Notes on a short trip to China

A two-week tour of China does not an expert make. I do not speak or read Chinese. Immodesty is my main credential for voicing any opinion whatsoever on People’s China. But here goes.

The June 2007 study tour, organized by the U.S. journal Nature, Society and Thought, began with a conference in Beijing on the theoretical aspects of China’s “socialist market economy.”

There were representatives from the Chinese Academy of Social Science and the Academy of Marxism and other Chinese social research institutes. The non-Chinese participants came mostly from the United States but also from Ireland, Canada, Germany, Turkey, Greece, Australia, Britain and Israel.

We visited Beijing, Guilin, Lijiang (the Naxi Territory), Shanghai and Zhongdian (the fabled Shangri-La) in Tibet.

At the Beijing conference on the socialist market economy that began the tour the Chinese scholars seemed divided on it too. A few (the left) are sharply critical. A few (the right) love the socialist market economy and want to go further and faster down the capitalist road. The center forces, the largest and dominant group, see positives and negatives.

What, then, is one to make of the socialist market economy? Signs of Western and Japanese transnational corporations are in evidence all over Beijing and Shanghai.

Is this socialism? Is this capitalist restoration? Is it the new, correct (if longer) path to 21st-century socialism, as its proponents claim, after the alleged blunders of 20th-century socialism?

Presumably Marxists should turn to history to answer such questions. Some believe it’s all a rerun of the USSR’s New Economic Policy (NEP), the 1921-28 period when the Bolsheviks turned to market forces and private ownership to help their ruined economy get back on its feet.

An Italian Marxist scholar has observed: “The social order that in China is currently considered valid presents itself as a kind of gigantic and expanded NEP.” There is indeed a resemblance between NEP and the socialist market economy.

But the main lesson, I believe, is that this resemblance explains why the socialist market economy is a strange mixture of success and crisis, not that it would have been smiled upon by Lenin.

The night before our briefing at the Shanghai Party Institute of the Communist Party of China (which trains top party officials and state administrators; it used to be run by Jiang Zemin) we cruised on a tourist vessel up and down the river separating the Shanghai and Pudong skylines.

Symbol of the new wealth created in China, Pudong is brilliantly lit up, evoking a mega-Las Vegas. The whole country is bustling with construction as the 2008 Olympics loom.

The party educators at the SPI spoke of their expanded new program of Marxist education for the 70-million-plus party members. The Chinese Communist Party educators declare that it will counter the ideological effects of expanding capitalist relations of production.

The key question posed from the floor at the Shanghai party briefing was: Who will win? Isn’t the socialist market economy much more powerful than party education can ever be? Doesn’t it affect the consciousness of 1.3 billion people every day, promoting a buildup of classes objectively hostile to socialism and instilling such values as greed, selfishness, individualism and a taste for Western luxury goods “every day and on a mass scale”?

The Chinese rejected the notion that their new education program is not enough. They think skeptics underestimate the scale and quality of the new education work.

There are plenty of things going wrong in today’s China: violations of labor rights in the Special Economic Zones, inequality, peasant riots when land is seized for factory expansions, party corruption, lax regulation of industry, major environmental degradation, bad treatment of rural immigrants to the cities. Reasonable people can and do differ on their scope.

Against this we must weigh the country’s genuine achievements. Overcoming the mad zigzags of the 20 years before 1978 (the Great Leap Forward, the Cultural Revolution), China enjoys steady and rapid economic growth.

Since 1978, real wages have doubled every 10 years. To be sure, wealth is poorly distributed, but almost everyone has benefited somewhat. Hundred of millions have escaped grinding poverty. The rural health care system that collapsed in 1978 when the communes were privatized is being restored on a new basis, albeit slowly.

The Hu Jintao leadership, inaugurated in 2002, disturbed by negative signs, is fighting harder against the free market’s harmful consequences. President Hu is seen as a leading campaigner against corruption.

This is popular. From what one can glean from the English language service on Chinese television (where there is plenty of lively debate: I watched a spirited exchange on what happens if the wobbly U.S. economy starts to drag down the Chinese economy), there is a democratic spirit in civil society, which is reflected in the media. It is a far cry from the debased and willfully idiotic “infotainment” of American cable television.

An anthropologist in our group, an expert on Native Americans, concluded that China’s national minorities fare infinitely better than U.S. indigenous peoples. A trade unionist noted that in the Special Economic Zones the Chinese are building up adversarial trade unionism, familiar to us but new to them, to take on the transnational corporations resisting unions and workers’ rights.

True, China is not leading a “socialist camp” and confronting imperialism consistently, the way the USSR did from 1917 to 1985, but China’s foreign policy is much better than before. The most terrible crimes — the invasion of Vietnam and the support for Pol Pot, Chile’s Pinochet, and the mujahideen in Afghanistan — are, thank goodness, things of the past.

Today China is helping socialist Cuba. China has defused the U.S. military pressure on North Korea. The Shanghai Cooperation Organization is an important initiative that could develop in interesting ways. China’s growing trade with much of the world objectively weakens the hegemony of the imperialist states.

Since 1978 China has made dramatic gains in output by extending capitalist relations of production.

Is it not reasonable to think that a long delay in reversing course — back to the plan and public ownership — will exact an immense price if it is deferred for “100 years,” as some in China advocate? Is there another path for People’s China that offers an equal or even a faster rate of development?

The USSR in the first five-year plan achieved growth rates of about 13 percent, little different from China’s growth rates today.

Economic storm-clouds are forming over imperialism’s financial centers. How much longer can the boom last? What follows it? Voices on Wall Street fear a crash.

China’s integration in the capitalist system is advanced. Central planners in Beijing have yielded much power to the spontaneity of the market, or have devolved powers to provincial or city bodies. Is the state’s capacity to stabilize the roaring economy and blunt the impact of external shocks now in question?

What about the regressive political impact on 800 million Chinese peasants of de-collectivization and a return to private ownership?

Will imperialism acquiesce in “China’s peaceful rise,” as the Chinese hope? Imperialism does not take kindly to adverse shifts in the balance of forces. Imperialist Britain did not acquiesce in Germany’s “peaceful rise” in 1870-1914; imperialist America did not acquiesce in the USSR’s “peaceful rise” in 1945-1991.

Imperialism hates China’s independence, its socialism, and its desire for a peaceful rise. China will have to straggle for all three.

I came home with such questions, still worried but not despairing.

One crucial difference between the PRC and the USSR is that the reforms did not liquidate the Communist Party, as Gorbachev did in 1987-1991. The top CPC leaders seem to do everything by consensus, i.e. after pilot programs and after provincial experiments.

The Communist Party of China seems almost a popular front, not a monolithic party.

I concluded that, first, everything depends on what happens in (and to) the CPC: the healthy forces in the Chinese party are the key. Second, the best solidarity we can give to the working people of China is to take an honest look at their country and call it as we see it.

Thomas Kenny is a U.S. economist.