Article: What is Socialism with Chinese Characteristics?

In Chinese Civics & Socialism, Education by TechnoOwl

Marxism-Leninism is a Constantly Evolving Organism and Socialism with Chinese Characteristics is the Chinese sub-species of it by China for China

While a critique of Chinese Socialism must absolutely be examined, accepted if true, and rejected if incorrect, the way this practice has been carried out by and within sects of the Left (especially the Western Left) is extremely unconstructive, without merit or nuance, and objectively enabling of imperialist reactionary forces. What this refers to is the very apparent dogmatism of mono-national approaches (China is not the Soviet Union) to often be found deeply embedded within these discourses, and this is a problem which extends much further than just Socialism with Chinese Characteristics, it is a problem which has and continues to haunt the Left (Cuba is not the Soviet Union). It is thus of the utmost importance to confront this issue with honesty and humility; we must abandon dogmatism for it is counter-revolutionary, destructive, and a straight play into the hands of the imperialists.

What happened in 1978?

TL;DR: The collapse of the USSR and the Socialist Bloc weakened China to the point of concessions with the Americans. However, China did not become a complete puppet of imperialism as Deng Xiaoping successfully negotiated with the Americans to allow China to gradually liberalize its markets, unlike the shock therapy treatment that was done with the sudden collapse of the USSR. China maintained complete control over numerous SOEs and continued to maintain its dictatorship of the proletariat as opposed to a dictatorship of the bourgeoisie (or more commonly known as liberal democracy). this would keep the comprador Bourgeoisie forces from influencing its political policies + stronger bargaining power (allowed China to get better deals) as it already had some domestic industry/capital accumulation from the Mao era.

There is often a great misunderstanding of the events which took place in 1978, the year in which the CPC adopted a new policy, that of “opening up”. This question is often approached with an extreme level of arrogance and without a proper understanding or examination of either the material conditions which led to this decision, why this decision was taken, or what this decision entailed and continues to entail. We must then first explore what led to this radical new road.

Leonid Brezhnev was general secretary of the CPSU in 1978, he had been an opportunist who masked his revisionism through a thin aesthetic veil of “anti revisionism”{1[‘}. Brezhnev proceeded with the revisionist reforms which weakened socialist central planning beginning with the 1965 reforms which strengthened the importance of profit in the planning system{2}, and weakened collective control over economic development{3}. The effects of capitalist restoration had already begun to make themselves evident already in 1965{4}, but only in 1978 did the situation become grave: economic slowdown was intensifying, the black market expanded like never before, and widespread corruption accompanied this. Even if the sino-Soviet split had severed many ties, the USSR, even if revisionist, still acted as a deterrent for imperialism which would help the PRC if it came under attack (just like the USSR did with DRA and the Viet Cong). It was clear to the CPC the future of the USSR was extremely uncertain, and if the PRC wanted to survive, it had to be fully prepared for the worst-case scenario, which required:

  1. The rapid achievement of some form of self-sustainability (This was an especially pressing question as much of national resources had been drained from the failure of the Great Leap Forward)
  2. A much calmer relationship to the imperialist West

It would be an understatement to say that the Great Leap Forward was a chaotic failure (the reasons for this are far beyond the scope of this piece), it had drained the majority of national resources and had produced somewhat minimal results, continuing this path would mean economic development, but at an extremely bad pace{5}. The PRC thus required rapid development, but the current circumstances it was in would provide no such thing: the CPC needed a radically new line if it wanted to survive a crisis like the fall of the USSR.

These are the conditions which led up to the re-examination and the rebirth of the Chinese road to socialism, so now the question becomes: why Socialism with Chinese Characteristics (we shall focus specifically on the “opening up” policy) The center of Deng Xiaoping theory{6} rests with imperialism. Under normal conditions a comprador Bourgeoisie is installed which avidly fulfills the interest of imperialist capital, disregarding national interests, this is one of the causes for the exceptional destructiveness of imperialism. The second reason is that generally there is effectively no break between colonial and imperialist domination, this is a severe handicap to the subject nation’s bargaining power which results in a vigorous intensification of the brutality of (“unequalness”) unequal exchange. The PRC had methods to overcome both these issues, so it took a risky bid, could imperialist capital forces hypothetically be used for national development?{7}

The PRC was controlled by the CPC, the organ of people’s power which was supported by the Chinese people and which the Chinese people were ready to defend, no comprador Bourgeoisie could be installed under such favorable conditions: this meant that the PRC would not accept every incredibly unfavorable deal or proposal which was thrown at them. Some domestic industry had also been developed, this reduced reliance on imports which afforded the PRC an increase in bargaining power. The combination of these two things meant that unlike the majority of socialist countries that became victims of imperialism, the PRC managed to achieve substantial development and to pursue national and popular interests instead of complete subjugation from imperialism{8} (and that also meant the PRC had better, less hostile relations with the capitalist world). China’s construction of socialism was not destroyed! (even if severely retreated and damaged)

What must however be noted is that there would be no Deng if there was no Mao, there would be no fruitful harvest if first the terrain had not been sown by Mao who built much of the early infrastructure that allowed China to negotiate this deal.

Why was the invisible hand let in then?

TL;DR: China was not a self-sufficient nation and needed to trade with others, after the fall of the Socialist Bloc, the only countries to trade with were Western Capitalists. The problem was that Western imperialist nations do not trade and blockade anyone not conforming to their ideals unless sufficient concessions were made. Some goods at horrible prices were better than no goods at all. Extremely tense relations with imperialist powers pre-1980s had a huge drain on the economy (which worsened the black market)

In the above section, we discussed the new policy of “opening up” which accompanied the CPC’s new, radically diverging initiative; this however was only 1 of the 2 major changes enacted by the PRC’s new road. Deng Xiaoping Theory “the new road” also included market reforms, again one must not reactively make a decisive judgment, under certain conditions a retreat one step back is necessary today so that tomorrow we may take 2 steps forward. Having said this, we can now proceed with the discussion.

With the continuing process of capitalist restoration and national destruction that was occurring within the USSR, a new question urgently had to be answered: How did this happen, and how can the CPC avoid the same fate for the PRC? At the heart of the first inquiry’s answer was the Black market. Within the Soviet Union the manifestation of a black market, resulting from unmet social demand for consumer goods, established a class of petty-Bourgeois and Bourgeois individuals who objectively had interest against collective property and socialist planning, and for private property and the market. This class did not merely exist, which would “only” mean that some of these individuals would eventually infiltrate the party, leading to long-term slow deterioration of the party, but this class also had the funds to pursue its aims, allowing this class to increase its forces within the party through bribery. This is what caused the onslaught of revisionism within the party, and had to absolutely be avoided by the CPC, a road it was already heading in.

It would simply be dishonest to say that this lack of consumer goods was an inherent problem of the socialist planned economy, the cause for this lack is not to be found with some eternal ever-present problem of socialism, but with the acutely unfavorable conditions, the Soviet Union was facing. Like I said before all Western countries and their allies did not trade with and blockaded major economic relations and the Soviet Union was not a self-sufficient nation. This was also coupled with Cold War Militarism which the Soviet Union, unfortunately, bought hook line and sinker into with the Americans who got the Soviets to increasingly drain their resources on military expenditures. Essential goods obviously being the priority, a lack of luxury consumer goods was to be expected with this draining and no trade to cover the gap. This was heavily discussed and finally incorporated into the CPC’s response.

The combination of these problems would lead to the cascading effects of the fall of the Soviets and the disintegration of the socialist bloc could not maintain trade to the degree necessitated. The PRC would have to trade with capitalist nations.

The CPC addressed all of these issues in one fell swoop, it would install markets to:

  1. Better relations with the capitalist world (tactical concession)
  2. Act as concessions so that imperialist core capitalist nations (the desired ones) may trade needed commodities with the PRC. Placating the international bourgeois from being aggressive and imperialistic towards china.
  3. Inefficient distribution is superior and always preferable to no distribution, contesting this is one of the most reactionary utopian idealist positions one can hold.
  4. China can finally accomplish what Marx said about build up productive forces with a Socialist Market Economy through vibrant trade and industrial development.

(Article about what Lenin said about Markets) It is essential to highlight the fact that within Chinese & Marxist scholarship “the market” does not signal the same concept as western capitalism, it does not mean the unregulated Laissez-Faire or the liberal system of distribution western scholars refer to when they use the word, but rather, it refers to a semi-planned heavily regulated market. The idea of a Socialist Market Economy is not a new idea created by China, Marx himself talked about how civilization must go through a period of Market Economics controlled by the state before transitioning to a completely centrally planned economy. This transition was to occur only after the productive forces of the country had been sufficiently built up over trade and industrial development. The Soviet Union tried to go through this period with their “New Economic Policy” initiative from 1921 to 1928. However, some argue that this was nowhere near enough time to develop its productive forces and without trade with the industrialized countries it was handicapped. China has now had 40 years to build up its productive forces, becoming the largest trading nation in the world and having one of the most advanced and robust industrial development periods of any country in the world.

Why does the invisible hand continue to have a place now?

TL;DR: Concessions and China is not ready yet to transition away from a market economy. China continues to not be a self-sufficient nation. Rising tense relations with America are returning as talk of a new Cold War abound and America spreads its propaganda war against China however, unlike with the Soviets with Chinese market access the international bourgeoisie is largely placated, and benign. China is heavily integrated into the world economy, something the Soviets never had. Resulting in capitalist companies and the international bourgeoisie choosing profits and market access over politics and ideology every time. The old saying “Keep your friends close, but your enemies closer”.

In the book “The Governance of China” President Xi dedicates a section entitled “The “Invisible Hand” and the “Visible Hand” to the role of the “market” (invisible hand) within the Chinese economy, this brings forth the question: why does the market still have a significant role in China?

(Again to understand this extract we must realize that the Chinese cultural situation is different, the concept of “the market” in Chinese scholarship is much closer to a “socialist semi-planned economy”, or “socialist market economy”.

The reason for the continued presence of the market within the PRC’s economy is that fundamentally, the situation the PRC faces today is the same as the situation it faced when it originally installed market elements in the 1980s. China is much more advanced than it was 40 years ago, however, this does not mean it has reached self-sufficiency yet, this is addressed in the newly implemented Dual Circulation & China 2035 policy plan which seeks to finally close that gap and eventually transition China back towards a planned economy. It is also very clear that tensions between the PRC and the imperialist countries in the West are very much alive, the expanding propaganda war which has significantly damaged views of China in the West for example in relation to Xinjiang and Hong Kong{10}, the PRC’s abysmal rhetoric treatment by the West during the COVID-19 pandemic, and intensifying economic warfare{11}, all confirm this. It’s clear then that tensions will increasingly get worsened, and perhaps even lead to an open military conflict, if the PRC stopped its concessions{12}. These are the concrete conditions that objectively require the PRC to lie low and prolong its retreat, and not some imaginary simply: “a revisionist tendency”.

Do not be fooled however, modern Socialism with Chinese Characteristics is far from perfect or even optimal, the proletariat’s blade requires sharpening and constant refinement this is true whether it is anti-corruption campaigns, economic reforms, or cultural revolutions. Socialism with Chinese Characteristics is a constantly evolving & improving thing, this however can only be done through well-thought-out nuanced (and genuine) criticism.

The Future of Socialism with Chinese Characteristics (2020-2040)

TL;DR: The relative decline of American world leadership and control over world markets (which will not change under Biden) and China’s build-up of productive forces over the last 40 years will allow China to shift back towards a more state-planned economy over the next 20-30 years with the Dual Circulation, Made in China 2025, & China 2035 Policy Plans which focus on consolidating China’s domestic markets and strengthening self-reliance on key industries, which by 2035 will make it completely capable of self-sufficiency in addition to achieving a world leadership position.

President Xi has led the largest restructuring of the PRC and the CPC since the 1980s reforms for “opening up”. He has restructured how the Chinese military operates, streamlining its operations as well as modernizing its techniques, tactics, and equipment{13}. He has also restructured how the government functions and repositioned the relationship of the CPC and how it works with the Civil Bureaucracy. His iconic anti-corruption crackdown has purged many of the opportunists and revisionists from the government, the same people who would be responsible for the destruction of the USSR.

As stated in the Made in China 2025, Dual Circulation, & China 2035 Policy Plans, China plans to consolidate its domestic market, making the domestic market the primary driving economic force with international trade just being supplementary and extra {14}. This will be done by China achieving self-reliance on key industries like IT & software, Chip Set Manufacturing, Industrial internet, agricultural technology among several other industries. {14}{15}

Alongside these other changes going on include China returning rural communities back to being Socialist communes and collectives. With almost 50% of rural communities returning back to this format so far {16}. Shenzhen, a bastion of everything that made up the “reform and opening up” period announced that they will be resettling 60% of its population into public housing units by 2035 {17}. This is also related to how Xiong’An which is an up-and-coming Master Plan community built just outside Beijing that will be purpose-built with a ban on all real-estate trading. All residential housing will be state-owned public housing. Xiong’An is expected to become a demonstration city for how all future residential construction projects will be in this new coming era {18}.

The Chinese government is also expected to expand the role of the state sector which currently only contributes 28% of China’s GDP to a majority position by 2035. In July 2020 the Central Comprehensively Deepening Reforms Commission approved a three-year plan to enhance the role of state-owned enterprises (SOEs) in China’s economy as it faces fallout from the coronavirus. This will include expanding preference stock schemes, employment shareholding schemes, and new state capital investment and operation platforms. {19}. They also plan on restructuring the relationship of the private sector and SOEs, allowing SMEs (small & medium-sized enterprises) to continue operating as usual but businesses that need large investments to grow and become regional and national brands will need to cede more and more shares and equity to SOEs in various fields, creating a feeder system that will eventually buy out all private-owned big corporations into the state sector. Some commentary out of China has said that:

The private sector had completed its “historic task” in helping state-owned companies to develop and that it was time for it to start “fading away.”

Author Wu Xiaoping

This is because like mentioned above the Chinese government has started shifted focus from promoting the private sector to strengthening the state sector More reading on this can be found here and here.

Conclusion

If the essence of Socialism with Chinese Characteristics were to be captured in one phrase, it would be: “Let us embrace the spirit of the Bolsheviks and develop creative applications of Marxism-Leninism & Maoism for each nation!{20}”

Let us combat ultra-leftism, a reactionary idealist utopian mentality that rejects material conditions{21}) which weakens revolution and corrodes the march to the triumph of communism, while also adequately critiquing and commending the Chinese road so that the socialist cause is ever emboldened. As comrade Xi Jinping said:

“As we stand now, seeking truth from facts means that we should clearly understand our basic national condition, that is, our country is still in the primary stage of socialism, and will remain so for a long time to come. When advancing reform and development, and formulating guidelines and policies, we should do everything in line with this basic national condition. Any tendency to pursue quick success regardless of objective conditions and timing should be avoided, and any outdated or complacent ideas and actions which do not conform to reality, or which neglect fundamental changes of reality, should be corrected without exception”

Socialism with Chinese Characteristics was never and still is not about revisionism as some vulgar dogmatists might contend, it is the Chinese road which is most fit for the material circumstances of the PRC. If a strategic retreat is what the Chinese people require for their future liberation, then we must support them!

Footnotes & Sources

  1. https://revolutionarydemocracy.org/archive/BlandRestoration.pdf
  2. Let us consider profit, one of the economic instruments of socialism. A considerable enhancement of its role in the socialist economy is an indispensable requisite for cost accounting”. (Editorial: “Economic Policy and the Work of Communism”, in: “Pravda” (Truth), January 14th., 1966, in: “The Soviet Economic Reform: Main Features and Aims”; Moscow; 1967; p.11).
  3. “A serious shortcoming of industrial management is that administrative methods have superseded economic necessity… The powers of enterprises with regard to their economic activity are restricted. The work of enterprises is regulated by numerous indices which restrict the independence and initiative of the personnel of enterprises, diminish their sense of responsibility for improving the organization of production… It has been found expedient to put a stop to excessive regulation of the activity of enterprises, to reduce the number of plan indices required of enterprises from above.” (CC, CPSU: Decision “On Improving Management of Industry, Perfecting Planning and Enhancing Economic Incentives in Industrial Production”, in: “The Soviet Economic Reform: Main Features and Aims”, Moscow; 1967; p.147).
    “What was not made clear in these statements was that the “economic reform” did not merely reduce the number of “indices” handed down to enterprises by the state “planning authority”: it transformed the remaining “indices” from directives, binding on the enterprises, to”guidelines” which the enterprises could follow or not, as they chose.”Evsei Liberman, Professor of Engineering Economics at the University of Kharkov and the principal architect of the “economic reform” expressed the true position with characteristic blunteness: “From the center, each enterprise should be given an aim” (E.G. Liberman: “Planning Industrial Management and Material Stimuli for its Development”, in: “Kommunist” (Communist), No. 10, 1956, in: M.E. Sharpe (Ed.): op. cit., Volume 1; p.32).
  4. “In introducing the “economic reform” in September 1965, Prime Minister Aleksei Kosygin drew attention to a slowdown in the rate of growth of the productivity of labour, which had occurred in recent years: “It should be said that in recent years the volume of the national income and industrial output per ruble of fixed assets has declined somewhat. The rates of growth of labour productivity in industry… have slowed down somewhat in recent years”. (A.N. Kosygin: “On Improving Industrial Management, Perfecting Planning and Enhancing Economic Incentives in Industrial Production”, in: “Izvestia” (News), September 28th., 1965, in; M.E. Sharpe (Ed.): Planning, Profit and Incentives in the USSR”, Volume 2; New York; 1966; p.””expressed as a percentage of the total value of production assets, showed a consistent decline in the years prior to 1959: 62.6% 1960: 61.6% 1961: 60.5% 1962: 58.2% 1963: 55.0% 1964: 54.7% 1965: 53.2% (T.S. Khachaturov: “The Economic Reform and Efficiency of Investments”, in: “Soviet Economic Reform: Progress and Problems”; Moscow; 1972; p. 158). Tigran Khachaturov, a specialist in investment efficiency, describing this ratio as “…the main indicator of efficiency for the national economy”, (T.S. Khachaturov: ibid.; p. 158) commented: “A decline of this indicator during the seven-year period (1959-65) speaks about the existence of unfavourable phenomena in the Soviet economy”. (T.S. Khachaturov: ibid.; p. 158).”
  5. In 1964 81.7% of the population was rural while in 1978 82.1% of the population was rural, over 12 years an increase of +0.4% (https://data.worldbank.org/indicator/SP.RUR.TOTL.ZS?locations=CN)
  6. It is essential to note that the reason Deng is not considered the 6th head, is not because he was not a Marxist, but because his developments are not universal. Deng Xiaoping theory is a creative application of Marxism-Leninism [-Maoism] to the specific conditions of China, specially crafted for Chinese, and not a theory that can or should be applied to all nations pursuing. The very existence of the USSR proves this (what caused the downfall of the Soviet Union was fundamentally not having access to the developments of Marxism-Leninism-Maoism)
  7. As we have seen with the extremely rapid development of the PRC, which is certainly complemented by socialist rationally planned control of the commanding heights of the economy, this was a successful gamble. In 1978 82.1% of the population was rural, while in 2015 only 39.7% of the population was rural. In 1992 71.8% of the population, which when compared to 1978, also a 12-year gap, a difference of -10.3% (https://data.worldbank.org/indicator/SP.RUR.TOTL.ZS?locations=CN)
  8. https://www.workers.org/2015/07/21101/#.WXOlQtPytsM
    https://www.trotskyistplatform.com/workplace-safety-now-better-in-china-than-in-australia/
    https://www.forbes.com/sites/mitchfree/2013/07/11/held-hostage-entrepreneurs-uneasy-over-chinese-govt-inaction/#2431f5463de4
    https://www.statista.com/statistics/235258/average-working-hours-of-migrant-workers-in-china/ (8.8 hours is 0.8 hours more than the average, 8 hours)
    https://www.travelchinaguide.com/essential/businesshour.htm#:~:text=The%20regular%20working%20time%20generally,or%20policy%20in%20different%20cities.
  9. https://nintil.com/the-soviet-union-military-spending/
  10. https://www.pewresearch.org/global/2020/04/21/u-s-views-of-china-increasingly-negative-amid-coronavirus-outbreak/
  11. https://theweek.com/articles/931121/wechat-next-battle-uschina-trade-war
    https://www.theverge.com/2020/5/13/21257675/trump-extends-huawei-ban-may-2021-china-us-android-google-telecom
    https://www.wsws.org/en/articles/2020/07/18/trad-j18.html
  12. Peaceful coexistence is revisionist utopianism; the time for international conflict between the socialist and capitalist block, however it is simply foolish to pursue it indifferently to the real material conditions we are currently facing
  13. https://news.cgtn.com/news/2020-08-01/Graphics-China-s-military-reform-in-past-5-years–SceNvpfC92/index.html
  14. https://www.globaltimes.cn/content/1205131.shtml
  15. http://en.people.cn/n/2015/0522/c98649-8895998.html
  16. https://www.sixthtone.com/news/1004505/how-village-co-ops-are-remapping-chinas-rural-communities
  17. https://www.caixinglobal.com/2020-09-03/pricey-shenzhen-aims-to-put-60-of-its-people-in-public-housing-101600958.html
  18. https://www.brookings.edu/opinions/a-brave-new-world-xis-xiongan/
  19. https://www.scmp.com/economy/china-economy/article/3092339/china-approves-plan-boost-prominence-state-firms-despite
  20. https://www.youtube.com/watch?v=GEd_jkyqg70&t=2s
    https://www.youtube.com/watch?v=0RoJ42SGyS8
  21. Utopianism is a form of idealism as it is concerned with abstract ideals instead of what is concretely possible at the time, in the found conditions