CPA - The Guardian

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 Communist Party of China (CPC) estimated that this process would take at least 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 “the building of socialism with Chinese characteristics”.

Then Vice Premier Deng Xiaoping visiting the NASA Space Centre in Houston, Texas, in 1979.

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, the 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.

As a result of these reforms, China over these decades has achieved tremendous successes. Material standards of living have grown by leaps and bounds. Poverty levels have come down sharply. In health, higher education, scientific research and technology development, China has moved ahead at a commendable rate. It has come a long way from 1978, when the gross domestic product, at current prices, stood at 364.5 billion yuan. By 2007, it had grown 68-fold to 25.1 trillion yuan. In 1978, the average annual disposable income of urban households was 343.4 yuan, while in 2007 it was 13,786 yuan, a 40-fold increase. For rural households, the increase was 31-fold to 4,140 yuan from 133.6 yuan. The country’s poor population was reduced from 250 million in 1978 to 14.79 million in 2007.

In the year 2008, GDP had increased by 9 percent over the previous year, grain output continued its increase for the past five years, per capita annual net income of rural residents increased by 8 percent while the per capita annual disposable income of the urban residents increased by 8.4 per cent.

China had topped the Olympic gold medal tally, displacing the US, in one of the most spectacularly and successfully organised Beijing Olympic Games in 2008. China is also host to the largest number of internet users in the world with more than 300 million users among whom 270 million connect through broadband.

The scientific achievements of China are displayed best by the space walk carried out by the Chinese astronauts abroad the Shenzhou 7 spacecraft, joining the country in a band of a select few. The speed with which the country had reacted to one of the most devastating earthquakes, in Wenchuan, and conducted comprehensive relief and rehabilitation activities also testify not only to the enormous strides of progress made by the country but also speaks volumes of its social commitment.

All these have been possible not because China “broke from the Maoist past” but because it developed on the solid foundations laid by the People’s Republic of China during the first three decades of centralised planning.

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 programs 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 said: “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 said: “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.

People’s Democracy, newspaper of the Communist Party of India (Marxist)

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