Tuesday, July 11, 2023

Communist Youth of Denmark: Socialist or Capitalist? The political character of contemporary China

Socialist or Capitalist? Is China an imperialist state? A comprehensive article by the Communist Youth of Denmark (DKU), adopted by its Third General Assembly, on the political character of contemporary China:

The question of whether or not modern China is a socialist country, is one of the most polarizing issues among self-proclaimed Marxist-Leninists today. DKU's position on this question defines our position on a wide range of theoretical, political, philosophical and economic issues that we have to deal with in our daily activities. Therefore, we must give a clear answer to our view on the political character of China.

We believe that China's socialist development stretched from the founding of the People's Republic in 1949 to 1978, when Deng Xiaoping's complete seizure of power and the introduction of his reform policies marked a concrete rupture from China's previous practical and theoretical line.

During China's socialist period, the Communist Party of China was primarily divided into two political groupings, the left wing, represented by Mao Zedong, who prioritized egalitarian socialist development, and the right wing, represented by Liu Shaoqi and Deng Xiaoping, who prioritized economic development even through capitalist initiatives. This was a contradiction in the view on the economic base, which is also split in two. In communist parties, the left wing has historically prioritized the mode of production, while the right wing has prioritized the productive forces, a viewpoint also seen in earlier Soviet opportunists such as Bukharin and Yaroshenko. This contradiction manifested itself on a wide range of political issues, of which the primary was the issue of collectivized agriculture.

After the party's left wing was defeated and imprisoned, the right wing's previous policies were quickly introduced one after another. Workers' rights to strike and freedom of speech, which had been introduced with the 1975 constitutional amendment, were removed in 1978. Other workers' rights were continuously decreased, state-owned companies were privatized and agriculture was decollectivized.

The collectivization of agriculture is one of the primary theses of Marxism-Leninism, as collectivized agriculture forms the main pillar of the worker-peasant alliance, which serves as the foundation of the dictatorship of the proletariat in a formerly semi-feudal society. In addition, collectivized agriculture is necessary to transform the individual small production that peasants previously engaged in, into collectivized production, with the goal of eventually evolving into a higher stage of socialist production. The danger small production poses to socialist construction was clearly described by Stalin in Foundations of Leninism:

Wherein lies the power of the overthrown bourgeoisie?..."in the force of habit, in the strength of small production... small production engenders capitalism and the bourgeoisie continuously, daily, hourly, spontaneously, and on a mass scale"... "the abolition of classes means not only driving out the landlords and capitalists... it also means abolishing the small commodity producers, and they cannot be drive out, or crushed; we must live in harmony with them, they can (and must) be remoulded and re-educated only by very prolonged, slow, cautious organizational work."

Here Stalin clarifies, by quoting Lenin, that small production is the primary danger to the dictatorship of the proletariat, and that a transformation of the small producers, for example through the collectivization of the peasants, is the only way to do away with small production. Without this transformation, the establishment of communism is not possible. Stalin clarifies this point further in a later article: Speech Delivered at the First All-Union Congress of Collective Farm Shock Brigadiers:

There you have the two paths, the capitalist path [private agriculture] and the socialist path [collectivized agriculture]: the path forward—to socialism, and the path backward—to capitalism.

There are people who think that some sort of third path could be followed… They want us to return to the old system, to return to individual farming, but without capitalists and landlords. Moreover, they "only" want us to permit the existence of the kulaks and other small capitalists as a legitimate phenomenon of our economic system. Actually, this is not a third path, but the second path—the path to capitalism. For what does it mean to return to individual farming and to restore the kulaks? It means restoring kulak bondage, restoring the exploitation of the peasantry by the kulaks and giving the kulaks power. But is it possible to restore the kulaks and at the same time to preserve the Soviet power? No, it is not possible. The restoration of the kulaks is bound to lead to the creation of a kulak power and to the liquidation of the Soviet power—hence, it is bound to lead to the formation of a bourgeois government. And the formation of a bourgeois government is bound to lead in its turn to the restoration of the landlords and capitalists, to the restoration of capitalism. The so-called third path is actually the second path, the path leading back to capitalism… Hence, there are only two paths: either forward and uphill—to the new, collective-farm system; or backward and down hill—to the old kulak-capitalist system. There is no third path.

These are just two of the most overt examples of texts that discuss the necessity of collectivization to eliminate small production. Deng Xiaoping was no doubt familiar with them, as texts like these were often brought up in the heated political debates of the early 1970s. However, decollectivization went ahead anyway, and was fully implemented by 1984. This would eventually lead to millions of unemployed people moving to the cities for work.

Along with the decollectivization of agriculture, the dismantling of socialist industry also began. In 1986, a new contract system was introduced, which meant that workers hired after its implementation would no longer be guaranteed permanent employment. This meant that the labor market, 4 which had been abolished during the socialist construction under Mao, was re-established with the main purpose of raising the rate of surplus value extraction, thus further exploiting the proletariat of China. Soon after, the Iron Rice Bowl, which provided workers with permanent employment, a strong welfare net and other benefits, was completely removed, because it stood in the way of further extraction of surplus value from the Chinese proletariat. This came alongside an economic structural reform in 1985, which gave company management more individual control over the company's finances. In 1988, this control was extended when ownership of many firms was shifted from the state to the firm's management. Cadres who were previously encouraged to stand among the masses and not take on bureaucratic roles were, after Deng's reforms, bribed with directorships and given a share of the profits their companies could achieve. This would eventually lead to the total privatization or closure of many companies in the late 1990s.

The purpose of production, which previously under Mao was aimed at satisfying the needs of the Chinese population and thus made it possible to circumvent the law of value, was changed to make the firms as profitable as possible. In China today, the private sector accounts for over half of the country's top 100 companies. According to the South China Morning Post, at the start of 2023, the private sector accounted for over half of government tax revenue, over 60% of GDP, over 80% of urban jobs and over 90% of the total number of companies. China's largest sector is without doubt the private sector.

Many advocates of China as a socialist country, in response to this, will point to the state-owned sector as a sign that China is socialist. However, here the truth is also sad. In the late 1990s and early 2000s, even the largest state-owned enterprises were also partially privatized. China's largest state-owned companies, such as State Grid Corporation of China, China 5 National Petroleum Corporation, Sinopec and China State Construction Engineering, are now on the stock market, with major Western financial sector monopolies such as The Vanguard Group, Blackrock and Credit Suisse as partial owners. When China's 'state-owned' companies make money, so does the global bourgeoisie.

What all this points to is that there is no large-scale socialist sector in China today. Not even the state-owned companies are without the presence of the bourgeoisie. It is therefore impossible to conclude that China is a socialist country based on its economic structure. China's foreign policy has also taken a reactionary turn since Deng Xiaoping came to power. China has replaced proletarian internationalism with a "non-interference policy". However, it is not quite true that China does not interfere in the affairs of other countries, only that they don't interfere in the interests of these countriesø bourgeoisies. China has supported reactionary governments' wars against communists with weapons in countries such as Nepal, Sri Lanka and the Philippines.

China has also deviated from its previous anti-colonialist stance. In the 1980s, China established not only open trade but also secret arms trade with apartheid South Africa. This was during a period where the UN prohibited arms trade with South Africa. China established diplomatic relations with Israel in 1992, buys Israeli weapons, and is today the country's second largest trading partner. From the 1990s, China also sold arms to Indonesia during its illegal occupation of East Timor.

The CCP still believes that it is the development of the productive forces which is the primary contradiction in China. If you think the primary contradiction is the class struggle, you are labeled a "left deviationist" and a "dogmatist". How can class struggle not be the primary contradiction when capitalism has grown as big as it has in China? How can class 6 struggle not be the primary contradiction when every year there are hundreds of demonstrations and strikes for better working conditions in China? Even the CPSU(b) believed that socialist construction could begin in the Soviet Union once they had rebuilt the economy to what it was before World War I, but China isn’t able to begin it now when they are on their way to becoming the largest economy in the world.

China, an imperialist state

The People's Republic of China is an imperialist state that exploits the global south like the traditional European imperialists. This takes the form of investments and development projects in Africa in particular. China acts both through US-dominated imperialist assemblies such as the IMF and World Bank, but also through its own channels such as BRICS. China has lucrative opportunities to buy off comprador leaders in these countries, as the more developed and thus degraded capitalism in the West has led our capitalists to exploit their semi-colonies particularly much.

Ιnvestment, charity or exploitation?

Certain illusions still exist among aspiring communists that China's investments are for mutual enrichment, or even charity. Firstly, capitalist investments are inherently exploitative. They still are if we abstract from unequal trade relations, political influence and the destruction of nature.

Karl Marx teaches us that a commodity bought at its price contains exploitation in itself. This is because it is labor power and not labor that is sold on the market. The surplus value is not paid for, but is expropriated by the owner of the means of production, in this case the Chinese private monopoly capital, or more often state-owned monopolies and banks. The Chinese economy basically functions according to the laws of capitalism. Therefore, companies that do not generate profits in line with the rest of the market will be outcompeted and displaced. It is therefore a vital necessity for these companies to increase profits as much as possible. It logically follows that a capitalist state's investment, which is merely the purchase of commodities (labor power, land, etc.), cannot possibly benefit both parties in the long run.

At the beginning of 2023, Chinese monopolies owned parts of 96 port terminals in a wide range of countries, both in the first and third world. A 8 case study in this is the port of Piraeus, Athens, which the Chinese shipping monopoly Cosco currently owns 67 percent of. Trade unionists had to fight for almost 10 years to be allowed to establish a union at the port, and have been plagued by brutal police violence and unsafe working conditions that have led to several deaths.

"The theory of productive forces"

It is the backward relations of production and, secondarily, the low level of productive forces that make the semi-colonies dependent on the imperialists. Right-wing opportunism, in the form of Dengism, is today coming to China's defense. They say that Chinese investments are developing productive forces and industry so that a break with imperialism is possible. The old imperialists also claim to have created economic development in their colonies with modern infrastructure and technology. In reality, there was a one-sided development of the wider economies, an export economy, that in the international division of labor is bound to lag behind big capital's pursuit of profit. This creates uncertainty, as changes in the price or demand for specific goods on the international market can lead to depression or boom depending on which way the wind blows. The boom, however, usually leads to extraordinarily high profits for the imperialists, with the depression being covered entirely by the working masses of the subjugated nation.

The Chinese "development projects" and their social democratic / "national" lackeys in the semi-colonies are not sincerely interested in breaking with imperialism. The agents of imperialism in the semi-colonies are the comprador bourgeoisie and the landowning class. By simply developing industry without thorough land reform, the urban working class and rural peasants remain condemned to impoverishment. The poor peasants lose their land to the landowner and have to work full or part-time in the city for a pittance. Competition with the rural poor breaks 9 down unions and wages for the urban working class. This is the economic basis of the semi-colonies that China is not addressing.

The exception to the rule? Countries like Iran and Venezuela

There are certain cases where there can be a more diverse development, as well as forgiveness of loans and other "kindnesses" from China. We must remember that there exists not only the short-term economic interest, but also a long-term strategic interest. Imperialist powers can benefit from loyal regional powers that allow them to project power in those parts of the world and act as a counterweight to competing imperialist powers. These semi-colonies gain elevated status, a slightly more diverse economy and a higher standard of living. The West used this strategy against China itself in the form of Taiwan and South Korea. In some ways, China itself played such a role in the 80s against the influence of the Soviet Union. So just because there is development in GDP or productive forces, this does not mean that this is the path to socialism. It is also convenient for imperialism to have some countries where slightly more advanced production can take place. Impoverished peasants without education are not the cheapest and most efficient solution for all forms of production.

More state - more socialism?

Many claim that China's state-owned enterprises are socialist. The capitalist mode of production is not contingent on the individual capitalist's ownership of the means of production. It can just as well exist in the form of state monopoly capital. What is essential is the form of exploitation and the capitalists' ownership of production, even if this happens in an abstracted form through the state. A good example is Danish imperialism, where the state still plays a major role in the economy.

The contradiction between collective and individual interests within the bourgeoisie

To understand Chinese imperialism and capitalism, we must understand the contradiction between collective and individual interests within the bourgeoisie. The contradiction consists in that the individual capitalist will do anything to promote his own profit, even at the expense of his fellow countrymen. But in the national and international struggle between capital groups, unity is necessary.

This contradiction is the reason for the self-regulation of the capitalist class. So here we have the explanation for why a capitalist state would execute a billionaire. It is actually the expression of capitalism in advancement, with high unity. The punishment of a corrupt capitalist can promote the profits of the broader imperialist bourgeoisie in China and strengthen them in the struggle for markets. The individual interest is in that case subordinated to the collective.

Because the ultimate interests of capitalists are mutually incompatible, any capitalist association will be temporary. It will change type when the old one no longer corresponds to the level of unity of the interests of the bourgeoisie.

This is our salvation because it means that no matter how much power a capitalist group gains, it will one day disintegrate. The capitalists are a cannibalistic class that will eat itself. They will, because their interests are material, economic and incompatible in the long run.

The importance of state capital in China

State monopoly capital is an expression of unity and progress within the bourgeoisie. It is a form of ownership that capital will use in cases where the broader profit can be secured by "sparing" that branch of society from competition. The naturally divergent interests of capital make this category smaller and smaller as the congruence of interests decreases.

State monopoly capital has many aspects in common with private monopoly capital: the arbitrary placement of prices. etc. The essential difference is ownership. State capital is common property of the bourgeoisie. The real share is obscured by the illusion of a people's state, particularly prominent in China, but which exists in different ways in all capitalist countries. The influence on state capital differs from capitalist to capitalist, but a special type is the bureaucrat capitalist, whose personal ownership of capital may be relatively modest, while their influence on state capital is great.

Here we're talking about people in management positions in the state apparatus or the party. China's capitalism is characterized by a disproportionately large and powerful bureaucratic strata, consisting of both big and small bureaucrats. The petty bureaucrats differ from your average private citizen in that their interests are far more closely tied to the imperialist state. This is because their own personal wealth does not derive from generating profit for their own company, but from making themselves useful to the imperialist state. This is a phenomenon that exists in both China and Denmark, but especially China. The leaders of China's Communist Party constitute a bureaucratic stratum of big capital. In other words, they are not just the few private capitalists you hear about who gain membership in the CCP, but a much broader layer of bureaucrat capitalists.


Since 1978, with the seizure of power by the revisionist wing, China has abandoned the socialist path to achieve communism, and has thus chosen to go down the path of capitalist development, to restore capitalism in China. We should not be fooled by the fact that a large portrait of Mao still hangs in Tiananmen Square, that China's ruling party uses a hammer and sickle as a party symbol, or that they still fly red flags. 
If there is one thing we have learned from other examples of formerly socialist countries in the twentieth century, it is that revisionists prefer to cloak their anti-communist and liberal ideas and policies with a communist aesthetic, for the simple purpose of fooling the masses and the revolutionary movement. 
The DKU chooses to stand by the revolutionary line and is consistently opposed to the revisionist tendency among communists who replace dialectics with mechanism, who confuse socialist construction with capitalist restoration, and who choose to defend an imperialist superpower. 

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