At the Ministry of Foreign Affairs press conference on 19 October 2021, Foreign Ministry Spokesperson Wang Wenbin made an important point about how the US government, via such measures as its forthcoming ‘Leaders’ Summit for Democracy’, is attempting to use its own specific definition of democracy as a means of inciting division and confrontation.
Democracy is not a slogan. One should not use “democracy” as an excuse to cover up one’s own incompetence and failure in governance, and let its people pay a heavy price for rampant racial discrimination, enlarging social divide and widening wealth gap.
Democracy is not a dogma. One should not try to turn democracy into Coca-Cola, which tastes the same across the world with the syrup produced by one country, and deprive countries of the right and freedom to explore their own democratic path, in total disregard of the diversity of history, culture, social system and development stage of countries.
Democracy is not a pretext for imposing hegemony. One should not use ideology and values as tools to oppress other countries and advance geopolitical strategy, incite division and confrontation in the international arena and push the world back to the dangerous Cold War era under the banner of democracy.
What is urgently needed now is not a so-called “summit for democracy” or establish an “alliance of democracies”, but efforts to strengthen global coordination and cooperation on the basis of observing the norms governing international relations represented by the UN Charter and jointly address global challenges such as the ongoing pandemic and climate change, and advance the cause of human progress.
Provoking estrangement, division and confrontation in the name of democracy is an act of trampling on and betraying the democratic spirit and values. It will only bring turbulence and chaos to the world and undermine peace and development of mankind. This is bound to be resisted and opposed by the international community.
This article by Friends of Socialist China co-editor Danny Haiphong, originally published in CGTN, exposes the growing contradiction in the US’s approach to relations with China. While some progress has been made in the diplomatic sphere in recent weeks, the CIA is pursuing an opposing and dangerous agenda.
In recent weeks, high level officials from the U.S. and China have held in-person meetings. Both sides have reported bilateral discussions thus far to be productive. A tentative agreement exists between presidents Joe Biden and Xi Jinping to meet virtually before the end of 2021. China’s long-time offer of dialogue with the United States appears to have been accepted, at least in the short-term.
However, a paradox remains in the U.S.’s approach to China. The release of Huawei CFO Meng Wanzhou from an unjust house arrest has indeed opened doors to mutual exchanges that were once shut. But the United States’ political system is not a unified body. Key institutional forces remain opposed to stronger bilateral ties between the U.S. and China. One of those forces is the Central Intelligence Agency (CIA).
We are republishing this useful article by Gary Wilson in Struggle for Socialism analysing the significance of recent revelations that US special operations and support troops have been secretly operating in Taiwan for the last year, in violation of international law.
Unless the U.S. government promptly removes its military forces from China’s Taiwan province, China may send in its own military force to defend its territory, declared an Oct. 8 editorial in Global Times, the Communist Party of China’s daily newspaper.
Global Times explains: “We must resolutely define the deployment of U.S. troops in Taiwan as an ‘invasion.’ The mainland has the right to carry out military strikes against them at any time. We will not make any promises over their safety. Once a war breaks out in the Taiwan Straits, those U.S. military personnel will be the first to be eliminated. Through such a declaration, we must make Washington understand that it is playing a dangerous game that is destined to draw fire onto itself and it is risking the lives of young U.S. soldiers.”
We are pleased to republish this report in Xinhua marking the completion of a high-speed railway linking China and Laos. The railway is an example of China’s win-win approach to relations with foreign countries and its support for sovereign development.
The streamlined “China-standard” bullet train, or electric multiple unit (EMU) train, for the China-Laos railway arrived at the newly built China-Laos Railway Vientiane Station on Saturday.
The EMU train was officially delivered to the Laos-China Railway Co., Ltd., a joint venture based in the Lao capital Vientiane in charge of the railway’s construction and operation, at a handover ceremony held in the station with the attendance of Chinese Ambassador to Laos Jiang Zaidong and Lao Minister of Public Works and Transport Viengsavath Siphandone.
We reproduce below an article by Xi Jinping titled ‘To Firmly Drive Common Prosperity’, published in Qiushi, the bi-monthly theoretical journal of the CPC. Based on Xi’s speech at the 10th meeting of the Central Financial and Economic Affairs Commission on 17 August 2021, the article provides indispensable insight regarding the concept of ‘common prosperity’ and its centrality to China’s overall strategy. This English translation by Adam Ni first appeared in China Neican on 17 October 2021.
Since the start of reform and opening up, our Party has thoroughly summarised both positive and negative historical experiences. We realised that poverty is not socialism; we broke the shackles of the traditional system; we allowed some people and regions to get rich first; and we promoted the liberation and development of socially productive forces.
Since the 18th Party Congress [in November 2012], the Party Central Committee has grasped the new changes to [China’s] stage of development and placed greater importance on progressively achieving common prosperity for all people. It has promoted coordinated regional development and taken effective measures to safeguard and improve the livelihood of the people. We have won the tough battle against poverty, completed the building of a moderately prosperous society, and created favourable conditions for promoting common prosperity.
We are very pleased to publish this original article by Michael Dunford, Professor Emeritus of Sussex University and currently Professor at the Chinese Academy of Sciences. Professor Dunford provides a detailed theoretical, empirical and historical treatment of the key Chinese political concept of common prosperity, outlining its evolution and interpretation through the various phases of the history of the People’s Republic since 1953. Its publication is particularly timely. On 16 October, Qiushi, the main theoretical organ of the Communist Party of China, released the full text of an important speech by President Xi Jinping, delivered in mid-August to the party’s Central Committee for Financial and Economic Affairs, in which the Chinese leader forcefully outlined that now is the time to boldly advance the common prosperity agenda.
In China the idea of common prosperity dates back to 1953. After 1979 China chose to let some people and places get rich first to accelerate economic development, with Deng Xiaoping arguing that public property could prevent social polarization. The result was extraordinary sustained economic growth but at the expense of large increases in urban-rural, regional and social inequalities in income and wealth themselves associated with the growth of private capital. In 1999 the Communist Party of China started to address urban-rural and regional disparities in the name of common prosperity, while under the leadership of Xi Jinping the emphasis on common prosperity has increased markedly alongside domestic goals relating to innovation, improved governance and ecological and spiritual civilization. Starting in 2020 this course has seen strong government action against the disorderly expansion of private capital, monopolies, speculation and the costs of privately provided education, housing and potentially health as well as the establishment of a demonstration zone in Zhejiang province to explore ways to address uneven development and reshape the primary, secondary and tertiary distributions of income.
1 The meaning of common prosperity
On 17th August 2021 in a meeting of the Central Committee for Financial and Economic Affairs ( 中央财经委员会) Chinese President Xi Jinping called on China to promote common prosperity (material, ecological and cultural) in a context of high quality development (在高质量发展中促进共同富裕- zài gāo zhìliàng fāzhǎn zhōng cùjìn gòngtóng fùyù). In circumstances in which indigenous innovation is desired, a new industrial revolution is on the horizon and ecological civilization construction is designed to address environmental challenges, high quality development of the productive forces remains and will remain of vital importance, alone enabling China to advance from an upper middle to a high-income country. However the combination of high quality development with a quest for common prosperity and the increasingly frequent use of this term in defining China’s development direction are particularly significant and increasingly seen as mapping a new phase in China’s path to socialism.
The phrase ‘common prosperity’ first appeared in an article in the People’s Daily on 25th September 1953. On 12th December 1953 it appeared in the headline of a People’s Daily article entitled ‘The Path of Socialism is the Path to Common Prosperity’ (社会主义的路是农民共同富裕的路). Advanced as a step in the path to rural mutual aid, cooperatives and collectivization, collective prosperity was associated with the holding of resources in common. Just four days later the Communist Party of China (CPC) released its ‘Resolution on the Development of Agricultural Production Cooperatives’ (关于发展农业生产合作社的决议). Drafted under the chairmanship of Mao Zedong, it invoked ‘common prosperity’ as a goal of China’s socialist construction.
In the late 1970s the term was often used by Deng Xiaoping to characterize socialism (Deng, 1999, 2014 ). Also in the 1980s it was frequently used in his insistence that common prosperity (entailing the avoidance of polarization) and the predominance of public ownership are fundamental socialist principles.
At the end of the 1970s, however, an earlier association between common prosperity and egalitarianism (平均主义 平均主义 – píngjūn zhǔyì) was rejected. On 15th April 1979 the People’s Daily carried an article entitled: ‘A Few Getting Rich First and Common Prosperity (一部分先富裕和共同富裕). Increasingly, it was argued that to speed up the development of the productive forces, achieve the four modernizations and accelerate the arrival of common prosperity, some people and some places should be allowed to get rich first, with others getting rich later. Deng Xiaoping’s words repeated on a number of occasions are particularly important:
In short, predominance of public ownership and common prosperity are the two fundamental socialist principles that we must adhere to. The aim of socialism is to make all our people prosperous, not to create polarization. If our policies led to polarization, it would mean that we had failed; if a new bourgeoisie emerged, it would mean that we had strayed from the right path. In encouraging some regions to become prosperous first, we intend that they should inspire others to follow their example and that all of them should help economically backward regions to develop. The same holds good for some individuals (Deng, 2014 -b).
In the capitalist mode of production, the means of production and exchange are privately owned. In societies in which the capitalist mode of production predominates, private ownership derives from multiple (often corrupt) processes of accumulation by dispossession, and the concentration and centralization of assets and wealth in the hands of a small share of the population. This concentration of property in the hands of a class of private owners is the root cause of the gap between the rich and the poor. Although these mechanisms can lead in the direction of monopolies, the concentration and centralization of capital derive from market competition which gives rise to unending turbulence. Measures preventing and addressing the emergence of monopoly power do help. However anti-monopoly measures do not prevent the polarization of wealth and income (in the sense of a large and widening gap between rich and poor), as the accumulation of capital in competitive conditions (especially where returns to scale are increasing) is self-reinforcing.
Capital-centred societies have created considerable material wealth, and the material living standards of working people have increased significantly, especially in the post-war Golden Age when the income of low-income groups grew faster than those of high income groups. This outcome was however a result of an economic and political compromise, deriving from the struggles of working class people and their social movements and political parties at home, and the challenge of Communism. In that era trades union wage bargaining saw real wages increase steadily with productivity growth, while welfare states/social security co-existed with the capitalist mode of production (combined in many cases with significant state capital). Welfare funded principally out or taxation paid by the wage earning classes provided citizens with significant minimum rights and life guarantees. This era was however exceptional, and since the 1970s the competitive accumulation of private capital along with governments that principally serve capitalist interests are the main reasons for polarization and the expanded reproduction of income and wealth gaps in capitalist countries. As wealth and income accumulate at one end of the spectrum, non-owners, comprising the great majority of the population, are denied similar rights due to extreme self-reinforcing disparities in the ownership of private assets.
After the 1970s western capitalist societies moved in the direction of marketization, privatization and internationalization and also in the direction of financialization. Alongside the profits of capitalist enterprises, the owners of marketized land, natural resources and natural monopolies acquire economic rents. These rents are associated with monopoly positions, scarcity and differential advantages that cause the market values of the goods and services involving their use (land uses) to exceed their prices of production. In capitalist economies rents accrue to real estate capital and are also financialized: assets are pledged as collateral for financial sector loans, owners incur debts, and revenues on rent yielding assets are transformed into compound interest payments. Credit drives asset price inflation, while debtors unable to repay are expropriated, leading to a greater concentration of wealth in the hands of the financial sector. A relative increase in rentier and financial incomes and asset values diverts income away from real production and consumption, while in the absence of effective regulation capital market liberalization permits capital flight, tax evasion and money laundering. In financialized economies debt grows faster than the real production of goods and services, and financial and real estate interests seek leverage over money, credit creation and quantitative easing. In these conditions inequality increased dramatically.
The aim of socialism is people-centred rather than capital-centred development. The principal goal is to orient economic and social activities towards the production of goods and services that are socially useful, increase social well-being and enable all human beings to realize their potential and live happy and fulfilling lives (common prosperity). Although the material conditions for common prosperity (which itself involves an evolving and not a fixed standard) include development of the productive forces (although not the one-sided pursuit of GDP growth) the avoidance of polarization requires the development and improvement of socialist public ownership which also contributes to the development of the productive forces and national strength. Deng Xiaoping made this clear on repeated occasions. ‘As long as public ownership occupies the main position in our economy, polarization can be avoided,’ he said (Deng, 2014 -a, p. 149). In the public-owned socialist economy in the primitive stage of socialism, distribution should also depend on labour contributions, itself a way of avoiding social polarization. Contributions however vary. As a result incomes will vary but the differences should not be large. At the same time public ownership limits the possibilities of securing very high incomes as a result of personal possession/ownership of means of production and the exploitation of labour by capital (Wei, 2019) as well as of real estate and financial assets.
The implication is that the eventual liberation of the working classes, realization of realm of freedom and comprehensive human development require the replacement of private by collective ownership of economic assets and shared rights to and enjoyment of the fruits of their use in a communist society. The path to communism involves however a series of steps. These steps include a socialist stage (of to each according to his/her contribution) itself evolving from primitive to successively higher levels.
At present however common prosperity is not equality. Not only are people’s living needs differentiated requiring multi-channel supply systems. At the socialist stage (even after the elimination of private ownership of the means of production and exchange) the development of the productive forces remains limited. In the case of China it needs to advance socialist modernization, upgrade, innovate and escape the model of the recent past in which it imported high-end goods and exported low end assembled products. In this situation investment in skills and in indigenous science, technology and innovation are essential and will be associated with a distribution of rewards according to the quantity and quality of labour contributions. At present differences that are justified are moreover widely accepted. Differences that are not are widely condemned. Differences need not be large. In this new stage however the view that one ‘should give priority to efficiency with due consideration to fairness’ (Jiang Zemin, 2002) is decisively giving way to a concept of shared development in which what is produced contributes to material, ecological and cultural needs, excessive primary income and wealth gaps are closed, distribution is reasonable and all develop, building on China’s success in eliminating extreme poverty
The realization of common prosperity echoes the construction of a community of shared future for mankind: the establishment of an international division of labour has created a world in which developed countries with their relatively advanced industrial and military technologies and their financial power extract value from developing countries reproducing a global divide between the rich and the poor. Common prosperity as a national ambition has a counterpart in a global demand for shared development and common prosperity.
2 China’s path
The identification of a new path of common prosperity is a new step in the evolution of the new China. In 1949 China was virtually the poorest country in the world. In the next 30 years it grew at an average rate of 6.3% per year. China remained a low income country, but according to The World Bank (1981, p. 101), 1979 life expectancy of 64 was higher than the average of 51 for low income countries and 61 for middle-income countries, adult literacy stood at 66% compared with 39% in low income countries and 72% in middle income, while net primary school enrollment (93%) was just short of that for industrialized countries (94%). China’s population had nearly doubled. In the words of a glowing 1983 World Bank Report ‘China’s most remarkable achievement during the past three decades’ was to have made ‘low-income groups far better off in terms of basic needs than their counterparts in most other poor countries’ due to priorities attached to food, education and health. The authors of the report concluded that with the right policies China’s ‘immense wealth of human talent, effort and discipline’ would enable it ‘within a generation or so, to achieve a tremendous increase in the living standards of its people’ (The World Bank, 1983).
In the early 1970s after the visit of US President Richard Nixon to China a US embargo ended and China started to acquire western technologies. In 1979 it embarked on reform and opening up leading to historically unprecedented economic growth. As industrialization, urbanization and informatization advanced, China grew on average at 9.3% per year. By 2020 China was an upper middle income country with an average Gross National Income per head of US$ 10,610. At present it is expected to join the ranks of high-income economies during the country’s 14th Five-Year Plan (2021-25) period.
China’s extraordinary growth transformed it into the second largest economy in the world, the world’s largest exporter, the second largest exporter of capital, the holder of huge foreign currency reserves (US$ 3.20 trillion in January 2021, down from a peak of 3.8 trillion in 2014), the owner of a currency that is increasingly used to settle international payments, the owner of a vast, increasingly affluent and highly coveted domestic market where permanent urban residents account for 60% of the population, a country with (as a result of painful reforms) a powerful core set of state and collectively owned enterprises and a country that has led recent world economic growth.
As a result of the prioritization of GDP, growth occurred however at the cost of serious environmental damage, growing inequalities in income and wealth, growing rural-urban and regional disparities and a rapid increase (from 10,000 in 1994 and more quickly from 1997 to reach 87,000 in 2005 according to official Public Security Bureau figures) in mass incidents (involving in the new millennium at least 100 and up to 10,000 people and often involving petitions to central government relating to employment, land acquisition, demolitions, pollution and official conduct).
As already mentioned, after the restoration of national sovereignty and the establishment of a basic industrial system and minimum life guarantees, overall priority was given from 1979 to the development of the productive forces allowing, some people and places to get rich first. This phase lasted until 1999.with a more decisive change of course with the arrival of China’s new leadership group in 2013. Commencing at first in a limited way in 1999 common prosperity came to mark a new phase of development in which everyone should get rich together and wealth is conceived in political, cultural and ecological as well as in material terms (Ge, 2021). More specifically, in 1998 the Third Plenary Session of the 15th Central Committee of the CPC (CCCPC) addressed the question of agriculture and the sān nóng wèntí (three rural problems of agriculture, farmers and the countryside). This discussion opened the way to a succession of reforms to grant farmers secure rights to contracted land and use rights transfer, improve infrastructure and public services, to establish a new socialist countryside by 2010 and from 2003 to introduce a New Rural Co-operative Medical System and minimum life guarantees.
In 1999 western development was set in motion. The aims were to expand domestic demand and drive economic growth in the aftermath of the Asian Financial Crisis and to contribute to ‘common prosperity’.These measures were followed by measures to support Northeast and Central China. In 2000 to 2007, central government financial transfers reaching nearly 1.5 trillion yuan and national debt, budgetary and departmental construction funds in excess of 730 billion yuan were allocated to the West. In subsequent years regional gaps (with the exception of Northeast China) started to close (Figure 1).
In 2013-15 China’s new leadership adopted a new eight-year targeted poverty alleviation campaign to identify poverty households and lift them out of poverty. This campaign enabled the CPC to meet its first centenary target of ending extreme poverty by 2020. In the 5th Plenary of 18th CCCPC in 2015 a strong emphasis was placed on shared development and common prosperity.  At the opening of the 19th National Congress of the CPC President Xi Jinping announced that the principal contradiction was no longer ‘the ever-growing material and cultural needs of the people versus backward social production’ identified in 1981 but ‘the contradiction between unbalanced and inadequate development and the people’s ever-growing needs for a better life’. And in January 2021 at a seminar for provincial and ministerial level officials on the guiding principles of the Fifth Plenary Session of the 19th CPC Central Committee, Xi Jinping said:
At the Fifth Plenary Session, I underscored five characteristics in particular. China’s modernization must cover a massive population, lead to common prosperity, deliver both material and cultural-ethical progress, promote harmony between humanity and nature, and proceed along a path of peaceful development. … ‘Realizing common prosperity is more than an economic goal. It is a major political issue that bears on our Party’s governance foundation. We cannot allow the gap between the rich and the poor to continue growing—for the poor to keep getting poorer while the rich continue growing richer. We cannot permit the wealth gap to become an unbridgeable gulf. Of course, common prosperity should be realized in a gradual way that gives full consideration to what is necessary and what is possible and adheres to the laws governing social and economic development. At the same time, however, we cannot afford to just sit around and wait. We must be proactive about narrowing the gaps between regions, between urban and rural areas, and between rich and poor people. We should promote all-around social progress and well-rounded personal development, and advocate social fairness and justice, so that our people enjoy the fruits of development in a fairer way.’ (Xi Jinping, 2021).
3 The growth in inequalities
As already mentioned, in 2019 China’s GNI per capita (Atlas method) reached US$ 10,390, making it an upper middle-income country. In Japan and the US it reached US$ 41,580 and US$ 65,910, respectively (World Development Indicators | DataBank (worldbank.org). China’s growth was fast, but growth rates and starting points varied, generating excessive disparities in wealth and income. These disparities increased from the start of reform and opening up in 1979 until well into the new millennium.
Inter-provincial and rural-urban inequalities declined in the early 1980s, but subsequently increased especially from the early 1990s until the western financial crisis when they started to decline (Figure 1) although they remained high. At present, China’s middle-income groups account for about 30% of the total population. The proportion of low-income groups is still large. In May 2020, Premier Li Keqiang caused shockwaves when he announced that 600 million people were making less than 1,000 yuan per month (US$153), although the country’s average disposable income per capita stood at 30,000 yuan. The income Gini coefficient increased from under 0.3 in the early 1980s to 0.49 in 2008 after which it declined slowly (Ravallion & Chen, 2007; Sicular, 2020). In 2019 it stood at 0.465 (Figure 2). World Bank estimates are lower, its estimate of 0.385 in 2016 (o.462 according to the National Bureau of Statistics) compared with 0.414 in the United States in 2018 and 0.329 in Japan in 2013. In the case of wealth China’s Gini coefficient increased very strongly from 0.450 in 1995 to 0.720 in 2013 (according to the Peking University China Family Panel Studies). In 2020 it stood at 0.704 compared with 0.850 in the US and 0.644 in Japan. (Credit Suisse, 2022), while recent evidence points to a large increase in wealth inequality since the outbreak of the COVID-19 pandemic. Although almost all real incomes have increased overall since 1979 (but not in all sub-periods), common prosperity seems far off and presents an arduous and complicated task that will be promoted in a gradual and progressive manner.
The rich are predominantly private entrepreneurs whose wealth derives from privatization and the development of private industry, property development and finance. The rest are mainly superstars in the realm of media and entertainment. Generally speaking the richer they are the more likely they are to make money.
As already mentioned , the incomes of low income groups have increased overall and the size of low-income groups has declined. The income and wealth gaps between low income groups and the rich are however very large and have increased. These gaps are therefore relative. But relative differences matter a great deal for several reasons. On the one hand, an increase in real wages as a result of an increase in the stock of society’s wealth may involve a relative decline in wages as a share of society’s total wealth. On the other, as Marx pointed out in Wage Labour and Capital
‘An appreciable rise in wages presupposes a rapid growth of productive capital. Rapid growth of productive capital calls forth just as rapid a growth of wealth, of luxury, of social needs and social pleasures. Therefore, although the pleasures of the labourer have increased, the social gratification which they afford has fallen in comparison with the increased pleasures of the capitalist, … in comparison with the stage of development of society in general. Our wants and pleasures have their origin in society; we therefore measure them in relation to society; we do not measure them in relation to the objects which serve for their gratification. Since they are of a social nature, they are of a relative nature.’ (Marx, 1891 , p. 16).
To address this issue and move in the direction of common prosperity China plans to make major efforts to increase the share of household income in total national income, increase the share of the compensation of labour in the primary distribution of income, increase the income of low income groups, expand the share of middle income earners, and address excessively high incomes, reversing the excessive widening of income and wealth gaps as quickly as possible. More attention will also be paid to secondary and tertiary redistribution and decommodification with measures relating to taxation, health insurance, social security, affordable housing, Hukou (household registration) reform, poverty alleviation, rural vitalization and charity. Other measures will address the structure of the economy dealing with monopolies and externalities, orienting investment towards real productive sectors, expanding consumer demand and improving people’s livelihoods.
4 Causes and measures
Addressing the wealth and income gaps and promoting common prosperity involves identifying causes and reforms that deal effectively with these causes. As already explained, the main driver of polarization is the development of the private sector where substantial private wealth accumulates at one pole and many workers are subject to insecure employment and wages and inadequate public service access at the other. In the private sector wages and social protection are usually far lower than in the state and collective sector: in 2015 the average wage was 65% higher in SOEs than in private enterprises. In the private sector the average wage was one-third less than the average disposable income of an employee in an urban household (Qi & Kotz, 2020, p. 10).
The distribution and ownership of material and financial conditions of production and exchange (mode of production) is the main determinant of the primary distribution of income. To argue that the initial distribution should reflect efficiency and not equity and that subsequent redistribution should address equity separates production from distribution and sanctions large inequalities as inequalities are fundamentally determined by an unequal, unfair and inequitable distribution of assets. As a result addressing the ownership of assets and limiting the marketization of assets are vital. The significance of this issue was highlighted by an estimate mentioned in 2020 by Ning Jixuan, Deputy Director of the National Development and Reform Commission when he announced at a State Council press conference that China’s state assets accumulated as a result of massive infrastructure investment stood at 1300 trillion Yuan.
In this respect an important suggestion was recently made by Cheng Enfu (2021), namely that China conduct experiments with the implementation of a national dividend deriving from the surplus operating income earned on state-owned assets. Macao has already conducted an operation of this kind paying a ‘red envelope’ of 9,000 Yuan to each permanent resident and 5,400 to non-permanent residents in 2014, having started to make payments in 2008.  A dividend would provide a new income stream that reflects the ownership of collective and state assets by all of the population and is subject to the same market attributes and governance rules as other economic subjects.
Alongside ownership relations, corruption, monopolies, superstar phenomena and markets have been identified as causes of inequality. These factors are not however the root cause of social polarization. In the case of celebrity phenomena incomes are excessive but these incomes are not a cause of the existence of large numbers of low income people.
In the case of corruption President Xi Jinping China has launched a major anti-corruption campaign. In 2018 the governmnet organized a three-year campaign to ‘Combat organized crime and root out local Mafia’ [打击有组织犯罪, 铲除当地黑手党 – dǎjī yǒu zǔzhī fànzuì, chǎnchú dāngdì hēishǒudǎng]. The aim was to address rent-seeking relationships between government and business and it resulted in the eradication of 3,644 organizations and disrupted interest consolidation mechanisms. Addressing the corruption of government officials plays a vital role in establishing public trust in government. Although some people did secretly enrich themselves, corruption is however not the root cause of wealth and income divides: it does not adequately explain the wealth of the rich, nor does it explain the large size and limited wealth of low income groups (Wei, 2019).
Official corruption did play an indirect role: in some cases officials and managers acted corruptly in enabling economic initiatives and permitted the misappropriation of state assets through for example questionable management buyouts and restructuring of state-owned and collective enterprises. These privatizations made some people very rich almost overnight and saw many workers laid off (Wei, 2019). In each year from 1982 until 1992 state assets worth 50 billion Yuan were transferred to the private sector. In the 1990s this figure stood at 500 billion Yuan. According to a 2007 survey at least one-third of the private capital stock of 7 trillion Yuan was transferred from the state and collective sector (Wei, 2019) with significant layoffs and changes in employment conditions for their workers. These layoffs contributed directly to the existence of large numbers of people in low income groups.
At the end of the 1990s and In the new millennium opposition to privatization intensified. As a result from 2004 management buyouts of large State-Owned Enterprises (SOEs) came to an end with much stricter rules applied to acquisitions of smaller SOEs. In 2005 a draft property law was deferred for revision (Blanchette, 2019 chapter 2).
In social terms these reforms were extremely painful. As already mentioned, they led to the layoff and reduced social protection of millions of workers. The outcome was however the establishment of a smaller but highly competitive set of collective and state-owned enterprises that in 2020 accounted for more than one-third of capital investment (not far short of the private sector). Indeed since 2003 China’s Central SOES have experienced a significant rise and expansion under the leadership of the State Assets Supervision and Administration Commission (SASAC) and in the context of employing market competition as an instrument of a developmental state strategy (Chen, 2017).
The existence of monopolies can also affect the distribution of income. Monopolies are however not the root cause of income and wealth gaps. In 2012 90% of state and collective enterprises were in competitive sectors. In the case of natural monopolies SOEs pay high taxes and use profits to fund investment. In each case the main shareholders are public. In the private sector the quest for increased private wealth has led to the appearance of a series of problems of which some involve monopolistic practices, but it is ownership rather than monopoly market positions that explains increasing inequality.
In 2012 one China’s leading neoliberal economists, Zhang Weiying, claimed that in the new millennium market-oriented reform had been reversed on the grounds that ‘the state owned sector advances but the private sector retreats’ (Xiang, 2020). In the following year the World Bank and the Development Research Centre of the State Council published a report calling for a set of neoliberal economic reforms: redefinition of the role of government, a restructuring of state enterprises and banks, development of the private sector and reforms of land, labour and financial markets.
In 2012, however, in dealing with the need for structural economic reform, the 18th CPC National Congress called for consolidating and developing the public sector of the economy. Although the state sector has contracted in the reform era, China still has a large SOE sector and has ruled out further privatization. In addition it has a state-owned banking system, and the public ownership of land is written into the Constitution (although land is leased and subsequent increases in value are not captured by the state but by private actors). In 2017 China had more than 150,000 SOEs (Lin, Lu, Zhang, & Zheng, 2020). In 2015 SOEs accounted for 30.9% of tax income. In industrial sector SOEs account for 38.8% of revenue (Qi & Kotz, 2020, p. 1). In the last few years SOEs and collective enterprises accounted for more than 35% of aggregate fixed asset investment with the private sector accounting for a similar share. SOEs occupy commanding heights of the economy, create economy wide externalities, invest in essential capital intensive industries, adopt a high road approach to employment, absorb labour to maintain social stability, undertake countercyclical investments and serve to limit foreign control. At the same time its existence limits the accumulation of private assets and provides opportunities to reduce social polarization and contribute to common prosperity.
5 Common prosperity in the new era
On August 29, 2021, Li Guangman’s Ice Point Commentary entitled ‘Everyone can feel a critical change is taking place’ was republished across Chinese state-owned media outlets. In it he declared ‘The capital market will no longer become a paradise for capitalists to get rich overnight. … The cultural market will no longer be a paradise for sissy (effeminate) stars, and news and public opinion will no longer be in a position worshiping Western culture.’
In the last few years the Chinese government has pursued the common prosperity agenda with a series of striking reforms. These reforms amount to a major crackdown on tech, platform economy and other monopolies (online food delivery, car and truck hailing, recruitment), on real estate (red lines controlling debt and associated risks) and financial capital (shadow banking), on owners seeking to get rich by going public on foreign stock markets and on wealthy elites. Housing and education were other targets with the latter said to have been ‘hijacked’ by capital. As a result of liberalization, private initiatives and serious regulatory deficiencies or oversights the costs of housing, education and health have exploded, creating three mountains whose rising costs and declining affordability crowd out other household expenditure and limit the domestic side of dual circulation. A consequence of the large increase in the cost of living is an increase also in the cost of raising children which acts as a serious disincentive to couples giving birth to the three children the government hopes to see them raise. Measures were directed at property development and management, at private finance and speculation not only to reduce costs but also to reduce the risks of real estate and financial market crises. Other measures placed limits on increases in market rents and steps may be taken to deal with unoccupied housing. In May 2021 the Chinese internet finance, banking and payment clearance associations banned the use of crypto currencies (not the official digital yuan) about which it has been concerned since 2013. In June 2021 it finally shuttered crypto-mining operations that were present in energy-rich provinces. In addition some state-linked or very large corporations are allowed to teeter towards default.
In December 2020, at the Central Economic Work Conference, Xi Jinping tasked government agencies with curbing the ‘disorderly expansion of capital’ along with other important economic tasks including strengthening technological innovation, increasing domestic demand and moving in the direction of carbon neutrality and ecological civilization. In his words ‘lucid waters and lush mountains are as precious as mountains of silver and gold’.
To ‘prevent the disorderly expansion of capital’ China started to address the power of tech companies with a storm of regulation. This regulation was clearly already in preparation when in October 2020 Alibaba Group Holding founder Jack Ma criticized the Chinese government for excessive regulation and condemned the capital requirements imposed on financial institutions. Ma’s Ant Group initial public offering (IPO) on the Shanghai and Hong Kong stock markets was halted by the government authorities. A part of the Alibaba multinational e-commerce Group Ant Group uses mobile internet, big data and cloud computing to discover and provide highly leveraged micro financial services at high interest rates to vulnerable people creating a growing mountain of debt. Alibaba Group accounted for less than 2% of the funds Ant Group lends. All in all Alibaba poses risks that are too large (Tsui, He, & Yan, 2021). Alibaba, Tencent Holdings and Baidu have all been fined for anti-competitive practices (exclusivity arrangements, for example). New draft rules for overseeing Big Tech have been published, including for regulations concerning antitrust and personal data protection (a Personal Information Protection Law) and national data security (a Data Security Law). New video gaming rules that limit playing time for people under 18 years of age to just three hours per week will adversely affect the video games sector. These measures are a repudiation of the imported individualistic cultural values and addictions of western society and are designed to encourage science, technology, innovation and education, win the next technological race and alter the profile of the economy in favour of strategically important and socially useful industries. In the specific case of these industries measures are designed to address the threat their dominance poses to competition, privacy and through their fintech empires to financial stability. These measures also deal with their non-compliance with regulation. For example companies did not report acquisitions, while the use of Variable Interest Equity (VIE) that allowed largely unsupervised overseas Initial Public Offerings (IPOs) was questioned. VIE is a structure in which Chinese companies raise massive amounts of capital through offshore share issues which involve the sale of a majority of shares (in shell companies registered in tax havens) yet maintain a controlling interest. These companies can then invest in China circumventing restrictions on the entry of foreign capital.
On 30th June Didi Global, a Chinese ride-hailing company, raised $4.4 billion on its debut on the New York Stock Exchange. On 2nd July 2021, it was accused by the Cyberspace Administration of China of illegally collecting users’ personal data and not adequately ensuring data security. Its app was removed from phones in mainland China and it will incur a large fine. In less than one month it lost about $29 billion in market value. In principle because of its VIE structure, DiDi, which is incorporated in the Cayman Islands, did not need Chinese government approval to list in New York. However, the cyber security administration was concerned about the sensitivity of its data and suggested DiDi postpone the floatation. DiDi ignored the warning.
On July 24, 2021, the General Office of the CCCPC and the General Office of the State Council jointly released the Guidelines for Further Easing the Burden of Excessive Homework and Off-campus Tutoring for Students at the Stage of Compulsory Education. The guidelines included some thirty measures to stop after school, weekend, national holiday and school vacation courses that were expected to earn private companies US$183 billion per year by 2023. After declaring that education had been hijacked by capital, it decided to stop licensing new tutorial centres and course providers for elementary and high school students, while existing ones will face stricter reviews and be regulated as not-for-profit entities whose programmes must be approved by the government. No foreign capital can invest in them (as had happened as a result of the speculative capitalization of Chinese education companies on the US stock market via VIE arrangements). These reforms follow a new education law that limits private sector involvement in core education and disallows the use of foreign education materials.
These measures will reduce the enormous pressures on young people in a highly competitive education system oriented towards performance in the gaokao examinations which drive entry to China’s top universities and career prospects. The aims are to improve the school-life balance for children and their families, level a playing field on which the children of low-income and rural households were seriously disadvantaged, reduce financial pressures on parents faced with exorbitant fees for private lessons (US$60-220 per hour in Beijing) which absorb a very large share of their incomes and restrict ‘encroachment’ on public education including the poaching of teachers as part-time private sector tutors. The new measures will put an end to the extraordinary profitability of a $180 billion industry and decimated stock values. When the news of the measures leaked out, shares in New Oriental Education & Technology Group Inc plunged by a record 47% in Hong Kong, while those of Koolearn Technology Holding Ltd. tumbled 33% and China Maple Leaf Educational Systems Ltd by 10%. These losses spilled into other technology, healthcare and property sectors where regulation was expected to tighten. All in all these events erased $769 billion in value from US-listed Chinese stocks in just five months.
On 26th July China’s State Administration for Market Regulation announced that food delivery firms will be required to guarantee the couriers their platforms employ a minimum income that is in excess of the minimum salary, relax delivery deadlines, strengthen traffic safety education and ensure that couriers join social insurance programmes. After this announcement the shares in Meituan, a food delivery giant, declined by 26%.
At the end of August 2021 China’s Supreme People’s Court and the Ministry of Human Resources and Social Security issued a lengthy condemnation of ‘996’, the practice of working from 9 in the morning until 9 in the evening six days per week (described in 2019 as a ‘huge blessing’ by Alibaba co-founder Jack Ma). This practice is said to be common among the country’s technology companies, startups and other private businesses. The document stated that ‘adhering to the national working hour system is the legal obligation of employers’. In January 2021 e-commerce giant, Pinduoduo was accused of over-working its employees after two died unexpectedly.
In July and August 2021 the Ministry of Housing and Urban-Rural development pledged to stabilize property prices, and started to cap housing rents in cities, saying that they should not rise by more than 5% per year. In 2017 at the 19th Party Congress Xi Jinping announced that ‘houses are for living in and not for speculation’. In subsequent years steps have been taken to control house prices and increase government-subsidized rental housing. Other measures may address the existence of non-occupied homes. Credit availability along with a limited supply of new residential land has kept up the price of urban land. The initial sale of leases is a major source of local government revenue, but subsequent increases in land values are not captured, while low-cost construction land is provided to companies to drive local economic development. The government has also required local authorities to scrutinize closely all the activities of developers from the arrangement of finance to the transfer of ownership titles.
In early September 2021 the National Radio and Television Administration (NRTA) issued a document calling for strengthening of the management of cultural and entertainment programmes and personnel and giving specific guidance on what the entertainment industry can and cannot do. This step followed a series of celebrity tax and other scandals and the removal of TV shows and programmes featuring celebrities caught up in them.
Centred on continuing steady increases in income and high quality development, common prosperity aims to increase the size of middle income groups, raise the earnings of low income groups and reduce excessive incomes in a three-stage income distribution and tax system. The first stage involves an increase in primary incomes. The goals included an increase in the wage share (seen as the main component of income), increased property income (equity transfer and dividends) from rural homesteads, contracted land, rural assets and collective land used for construction, enriched capital market income, an improved environment for urban self-employed whose incomes are predominantly low and whose work situation is unstable and employee stock ownership.
The second is the tax and social security system. New taxes will be imposed on property, inheritance and capital gains and on high-income groups. Excessive incomes will be reduced, illicit incomes prohibited and monopoly rents reduced. The capping of SOE executives’ salaries will be refined. As for social security the aim is equitable access to improved public services (with significant increases in the quantity, quality and accessibility of public provision of elderly care, health, pre-school and school education making use of information technologies. Universal social protection (while dependent on high employment rates) will narrow gaps in the primary distribution and share the fruits of growth, while a decline in savings rates will increase expenditure, reinforcing domestic circulation.
The third is an improvement of mechanisms and preferential policies that will encourage high-income groups and enterprises to give back some of what they have gained from society in the shape of voluntary gifts and charitable donations. Government documents have referred to tertiary distribution since at least the 1990s but the importance attached to it has increased with an emphasis on government-recognized charity and social assistance organizations and government projects (to help elderly, lonely, sick, disabled and poverty-afflicted people) has increased as has the attention paid to it.
Zhejiang demonstration zone for Common Prosperity
In June 2021 the State Council issued an Opinion of the State Council of the People’s Republic of China on supporting high quality development and construction of a common prosperity demonstration zone in Zhejiang (The State Council Information Office of the People’s Republic of China, 2021). This document drew on aspects of the ‘Eight-Eight strategy’ (eight advantages and eight initiatives) identified by Xi Jinping in 2003 when he was provincial Party Secretary. One month earlier in 2021 the Ministry of Agriculture and Rural affairs and Zhejiang provincial government announced a series of rural vitalization demonstration zone measures.
The choice of Zhejiang as a demonstration zone was striking as in that province the state sector accounts for just 35% of GDP compared with 40% nationally. Although this choice reflects a comparatively high regional income per capita (1.63 times the national average with about one-half earning 100,000 to 500,000 per year) in rural and urban areas and a relatively small rural-urban income gap (1.96), it is probably designed to demonstrate that while the province’s dominant private companies have an important role to play the CPC rules.
The Opinions identified six aspects and twenty-eight measures. The first aspect concerned the guiding ideology, adherence to overall party leadership and the goals of high quality development, a high quality of life, ecological and spiritual civilization rooted in socialist ideals and Chinese civilization. As an experimental area for the reform of the income distribution system, the Opinions called for adherence to the principle that distribution depends mainly on work and protection of the compensation of labour which coexists alongside other sources of income where improved policies are required, continuous increases in urban and rural incomes and a narrowing of the income gap. Also development goals were set for 2025 and 2035 by when Zhejiang’ GDP per capita is expected to equal that of economically advanced countries.
The second point was that the quality and efficiency of development are to lay the material foundations for common prosperity. The Opinions called for vigorous improvements in independent innovation, scientific and technological self-reliance and self-improvement, the establishment with strategic support of new competitive advantages and the consolidation and expansion of the real economy, increased economic efficiency, and increased vitality of market actors giving ‘full play to the strategic supporting role of the state owned economy and preventing the ‘disorderly expansion of capital’.
The third aspect was deepening reform of the income distribution system and increasing the income of rural and urban residents through multiple channels. The document specified fuller and higher quality employment, life-long education and training, collective wage bargaining and an increase in labour compensation, continuous improvements in incomes, expansion of middle income groups, an improved distribution system and encouraging the return to society of wealth and income (tertiary distribution).
The fourth point concerned the narrowing of the development gap between urban and rural areas and realizing the sharing of high-quality public services. The measures identified include equalization of the provision of basic social services, integrated development of urban and rural areas, improved living conditions in the city and countryside including new urbanization, adhering to the position that houses are for living and not for speculation, development of affordable housing and rural revitalization with an ecological, rational, collectively owned and cooperative rural economy, a strong social security system and improved assistance of less advanced by more advanced areas including stronger east (coast) west (mountain) counterpart assistance.
The fifth concerned development of a ‘cultural highland in the new era’ and an enrichment of people’s spiritual and cultural life. Involved are socialist ideology and core socialist values and support for traditional Chinese culture, revolutionary culture and advanced socialist culture.
The sixth aspect involved the practical application of the idea that ‘lucid waters and green mountains are as precious as mountains of silver and gold’ and the creation of a beautiful and livable living environment. Stronger land use planning and control, improved spatial organization, ecological protection, protection of arable land, reduced carbon emissions, green finance and recycling and a circular economy are all involved.
The seventh aspect refers to the Fengqiao experience [枫桥经验- fēngqiáo jīngyàn] considered a model of rural governance that involves ‘relying on the masses to resolve contradictions locally’. The aim is to improve governance capacity and efficiency with digital reform and establish a grassroots governance system which integrates autonomy, the rule of law, the rule of virtue and the rule of intelligence and improves democratic consultation. More generally the construction of a Zhejiang under the rule of law and a safe Zhejiang.
The eighth aspect concerns a series of safeguards: upholding and strengthening the overall leadership of the CPC, strengthening a system involving central government guidance and overall planning, provincial responsibility and implementation by cities and counties, improving approval and supervision mechanisms and establishing an evaluation system.
The next steps involved the fleshing out of a plan by the provincial government, a leadership group and individual departments and local government. In July 2021, Zhejiang Province launched a road map aiming amongst other things to increase provincial residents’ per capita disposable income to 75,000 yuan ($11,560) by 2025, raise the compensation of labour to more than 50% of GDP, increase higher education enrollment to more than 70% and reduce personal health expenditure below 26% of total expenditure. The first set of 28 pilot projects were announced, and municipal governments were asked to outline their three-year plans for achievements that could be replicated and promoted in other cities.
China’s development path is evolving. In a country accounting for nearly one-fifth of the world’s population the aim is to promote common prosperity, while making progress in material terms (indigenous innovation, industrial upgrading, and dual circulation articulating an expanding domestic market with international markets for exports and imports) and also in cultural, ethical and spiritual terms. At the same time it aims to promote harmony between humanity and nature (ecological civilization).
Strikingly western economic experts have claimed that China’s decision to crack down on finance, property and private tech is in growth terms suicidal. A system involving market-driven state and collective ownership, planning and investment with a wide range of co-existing enterprise types is considered incapable of performing as well as one centred on profit-driven private capital and free markets for resources and assets of all kinds. If one simply compares the past and current growth records of China (with China growing at some 6% per year and the US and EU at less than 1% recently with little prospect of reaching much more than 2% for a sustained period of time as well as the dubiousness of the measured contributions of real estate and finance to G7 growth), this claim is quite astonishing. Almost certainly it reflects the mistaken view that China’s growth was driven by its private sector and the extraordinary view that unregulated tech, finance and property sectors make major contributions to human prosperity. In China as in the G7 private sector profitability has declined explaining in part why speculation and unproductive investment increased. The growth of labour productivity and investment in the real economy, innovation, new infrastructure and socially useful public services are what China’s economy can deliver, whereas G7 economies as currently constituted cannot.
The socialist public-owned economy with state-owned economy as its core is the necessary institutional arrangement. The socialist public-owned economy is not only the necessary condition and foundation to eliminate polarization and realize common prosperity, but also the institutional guarantee of rapid development of productive forces as China’s investment share testifies: in western countries investment has stagnated due to a decline in private profitability. In order to realize fairness and justice and common prosperity, China will adhere to and improve its economic system which is led by a state-owned economy that exists alongside a variety of other types of property including foreign and private capital and widespread and strongly encouraged innovative micro entrepreneurship. In a situation in which disorderly capital accumulation, monopolies and speculation will be brought under control, the rich will be able to remain rich, but the poor will not continue to be poor.
Cáo Yǒngdòng (2021) 新思想对马克思主义共同富裕理论的丰富与拓展 xīn sīxiǎng duì mǎkèsīzhǔyì gòngtóng fùyù lǐlùn de fēngfù yú tuòzhǎn [New ideas enrich and expand the Marxist theory of common prosperity], guójiā zhìlǐ (National Governance), 8(342): 3-7. https://page.om.qq.com/page/OOYEHBm3MZoQUahSPPmh4SNA0.
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 The author would like to thank Qi Bing for providing some of the Chinese language material.
 In some cases it is claimed that China is an example of state capitalism. Without entering this controversy it is important to note as Lenin emphasized that state capitalism under capitalism and socialism differ and that the former is a ‘step towards socialism’ (Lenin, 1983 ) while Mao (and indeed Stalin) spoke of a need to ‘develop socialist commodity production and commodity exchange. The implication is that commodity production under socialism and capitalism differ (Coderre, 2019, 34).
 ‘in communist society, where nobody has one exclusive sphere of activity but each can become accomplished in any branch he wishes, society regulates the general production and thus makes it possible for me to do one thing today and another tomorrow, to hunt in the morning, fish in the afternoon, rear cattle in the evening, criticise after dinner, just as I have a mind, without ever becoming hunter, fisherman, herdsman or critic’ (Marx & Engels, 1968 ).
 We should give priority to efficiency with due consideration to fairness, earnestly implementing the distribution policy while advocating the spirit of devotion and guarding against an excessive disparity in income while opposing equalitarianism. In primary distribution, we should pay more attention to efficiency, bringing the market forces into play and encouraging part of the people to become rich first through honest labor and lawful operations. In redistribution, we should pay more attention to fairness and strengthen the function of the government in regulating income distribution to narrow the gap if it is too wide. We should standardize the order of income distribution, properly regulate the excessively high income of some monopoly industries and outlaw illegal gains. Bearing in mind the objective of common prosperity, we should try to raise the proportion of the middle-income group and increase the income of the low-income group’ (Jiang, 2002).
 In official documents reference is made to ‘the income distribution system with labour distribution as the main body and multiple coexisting distribution modes, focusing on protecting labour income and perfecting the mechanism of factor participation in distribution.’ Alongside wages, the rents, interest, profits and capital gains of landowners/possessors, capital owners and owners of financial wealth co-exist.
 澳门再发全民红包：居民9000元 非永久居民5400元 [àomén zàifā quánmín hóngbāo: jūmín 9000 yuán fēiyǒngjiǔjūmín 5400 yuán: Macao reissued a red packet for all people: 9,000 Yuan for residents and 5,400 Yuan for non-permanent residents. 澳门再发全民红包：居民9000元 非永久居民5400元_新闻_腾讯网 (qq.com)
 ‘The underlying issue we face in economic structural reform is how to strike a balance between the role of the government and that of the market, and we should follow more closely the rules of the market and better play the role of the government. We should unwaveringly consolidate and develop the public sector of the economy; allow public ownership to take diverse forms; deepen reform of state-owned enterprises; improve the mechanisms for managing all types of state assets; and invest more of state capital in major industries and key fields that comprise the lifeline of the economy and are vital to national security. We should thus steadily enhance the vitality of the state-owned sector of the economy and its capacity to leverage and influence the economy.’ 十八大报告全文英汉对照 [shíbā dà bàogào quánwén yīnghàn duìzhào – English Chinese comparison of the full text of the report of the 18th National Congress十八大报告全文英汉对照 (chinadaily.com.cn)http://language.chinadaily.com.cn/19thcpcnationalcongress/2017-10/16/content_32684880_5.htm In 2013 the Third Plenary of the 18th CCCPC decided that the market plays a decisive role in resource allocation but as President Xi Jinping explained the government also plays a role that it should improve (Cheng, 2020).
 A pilot affecting twelve large property developers subjects their debt to three red lines: a liability-to- presale -asset ratio of no more than 70%; a net debt-to-equity ratio of under 100%; and cash holdings at least equal to short-term debt,
 In sectors where China restricts or prohibits foreign participation Chinese companies set up shell companies in a tax haven such as the Cayman Islands with a similar name. The original company sets up agreements that give the shell company a claim on the profits and control over the assets of the original company. The shell company then registers on the New York Stock Exchange and sells shares to investors under the name of the Chinese company. Although these shares do not entail any company ownership claims, the Chinese company can raise international capital, and international investors secure a share of the Chinese company’s profits. The Chinese government would prefer that capital is raised on domestic capital markets where it can also ensure that it goes to industries it wants to see develop and avoids areas it deems a threat to the common good.
 In August 2021 tech giant Tencent Holdings donated US $7.7 billion towards ‘common prosperity’ to support low-income groups, rural revitalization, healthcare and education after having in April 2021 committed US $7.7 billion towards ‘sustainable innovations for social value’. Nasdaq-listed e-commerce website Pinduoduo announced that it would donate its second-quarter profit and all future earnings until the sum reached 10 billion Yuan ($1.5 billion) for China’s agricultural development.
 In G7 countries the rate of growth of productivity in real sectors has almost progressively declined. In liberal market economics it is argued that capital is allocated efficiently to activities according to the marginal efficiency of capital (Keynes) or marginal productivity (neoclassics). Yet the marginal efficiency of capital in which capitalists are interested has declined and with it real productivity increasing investment (see also Wei, 2019).
Introducing the event, Radhika Desai (Professor of Political Studies, University of Manitoba, Director, Geopolitical Economy Research Group) pointed out that, on the left, the most fundamental lie about China is that it is not building socialism but rather that it is just another capitalist country, indeed a particularly brutal capitalist country. Once this untruth is accepted, China can be treated as an enemy of progressive humanity – successes can be ignored, weaknesses exaggerated and accusations hurled.
For decades, the West constructively engaged with China at an economic and diplomatic level. But the capitalist powers were suffering under two illusions: first, that the Communist Party of China would transform itself into a social democratic or even a neoliberal party that would lead China towards the type of financialised, neoliberal, unproductive capitalism that prevails in the West; second, that China would remain on the bottom rung of the global economic ladder, providing low-cost manufacturing for goods consumed in the West.
We are pleased to republish this editorial from The Herald, Zimbabwe’s most widely-distributed newspaper, addressing recent revelations that the US State Department has been sponsoring journalists to spread disinformation about Chinese investments in Zimbabwe. The article notes that China was a friend to the Zimbabwean people throughout their liberation struggle, and was the first country to formally recognise independent Zimbabwe in 1980. China has remained an all-weather friend and supporter of Zimbabwe, in a period when the US and its allies have pursued economic and political destabilisation.
Never be used against China by the United States
Revelations that the United States and some Western countries are engaged in sponsoring the media, labour unions, civil society and lawyers to fight Chinese investments in Zimbabwe, although hardly surprising, are most unfortunate.
It is understandable that the US is especially feeling the heat of a rising China, which is now the world’s second largest economy, and breathing down hard on the former sole superpower.
We are pleased to republish this report from CGTN concerning the very important remarks made by President Xi Jinping at the recent conference on the work related to China’s system of People’s Congresses, which are China’s principal method of governance operating at every level from the national to the village.
President Xi described this as “whole-process people’s democracy”, noting that they are the organisational form of the state power of the people’s democratic dictatorship. He pointed out that democracy is not an ornament only for decoration. The key question, he said, is whether the people run the country – meaning not only voting but participating. Democracy needs not only to be judged on the promises made during an election but also on their fulfilment.
Xi’s remarks provide an important insight into the nature of socialist democracy in China and the ways in which it is being broadened and deepened. They are also an extremely important contribution to international political debate and should be widely noted and studied. Whilst he diplomatically avoids mentioning any other country by name, his unmistakable critique of the limitations of bourgeois democracies and the hollow promises of their leaders will surely strike a chord with many. Despite their undoubted popular resonance, the conclusions that flow from this analysis are too often overlooked by the leading sections of the working class movement in the imperialist countries. It is long overdue for this political deficit to be addressed.
China’s political leadership, while maligned by detractors in the United States and the West, has served as an inspiration to nations around the world in tackling the most pressing global problems of this generation. Russian Sinologist Yuri Tavrovsky discusses his deep experience in studying the contributions of China’s current President and General Secretary of the Communist Party of China, Xi Jinping.
Justin Yifu Lin is one of China’s most distinguished economists and a former Chief Economist and Senior Vice President at the World Bank. We are very pleased to republish here from Asia Times his important article on the Fourth Industrial Revolution. Lin points out that new industries will predominate in China by the time of the People’s Republic’s centenary in 2049. He notes how historically the United States has taken measures to prevent any rising power from being able to challenge its hegemony. China therefore needs to break through the US blockade and to do so it must lead the new industrial revolution. China not only has the material conditions to do this, he argues, but also a number of comparative advantages over the US.
As a national mandate, the 19th National People’s Congress of the Communist Party of China (CPC) in 2017 announced its “Two Centennial Goals”: the first is to complete building a moderately prosperous society in an all-round way in China, which is to be achieved at the 100th anniversary of the CPC in 2021, and the second is to build the People’s Republic of China into a modern socialist power by 2049, the 100th anniversary of its founding.
There are a number of characteristics of a modern country. One is that China’s GDP per capita should reach at least half of that of the United States, the other most powerful country.
This article by Keith Lamb in CGTN analyses Xi Jinping’s speech at the Conference of the Parties (COP15) to the United Nations Convention on Biological Diversity in Kunming, Yunnan, and highlights the importance of the ‘ecological civilization’ concept. The author urges the West to drop its ‘clash of civilizations’ propaganda and to join with China and the rest of the world in building what Xi refers to as ‘a shared future for all life on Earth’.
At the 15th meeting of the Conference of the Parties (COP15) to the United Nations Convention on Biological Diversity (CBD) in Kunming, southwest China’s Yunnan Province, Chinese President Xi Jinping gave a keynote speech that once again surpassed the outdated clash of civilizations narrative. Instead, by talking about “building a community of all life on Earth,” he spread the message of a common destiny of mankind where protecting biodiversity, sustainable development and environmental protection are a shared global responsibility.
In his speech, Xi more than once mentioned the concept of ecological civilization, which has become one of China’s key developmental principles. As China reflected on its rapid development, which came at the cost of severe environmental degradation, the urgency of building an ecological civilization became increasingly acute.
On October 9, the Friends of Socialist China sponsored a zoom event on the Propaganda War against China. The event was co-sponsored by Morning Star, the Grayzone, Pivot to Peace, the Geopolitical Economy Research Group, the International Manifesto Group, and the Qiao Collective.
The event was moderated by Radhika Desai, Professor of Political Studies, University of Manitoba, Winnipeg, Canada; and Director of the Geopolitical Economy Research Group. In her introduction to the panel, she noted that propaganda is dehumanizing, in that it portrays peoples and nations in ways that deny their humanity. Propaganda is always based on lies, and the biggest lie about China is the denial of the fundamental fact that China has been developing with continuity its socialist project for seven decades. The anti-China propaganda disseminates the false claim that, with the Reform and Opening that was initiated in 1978, China abandoned socialism for capitalism.
This very useful editorial in the Morning Star challenges the recent reports about a purported police defector ‘Jiang’, who claims to have witnessed human rights abuses perpetrated against Uyghur people in Xinjiang. The story is “spectacularly telegenic”, but its authenticity is highly questionable.
The new cold war on China has an essential ideological front in order to shape Western public opinion.
It has captured the headlines on an international scale over the past seven days, not least on Sky News today.
Someone claiming to be a former police officer in China’s Xinjiang Autonomous Region, claimed in a silhouetted interview that he had witnessed, heard of or participated in deadly beatings, sexual torture and inhuman treatment of prisoners in police stations and internment camps.
In his keynote speech delivered on 12 October via video link at the leaders’ summit of the 15th meeting of the Conference of the Parties to the Convention on Biological Diversity (COP15), Xi Jinping reiterated China’s total commitment to strengthening biodiversity and tackling other key environmental issues. Among other things, he announced that China would set up a 1.5 billion RMB fund to support biodiversity protection in developing countries, and that an extensive system of national parks would be established in China.
Ladies and Gentlemen,
It gives me great pleasure to meet you virtually in Kunming and jointly attend the 15th meeting of the Conference of the Parties to the Convention on Biological Diversity. On behalf of the government and people of China as well as in my own name, I wish to extend a warm welcome to all the distinguished guests.
As a Chinese saying goes, “All beings flourish when they live in harmony and receive nourishment from Nature.” Biodiversity makes Earth full of vigor and vitality, and lays the foundation for human survival and development. Protecting biodiversity helps protect Earth, our common homeland, and contributes to humanity’s sustainable development.
At the Friends of Socialist China webinar on the propaganda war against China, held on Saturday 9 October 2021, the following statement was adopted.
We, the undersigned, are concerned about the escalating propaganda war being waged by the United States and its allies against the People’s Republic of China.
Although China in recent years has recorded some truly remarkable achievements in the realm of human rights – notably, eliminating extreme poverty and successfully containing Covid-19 – it has been subjected in the Western media to the most terrible slanders regarding its human rights record. Unsubstantiated accusations of genocide and forced labour in Xinjiang echo endlessly in Western media and governments, along with conspiracy theories about the origins of the pandemic.
This information warfare accompanies, complements and seeks to build public support for a dangerous New Cold War; it serves to distract from, and justify, the construction of nuclear alliances in the Pacific, the deployment of warships to the South China Sea, the fomenting of a new arms race, and assorted attempts to obstruct China’s economic rise.
We believe that this demonisation campaign is an obstacle to urgently-needed cooperation between the world’s major powers on the questions of climate change, pandemics, nuclear weapons, and economic development. Such cooperation cannot be built in an atmosphere of fear, distrust, enmity and slander.
Therefore we demand that Western governments adopt a principled and responsible approach to improving relations and deepening cooperation with China; and that media outlets cease their vilification campaign and adhere to journalistic principles of honesty and balanced reporting.
US citizen in support of peaceful bilateral international relations.
Concerned US citizen
Principal scientist, Porton Biologics
Lecturer, The University of Sheffield
Young Communist League
concerned Chinese Australian
Strategic Planning Specialist
Daniel J. Brown
Rite of Strings
Communist Party of Canada – Fredericton Club / 2019, 2021 CPC Candidate for Fredericton
US citizen, activist, socialist, and a friend of China
Family Doctor, Montreal
David Erick Altimari
Revolutionary Marxist Leninist
John Thompson Parker
Coordinator, Harriet Tubman Center for Social Justice
President, Canadian Peace Congress
Retired. Part-time work with CareerSource Gulf Coast, Florida
Carlos L Garrido
Editor at Midwestern Marx
Socialist Unity Party
Activist and political observer
Eddie Liger Smith
Midwestern Marx Founder and Editor
Chin K Seah
Retired Structural Engineer
Albert Ang Chun
Maria Fe Celi
Professor of Economics, Skyline College
Wong Mun Lai
Wong Mun Lai
Retired Health Care Worker
Dr Agnes Kory
Editor, Fight Back!
John Frederick Maryon
New Communist Party
General Secretary, New Communist Party of Britain
Txinarekin.com Basque Country
President/ AP Oriental
Publisher at The Revoltist
James J Bush
Prof.em., UCLouvain, Belgium
Note: once you sign the statement via Google Forms, your name will appear on this page within a few hours. If you are having difficulty accessing the form, please email your name and organization/role to statement[at]socialistchina.org
This article by Danny Haiphong for CGTN analyzes the latest round of high level talks between the US and China, noting that China has been consistent in its pursuit of a friendly and collaborative relationship, and that it is for the US to reciprocate this approach – in the interests of the peoples of both countries and indeed the world.
On October 6, senior diplomat and member of the Political Bureau of the Communist Party of China Central Committee Yang Jiechi met National Security Advisor of the United States Jake Sullivan in Zurich, Switzerland. The two sides discussed many issues of common concern in the realms of security, economic relations and diplomacy. Unlike the first meeting between Sullivan and Yang in March in Alaska, both sides on Wednesday engaged in constructive dialogue that could be described as a positive step toward mutual understanding.
During the meeting in Zurich, Yang remained firm on China’s view that bilateral relations can be restored through mutual understanding and a win-win approach to cooperation, but China’s position must be understood and respected for relations to move in the right direction. It remains to be seen whether the U.S. will commit to mending relations in practice.
We will discuss the relationship between this propaganda onslaught and the New Cold War; the reality in Xinjiang and Hong Kong; the participation of sections of the Western left in the propaganda war; and more.
The event is co-sponsored by the Morning Star, the Grayzone, Pivot to Peace, the Geopolitical Economy Research Group, the International Manifesto Group, and Qiao Collective.
Many China-watchers have believed that the post-Mao Chinese reform and opening constituted an abandonment of the principles of Marxism, Maoism, and socialism. For all who are proponents of the capitalist system, such an interpretation confirms their belief in the superiority of capitalism over socialism. At the same time, many Western leftist intellectuals also adhere to the interpretation that the Chinese have abandoned socialism, but they consider it a turn in the wrong direction. For leftist intellectuals, such an interpretation of China validates their sub-conscious belief that socialism in the real world is not attainable, but they themselves have a lifetime position as a commentator, sometimes well-rewarded, on the contradictions of capitalism and socialism.
Both perspectives are formulated from outside China or any country seeking to construct socialism. They are formed by assumptions and beliefs beyond the world of actually existing socialisms, without appreciation of the dynamics that shape the concrete decisions that the leaders of socialist projects must make. These perspectives are grounded in the real world of capitalism or by the intellectual world forged by academic and intellectual debates. They do not give serious consideration to the self-interpretations of the socialist projects; how the leaders, academics, and intellectuals of socialist projects interpret their own world.
I have discussed this phenomenon in a previous commentary with respect to Cuba, in which I observe that there is a tendency to dismiss explanations by Cuban leaders, academics, and intellectuals as “official” discourses not worthy of serious consideration. This tendency functions to silence the voice of the Cuban Revolution and to deny the Cuban Revolution its right to explain itself. Thus, there emerge public debates about the revolution conducted by persons who are not of the revolution, and citizens of the countries of the North are denied their right to know the revolution’s understanding of itself. This epistemological method is functional for capitalism, because it contributes to the confusion and division of the people; it is dysfunctional for the advance of human understanding and the forging of socialist movements in the world.
An article by Carlos Martínez in the Invent the Future Website, “No Great Wall: on the continuities of the Chinese Revolution,” seems to utilize an alternative method, different from the Western pro-capitalist and “socialist” methodology. He appears to take seriously the insights of revolutionary leaders, such that his criticisms of defects of the revolution are intertwined with his developing understanding of their understandings and formulations. In effect, drawing upon Chinese sources, he facilitates the dissemination to Western readers of the Chinese Revolution’s interpretation and defense of itself.
Listening to and taking seriously the formulations of Chinese leaders, Martínez arrives to appreciate the continuity between the radical socialist project of Mao and the reform project of Deng, an interpretation that dovetails with the understanding of the Chinese revolution itself. Western intellectuals, trapped in a Eurocentric method, no doubt would view his approach as circular, for in listening, he has set himself up to the possibly of finding credibility. But the Western intellectuals cannot answer the question, how can any revolutionary process be understood without taking into account the understanding that the revolution has of itself? How can criticism of defects be put forth, before the revolutionary understanding of itself has been understood?
The Communist Party of China (CPC) was formed in July 1921. From that time up to the present day, it has led the Chinese Revolution – a revolution to eliminate feudalism, to regain China’s national sovereignty, to end foreign domination of China, to build socialism, to create a better life for the Chinese people, and to contribute to a peaceful and prosperous future for humanity.
Some of these goals have already been achieved; others are ongoing. Thus the Chinese Revolution is a continuing process, and its basic political orientation remains the same.
China in the epoch of Mao
Martínez summarizes the emergence of the Communist Party of China (CPC) from the post-World War I Chinese anti-imperialist and nationalist protests by students, workers, and intellectuals; who were reacting to the Treaty of Versailles, which had offended Chinese national pride by ignoring Chinese demands. In accordance with its anti-imperialist and nationalist orientation, the CPC participated in the early 1920s in a united Front with the nationalist party of Sun Yat-sen, with the intention of constructing an anti-imperialist alliance of workers, peasants, intellectuals, and patriotic elements of the capitalist class. Later, in the period 1937 to 1945, the CPC joined a Second United Front with the nationalists, now under the control of the Chiang Kai-shek, in spite of the fact that Chiang’s nationalist party in political power had unleashed a brutal repression of the communists from 1927 to 1937.
During the period of the Second United Front, the CPC implemented a program for the improvement of the lives of the population in the territory under its control. Its base in Yan’an attracted revolutionary and progressive youth from throughout the country as well as foreign visitors. There were extensive debates concerning the types of society that they were trying to build, which Mao synthesized in his 1940 pamphlet, On New Democracy. Here Mao described the revolution as having two stages, first new democracy, and then socialism. In the first stage, the goal is to defeat imperialism and establish independence from foreign rule, thus providing an essential foundation for the later stage of constructing socialism. During the first stage, political power ought to be shared among all the anti-imperialist classes: the working class, the peasantry, the petty bourgeoisie, and those elements of the national bourgeoisie that were against foreign domination.
The stage of New Democracy would combine components of both socialism and capitalism. Martínez quotes the text of Mao’s OnNew Democracy:
The state enterprises will be of a socialist character and will constitute the leading force in the whole national economy, but the republic will neither confiscate capitalist private property in general nor forbid the development of such capitalist production as does not ‘dominate the livelihood of the people’, for China’s economy is still very backward.
Such private capital, however, would be subject to extensive state regulation.
Following the defeat of Japan in 1945 and the bitter four-year civil war between Chiang’s nationalists and Mao’s communists, the People’s Republic of China was declared on October 1, 1949. The new government was a united front government led by the CPC. It attempted to construct the type of society envisioned in On New Democracy. It accomplished the dismantling of feudalism and the elimination of the rural class structure through the distribution of land to the peasants. These reforms generated an agricultural surplus which, along with the support of the Soviet Union, enabled infrastructure construction and a program of rapid state-led industrialization.
By 1954, the government was moving beyond New Democracy and toward the collectivization of peasant lands and the shifting of private industrial production into state hands. With the Cold War and U.S. hostility intensified, and with the Soviet Union moving toward “peaceful coexistence” with the West, the Chinese Revolution saw the need to accelerate production on basis of China’s own resources. Accordingly, the Great Leap Forward, launched in 1958, sought to attain rapid industrialization and collectivization, a fast-track to the construction of socialism.
The Great Leap Forward was overly ambitious, causing disruptions in established productive processes, leading to a fall in production. The withdrawal of Soviet technicians as well as draughts and floods also contributed to the failure of the project. In 1960, Mao ordered decreasing the pace of the Great Leap Forward.
Reasonable estimates are that the Great Leap Forward is responsible for 11.5 million deaths, a fact utilized by opponents to discredit the Chinese Revolution. Martínez points out, however, that the death rate in India in 1960 was similar, and that China previously had terrible famines in 1907, 1928, and 1942. Pro-capitalist academics use the failure of the Great Leap Forward (GLF) to denigrate the entire history of the Chinese Revolution, but “the GLF was not some outrageous crime against humanity; it was a legitimate attempt to accelerate the building of a prosperous and advanced socialist society. It turned out not to be successful and was therefore dropped.”
As a result of the failure of the Great Leap Forward, Mao and the radical wing lost influence in the highest levels of the Party. Leading Party members with a more pragmatic approach that stressed social stability and economic growth arrived to positions of power in the Party, including Liu Shaoqi, Deng Xiaoping, Chen Yun and Zhou Enlai. They put forth the concept of the Four Modernizations in agriculture, industry, defense, and science and technology.
Mao and a group of close comrades began to believe that the pragmatic approach was an anti-revolutionary revisionist trend that could ultimately lead to capitalist restoration. Mao was concerned that the new orientation meant greater reliance on teachers and academics who came from non-working-class backgrounds, who would promote capitalist and feudal values among young people. Mao maintained that it was necessary to “exterminate the roots of revisionism” and “struggle against those in power in the party who were taking the capitalist road.”
In 1966, university students, responding to Mao’s call to “thoroughly criticize and repudiate the reactionary bourgeois ideas in the sphere of academic work, education, journalism, literature and art,” formed a mass movement of university and school students, calling themselves “Red Guards.” Initially supported by Mao and by the Central Committee of the Communist Party of China, the Great Proletarian Cultural Revolution sought to eliminate persons in authority who were taking a supposedly revisionist and capitalist road. Its objective was to forge a new socialist, collective, and modern culture.
In August 1966, the Cultural Revolution exploded into widespread disruption and violence, resulting in the closing of universities. Many people were attacked and humiliated. Liu Shaoqi, previously considered to be Mao’s successor, was arrested and tortured; he died in prison. A similar fate awaited Peng Dehuai, former Defense Minister and the leader of the Chinese People’s Volunteer Army’s operations in the Korean War.
In 1967, Mao recognized that the situation was out of control, and he and high members of the Party ordered the army to establish order and reorganize production. However, the Cultural Revolution flared up again with the ascendancy of a radical wing, the so-called “Gang of Four,” beginning in 1972.
To the enemies of the Chinese Revolution, the Cultural Revolution is an example of Mao’s tendency toward violence and power or an illustration of communist authoritarianism. In contrast to this view, Martínez writes of the idealism that was at the foundation of the Cultural Revolution.
The Cultural Revolution was a radical mass movement; millions of young people were inspired by the idea of moving faster towards socialism, of putting an end to feudal traditions, of creating a more egalitarian society, of fighting bureaucracy, of preventing the emergence of a capitalist class, of empowering workers and peasants, of making their contribution to a global socialist revolution, of building a proud socialist culture unfettered by thousands of years of Confucian tradition. They wanted a fast track to a socialist future. They were inspired by Mao and his allies, who were in turn inspired by them.
Today in China, Martínez observes, the Cultural Revolution is understood as misguided. But Mao remains a revered figure. His errors are understood as errors of excessive revolutionary fervor, and they do not negate his achievements.
Reform and Opening
Beginning in 1978, two years after Mao’s death, the post-Mao leadership embarked on a process of “reform and opening,” which expanded space for private property and permitted foreign investment. “Socialism with Chinese characteristics” is characterized by a “socialist market economy,” an economy that is directed by the state but utilizes the profit motive to contribute the development of the productive forces.
The need to develop the productive forces in the construction of socialism is a Marxist concept. As expressed by Deng Xiaoping,
Marxism attaches utmost importance to developing the productive forces… [The advance towards communism] calls for highly developed productive forces and an overwhelming abundance of material wealth. Therefore, the fundamental task for the socialist stage is to develop the productive forces. The superiority of the socialist system is demonstrated, in the final analysis, by faster and greater development of those forces than under the capitalist system. As they develop, the people’s material and cultural life will constantly improve… Socialism means eliminating poverty. Pauperism is not socialism, still less communism.
This view, that the construction of socialism involves the development of the productive forces in order to satisfy the needs of the people, is the prevailing thought in China today. Martínez writes that “the consensus view within the CPC is that socialism with Chinese characteristics is a strategy aimed at strengthening socialism, improving the lives of the Chinese people, and consolidating China’s sovereignty.”
The 1978 turn to reform and opening was made necessary by objective economic and social conditions in China. On the one hand, the achievements from 1949 to 1978 were enormous. China had been unified and liberated from foreign rule. Land had been distributed to peasants; and rural class relations had been transformed, which was accompanied by extensive irrigation of land. Women had been liberated from archaic, feudal cultural constraints. The literacy rate, which had been twenty percent prior to the revolution, had risen to ninety-three percent. And universal health care had been established; life expectancy increased by thirty-one years during the period. The poor in China had secure access to land and housing, so they were much better off than their counterparts in the developing world.
But on the other hand, China in 1978 was still a backward country in many ways. Approximately thirty percent of the rural population lived below the poverty line, dependent on small loans for production and state grants for food. Many did not have access to modern energy and potable water. The per capita income gap between China and the developed world was not narrowing. Although the ascent of Japan, South Korea, and Taiwan could be explained by geopolitical factors, and the relative wealth of Hong Kong and Macao can be explained by global economic dynamics, the contrasting socioeconomic situation of China with respect to its East Asian neighbors was undermining the legitimacy of the revolution in the eyes of the Chinese people.
In this situation, the leadership of the Party decided for policies designed to increase the productive forces and elevate the standard of living, drawing upon the theoretical formulations of Marx and Mao in their policy reformulation. Their “socialism with Chinese characteristics” was unorthodox in relation to Western Marxism; it was forged on the basis of reflection on the experience of Chinese socialism and the objective conditions of China. As expressed by Deng:
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… 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?
Martínez maintains that Deng is echoing Mao, who in 1949 warned that the revolution would lose the support of the people if it cannot improve the standard of living of the people. “If we are ignorant in production, cannot grasp production work quickly … so as to improve the livelihood of workers first and then that of other ordinary people, we shall certainly not be able to maintain our political power: we shall lose our position and we shall fail.”
International developments also favored the 1978 turn to reform and opening. The international environment was less hostile to China, as indicated by the restoration of China’s seat in the United Nations and by the rapprochement between China and the USA. There now existed greater real possibilities for the sale of Chinese goods in the world market and for the entrance into China of foreign capital, technology, and expertise. Moreover, as Zhou Enlai observed, “new developments in science are bringing humanity to a new technological and industrial revolution… we must conquer these new heights in science to reach advanced world standards.” In 1975, Zhou called for the nation to take advantage of the more favorable international environment to “accomplish the comprehensive modernization of agriculture, industry, national defense and science and technology before the end of the century, so that our national economy will be advancing in the front ranks of the world.”
The new policies were intelligently designed. As Martínez notes, the opening toward foreign investment and international commerce enabled China to accumulate capital and technology, thereby facilitating the development of the productive forces. The post-1978 policies were effective in increasing China’s productive capacity.
In a capitalist system, an increased productive capacity does not necessarily lead to an elevation of the standard of living of the majority. But when the working class and the peasantry control the state, it can give priority to satisfying the needs of the people. And this is precisely the situation in China. Martínez writes that “there are some extremely wealthy individuals and companies controlling vast sums of capital. And yet their political status is essentially the same as it was in the early days of the PRC; their existence as a class is predicated on their acceptance of the overall socialist programme and trajectory of the country.”
As a result, the per capita income in China has doubled since 1980. And the combination of state direction and increasing productivity has led to a massive program in the construction of roads, railways, ports, airports, dams, housing, and systems of energy, telecommunications, water, and sewage. With the New Reform since 2012, under the leadership of Xi Jinping, China has eliminated absolute poverty. The New Reform seeks to eliminate negative consequences of the spectacular economic growth of 1978 to 2012, addressing such problems as poverty, inequality, corruption, and environmental degradation.
The principles of the Chinese Communist Party, therefore, have not changed since its founding in 1923. As succinctly expressed by Xi Jinping, “Both history and reality have shown us that only socialism can save China and only socialism with Chinese characteristics can bring development to China.”
Western intellectuals, both pro-capitalist and “socialist,” have not experienced a revolutionary transformation, in which exceptional leaders with keen understanding of historical and political-economic dynamics, and with unbounded commitment to the sovereignty of the nation and the people, guide the people on the correct road, explaining to the people as the process moves forward. Western intellectuals, therefore, do not believe that a better world is possible, and they do not know that an alternative, more just world is under construction in the Third World plus China. They frame their observations with the cynical assumption that the discourse of leaders is a politically motivated deception; they cannot see an explanation rooted in critical reflection on revolutionary practice, thus advancing human understanding.
We intellectuals of the North who are committed to social justice for humanity must, in the first place, listen to Third World revolutionary voices, arriving to discern their insights and to appreciate that they are constructing a more just and sustainable world. Secondly, we must learn to communicate this important news to our peoples, so that they too can believe that the taking of political power by the people and the subsequent redirection of state policies is possible. And high on the agenda of the revolutionary popular movement in the North is the abolition of imperialist policies toward other nations.