (pioneer in ‘5G revolution’) have now become world leaders in digitisation, the fast-moving frontier technology of the 21st century, and  even capable of successfully challenging US-based “Silicon Six” (Google, Facebook, Amazon, Netflix, Apple, Microsoft). For instance, though five years younger than Amazon, the biggest American e-commerce giant, in terms of volume of trade, Alibaba has already eclipsed the former and is now the leading cloud-provider besides being world’s biggest e-commerce company. And backed by the breakthroughs in digital technology, China is also pioneering a digital currency alternative to the hegemony of US dollar in international transactions.

A crucial aspect to be underlined in this context is that mechanical approach to class/property relations and western notions of corporate governance do not fit in with the private sector in China. Chinese bureaucrats have learned lessons from Soviet Union’s eventual disintegration on account of private corporate sector finally usurping power and taking over the regime. As such, Chinese bureaucratic bourgeoisie’s unleashing of privatisation and corporatisation and encouragement to private businesses for generating economic growth, propelling investment and exports, etc., always go hand in hand with party bureaucracy’s strict supervision over the entire process. Party bodies and ‘party cells’ function in every private business, including even foreign enterprises. This intervention is intended to ensure economic growth strictly avoiding the plausible danger arising from any organised alternative to centres of political power.

It also ensures the regime’s close nexus with corporate capital together with constant surveillance over their dealings. According to a 2018 report, around 95 percent of the private enterprises in China had or in the process of having party cells/units in them. And the presence of the appropriate party representative in board meetings of companies is the accepted norm and corporate CEOs holding ‘Communist party’ membership is the general rule.

For instance, Jack Ma of Alibaba, global face of Chinese monopoly capital and corporate philanthropy has been a party member since 1980s, though his membership was openly declared only in 2018.  Even Walmart, world’s biggest US-based retail MNC (that at one time depended on China for around 70-80 percent of its merchandise) which is notorious for not allowing unions in its US stores, had party cells in its companies in China.  To be precise, driving corporate wealth accumulation and buttressing the bureaucratic state regime are two sides of China’s private sector that is accomplishing the miraculous “success story” of Chinese imperialism.