Leaning Left: recent policy trends in China

By Duncan McFarland

Center for Marxist Education, Cambridge, MA (June 21, 2015)

Chinese policy today is “leaning left.”  A center-left government headed by President and General Secretary Xi Jinping is in power, a change from the reform group dominant during 1980s-90s period.  China is shifting to a new economic model, where growth is driven by domestic spending rather than low-cost exports.  A struggle has unfolded between the Communist Party of China and Western anti-China forces and Chinese dissidents.

Background: the Deng Xiaoping period

Deng Xiaoping’s reform and opening policy introduced in 1979 focused on rapid industrialization and modernization.   Class struggle, emphasized during the Cultural Revolution, was put on the back burner; expanding the production forces was the order of the day.  This program was successful over the next 20 years in building a large and powerful industrial economy.  Driving this in part was large scale foreign direct investment, a low-wage, export oriented strategy and a vast expansion of the private, capitalistic sector creating a large socialist market economy.  Living standards for most Chinese people greatly improved and large numbers of people were lifted out of poverty.  China developed a mixed economy, with a socialist, state owned sector controlling banking and strategic industries combined with the nonpublic sector.  China became more and more integrated with global markets and turnedS into one of the world’s greatest trading countries. 

Major problems and the beginnings of change

By the year 2000 the problems associated with this concentrated focus on economic development were of great concern:  the opening up of a large income gap between the newly wealthy and the working class, serious environmental degradation, corruption among Communist Party officials.  Large numbers of peasants left their homes in the interior to find work in the factories in the coastal areas, often paid low wages and working long hours.  The socialist values of the long revolution began to give way to individualistic drive for money, career and success.

General Secretary Hu Jintao (2002-2012) began to deal with these problems.  He introduced the policy of “Scientific Development” to balance to economic growth with social programs and environmental preservation, returning to a people-centered socialism.  “GDP worship” was criticized.  The central government adopted a series of labor laws strengthening the position of workers in regard to contracts, mediation and collective bargaining; a successful strike at Honda in South China led to a national wave of increasing wages and raising the minimum wage.

Recession of 2008 brings political change

The Great Recession of 2008 had great impact on China which lost global markets and shut down factories with many millions of workers losing their jobs.  The government responded with a huge infrastructure spending program.  These developments dealt a blow to Chinese policy groups advocating for continued expansion of the private markets and export strategy.  The left wing of the CCP became more influential; state owned enterprises got priority in investment decisions and central planning acquired new importance. 

At the Party Congress of 2012 and National Peoples Congress of 2013, Chinese leadership began the transition to a new economic model: driving a slower-paced growth with consumer spending and emphasizing quality.  Consumer spending means not only buying products like cars and color TV’s but also spending on education, health care, social security and cultural facilities.  The service sector has become more important and manufacturing is becoming more reliant on research and development, innovation and high tech products, moving up the value scale.  Important infrastructure projects include railways and highways in the interior.. China is now moving to expand on its huge economic accomplishments to prioritize the social development of the country with considerations of fairness and justice; extending the benefits of economic growth to all people, including those still in poverty, the migrant workers, and the national minorities.  The values emphasized in the new model of socio-economic development are more like the traditional Western concepts of socialism.

The new president and general secretary Xi Jinping has a more forceful style than the cautious Hu Jintao.  Identifying problems within the CCP, Xi launched an anti-corruption campaign targeting both “tigers and flies” which has helped win him popularity among the Chinese people.  Xi has led a resurgence of the study of Marxism-Leninism with better funding for research institutes.   A Chinese Communist Party circular know as  “Document Number Nine” was spirited out of the country in 2013; apparently genuine, it illuminates Xi’s political thinking.  This document identifies on the one hand an ideological and cultural struggle in China between the ruling position of the Chinese Communist Party and the program of building socialism with Chinese characteristics, and on the other hand, Western anti-China forces in connection with Chinese dissidents. 

Document Number Nine makes it clear that China will develop its own style of working-class democracy and will not copy or adopt Western practices of a bourgeois multi-party system or supposedly free elections.  The Western principles of absolute free speech and universal human values are criticized as all speech and human values reflect a class nature.  Neoliberal economics and supremacy of the free-market are criticized as is all negative propaganda attacking the accomplishments of the Chinese revolution or the Chinese Communist party.  

Dangerous bourgeois influences expanded in China in connection with the growth of the private market and opening up to the West, and an ideological struggle is necessary to contain these influences.  Document Number Nine directly counters the US-led capitalist/imperialist strategy to overthrow the Chinese Communist Party by means of a “color revolution.”

Countering the moves of the US empire

US capitalism-imperialism perceives China as its main rival on the world stage looking to the future.  Anti-China propaganda is now commonplace in the US media with very little effort to achieve balance or objectivity.  Thus China must deal with the imperialist strategy of encirclement and military pressure which is  being employed at this time.  In foreign policy, China wants peace and does not want confrontation or war with the US.  However, there is also a greater willingness to resist US pressure, and pursue a multi-polar world and a South/South strategy.  The US Trans Pacific Partnership and pivot to Asia/Pacific are countered by the “New Silk Road” through Central Asia, the 21^st Century Maritime Silk Road through southeast Asia, and increased Chinese trade and investments in Asia, Africa and Latin America.  Militarily, China continues to strengthen its capacities, pursuing a program of modernization with upgraded training and technology.

 US-led finance capital has long wanted China to privatize its banking system, free-float the yuan in international markets and open up China to foreign, capitalist investment with little regulation.  China has not only refused to accommodate these demands but has developed a series of initiatives to challenge the Western dominated international financial order set up at Bretton Woods at the end of World War Two; an Asian Infrastructure Development Bank, a BRICS bank, a plan to replace the dollar as the international trading standard, and more and more trade transacted in the Chinese yuan and the currencies of other countries. 

In the UN negotiations on Climate Change, China has consistently supported the principle of “common commitment, different responsibilities.”    China supports the developing countries’ position that international agreements limiting carbon emissions must be considered within a context of development and justice.  The more advanced Western economies grew in part by exploiting the resources of third world countries; there is a need for large scale commitment to an international fund to support green economic development in developing countries.

Implementation?

Changing China’s socio-economic model is a long-term project; self-identified as in the “primary stage of socialism,” the medium stage of socialist development may be achieved by 2030 or 2050.    Indeed, the country may look considerably different when Xi Jinping steps down as president in 2022.  The first signs of a different course are apparent: wages are increasing in industrial enterprises and the minimum wage is rising in many localities.  The UN praises continued gains in poverty eradication and programs to support migrant works are being set up.  The GINI constant measuring inequality is now declining, showing the beginnings of a trend to greater equality.  Social services have continued to improve with health insurance in different forms nearly universal.  FDIC has flattened out but Chinese investments abroad are rapidly increasing.  GDP growth has shifted towards consumer spending and away from exports.   China is becoming more efficient in industrial production with energy intensity declining per unit of GDP; 2030 is now set as the year for peak emissions.

Conclusion

China’s mixed economy has both socialist and capitalist sectors – the key question is, what is the direction of change…towards socialism or capitalism?  Recent developments affirm that the CCP is leading this huge, ancient country towards a bright socialist future.  However, the obstacles presented by the history of 4000 years of class society are immense and there is no guarantee of success.   Improving the performance of the CCP and developing socialist democracy are urgent tasks; the possibility of political regression is real.  The US Left needs to enhance study of Chinese socialist development from the Chinese perspective with a deeper understanding of  history and culture to balance Western interpretations and sources of information.  There is a huge stake for global politics and the international working class; China’s socialist modernization has world historic impact.