The following article is a contribution to the CWI discussion on the character of the Chinese regime, state and economy, and is based on an introduction by Tony Saunois to a plenary session at the recent CWI School in Berlin.
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China has emerged as a world power challenging the dominance of US imperialism. It now plays a central role in the world economy, geo-political world relations not least in Europe, Asia, Africa and Latin America. It is impossible to analyse world events today or grasp possible future events without considering the developments in China. US imperialism has been in a drawn-out decline for decades. Its’ decline is relative. It remains the largest and most powerful imperial power with economic growth better than many other capitalist countries. Yet the historic trend is clear. It will develop further in the future albeit in quite a protracted manner.
However, US imperialism is no longer the power that it was. It is no longer unchallenged. Its humiliation at the hands of the Iranian regime in the recent war have starkly revealed its limitations. European capitalism, from a global standpoint, has suffered an even sharper and more rapid retreat. A bleaker future lies before it as tensions and divisions mount within the EU.
The decline of western imperialist powers has been mirrored by the unprecedented rise of China. The economic centre of gravity of the world economy has shifted to Asia – especially China. This does not mean that China will replace the US as the global power acting the “policeman of the world”. We are now in a multi-polar world. The major clash is between the US and China with significant others also taking place. A new age of conflicts and wars between global, regional powers and the classes. The age of a unipolar world dominated by US imperialism has, like the snows of yester-year melted away. Like the glaciers US imperialism is in retreat. Yet how and why has China managed such a development? What is China economically, politically and as a state?
These questions are the subject of a widespread discussion and debate amongst capitalist commentators, academics and amongst the socialist left. Is China socialist? Is it capitalist? Or is it something else? These are important questions to understand what has happened and how this new world power is likely to develop in the age of modern capitalism. A social system that is in a protracted death agony, but which not leave the stage voluntarily and will need to be overthrown through a socialist revolution. Protracted mainly due to a combination of some objective and subjective factors which inter-relate. The weakness of the leadership of the working class, ideologically, politically, in organisation and political parties are crucial.
China in the last four decades has been transformed. It has progressed from a mainly agriculturally based society into a mainly highly developed urbanised society combined with a continued rural backwardness in some provinces. It is now challenging the most powerful western imperialist powers.
800 million have been lifted out of poverty in just four decades. Urbanisation has exploded from roughly 18% in 1978 to approximately 67% in 2024. Between 1978-22 China’s annual compound economic growth averaged 8.1% with a population of 1.2 billion. That has never been replicated by any of the imperialist powers.
Japan between 1952-91 averaged an annual compound economic growth of 7.1% with a population of 105 million. This development in Japan was mainly consequence of US imperialist intervention following the second world war. It did this to stabilise the situation and strengthen its own position and that of capitalism in the region. This was a special situation. US imperialism in its period of take-off (1865-1914) managed an annual economic growth of a mere 1.3% with a population of 63 million.
Yet how and why was this possible? What did China have that the western powers lacked? To understand what took place it is necessary not to view the various phases of China’s development in unconnected fixed categories. It is necessary to see them as an unfolding inter-connected process following the revolution in 1949 which led to the overthrew of landlordism and capitalism. Like all processes, it is not yet completed. It is still developing within which sharp quantative and qualitative changes occur.
What has taken place during the last four decades is derived from the 1949 revolution which is crucial to understand what has unfolded in China. A further consideration to be taken account of is the history of the Chinese Communist Party founded in 1921. It undertook various zigzags politically. It did not on all occasions simply follow the dictates of Stalin’s bureaucracy. One of the co-founders of the party was Chen Duxiu, who was its first General Secretary from 1921-1927. He was expelled from the party in 1929 and became a prominent leader of the Chinese Left Opposition. Later Mao Zedong was to break with some of the policies of Stalin to carry through the revolution in 1949 and led a peasant army to power. This had some comparison to what Tito did in Yugoslavia although with significant differences.
A unique form of state capitalism?
Approximately twenty years ago the CWI went through a debate and discussion on the class character of China. This was centred on disagreements primarily with the then leaders of the Swedish section and some others and the International Secretariat (IS). The former contended in a rigid, mechanical, analysis that China was capitalist; pure and simple, end of story. The IS argued that this was inadequate, too rigid, not nuanced, and failed to consider the complexities of the situation. The IS argued that China was in a process of transition. That the process of capitalist restoration had not then been fully completed. Moreover, it could take many twists and turns including a reassertion of greater state control of the economy given that the CCP had retained state power. The debate was circular and inconclusive. As work was being conducted in China at the time, to try and break a circular repetition of the argument, a compromise was agreed – that China had a “unique form of State capitalism”.
This formula, although serving at the time, was however inadequate. It did not fully address the process that were underway. Above all It addressed only one factor – the economic. This was crucially important, but it was and is not the whole story. The formula we used did not address sufficiently the character of the state machine, the party, (CCP) and the character of the ruling Bonapartist authoritarian state. This is also a crucial ingredient needed to fully characterise the unfolding class nature of the Chinese state regime and the economic relations which exist.
What is meant by “State Capitalism”? What has developed in China is fundamentally different from state capitalist enterprises which existed in countries where a bourgeois state exists. Even these involved a certain element of state planning. Engels (In Socialism: Utopian and Scientific) argued that as capitalism develops it transitions into trusts and state ownership. Such development still left the proletariat as wage earners in a capitalist economy and in a bourgeois capitalist state. Never-the-less it was a harbinger for the encroaching socialist revolution. The term “state capitalism” appears to have originated by Wilhelm Liebknecht, a German socialist leader, in 1896. He used it to differentiate between enterprises nationalised by the bourgeois state such as railways, utilities etc, in a capitalist economy, and those nationalised in a centrally planned economy moving towards socialism.
To explain the Chinese phenomena, it is necessary to grasp the complex, contradictory nature of the state which exists. We cannot limit ourselves only to economic and class relations, which though crucial, are not the totality of the situation. A full analysis requires returning to the Chinese revolution in 1949 and subsequent developments to grasp the current character of the Chinese state and how it has evolved.
The Chinese Revolution 1949 and the Permanent Revolution
The Chinese revolution in 1949 was from the standpoint of the CWI the second most crucial revolutionary development internationally after the Bolshevik revolution in 1917. As a result of this capitalism and landlordism were overthrown and China was transformed. The scale of what was achieved was incredible involving millions in a revolutionary struggle conquering enormous obstacles. Yet the revolution was based on a peasant army. A herculean war was fought for 22 years following the crushing of the revolution in 1927. This involved, in 1934-35, a 6,000 mile ‘Long March’ which solidified Mao Zedung’s leadership within the party. The revolution that triumphed and the declaration of the People’s Republic of China on October 1st, 1949, had sympathy and support from the working class. Yet it was not led by the proletariat unlike the Russian Revolution in October 1917.
This crucial difference meant the state that was formed was of a different character. A workers’ state based on the Soviets and working class and workers’ democracy was not established. A bureaucratic, authoritarian, Bonapartist, regime of a Stalinist form emerged. Yet despite this, landlordism and capitalism were overthrown, and the introduction of a centralised planned economy laid the basis for the transformation of China. The vast country became more industrialised and urbanised and less agriculturally based with transformative benefits for big sections of the population. Life expectancy increased to 57 years in 1953/7, up from 35 in 1949. Urbanisation went from 10% of the country to approximately 20% in roughly the same period.
Yet the bureaucratic nature of the state regime and absence of democratic workers’ management and control led to economic zigzags, corruption and at various stages economic stagnation. The ‘Hundred Flowers Campaign’ launched in 1956, was both a struggle within the bureaucracy and an attempt to create a ‘safety valve’ allow some open criticism and debate at a time of when there was the uprising in Hungary and the movement in Poland.
The “Great Leap Forward” (1958/67) was a utopian, rapid industrialisation policy and ended up in disaster. Life expectancy by 1961 fell back to 40-44 years.
The stagnation and crisis which followed was one factor that gave way to an inter-bureaucratic struggle which unleashed the horrors of the “Cultural Revolution” (1966-76). Within this a section of the bureaucracy was looking towards capitalist restoration. Various forces that were mixed and contradictory were involved in this massive social convulsion which took various forms. One in 1967 and the establishment of the ‘Shanghai People’s Commune’ when a mass movement of workers’ and students briefly took over the municipal administration. Yet during the ‘Cultural Revolution’ an horrific social convulsion took place resulting in the death of millions, of workers’ peasants, intellectuals, artists, musicians, and others who were slaughtered as youth/students especially were drawn into a frenzy of uncontrollable rage.
Yet despite this, in an extremely distorted way China’s development vindicated some aspects of the theory of the ‘Permanent Revolution’ in that China did not go through and complete the bourgeois revolution to develop capitalism as the CCP’s theory of the ‘Bloc of four classes’ formally proclaimed. In contrast, the theory of ‘Permanent Revolution’, applied to what today is termed the ‘neo-colonial’ world, which is dominated by imperialism, the tasks of the bourgeois democratic revolution are merged with the socialist revolution. This is because of the incapacity of the national bourgeoisie in these countries to carry through or complete the bourgeois revolution. Thus, the working class finds itself in a revolutionary process, that it needs to head, that needs to lead to the overthrow of landlordism and capitalism. Carried through in countries where capitalism has not fully developed it is linked to the need for the working class to consciously strive for international socialist revolution.
The overthrow of capitalism and landlordism and the introduction of a centrally planned economy in China allowed it to skip over some crucial aspects of the bourgeois democratic revolution. However, this was done not, with the working class at its head leading a workers’ democracy with the perspective of a developing international socialist revolution.
It was under the auspices of an authoritarian, bureaucratic, bonapartist regime which came to power based on a peasant army. Yet the developments which followed would not have been possible without the 1949 revolution and the subsequent overthrow of landlordism and capitalism. Socialism was not established. Yet a development of the productive forces and society did take place. Big advances for large sections of the working class materially and in culture were made. Other layers, especially in the countryside gain less and suffered terribly.
“It does not matter if the cat is black or white”
The bureaucratic nature of the regime inevitably brought with it mismanagement, corruption, waste and inefficiency resulting in stagnation and contradictions developing. Flowing from the preceding crisis, emerging from the ‘Cultural Revolution’ a section of the bureaucracy took control of the party and the state and took the initiative to defend their position and to break out of economic impasse which had developed. In 1978 a crucial turning point was reached flowing from the stagnation and impasse the bureaucracy found itself in. Deng Xiaoping, by then installed as CCP leader, (who had been purged during the cultural revolution), introduced the “Reform and Opening Up” programme. It was introduced incrementally, beginning with agriculture and the ending collective farming. This was followed by the establishment of SEZs (Special Economic Zones) allowing foreign companies in and other measures of market “reform”. The Iron Rice Bowl – guaranteeing jobs security for life, fixed wages and welfare benefits – was abolished.
This was a crucial turn. Yet the Chinese bureaucracy did not go for “shock therapy” as was later applied in the former USSR and Eastern/Central Europe with catastrophic consequences. The Chinese bureaucracy avoided the turmoil this could unleash which would have threatened its existence and rule. They opted for a more measured, step by step approach to the introduction of market reforms. The SEZs started in 1980. Initially in four areas, Shenzhen, Zhuhai and Shantou in Guangdong province and Xiamen in Fujian province.
Some similarities were seen decades earlier in Yugoslavia with the introduction of what the regime ‘market socialism’. This led it to become an observer to the OECD capitalist club in 1955 to fully participate in it in 1961. The economic crisis which hit it in the early 1980s and then the eruption of national conflict ultimately led to the collapse and disintegration of Yugoslavia in the 1990s. To date, the vastly different situation in China has enabled the regime to avoid such a fate.
The abolition of the Iron Rice Bowl was largely aimed at attracting foreign investment by reducing workers’ rights. This turn by Deng Xiaoping undoubtedly represented a crucial change. It opened the way for foreign investment. Western imperialism saw this as an opportunity to access cheap labour. This, together with the capitalist class emerging in China and the critical role of the state together transformed China into the manufacturing hub of the world economy. In the last thirty years some twenty million private firms have sprung up – some small other large. The private sector accounts now for something over sixty percent of national output. The ‘reproachment’ between the Chinese regime and western capitalism eventually led to China being accepted into the World Trade Organisation in 2001.
However, Deng Xiaoping and the Chinese regime did not totally abandon some aspects of the planned economy. The state maintained a capacity to intervene, direct and manage the capitalist sector which emerged. These measures were presented as “Socialism with Chinese characteristics”. Deng quipped, “It does not matter if a cat is black or white so long as it catches mice”.
This was not socialism but the maintenance of the rule of the party and its’ elite and the bonapartist bureaucratic state. The party and the state maintained strict control and direction of the economy. The banks continued to be state owned. The dual price policy and other mechanisms were there to control and direct the new market forces which developed, and introduced as part of the “Reform and Opening Programme”.
However, it opened the way for the emergence of a new and increasingly powerful Chinese capitalist class. A class whose interests potentially could pit itself against the interests of the party and the state in one form or another, including possibly taking control of the party, or plunging it into turmoil and ruptures. The potential clash of interests between the new bourgeois class and the party was reflected by a modification to the CCP and state constitution in 2002 and 2004 respectively. The then leader Jiang Zemin in 2000 introduced the “Three represents” policy. Amongst other things for the first-time it admitted private business owners and capitalists into the party. The layer of new capitalists in leading positions in the party grew. A trend reversed later under Xi Jinping.
Who is controlling who?
In doing so a central question was to be posed. Who would control who? Could the state and the party elite control this new bourgeoisie or would it, or sections of it, ultimately control or take over the party/state to defend its’ own interests? The outcome of this process, like all others, was not predetermined.
The explosive development of the market, in a unique form of state capitalism, opened the doors to massive corruption and a surge of inequality. This threatened to undermine the cohesion, credibility and base the party and state rested on. The mass uprising that took place in Tiananmen Square in 1989 reflected the contradictions that were emerging. Mainly student based although mixed with some other social layers, the demands raised during this movement centred on demands for democracy, ending corruption and others but it was not, in the main a movement, demanding capitalist restoration or a western capitalist model. The outline of the political revolution was seen in this movement in searching for a democratic alternative to bureaucracy but not, at that point demanding capitalist restoration. This was confirmed by the intervention made during these events by the CWI. The movement tragically was crushed in blood.
The particular bonapartist character of the state in China is crucial to correctly analyse what has and is unfolding. Marx, Engels and Lenin had analysed the role of the state as ultimately acting as the executive of the ruling class. Ultimately reduced to “armed bodies of men” it would act to defend the interests of the ruling class. However, as Marx and Engels concluded under certain conditions, the state can acquire its own interests, rising above and balancing between the classes ruling as an arbiter. In doing so it can acquire its own power, prestige, privilege and position to defend.
Interestingly, in China, in an entirely different historic era, in the feudal period, the Qing dynasty (1636/44 to 1912) in some phases of its existence developed this feature. It was a highly professional, efficient bureaucracy and state apparatus. It assumed a high level of independence that checked and managed the merchant class. This state managed and controlled the merchants rather than vice versa. Even prior to that the Song dynasty (960-1279) had similar features in its’ state machine. Xi Jinping draws upon this in the role of the state today as being a part of Chinese culture.
The massive bonapartist character of the Chinese state is a crucial factor to consider. The CCP currently has an estimated 100 million members. It has 5.1 million local organisational branches embedded in urban communities, rural villages, government offices, public institutions and in work-places and businesses. Of the party membership an estimated 32% are either workers or farmers. (Workers and skilled workers number approximately 6.6 million), Added to this is of course the Peoples Liberation Army with roughly 2 million active-duty personnel.
That is not to say that this social force is totally homogeneous. It includes numerous trends and factions. However, the role of this gargantuan bonapartist state is crucial to understand the unique, unprecedented processes unfolding in China.
The financial and economic crisis in the world economy in 2007/8 had consequences in China. On a world scale China played a significant role in preventing a collapse of the world financial markets. In November 2008 the Chinese regime launched a stimulus package of US$586 billion. Massive investment in infrastructure and construction took place along with a sharp rise in bank lending by the state-owned banks. This provided a vital lifeline to the world economy. The western capitalist powers also launched stimulus packages. Yet China by boosting its economic growth gave a lifeline especially to countries dependent on commodity exports. By early 2009 the Chinese economy grew by 6.9% and by mid-2009 by 10%. The World Bank accepted the measures adopted by China, which was a a critical factor in preventing a major crisis developing into a global catastrophe for capitalism. Domestically the crucial state intervention made possible by the unique form of the state ensured that it was not driven into recession as other countries would be.
Yet it also led to a reassertion of the state and party to check and control the Chinese capitalist class. A class which is also divided to what in China is known as the “private capitalists” and the “bureaucratic capitalists” – i.e. those linked to the state/party. The consequences of 2007/8 also seem to have re-enforced the faction of the party which emerged with Xi Jinpings’ accession to power in 2012.
In the past the CWI’s characterisation of a “unique form of state capitalism” also stressed that the process was unfinished and could result in a change of direction both ways. That has been confirmed by recent developments. The process remains unfinished.
Back to Lenin and 1921
The previous characterisation of China as a “unique form of state capitalism” addressed fundamentally economic relations. It did not address the question of the state and the party. For that it is worth revisiting what took place in post- revolutionary Russia under Lenin with the introduction of the ‘New Economic Policy’ in 1921 and adopted at the 10th party Congress.
This allowed the introduction of market mechanisms in forced grain requisitioning, and private trade, and allowed businesses to operate at a profit. It allowed temporary concessions to the capitalists, including foreign investors. It was a temporary retreat to buy time, to alleviate suffering and allow the working class to rise above the terrible conditions of famine and poverty which resulted from the civil war and the economic collapse which followed following imperialist intervention to crush the revolution. This was somewhat different to the situation which existed in China when the ‘Reform and Opening’ programme was introduced in 1978.
The NEP provoked a big debate within the party and a section opposed it. Lenin drew a sharp distinction between state capitalism in a bourgeois state to that introduced by a Soviet or workers’ state.
He addressed the threat that a strengthening capitalist class could threaten the existence of the workers’ state. He argued that if this was posed the workers’ state could take action to prevent this and if necessary, snuff out the capitalist enterprises.
In essence the Chinese regime, especially under Xi Jinping, has argued that they are doing the same – introducing the market, in a controlled manner, directed by the state, as a necessary step to develop the productive forces to eventually build “socialism”. “Socialism with Chinese characteristics”. The Chinese regime has partly borrowed from the NEP on a different scale and intensity.
There is however a crucial difference. The Chinese state is fundamentally different from the Soviet state that existed in 1921. That was a regime of workers’ democracy, with some bureaucratic distortions and weaknesses deriving from the condition that existed following the civil war. Then in the Soviet state there was still a Bolshevik party with a perspective of striving for the international socialist revolution.
After the 1949 revolution China was never a workers’ democracy. From the outset a bureaucratic, authoritarian regime which had come power based on a peasant army not the proletariat and having overthrown landlordism and capitalism established a ‘deformed workers’ state’. The CCP had long ceased to be a real Bolshevik party it tried to be in the 1920s. This is seen in the top-down way it is run with no real debate, unanimous decisions and, fundamentally, the complete absence of a Leninist approach to workers’ democracy and international revolution.
China today is a unique situation that has no clear historic parallels. The regime of Xi Jinping derives from, inherits and rests on that which took power in 1949. Xi Jinping himself, a highly cultured and educated individual, is what in China is termed a “hongerdai” – second generation red. His father was a lieutenant of Mao Zedong during the ‘Long March’ when Mao Zedong forces moved north towards Shaanxi. (Later he was purged and then rehabilitated).
Xi and ideology
The regime Xi Jinping currently heads are driven, yes, pragmatically by economic and political interests. Yet it also includes a strong ideological element rooted to a great degree in the history of the CCP and its adherence to “Marxism-Leninism”. CCP members are not simply admitted to the party. Courses in ideology are necessary. Years and decades are spent studying “Marxism”, “Leninism”, and dialectical materialism. This is done through the prism of a crude Stalinist distorted interpretation of Marxism and Leninism and is not how genuine Marxists study and apply the Marxist method. However, it is the analytical method of the CCP and shapes the language, logic and outlook of the regime at this stage. This has been re-enforced under Xi Jinping. His writings are permeated with this approach. The regime has a world view and a long-term vision of China’s role in it. The ‘Thought of Xi Jinping’ are now of course added to the curriculum.
It is also infused with very powerful strains of Chinese nationalism. The regime stresses that the development of China has finally allowed it to escape the “100 years of humiliation” following western and later Japanese imperialist intervention. Add a dose of “Confucius” thinking and it is all presented as the regime following the rich tradition of Chinese culture. Stamping his authority on the party Xi Jinping has concentrated more power in his hands than any other leader since Mao Zedung thus re-enforcing the bonapartist character of the current regime. After Mao Zedung it had a more collegiate element.
The importance of “ideology” for Xi Jinping and his faction in the party was emphasised by a speech he made in January 2013 to the Central Committee of the CCP on why the USSR collapsed: “Why did the Soviet Union disintegrate? Why did the Communist Party of the Soviet Union fall to pieces? An important reason is that in the ideological domain, competition is fierce! To completely repudiate the historical experience of the Soviet Union, to repudiate the history of the CPSU, to repudiate Lenin, to repudiate Stalin was to wreak chaos in Soviet ideology and engage in historical nihilism. It caused party organisations at all levels to have barely any function whatsoever. It robbed the Party of its leadership of the military. In the end the CPSU – a great party as it was – scattered like a flock of frightened beasts. The Soviet Union – as great a socialist state as it was – shattered into pieces.”
This clearly reveals the Stalinistic bureaucratic outlook Xi Jinping has of what the CPSU and USSR were at the time of its collapse. He inevitably misses crucial factors reflecting the character of the regime he heads. Ideology alone could not have prevented the collapse of the USSR, it did not, for example, in the German Democratic Republic. Short of a political revolution by the working class to overthrow the bureaucracy in the USSR there was no way out of the economic impasse and collapse that had taken place. The bureaucracy could not have overthrown itself and established a workers’ democracy. It therefore disintegrated and key sections morphed into a gangster capitalism, marking the end of the party and state as it was given the absence of any viable alternative existing.
The Chinese regime avoided the economic stagnation and collapse in part by taking the road it took in 1978. This allowed its ideological continuance and approach as its economy was going forward and progressing. Despite the slowdown that has taken place in recent years there is still a development taking place.
Does this mean the Chinese regime is advancing towards socialism? No, clearly not. It is adopting, thus far, the features it must to maintain the authoritarian, bureaucratic, bonapartist regime in power, within which it sees a road to develop China and to strengthen its position globally. Is its terminology merely rhetoric? Undoubtedly in part – yes. However, it is not only rhetoric. If it is the question is why use it? The ideological components espoused by the regime at this stage shapes the outlook and actions taken by this unique state form. It a necessary means through which maintain control of the party and through the party the state and society.
Corruption is an inevitable part of such a bonapartist regime compounded by the emergence of a capitalist class. Only a system of democratic workers’ control and management could eliminate it. Yet excessive corruption can undermine the regime socially and economically. At this stage this is not at the level of decay which corroded the former USSR in its last period when the bureaucracy had become an absolute fetter on the development of the productive forces. In China, the regime is still developing the productive forces but acts as a relative fetter on the development of the productive forces compared to what would be possible under a regime of real workers’ democracy, including democratic control, management and planning.
Xi Jinping has made combating corruption one of the corner stones of his legacy. The regime by its’ nature is corrupt but under Xi Jinping blows have been struck for both political and economic reasons. It is both a means of the state/party pushing back against the capitalist class and also can assist him and the party maintain a level of a social base and support.
Between 2012-21 4 million party members have been investigated for corruption, including powerful capitalists. Of those 3.7 million have been found guilty. 87% of those found guilty joined the party before 1992 and only a few of them since Xi became party leader. The number of capitalists in leading party position has also been reduced in direct contradiction to the policy of his two predecessors. Purges within the party have centred on those at more senior or middle ranking positions, popular with rank-and-file party members and amongst sections of the wider population.
The reason for the recent purges of the high command of the PLA leadership at this stage are not fully clear. It may involve corruption – the PLA was banned from business investments in 2016 when it was given an order to disinvest from business interests. Evidently a measure to prevent the military becoming too entwinned with the capitalist class and to be fully aligned with the party. As Mao put it in 1938, in different circumstances; “Our party commands the gun, and the gun must never be allowed to command the party”. It is also highly likely that the recent change in the PLA is linked to Xi Jinping declared objective of reuniting Tawain with China whether through invasion or other means.
It walks like a duck and quacks like a duck, but what is it?
The essence of the situation is that despite the emergence of a capitalist class the former state remains. It has direct influence, direction and in some cases ownership and control of the economy. A key point in the former USSR was the dissolving of the CPSU branches in the workplaces. That has not happened in China. They continue to function, passing on general directions and guidance. The CCP has a clear policy of testing out functionaries in various areas and provinces to measure their capacity. Various policies are applied and tested in different provinces. One of the most notable being between 2007/12. In Chongping, under the leadership of Xi Lai, more state intervention took place alongside foreign investment. In Gangdon, under Wang Yong, a fuller free market policy was introduced. Both states achieved substantial GDP growth of about 15%. Ironically Xi Lai was to be purged for corruption, but his programme was more closely allied to what Xi Jinping later has introduced at national level.
The conclusion from this analysis is that China is currently unique historically from the point of view of the class character of the state. Economically speaking, a unique form of state capitalism exists. One which is heavily directed by a powerful bonapartist state machine. The origins of the state machine lie in the bureaucratic, authoritarian deformed workers’ state that was established following the revolution in 1949. Despite modifications and important changes to it, the essence of the old state largely remains. It is neither fully capitalist, but neither is it fully a deformed workers’ state. A hybrid, a mix of elements of both, exist. Such a social characterisation is not alien to the natural world. In the past debates in the CWI some comrades accurately pointed to the evolutionary rarity of the duck-billed platypus. It is now considered to be a mammal. Yet it is a mammal with no stomach, or teeth, cannot lay eggs and has the features of a beaver, a shark, a duck and a reptile. It is an evolutionary aberration. Those who superficially declared China capitalist, pure and simple, followed the undialectical maxim that, “if it walks like a duck, if it quacks like a duck, it is therefore a duck”. Except it is not!
Yet a hybrid cannot continue indefinitely, although as has been seen it can last for a lengthy period. The process that has unfolded, like all ongoing processes, remains incomplete. The turn by Xi Jinping since he came to power could be reversed if the capitalist class, or powerful sections of it, come into a full confrontation with the party and state. And both party and state could split at a certain stage. The transition to a totally capitalist state will however also pose the question of the form it will take. A carbon copy of western imperialism is unlikely to unfold given the current unique situation and the features of Chinese culture and society.
What is clear is that the development of China, since the revolution, and especially over the last four decades, has only been possible because of the revolution and the particular and exceptional character of the state which emerged from it. To simply stick a mechanical, superficial label on it as “capitalist”, end of story, begs a question. Why, cannot and has not, such a development been repeated in other countries like India or Brazil? A cursory examination of such countries would rule this out. Or do the proponents of a pure capitalist China think such prospect is possible?
Who will copy who?
As China opened it was transformed into the manufacturing hub of world. The importation of technology and foreign investment for a period led the Chinese to copy what had been achieved in the western capitalist economies. Now it has surpassed that phase and is developing key sectors itself, which in many areas now are ahead of the west. It leads the way in green manufacturing and clean technology production, producing 80% of solar panels and lithium battery cells. Robotics, EV cars, investment in AI, and quantum computing all point in that direction. It is not an accident that Chinese cars are banned from importation into the US. The US motor industry fears it would be wiped out if they were, due to the superiority of Chinese models, especially EV. A Chinese bullet train uses magnetic force to lift the entire train above the tracks, while magnetic coils drive the train forward. On a recent test a bullet train surpassed its own record to reach 0-800 kmphIt in 5 seconds! Such developments would not have taken place without the current unique state regime. Who will now copy who now is the question.
China has expanded globally through the ‘Belt and Road’ project and vast investments including in Asia, Africa and Latin America. Does this mean that China is imperialist? Foreign policy is an extension of domestic. China undoubtedly has an imperialistic element. However, like the domestic unique form of state capitalism, its imperialism is not classic imperialism. It is an extension of the domestic hybrid form. The state can scrap old rules and make new ones as it judges necessary, influencing when, how, and in what firms can invest overseas, granting or denying specific approvals or licenses, or leveraging the financial system to serve as a national goal. For its own geo-political reasons, the Chinese regime has now floated the possibility of selective, conditional cancellation of the foreign debt in some neo-colonial countries.
At the same time, the domestic Chinese economy is rife with problems and potential crisis. The development which has taken place has its limits. Although there is a large domestic market, the regime is compelled to look to exports to try and mitigate the problem they have of overproduction and weaknesses of the domestic market flowing from relatively low wages etc. There is chronic crisis of youth unemployment which stands at 15.6% of 16–24-year-olds. (In the UK, it is 16.2% and throughout the EU 15.2%).
This is being re-enforced by the problems arising from AI. Since 2022, China has seen 10 million university graduate per annum. Given the AI tendency to replace entry level employment, the problem is being compounded by robotics being used in production (This is also a factor in the west).
The scale of debt in the provinces is potentially explosive. An estimated 50-90 million vacant housing units exist (although this is not generalised throughout China and is concentrated in certain areas including those planned to be developed).
The prospect of massive movements by what is now the largest working class in the world is inherent is the situation. Marx explained that capitalist society creates its own grave digger in the formation of the proletariat. The workforce in China is currently approximately 700 million. The industrial working class is approximately 260 million. Exploitation and conditions are brutal. The ‘996’ working week imposes harsh conditions – 9am until 9pm 6 days a week. Strikes, protests and other actions have repeatedly broken out and are a pointer to future upheavals. There is the division, often a class division, between those, often higher paid, who order, and those who deliver.
How workers organise during an upsurge of struggle is one of the many open questions that Marxists in China and internationally will need to be attentive to. Would workers struggle in part be channelled through the official state trade unions which are controlled by the CCP? Or could new independent unions or other organisations of struggle be formed or some combination of the two develop. These some of the issues that are uncertain.
Local protests and small uprisings have also broken out on issues relating to corruption and other issues. Other social problems are also surfacing. The aging population has led the regime to reassert “family” values, encouraging marriage and childbirth, attacks on “femboys” etc. There is an echo of Stalin’s image of the “ideal perfect” worker which is provoking opposition amongst sections of Chinese youth.
Yet, one thing is certain, the regime, through its development of the economy, has created the force and class that potentially could overthrow it at a certain stage. Economic growth has strengthened the regime, but opposition will not only develop in times of crisis. France 1968 showed that mass movements and revolutions against authoritarian regimes can develop when the economy is growing. How this will unfold and what will be the political consciousness and outlook of the working class and others in such battles at this stage is uncertain. It will only be clarified as events unfold.
So what alternative is needed?
It is significant that there has been the development of mainly student youth looking back to “Maoism” in opposition to the capitalist features that are present in Chinese society. Others have begun looking back to writings by Trotsky which are available to some extent in China. Both have suffered waves of repression by the regime. When workers move into struggle it is possible that their anger will be expressed in opposition to the “capitalists”. The party, or more likely sections of it, may try to balance in typical Bonapartist fashion between the classes involved in such battles.
It will be necessary for Marxists to be attentive to the demands and programme necessary for the Chinese revolution as it develops. At this stage, reflecting the hybrid features of the state, there are aspects of the programme needed to overthrow capitalism and also some features of the programme for the political revolution that were necessary in the former degenerated and deformed workers’ states in the USSR, Eastern Europe and China.
These would include demands for the election of officials subject to immediate recall, the right to organise, for free trade unions, a free media, democratic workers’ control and management in the nationalised state sector, for the renationalisation of the privatised sector and the nationalisation of key private sector companies as part of opposition to capitalism. The demand for the right to form political parties that support defend the planned economy and oppose capitalism is also relevant. Democratic demands will be crucial in the struggle against the regime, especially to combat sections of the capitalists who may hypocritically take up democratic demands and rights in opposition to the regime.
These are all important issues that Marxists will need to be open to explore as events develop in China. The huge country is destined to be central in the struggle for a world socialist revolution. An understanding of the special character of the current Chinese state is essential to prepare for the stormy events that will unfold. It is essential Marxists intervene without preconceived ideas of exactly how the revolutionary process will unfold. It is an unprecedented situation, and crude and rigid characterisations simply do not apply.