After overtaking Japan, this year
China became the second largest economy in the world. Some experts have
even predicted that by the end of this decade China may become the
largest economy bypassing the United States. However, that is based on a
mechanical, empirical approach that sees China maintaining its present
levels of growth uninterruptedly for years to come. In the past Japan
was also supposed to keep on growing, but then its apparent meteoric
rise was cut across by a long period of stagnation.
After overtaking Japan, this year
China became the second largest economy in the world. Some experts have
even predicted that by the end of this decade China may become the
largest economy bypassing the United States. However, that is based on a
mechanical, empirical approach that sees China maintaining its present
levels of growth uninterruptedly for years to come. In the past Japan
was also supposed to keep on growing, but then its apparent meteoric
rise was cut across by a long period of stagnation.
Photo: Alex MahanEven
if in absolute terms China’s economy should surpass that of the USA’s,
living standards of the Chinese people will remain far below those of
America and Japan. In spite of this, the rapid expansion of its economy
has made China a point of reference and topic in political and economic
discussions throughout the world.
The capitalists in the advanced world are, on the one hand overjoyed
at the capitalist restoration in China while at the same time they are
dismayed by the Chinese bureaucracy turned ruling class not allowing
them to go the whole hog in plundering China. Their conflicts today are
not of an ideological nature but of competitiveness in markets, capital
investments and trade antagonisms. And yet it was the Chinese elite that
provided cheap and skilled labour for profitable manufacturing ventures
to the multinational corporations that gave world capitalism respite
more than once in the last 15 years and avoided deep recessions before
2008. The policy conflict if any is over Keynesian or monetarist
methods.
In the so-called developing countries there has been a lot of talk
about the Chinese model. Political and trade union leaders have been
praising the Chinese “miracle” as the only way out of this crisis. The
ex-lefts, who themselves abandoned revolutionary politics long ago, have
used China as an alibi for their betrayal and their new apologetic role
as the latest sages of capitalism. Yet in the last decade all those
neo-colonial countries that have tried to follow the Chinese example
have ended up in socio-economic disasters.
In a number of ways the capitalist degeneration of China has served
imperialism and the local ruling elites to denigrate socialism and
communism by sowing confusion in the minds of the workers and youth. The
reality is that in some ways the Chinese bureaucracy’s capitalist binge
has played a bigger counter-revolutionary role than their Russian
counterparts, especially in the ex-colonial world. The process propelled
the left parties to capitulate to capitalism.
The Chinese Revolution of 1949 was not a classical socialist
revolution along the lines of the victorious 1917 Bolshevik revolution
or even the 1925-27 Chinese Revolution that was defeated in blood due to
the class collaborationist “two stages” policy. The regime that came to
power under Mao through a peasant war was forced to take over the
commanding heights of the economy and overthrow capitalism and
landlordism, in spite of Mao’s perspectives of the need for a long
period of capitalist development before they could move on to the
“second stage”. The imperialists were exhausted and debilitated by the
war and the revolutionary stirrings within their own armies and
societies.
However, the planned economy installed was not on the lines of Moscow
1917 but of 1945, i.e. it was devoid of workers’ democracy and control.
The abolition of market economics in China allowed for huge strides
forward. But these were possible in spite of the bureaucracy, not
because of it. In fact there were a number of blunders made by the
bureaucratic elite that led to famine and other catastrophes due to its
totalitarian nature. Ultimately, economic growth and social development
began to stagnate in the 1960’s and 70’s. And after the death of Mao his
faction was removed from power and the more conservative wing of the
bureaucracy under Deng Xiao Peng came to power.
They embarked upon Bukharin’s doctrine of a controlled opening to
capitalism that he advocated during the debate on the New Economic
Policy in Russia in the 1920s. At the time his interpretation was
rejected by Trotsky. In China as soon as corporate capitalism began to
penetrate the country, it brought with it growing contradictions, rising
inflation and so on, that led to the Tiananmen Square protest that was
brutally crushed. The bureaucracy felt threatened and initially it
tightened state control and increased repression. However, once having
re-established “order”, the process of capitalist restoration gathered
speed once more. In the 1990’s and the first few years of the 2000s the
bureaucracy went much further than it had originally planned. The
Chinese economy expanded vastly with rapid growth rates, but this
capitalist growth spurned the economic controls. From 1999 to 2009 the
state’s share of output fell significantly.
Now those very growth rates are haunting the Chinese elite. The whole
pattern of growth under capitalism has been one of an uneven and
combined character. Not only has China the largest gap between the rich
and poor, but the rural and urban and regional disparities have also
been immensely exacerbated. GDP per person in Shanghai is around $18000
while that of Yunnan is less than $1000. There are 160 million urban
unemployed while 20 million returned to their villages after the
recession of 2008. In 2010 only 17% of migrant workers in cities were
enrolled in any pension scheme at all, according to the state figures.
The Communist Party is in reality, neither “Communist” nor a “party”,
it is the elite that rules and plunders the Chinese masses. The
offspring of the leaders are the new rich bosses of China. Hu Haifeng,
the son of President Hu Jintao, and Wen Yunsong, the son of China’s
premier Wen Jiabao, are amongst the biggest financiers and business
tycoons of the country. Since the Politburo reshuffles in 2007 these
rich princelings have 7 of the 25 seats.
The burgeoning social crisis due to this disparity, and the Arab
Revolutions, has spooked the leadership. They have massively increased
spending on domestic security which in this year’s budget has overtaken
that of defence for the first time. Wen Jiabao sounded the alarm on the
economy in 2007: “unstable, unbalanced, uncoordinated and
unsustainable.” The Economist pointed out in its Special Report on
China, “The country is too divided between rich and poor to be
experiencing a shengshi (age of prosperity)… The leadership
has recently begun to talk about a new target: boosting public
‘happiness’ rather than just GDP. In a decade fraught with economic and
political perils in China, that will be the hardest goal to achieve.”
Paradoxically this very expansion and growth of the economy, rapid
and uneven, has made China the country with the largest proletariat in
the world. Napoleon once said that, “When China awakes the world will
tremble.” The bureaucratic stranglehold is faltering with the
aggravating socioeconomic contradictions. There are wave after wave of
strikes unreported by the capitalist media. But once the mighty Chinese
proletariat enters as a class into the arena of history the
revolutionary blizzard will be unstoppable.
