Markets' Republic of China

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Once it was seen as 'actually existing socialism'. Today China is capitalism's shining star. Sue Sparks surveys four recent books on its economy and those who make the profits.

Just as the Japanese economic "miracle" of the 1960s and 1970s spawned an explosion of books - many of them ill-informed punditry - so the "rise of China" is doing likewise. The books reviewed here seek, in their different ways, to chronicle and illuminate aspects of China's recent history. Three are by journalists, of which one is a translation of a work banned in China. Only one is by authors (two US economists) who would situate themselves in a Marxist tradition.

They are all worth reading and they all echo certain themes, especially the division between the rural areas and China's massively growing cities, and the price that is being paid by ordinary Chinese workers and peasants - and the environment - for the new globally-driven economy. Most of them also provide some insights into the forces of resistance who are trying to create an alternative future.

The Changing Face of China by John Gittings is the most comprehensive of the four books. Gittings is a journalist, but also something of a scholar, and this book reflects both aspects of his experience. In spite of the book's strengths, including its treatment of the Tiananmen protests, the massacre in 1989 and its aftermath, it is unsatisfactory in two main ways. The first problem is that although Gittings writes well, the book doesn't have a clear narrative structure.

The second problem is more fundamental. Though Gittings is not uncritical of the Chinese bureaucracy, he has no consistent framework in which to think about what happened in China. The first part of the book, dealing with the period up to Mao's death, tends to explain events almost entirely according to conflicts within the elite, and these conflicts are expressed in ideological terms. In this respect, it mirrors the voluntarism of Maoism itself, whereby reality could be shaped by the sheer effort of will.

With the chapter entitled Economics in Command, and the following chapter on the ending of the commune system in the rural areas and the wholesale introduction of market forces, we suddenly have, retrospectively, an explanation for what has gone before in terms of the failure of the Great Leap Forward and the attempt again to force the pace in the Cultural Revolution. The problem with the way Gittings tells the story is that, in reality, economics was always in command. The twists and turns of Mao's diktats and the consequent internal struggles in the elite were born out of the difficulties of trying to achieve development in a very poor country on the basis of economic independence.


The convulsions in the political superstructure need to be understood primarily in terms of a series of lurches from attempts to squeeze the peasants harder to fuel industrial development, to enforced steps back as food production stagnated or fell. Even in later parts of the book, there is still a heavy emphasis on debates within the bureaucracy. These are not necessarily unimportant, but Gittings takes their theoretical positions a bit too much at face value.

Having said that, the book does illuminate many aspects of recent Chinese history: for example, the realisation that many ordinary Chinese managed, under the most extreme repression, to arrive at remarkable critiques of Maoism, often by thoroughly reading the Marxist classics. Gittings quotes Fu Shenqi, a dissident, on the ideas of Wang Shenyou who was executed in April 1977. Wang had discovered Marxism for himself in the Cultural Revolution, but realised Maoism had little in common with it:

"He felt that the dogmas that Mao proposed in his old age were simply a cover for feudalism. Since China lacked a mature working class, the Communist Party developed as a peasant party led by revolutionary intellectuals, and the revolution it carried out was not proletarian-socialist but peasant, with a strong feudal tinge. After the revolution Chinese society therefore gradually evolved into a new form of oriental despotism. Once Wang said, 'Mao is just a peasant with a military cap'."

Gittings makes passing reference in a footnote to the theory that China and the Soviet Union were state capitalist regimes and that surplus value (profit) extracted from workers was appropriated by state bureaucrats and the political elite, only to dismiss the idea because it "ignores the degree to which the surplus value was redistributed in favour of the working classes and the underlying socialist ethic of the 1950s and 1960s". Again the primacy of the ideology to him is apparent, rather than the material reality of the dynamics forced on any backward country trying to defy the rules of global capitalism.

But in spite of its flaws, the book contains a wealth of information and is certainly a good counterweight to recent books which emphasise Mao's personality as the key to China's history in the 20th century.

Will The Boat Sink the Water? is a remarkable book which focuses on the lives of the mass of poor peasants by examining a number of incidents which have taken place in villages in the last decade or so. The authors, Chinese journalists, undertook a courageous investigation of a number of occurrences where peasants have resisted the impositions of the local bureaucrats and village chiefs, whose behaviour is indistinguishable in many ways from the feudal era.

After the abolition of the People's Communes and the introduction of private production in the rural areas, there was a brief rise in rural living standards. But the system of effectively removing the surplus in physical form has been replaced by the imposition of numerous taxes and fees, at the same time as peasants have lost access to the free education and welfare services (however basic) that used to be part of the Commune system.

Peasants are also tied to the land in the sense that they cannot get residence permits to live in the cities. This means that if they do leave the land in desperation - as millions have done - they do so as insecure migrant workers without even the rights that resident urban workers have.

The taxes and fees have risen enormously, partly driven by demands passed down from the centre, and partly multiplied by the local "cadres" who basically siphon off huge amounts for themselves. When peasants resist being charged twice over or more for the same tax, their protests are often met with extreme brutality. There are numerous examples in the book of arbitrary arrest and imprisonment, destruction of houses and confiscation of essential seeds and grain, beatings and murders. Famines and droughts provide no excuse for non-payment.

Meanwhile, the local village chiefs and party township officials grow richer on the back of the peasants. Because the Chinese government issues regular decrees insisting that the burden on peasants is reduced, people naively appeal further and further up the hierarchy, only to see their complaints referred back down again to the very people who are responsible for the oppression in the first place. Occasionally justice is done, at least partially, probably partly to reinforce the idea that the government is unaware of what's happening and would stop it if only it knew - "the Emperor's bad advisers" story.

Sometimes it is in the interests of the government to rein in some particularly outrageous petty local dictator, and executions - sometimes in public and televised - make examples of corrupt officials. The role of the media in this is interesting. Usually the local papers or cable TV repeat the line of the local township leaders against the peasants, but national TV occasionally comes in and reports something much closer to the truth.

Horrifying though much of the book is, it also has a great deal of humour in the style of old Soviet jokes. For example, one of Mao's poems "The Red Army fears not the long march, mountains and rivers they take in their stride" has a new popular version: "The official fears not a drinking match, ten thousand cups he will down with pride." The authors quote Mao's famous adage, "The revolution is not like a dinner party", before discussing the huge amounts of eating and drinking by officials at public expense. In one case, a restaurant owner sues the local township for non-payment of bills, and because the township can't pay, he is compensated with one of the administration buildings. The authors conclude that, contrary to Mao, the revolution is a dinner party.

It is hard to see how anyone could read this book and still believe that the peasants are in any sense, now or at any time in the past, masters of the country.

However, the authors can't really offer a way forward. They consult a lot of experts in the rural economy and receive a lot of contradictory answers. Understandably perhaps, the overall sense of the book is that more private control of land by the peasants, combined with the actual rule of law and proper elections (at the moment a peasant's vote counts for less than an urban resident's), as well as complete freedom of movement, would be the most desirable outcome. In other words, Western-style capitalism and bourgeois democracy.

James Kynge was the Financial Times' chief correspondent in Beijing, and his book, China Shakes the World, is much more in the conventional business book mould.

However, Kynge does a competent and interesting job of describing the impact of the world economy on China and vice versa. He uses examples such as the purchase of a whole steel plant by a Chinese businessman and its transport from Dortmund in Germany to Jinfeng in China to illustrate shifts in costs and demand. He investigates the rise of Chinese-owned clothing firms in Prato in Tuscany, following the fortunes of some illegal Chinese migrants there. The descriptions of the enormous wholesale markets and manufacturing operations that lie behind them put faces and stories to the shelves of cheap products we can see in our superstores.

The book does not skate over some of the human costs of the booming economy, and points out some of the contradictions that the system is facing. Employment growth is not fast enough to absorb the numbers of unemployed and underemployed from rural areas who are seeking work in the cities, and there is no mechanism for bankrupting enterprises which continue to churn out products with which the market is saturated, borrowing money which can only be repaid with more borrowing. Again the remedy is seen as political reform.

Martin Hart-Landsberg and Paul Burkett's book China and Socialism is in marked contrast to the others reviewed here. It is not a book in the revolutionary socialist tradition of this magazine, in that the authors believe that there was an attempt to build socialism in China in the years after 1949. But it is very different from the other books in that the authors look firmly in the direction of Chinese workers and peasants (and indeed international movements of workers) for solutions.

The authors are very critical both of the neoliberal admirers of post-reform China and even more of the "progressive" apologists for the regime, who argue that the legacy of the revolution has in some way allowed the Chinese state to insert itself into the global economy on preferential terms, and that this makes it a model for other poor countries to follow. They state:

"The facile linkage of China's post-revolutionary achievements to its current capitalist successes diverts attention from the main precondition of the latter: an increasingly insecure labour force whose efforts at self organisation are constantly suppressed by one of the world's most authoritarian states."

Unlike the other books, these authors tell us about the struggles of the working class in terms of strikes and self organisation, in the pre-revolutionary period, under Mao and in more recent decades.


They point out that even under conditions of extreme repression workers continue to organise strikes and demonstrations, sometimes on a very large scale, such as the movement in the north eastern provinces between March and May 2002, which involved more than 80,000 workers engaging in repeated demonstrations.

Some 50,000 oil workers in Daqing City marched for payment of unpaid wages and pensions, and against corruption and injustices committed by enterprise managers and local officials. They also formed an independent union, and when news of their actions travelled, other oil workers staged protests in solidarity. The government has responded with physical repression by police and soldiers, as well as new legal measures restricting the right to public assembly.

They are also careful not to blame Chinese workers for "stealing" jobs, either in South East Asia or in the West:

"Far from bashing China, our aim here is to demonstrate that China's capitalist growth strategy generates regional and global as well as national contradictions... Export-led growth pushes down regional wage rates, undermines domestic consumption and generates destructive regional competition for foreign investment and export production. The danger of course is that workers in different countries will come to see each other as the enemy rather than the system of capitalism that shapes their relationships and pits them against each other in a destructive competition."

However, they have a rather unrealistic vision of a regional development alternative where countries expand both domestic consumption and mutually beneficial trade. But at least they are looking to the right social forces for a solution:

"If there is any hope for a more progressive form of development in the China-East Asia region, it lies in these militant tendencies created by the region's industrialisation. Taken individually... a national working class movements are in a relatively weak position... But if they are able to coalesce, their ability to envision and fight for human-needs based forms of regional development will be greatly strengthened."

The common weakness of all the books is that, by never really coming to grips with the true nature of the post-1949 regime as state capitalist, they can't explain what has happened since the death of Mao in class terms, and only one of the books sees a solution in terms of class struggle.

In particular, there is the question of corruption, which crops up again and again. The question is, what is the nature of the corruption? Is it a "feudal" sort of problem - that is, is it purely to do with the personal enrichment of a layer of officials, limited by the capacity of their stomachs and the size and opulence of their houses? Or is it a "capitalist" one - that is, are these officials using excessive taxation and personal corruption as one (not the only one, of course) of the means by which they are changing from a state capitalist elite into a private capitalist one?

Kynge perhaps comes closest with his tale of oils wells "renationalised" in Shaanxi. Undoubtedly, there is a strong element of the personal enrichment factor, but to concentrate on that is to miss the most important thing that has been happening in China since the 1980s. The reason so many of these books miss that point is the fixation on the political role of the Communist Party as an end in itself, which is in turn the result of a belief - whether held positively or negatively by the different authors - that there was some kind of socialism in China after 1949.

  • The Changing Face of China by John Gittings is published by Oxford University Press, £9.99.
  • China Shakes the World by James Kynge is published by Orion Books, £18.99
  • China and Socialism by Martin Hart-Landsberg and Paul Burkett is published by Monthly Review Press, $15.95
  • Will the Boat Sink the Water? by Chen Guidi and Wu Chuntao is published by Public Affairs Books, £9.99.

These books are available from Bookmarks, phone 020 7637 1848 to order.