Two must-see documentaries on terrorism in Xinjiang

Two recently released videos on terrorism in Xinjiang, with much material not seen until now. The first concerns the ‘East Turkistan Islamic Movement’ (ETIM), with close connections to the Washington-funded ‘World Uyghur Congress’ (WUC).

The second concerns the complex and long-term counter-terrorism work in Xinjiang, which is made even more complex by some ‘Western’ countries supporting such terrorism.

Two points worth noting:

First, the Chinese analysis of the root cause of terrorism concludes that is not primarily due to religion or ethnicity, but to foundational socio-economic matters. Thus, poverty, connected with lack of education and  employment, all come first – as aspects of the economic base – and they provide fertile ground for extremist religious views. Obviously, a distinctly Marxist analysis of terrorism, and it also shapes short and long-term policies in Xinjiang.

Second, when the security bodies of Russia, Eastern Europe, Central Asia and East Asia meet, one of the common items on the agenda is dealing with the way some ‘Western’ countries complicate the problems by fostering terrorism in some parts of the world.

China’s military technology at least four years ahead of the rest

More and more aspects of Chinese technology have now leapt ahead of the rest of the world, from high speed trains to internet technology. Now it is military technology.

I remember reading this article by Vasily Kashin in October, soon after the amazing 70th anniversary celebrations of the New China. I have mentioned this article on a number of occasions in China, to much excitement, and returned to it recently.

Kashin is a Russian military expert and viewed with great interest the new military hardware on display at the wonderful parade in Beijing on 1 October, 2019. I recommend that you read the whole article, but these points are particularly noteworthy:

‘Making its debut at the China Day parade was the Dongfeng-41 (DF-41) intercontinental ballistic missile, which is capable of reaching any point in the continental United States in 30 minutes at Mach 25 carrying as many as 10 independently-targetable warheads … the introduction of these weapons of mass destruction by a US rival other than Russia remains impressive and sobering’.

Kashin mentions evidence of serious innovations, with methods never tried fully elsewhere, such as the use of the ramjet engine in cruise missles and high-altitude drones with liquid-propellant rocket engines. He observes that ‘China is taking a leading position in many areas regarding the development of military equipment’ and that ‘Chinese military and engineers are not afraid to try extremely original, never-used concepts and approaches’.

As for being at least four years ahead:

Kashin refers to the medium-range ballistic missile DF-17, the ‘first missile in the world equipped with a hypersonic manoeuvrable warhead. The United States expects to form the first experimental battery of its medium-range ballistic missiles with hypersonic warheads by 2023. Thus, the Americans are at best lagging four years‘.

A final observation: it makes the accusation levelled at China of ‘technology theft‘ or ‘forced technology transfer’ quite empty. How can you steal someone’s else’s technology when yours is the most advanced?

How anti-China stories are concocted (updated)

The gossip-scoop formula of a few media outlets in a small number of former colonising countries seems to have developed a fondness for anti-China stories. We know well enough at a general level that they are based on selective misinformation, but recently two clear examples of how such a process functions came to light.

The first concerns a former employee of the British Consulate in Hong Kong, who claimed to have been ‘tortured’ by ‘secret police’ (playing on an old anti-communist trope) while visiting Shenzhen. Actually, he was arrested for visiting a massage parlour and imprisoned for the standard period of time in China, before being released. You can find the story here and here, including video evidence.

The second concerns a convicted fraudster from China, who has already served time and is wanted for another fraud case. He skipped China on fake passports and turned up in Australia, where he is trying to pass himself off as a ‘spy’ who wants to ‘defect’, with inside information. Although I do not read Australian papers, you can bet that they are doing their best to tell another tall tale. You can find the whole story here, here and here.

Update: In regard to the bogus ‘spy’, who turned up in Australia recently, the spooks in that part of the world have decided that the man in question – Wang Liqiang – is at most ‘a bit player on the fringes of the espionage community’, and some have realised at last that the whole case is a ‘spy farce’.


A Forgotten History: East European Market Socialism

‘The alternative is still either Socialism or a market economy’ – these deceptive words come from Count Ludwig von Mises and they have haunted much economic thought concerning socialism and indeed communism ever since. They were initially uttered in 1932 in a moment of exasperation. Von Mises sought to respond to first successful communist revolution, in Russia, and what was then emerging as the Soviet Union, which was in the early stages of launching its ‘socialist offensive’ – the massive process of industrialisation and agricultural collectivisation. It would result in the Soviet Union’s leap into the modern era. However, in the rather different world after 1989, von Mises’s slogan of exasperation has become an apparent truism.

Why have the words of this slogan continued to haunt? In the now-faded triumphalism after the counter-revolutions in Eastern Europe, many – Marxists included – have clung onto the either-or dichotomy. You cannot have, they believe, a socialist system and a market economy. Such a combination is a hybrid, an oxymoron.

Why deceptive? Von Mises (and Count Friedrich von Hayek after him) restricted socialism to a fully planned economy, without any form of a market. And a ‘market economy’ was by definition a capitalist market economy. Deceptive, yes; persuasive, even more so. Today, it takes a significant mental effort for many to disconnect ‘market’ from ‘capitalism’, but the effort must be made.

The Initial Proposal

Over the last couple of months, I have been engaged in researching the various market socialist experiments in Eastern Europe, from the 195os to the 1980s. All of them – including the Soviet Union – attempted to develop versions of market socialism. Some were more tentative, such as the Soviet Union, Romania and Bulgaria, while some went much further, such as Poland, Hungary and Yugoslavia. The programs in these countries, which saw their role in the CMEA, or Comecon, as complementary rather than competitive, had distinct local variations, but they also evinced significant similarities that are still known as ‘market socialism’.

The initial model was proposed by Oskar Lange in the late 1930s (although there were stray precursors). He argued that under a market socialist system there would be neither a market in production nor in finance for enterprises, but individuals could select their own jobs and what they consumed. In this context, the Central Planning Board would set an initial price for products, to which enterprises would respond by two means: taking appropriate measures to minimise the average costs of production; levelling prices in relation to these costs of production and consumer preferences. Thus, while the state owned the means of production, workers would exercise freedom of choice in terms of where to work and what to consume, which would in turn influence the pricing mechanisms of the planning board. For Lange, this approach would achieve – through a perpetual cycle of trial and error – a viable form of socialist planning. This would overcome the inherent tendency of capitalist market systems to monopolies and state intervention, and enable the optimum outcome for the social good, as well as provide a way to make significant economic improvement. Lange’s proposal is usually seen in light of the ‘socialist calculation’ debate (including the two Austrian counts mentioned earlier), but this is to miss the profound impact of Lange’s model in Eastern Europe. There, it opened up crucial theoretical space for considering the role of markets within a socialist system, although each of the market socialist programs modified Lange’s proposal in various ways – particularly in terms of independent enterprises, the nature of prices and the law of value under socialism.

Lange was only the beginning, for in my research I have uncovered a significant trove of material that is mostly forgotten these days. For some, it is as though this important phase of economic theory and planning simply did not exist. But exist it did, particularly in in places like the GDR (East Germany), where a massive concentration of economic research opened up new paths in developing a Marxist political economy for the construction of socialism and a socialist economy. I do not need to go into all the material and references here (they are contained in a lengthy article which will be published in due time), but my focus is to draw out the most significant insights. I do so with an eye on the Chinese socialist market economy.

Economic Mechanism

There were three crucial insights that arose from Eastern European market socialism: the market as an economic mechanism; the relation between planning and market; and ownership, or what is really the connection between the relations and means of production.

The first breakthrough is often forgotten: a market economy is by no means equivalent to a capitalist market economy. Marx himself already points in this direction and historical analysis confirms Marx’s approach: market economies have existed in many different historical periods, and they have clearly not been capitalist market economies. Indeed, a market economy under a capitalist market system is but one historical form of a market economy.

How did the Eastern European economists see the market? It should be seen as an instrument rather than inherently capitalist. The favoured term was ‘economic mechanism’, which entailed that it was like a neutral piece of machinery. As for the workings of this economic mechanism, the most influential proposal came from the Hungarian economist, János Kornai. He argued that an economic mechanism such as the market could exist in different forms of organisation, including socialist ones, and the way one deploys such a mechanism is through direct and indirect levers. The direct levers were the direction of production, the allocation of production materials, the regulation of foreign trade, and the appointment of managers. All of these were centralised through the state, although the problem thus far had been overcentralisation and thus the dominance of direct levers. Kornai also proposed four indirect levers: investment, the monetary system, the price system, and the wage fund. These were indirect because the government would provide the necessary environment for appropriate forms of activity, but not control them directly.

However, there was a catch with the economic mechanism argument. By and large, Eastern European economists did not move beyond the idea of a neutral instrument that could be used in different contexts. Of all the economists, only Branko Horvat (from Yugoslavia) went a step further: ‘It is not the market that determines a social system; it is, on the contrary, the socio-economic system that determines the type of the market’. In other words, a market economy is not merely a neutral instrument that could be used in different contexts; its nature, its constellation of components, was also shaped by the socio-economic system in which it operated. But Horvat made this important point in 1989, already under the acknowledged influence of earlier developments in Chinese economic theory.

Between Planning and Market

A second important breakthrough was made in terms of the planning-market opposition. We have already seen that Count Ludwig von Mises had – deceptively – suggested that planning and the market were diametrically opposed to one another. Eastern European economist struggled with this question as well, often being tempted to see them in tension. This opposition was posed in various ways, such as centralisation and decentralisation, state control and worker (economic) democracy, or vertical and horizontal relations. Given these oppositions, many saw them as working against each other, so that the enhancement of one side undermined the other – most often in terms of the state refusing to allow or even actively blocking the decentralising impetus of market relations.

Most attempted to find the correct balance between the ‘invisible’ and ‘visible’ hands, which was described by Włodzimierz Brus as ‘central planning with a regulated market’. Thus, significant marketisation would be possible, all the way from individuals to enterprises, from supply-and-demand price mechanisms to an economic bottom line for an enterprise’s viability, from division of labour to wage differentials, without it being a version of laissez-faire or even the capitalist model of social democracy. At the same time, the state would continue to own the core means of production, engage not in micro-management but in overall planning and direction of the economy via indirect levers, engage in price control in crucial areas and to prevent speculation during shortages, focus on efficient allocation, calculation and valuation, and have primary control over many areas that simply cannot be ‘marketised’, such as the mitigation of inequalities, overcoming poverty, social care, fostering talents through education, and environmental concerns, which were already becoming apparent in the 1970s

While this ‘balance’ approach dominated, there was at least one effort to go a step further. It comes from Branko Horvat: ‘without market there is no self-management and therefore no socialism’. With all members of society as ‘share-holders’, his point is more dialectical rather than simply seeking a balance of opposing forces. Or, as he puts it even more sharply: ‘a market is a planning device; without planning a market cannot operate efficiently’. In other words, planning and a market are not diametrically opposed to one another, but work in a dialectical way to enhance the other. Again, Horvat was by this time influenced by Chinese economic thought, where we find that Chinese economic planning has taken on a whole new reality in light of the development of the socialist market economy. Let me be clear: China has certainly not abandoned economic planning, for it now works at a qualitatively higher and more sophisticated level. And it does so through the socialist market economy, which is in turn a planning device.

From Ownership to Liberating the Forces of Production

It should not surprise us that Eastern European economists focused extensively on ownership of the means of production. The Communist Manifesto makes it clear that one of the first acts after a proletarian revolution is to abolish bourgeois private property and give workers control over the means of production. But the Eastern Europeans also began to examine what happens after bourgeois ownership has been overcome, and so they began to distinguish between individual private property (deriving from the Roman legal tradition) and public-social ownership. Non-bourgeois private property was quite possible in a socialist system, so much so that it caused little debate. Most of the debate was focused on the transition from public (or state) ownership to social ownership.

However, this debate had one significant shortcoming: the tendency to focus too much on the relations of production, specifically by defining socialist economics in terms of the ownership of the means of production, an emphasis that led at times from economic democracy to misdirected emphases on political ‘democratisation’ with a distinctly bourgeois aftertaste. This emphasis relegates to second place or indeed neglects what is arguably the primary issue of liberating the forces of production under socialism (as Deng Xiaoping saw). So let us see how the question of ownership looks in light of a focus on productive forces.

After a successful revolution, the historical evidence is clear that all communist parties moved to liberate productive forces through full-scale nationalisation of enterprises, abolition of bourgeois private property, industrialisation in light of ‘backward’ economic conditions, collectivisation of agriculture, and moves to a fully planned economy. As the dictatorship of the proletariat and peasantry, the new state has had to act decisively to destroy the previous system and instigate the economic structures needed for the initial phase after a communist revolution. As Engels put it in 1890: ‘Gewalt (i.e. state power [Staatsmacht]) is also an economic force [ökonomische Potenz]!’ I know of no case where this approach did not propel productive forces forward, now that they were freed from the bonds of a capitalist-landlord system. Even more, it enabled Eastern European countries that were – due to a much longer history – on the periphery of Western European development to break out of this peripheral status. This process is particularly clear with the Soviet Union, Czechoslovakia and East Germany, which became highly industrialised and dynamic economies, but the others also made considerable breakthroughs and significant growth (in the 1950s averaging 11 percent per annum). These are quite stunning results of the first phase, especially in what were comparatively ‘backward’ countries.

However, this approach – full state ownership and planned economies – has turned out to be an initial phase of socialist economic construction.  With the development of productive forces, older tensions that formerly could be managed now become threatening, while new tensions arise between the forces and relations of productive, which hinder further development.[1] Fully planned socialist economies have found that they reach a limit-point for further liberation, with eventually stagnating economic performance, supply-side structural blockages, a dwindling of creative solutions to such problems, and increasing contradictions in the relations of production that threatened to become antagonistic.[2] In short, the forces of production need a new burst of life, another form of liberation.

Historically, the way these problems have been tackled – with less and more success – is the development of a market economy in a socialist framework. The implications for the relations of production were in terms of the rise and spread of private property, of increasing competition between enterprises (even state-owned enterprises), and even of new levels of creativity and competition. Not unexpectedly, this new phase gave rise to a whole new series of contradictions that were handled in less or more competent ways.

Concluding Assessment

How do we assess the whole experiment, with the advantage of hindsight? While the initial phases of planned economies did indeed liberate the forces of production, the problem was that the market socialist reforms did not seem to provide the hoped-for breakthroughs. Economic development, growth and wages evidenced initial improvements equal to and beyond those of Western Europe, but then began to fall behind by the late 1970s and 1980s. Herein lies the initial problem: the desire to show that socialism was better than capitalism, so much so that the former would ‘catch up’ to and ‘overtake’ the latter. Many factors were sidelined in such assessments, such as natural resources, global economic crises (especially in the early 1970s), hostile external forces, social structures, cultures, and especially the longer history of Eastern Europe over some five centuries. This economic, social and political history, characterised by a smaller population in relation to territory, the phenomenon of re-feudalisation on the way to capitalism, and persistence of pre-bourgeois modes of governance, led to a situation in the twentieth century in which Eastern Europe found itself on the periphery of and lagging behind Western European capitalism. In terms of economic analysis, the focus on growth, prices, wages, innovation and efficiency in one or more small country bracketed out both the global situation and crucial socio-economic indicators such as worker-focused medical care, education, retirement pensions, full employment of both women and men, and a sense of the common good.

All the same, the various efforts at market socialism in Eastern Europe remained tentative, achieving no more than a half-way house between centralised planning and market economies. They were of course feeling their way along a path no one had before travelled. And the fact that they were forced into ‘shock therapy’ in the 1990s, precisely when many expected that they would finally be able to achieve a fully function market socialism, has cast a pall over the whole effort.

What have been the responses? One line was to retreat to the position that market socialism was a hybrid that would never work. This approach usually bifurcates along the old planned-market opposition. For pro-capitalists, only a capitalist market economy is viable. Thus, it matters not whether one has a fully planned economy or market socialism: they are both unviable. On the other side were Marxists who argued that socialism should never entertain any type of market economy, for only a planned economy is appropriate to socialism. Any effort at market socialism thus becomes an oxymoron, if not a ‘betrayal’ of Marxism – a narrative that is redolent with Western religious assumptions. The solution in this case is to enhance the efficiency and sophistication of such central planning. However, the problem with either approach is that it assumes the misleading slogan promoted by von Mises – ‘the alternative is still either Socialism or a market economy’.

The alternative is to grasp the dialectic: full marketisation – including the ‘hard budget constraint’ of bankruptcy – is a socialist project, and thus planning happens and is indeed enhanced through a market economy. It is not a case of either planning or markets, but a dialectical enhancement of both, with the attendant qualitative leap in the need for sophistication.[3] In this light should we understand Xi Jinping’s observation that China ‘resolved a major problem that other socialist countries had long failed to resolve’. Or, as Oskar Lange said at one point, ‘authentic free competition could only exist in socialism, because under capitalism monopolies put down all kinds of true competition’.

Thus far, I have mentioned China on rare occasions. This is a deliberate move, since the socialist market economy in China requires a distinct study on its own, since it is not really the same as East European market socialism and cannot be drawn into that historical path. Of course, as the Reform and Opening Up began, scholars and economists from China studied the Eastern European situations very carefully, with interchanges between China and Eastern Europe and even implementation of some early Chinese measures. While the Chinese learnt from Eastern European successes and failures, and while Eastern European scholars began to learn from China’s approach, the latter developed a distinct approach, designated by the term, ‘socialist market economy with Chinese characteristics’.

[1] Here Marx’s well-known insight from ‘A Contribution to the Critique of Political Economy’ (1859) also applies, although perhaps not quite in the way he expected during the construction of socialism: ‘At a certain stage of development, the material productive forces of society come into conflict with the existing relations of production … From forms of development of the productive forces these relations turn into their fetters’. Stalin would, of course, develop this point much further in his long study of economic problems under socialism.

[2] Specific problems included the unevenness of development – in terms of talents and distribution of productive capacity – over a very short period of time; overspending of national incomes for the sake of increasing production to meet consumption demands, a situation that led to constant tensions between expanding or modernising production; the contradictions of engaging in foreign trade, where essentially complementary production processes had to deal with capitalist competition.

[3] Such detail and complexity is theoretically possible but in practice it proved immensely difficult, not least because the computational methods and extraordinary flexibility developed later – as with China – were not yet available.

From Germany embracing Huawei’s 5G to Chinese economic prowess

While I have been researching Eastern European market socialism, with its breakthroughs and logjams, have not posted so much recently. But there are some interesting recent developments.

First, despite all the hype about Huawei in small corners of the world, business is booming with company sales improving more than 25 percent compared to last year. Its new phone, the Mate 30, simply challenges you to do without the nefarious dealings of Google. For some time now, I have not been using any of the Google items, so this is good news. Further, Germany has decided that Huawei poses no risks whatsover, and indeed that it helpfully prevents US spying, so the company that has most global patents in 5G will be integral to Germany’s development.

On a related note, despite all the uncertainties of the global situation and with a new wave of US-driven nationalistic protectionism, the Chinese economy is moving ahead solidly. Chinese experts have have been predicting a gradual slowing of growth for some time, as China makes a transition from high volume to high quality, and with a focus on ecological civilisation (shengtai wenming). Then again, 6 to 6.5 percent growth now in China is equivalent to 15 percent 10 years ago, and it is way above standard levels elsewhere.


The value of farming

Since I now live in a regional area (when I am in China), I meet farmers like this everyday. Only a few minutes’ walk away is a local market, where I buy fresh fruit and vegetables, beans, spices, and freshly made tofu. These photographs come from Sichuan, but you can see similar scenes all across China. They concern a special early morning bus route for farmers so they can get to the markets with relative ease.

Believing in Ghosts in Hong Kong

In an earlier piece, I proposed that the dominant narrative concerning China in a small number of former colonising countries (usually known as ‘the West’) is like believing in ghosts. What is the narrative? It is the pure fancy that the Communist Party of China is a ‘secretive’ and ‘paranoid’ outfit, which is terribly afraid of its own people whom it monitors all the time, and is scheming for world domination. Nothing new here, since the same was believed concerning the Soviet Union.

How is this like believing in ghosts? If you believe in ghosts, then you can fit all sorts of odd things into your narrative. It might be a weird dream, a creak in the corner, a door closing by itself, a misplaced set of keys, and so on. All of these and more become part of your belief, confirming what is clearly false. And if you run out of a few twisted facts, you can simply make them up.

In short, if you believe that the CPC is an ‘authoritarian’ bunch with ‘evil intent’, then there are spooks everywhere. Boo!

In that earlier piece, I gave a number of examples, from Xinjiang, through Huawei to the Social Credit System in China. But let me focus here on the recent drug-fuelled violence in Hong Kong, with significant financial and logistical support from outside.

The narrative promoted misleadingly in a few ‘Western’ media outlets and government agencies has had a number of intriguing phases.

Phase 1 of the Ghost Story: The false idea of a ‘groundswell’ of popular opposition to ‘authoritarian’ measures.

This phase turned on deliberate misrepresentation of a modest extradition bill. The bill itself was simply standardising procedures for crimes such as murder (a murder case, with the culprit fleeing to the island of Taiwan, was in fact the immediate trigger for the bill). But through social media and deliberate misinformation, the extradition bill was pumped up into a measure instigated by the ‘authoritarian regime’ in Beijing, so that anyone and everyone in Hong Kong could be whisked away at any moment.

Behind this phase were a couple of assumptions: first, the obvious one is a ‘Western’ liberal paradigm of ‘authoritarianism’, a loose term used for any country that does not fit into the mould of the ‘Western’ bourgeois state.

The second is that Chinese people, and especially those in Hong Kong, are supposedly longing for Western ‘freedoms’, bourgeois ‘democracy’, ‘human rights’ and … Facebook. There were desperate efforts to show that the majority of people in Hong Kong supported the riots, although this flew directly in face of the fact that the majority are resolutely opposed to the riots and see themselves very much as part of China.

However, this assumption that people everywhere hanker after Western ‘freedoms’ is so strong in parts of Western Europe and North America that it underlies what passes as foreign policy in these places. While trying to claim the high moral ground, they use it consistently to intervene in and disrupt the sovereignty of many countries around the world, with the result that such countries are singularly unimpressed.

Curiously, this assumption leads to profoundly misguided policies. As they say in China, ‘seek truth from facts’ (Mao Zedong and especially Deng Xiaoping promoted this one). And what are the facts? In international surveys, Chinese people show between 86 and 90 percent trust in government and public institutions, along with confidence in the direction in which the country is headed. The more educated and younger the respondents, the higher the level of trust and support.

Phase 2 of the Ghost Story: ‘Beijing’ is ‘pulling the strings’.

When it became clear that the one country – two systems policy was being followed strictly, and that the local government in Hong Kong, headed by Carrie Lam Cheng Yuet-ngor, was standing firm, another piece of the narrative came to the fore: ‘Beijing’ was ‘pulling the strings’ behind the scenes, making sure that the ‘puppet’ leader was doing its bidding.

Now it was time for pure fabrication. Supposedly, Carrie Lam Cheng Yuet-ngor (to use her full name) had her resignation turned down. This lie was swiftly shown for what it was. This did not stop the ‘pulling strings’ line, which now relied on a standard approach in some places: using gossip, propagated these days through social media. Thus, they promoted by whatever way possible the belief that every step taken by the Hong Kong local government and its police to quell the riots were directed from ‘Beijing’.

A few points are worth noting? First, this approach was taken since the PLA garrison in Hong Kong had not been deployed, and troops from the mainland had not moved in. This turn of events was disappointing to some anti-China ideologues, if not the rioters themselves, so they had to find another line.

Second, it was a classic case of ‘look over there’. There is more than ample evidence of systemic interference in Hong Kong by government agencies from the United States and the UK, at times through NGOs and at times by direct political interference. For some time now, significant funds have flowed to the rioters, as well as logistical support. For example, more than 1000 Hong Kong police officers have been ‘doxed’, with their names, addresses, phone numbers, bank information, and so on, hacked and then spread widely. The result had been significant harassment of their families. Doxing requires a high level of logistical support, along with the assistance of compliant social media outfits like Facebook. How to respond to these embarrassing facts? Cry ‘look over there’ and blame ‘Beijing’.

Third, let us ask what is actually taking place. Since tensions in Hong Kong society had risen to the surface, extensive research for the sake of informing policies began. This research focuses on – to name a few – the problematic educational system in Hong Kong, extremes in poverty and wealth (more than one million people in Hong Kong live in poverty, in a city of seven million), the flawed political structure bequeathed by the UK, in which vested interests have an inordinate say in the Legislative Council and any resolution must have a two-thirds majority. We can expect much more in-depth research and reforms in these and other areas.

Of course, the whole idea of ‘pulling the strings’ is based on the ‘authoritarian’ paradigm, which shows profound ignorance of what the one country – two systems policy entails.

Phase 3 of the Ghost Story: The lie of Hong Kong police ‘brutality’.

With the initial protests fading away as people woke up to themselves, smaller and smaller groups raised the level of violence on the streets. They would typically be dressed in black, wear face masks or gas masks, and take drugs to bring on a type of ‘beserk’ behaviour. In their armoury they had petrol bombs, bamboo spears with knives attached, batons, baseball bats, lethal slingshots that fired large ball-bearings, and some began carrying guns.

They set about vandalising, smashing and burning public transport facilities, banks, shops, police vehicles, the airport and many other facilities. They would beat up any isolated police officer (most recently setting an officer on fire with a Molotov cocktail) or indeed member of public that condemned their acts. As the Hong Kong Federation of Trade Unions has opposed the violence, service centres of the federation have been vandalised and forced to close for repairs. These service centres provide medical, welfare and other community services to workers, especially its members but also the wider public.

Obviously, none of this was reported in the biased media outlets or indeed statements from some ‘Western’ foreign ministers and even leaders. Instead, they focused on supposed police ‘brutality’. And of course, ‘Beijing’ was behind it all.

The facts are quite different. The Hong Kong police have been exceedingly restrained, using measures only where needed to counter the escalation of violence by a small minority. For example, the anti-face mask law, with stiff penalties for covering one’s face in any public gathering, came in to effect on 5 October, 2019. This is quite late in the piece, follows international practice, and was instigated in response to widespread urging in Hong Kong. Indeed, the police have widespread support in Hong Kong and the mainland, with ‘I support Hong Kong police’ being displayed on many shop windows, on social media and so on.

Phase 4 of the Ghost Story: Supposedly, people on the mainland are ‘denied’ information about Hong Kong.

This one really runs through the whole story, but it was revealed to me by a question while I was in Western Europe: ‘What about Hong Kong, do the people in China know what is going on?’

The assumption behind this question is obvious: Chinese people are supposedly ‘denied’ information about the world and their own country.

Not long after I was asked this question, I returned to China. Not only are the news outlets regularly providing detailed and complete information about Hong Kong, but in everyday conversations people express their deep concern about what is happening. The foreign interference is clear, which they resent, and they are troubled by the overturning of central Chinese values, especially harmony, security and stability. Above all, they are not anti-Kong Kong, but instead feel for what ordinary people in Hong Kong are suffering (in light of the economic downturn in response to the riots) and hope that the situation will be stabilised soon.

I found that here one could gain a sense of the all the facts in relation to what was going on in Hong Kong. Thankfully, this is also the case in the vast majority of countries in the world, which increasingly do not listen to the biased material being pumped out of a few former colonising countries.

Celebrating 70 Years of the New China: A Foreigner’s Perspective

There is a saying very common in China these days: keep the mission firmly in mind, do not forget your original desire.

I begin with this saying since it is part and parcel of the momentous occasion of the 70th anniversary of the founding of the New China. I am currently in China, witnessing firsthand all of the preparations, anticipation, and then the day itself. Indeed, I write this on 1 October, when 70 years ago to this day Mao Zedong stood on the gate known as Tiananmen and announced the establishment of the People’s Republic of China. Today it was of course Xi Jinping who stood in the same place, acknowledging Mao and the leaders who followed. I watched the whole proceedings live on my computer, quite taken with the celebration of the diversity of China’s many nationalities, the recognition of its provinces and autonomous regions, and the emphasis on young people who hold China’s future in their hands. Of course, I was impressed by the relatively brief military part of the parade, for a socialist country has to be able to protect itself from those who would seek to undermine it. Representatives from many countries were there, especially from developing countries like China. They are increasingly taken with the ‘China paradigm’ as a way forward, and so turning their backs on the shattered neo-liberal project known as the ‘Washington Consensus’.

But let us step back for a moment and ask what does a foreigner who is somewhat familiar with China notice. What do everyday people say about the celebration of the 70th anniversary? I have had a month or so to talk with people to find out what they feel and think.

The most common observation is that today is a recognition of all the hard work that has gone into the last 70 years. Again and again, people say: ‘We have worked so hard; now we can celebrate and enjoy our achievements for a little’. The achievements are clear: realising the basic human right of socio-economic wellbeing for all people; lifting more than 800 million people out of poverty; building a prosperous and increasingly strong China, so that the people I know have a greater cultural confidence in speaking about and explaining what makes China tick; the reality that Marxism is even more now at the core of all China does. Indeed, the CPC and its history was a major feature of the parade in Beijing that I watched today.

But work? My sense at times is that people here work too hard. By contrast, they often say that they do not work hard enough. Alongside work there is struggle: the past 70 years have had a large dose of international opposition and the Chinese have struggled against the odds. They know full well that what has been achieved today is as much struggle as it is work. Perhaps I should rephrase that: from their experience, they know that work is struggle. And they are not afraid of struggle.

After all, they are very aware that much remains to be done. Tackling environmental problems has already made great headway, but they know that much more needs to be done. There are still a few million people living in poverty and this is unacceptable for any notion of a moderately prosperous and well-off society (xiaokang shehui). They are tackling the desperate efforts of a fractured ‘West’ (a handful of former colonisers) to contain China and tell it what to do. But they will not deviate from their own path and will certainly not let others dictate the terms.

But isn’t this all just a version of nationalism, a Chinese version of ‘America first and screw the rest’? Not at all. In the past, I have sought to understand a positive sense of nationalism in terms of how it was thoroughly reinterpreted, first in the Soviet Union and then later in many colonised countries that sought national liberation. In this light, nationalism became an anti-colonial desire, with a strong focus on sovereignty. This also entailed a respect for the sovereignty of others: in the same way that you do not want your own country to be dominated by another, you also do not want to do the same thing to others. Zhou Enlai and Mao Zedong’s ‘Five Principles of Peaceful Co-existence’ express this position most clearly.

As I have talked with people, another sense has begun to emerge. To begin with ‘nationalism’ is a bad translation of the Chinese term ‘ai guo’. Literally, it means ‘love of country’, with nothing of the ‘nation-state’ or ‘-ism’ about it. ‘Love of country’ is an inescapable identity, for all Chinese people anywhere in the world. It embodies 5,000 years of culture, history, tradition, philosophy and political forms. The most important point for me is that ‘love of country’ is not predicated on an ‘I win, you lose’ mentality, or ‘zero-sum’ as it is sometimes called (witness ‘America first’). Instead, it means that ‘love’ of my own country, my own cultural identity, is the basis for respecting, engaging with and promoting the identity of others. Thus, Chinese people see ‘love of country’ as a benefit to the globe, for as others also ‘love’ their country they have common project.

Still, a few may still feel that all the flag waving is an effort to find a replacement for Marxism in China. Not only does this assumption reflect a good deal of ignorance concerning Xi Jinping’s resolute focus on Marxism as the core and guiding principle of China’s path, let alone the 90 million strong CPC as a communist party clear in its mission, this suspicion also ignores the reality of the flag itself. In China, it is called the ‘five star red banner [wuxinghongqi]’. The red banner is of course a key communist symbol, as is the star. So every time someone waves a five star red banner, they are waving a communist flag.

And this brings me back to the saying with which I began: keep the mission firmly in mind, do not forget your original desire (laoji shiming, bu wang chuxin). Everywhere in China you find this saying, but it is one that immediately resonates with people. What is the original desire? Marxism. What is the mission? communism. And what does communism need for its realisation? More work and struggle.

The photos below were taken of my computer as I watched the parade live. You can find better quality pictures in many places, but I use these to give a sense of what unfolded as I watched. These are of course from Beijing, but all across the country events were held, including the area where I now reside in the northeast. The final picture is of a local version of the saying mentioned above.

Finally, here it is: keep the mission firmly in mind, do not forget your original desire.


While you were looking elsewhere … China now builds the best bridges in the world

While you may have been distracted by the way ‘Western’ countries (that is, a small group of former colonisers) are tearing themselves apart, China has quietly become a world leader in another area: bridge building.

You may know that the best and most advanced mobile phones are designed and contructed here (Huawei Mate 30), or that China is now the leading innovator and constructor of high-speed rail in more and more places throughout the world, or that China leads the world in re-afforestation and consistently wins awards for environmental protection, or that it offers a more stable model of governance, or that … the list could go on and on and it increases at a stunning rate.

But bridges? Given that most of China is quite mountainous, bridges are an absolute must (as are tunnels). And since a crucial feature of the poverty alleviation program, let alone the Belt and Road Initiative, is the construction of rail and road, bridges cannot be avoided. The outcome is that China is now the world leader in bridge technology and construction.

For example, China has recently constructed the world’s longest sea bridge in Fujian province connecting five islands and the mainland.

It will not be long before the island of Taiwan is connected with the mainland by such a bridge.

At the same time, the country’s bridge building is winning international awards. The showcase is Beipanjiang Bridge, on the border between the mountainous Guizhou and Yunnan provinces. More than half a kilometre above the gorge it spans, it required significant innovation to deal with complicated geographical conditions. It won the Gustav Lindenthal Medal in 2018 and the special merit award by the International Federation of Consulting Engineers (FIDIC) in 2019. Not a bad result in a country that in 1978 was one of the poorest in the world, with more than 95 percent below the poverty line. Not any more.

On State Capitalism

The following is the fourth part of the lecture on why foreign scholars are as yet unable to understand China’s socialist market economy. It deals with ‘state capitalism’, which is probably the most widely used term in both Marxist and non-Marxist traditions. As will become clear, what they mean differs considerably.

By 2008’s Atlantic financial crisis, or what is now called ‘The Great Recession’, the neoliberal project effectively came to an end. Since then, it has been in retreat, to the consternation of the true believers. The WTO is no longer setting the agenda in the way it used to do, for it is being changed from within, the ability of the United States to coerce others is in noticeable decline, the United States and Europe no longer see eye to eye, and a series of alternative international structures have gained significant influence, such as the Asia Infrastructure Investment Bank, the Shanghai Cooperation Organisation and the Belt and Road Initiative. How to make sense of these developments? On the back foot, more and more neoliberal true believers have begun once again to speak of the spread of ‘state capitalism’, with dire warnings as to its effects. By state capitalism they mean that the state is a large and influential corporation in its own right, a business enterprise and indeed core component that controls significant parts of a capitalist market economy.

But I have leapt ahead of myself, for the terminology of ‘state capitalism’ was developed mostly in the Marxist tradition, particularly in Lenin’s hands. The term itself may be older, used in relation to Bismarck’s project in Germany, but it is from the Marxist tradition that its most sophisticated sense arose. So let us consider Lenin’s contribution, after which I analyse a number of different paths that arose after Lenin.

Towards the end of his life, Lenin used ‘state capitalism’ on quite a number of occasions (Lenin 1918 [1965]-b, 1918 [1969]-b, 1918 [1965]-a, 1918 [1969]-a, 1921 [1965]-a, 1921 [1970]-a), but the fullest statement may be found in the key work, ‘The Tax in Kind’ (Lenin 1921 [1965]-b, 1921 [1970]-b). Lenin argued that in light of the sheer devastation and economic collapse caused by the First World War and the Civil War, as well as the very premature state of socialism in Russia, a measure of private enterprise was necessary to get the economy moving again. Peasants could sell the grain left over after paying the ‘tax in kind’, small private light-scale industry could be established, and concessions and leases would be given to foreign capitalist enterprises. All of this would entail the extraordinary dialectical point of building socialism through capitalism, or of private capital helping socialism.[1] How so? It would enable the initial impetus for the ‘development of the productive forces’ (Lenin 1921 [1965]-b, 342-43, 345-46).

Of course, Lenin had to overcome ‘left-wing’ opposition to do so, making two crucial points. First, he mapped out a process of transition, since it was not possible to move from a backward, imperialist situation immediately to full-blown socialism. Thus, he envisaged a series of transitions, from petty-bourgeois capitalism (and later from ‘War Communism’), through state capitalism, to socialism itself, during which elements of capitalism would remain.[2] Or, as he puts it more simply, from capitalism, through state capitalism, to socialism. Second, it all depends on the over-arching socio-economic and political system. His two examples are Germany (after Bismarck’s reforms) and Russia after the October Revolution. In Germany, this ‘state capitalism’ was firmly in the hands of ‘Junker-bourgeois imperialism’; by contrast, in Russia the socialist system already emerging was the key, with the nature of the socialist state and the proletarian dictatorship playing the major roles. Thus, argued Lenin, it would be highly advisable to learn from the German model and locate it within the Russian socialist system.

What has been the fate of Lenin’s insights? Four paths may be identified. First, some Western Marxists have sought to use ‘state capitalism’ to speak of socialist countries, albeit without acknowledging Lenin’s careful development of the idea. Thus, they have applied ‘state capitalism’ to both the Soviet Union and China in a purely negative sense. They do by ignoring Lenin’s key insights and understand ‘state capitalism’ as a system – with its new ‘bourgeoisie’ as exploiters – that is diametrically at odds with socialism, let alone communism (Cliff 1948 (2003); Pannekoek 1937; Norman 1955; Crump and Buick 1986; James 1986; Weil 1996, 26-27; Hooper 2017). Common to these works is a Western ‘betrayal narrative’, trying to find some moment when the Marxist tradition was ‘betrayed’ (see more below).

Intriguingly (and this is the second path), they also come close to a more recent group of non-Marxist scholars, who have begun to use ‘state capitalism’ in relation to a significant number of countries – including socialist ones – that have either refused or turned away from neoliberal approaches. In more detail, they see state capitalism as significant and long-term ‘intervention’ of the state in ‘the market’, by which they mean an entity separate from society and the state. They are also fond of using tired old categories, such as the opposition between ‘autocratic’ and bourgeois ‘democratic’, inefficient and efficient, so that state capitalism means inefficient ‘authoritarian’ capitalism and is contrasted with efficient ‘free-market’ capitalism. It should be no surprise that they see the spread of such state capitalism as a threat and hope to identify its shortcomings. Although they often focus on China as a favoured example (Haley and Haley 2013; MacDonald and Lemco 2015, 43-69; Naughton and Tsai 2015; Kurlantzick 2016; Chen 2015; Hundt and Uttam 2016, 189-220), this type of ‘state capitalism’ in certainly not restricted to China. The number identified is relatively large, whether one offers an analysis of the current situation or takes a historical perspective. In terms of the current context, the list includes most countries in East Asia, Central Asia, more and more Latin American and African countries, Russia and some Scandinavian countries. Historical surveys like to begin with modern state forms in Europe after the Peace of Westphalia of 1648, and then identify various forms of state capitalist ‘intervention’ in mercantilism, European colonialism, the Soviet Union and Eastern Europe, the welfare state in Europe (especially Scandinavia), many post-colonial states in Africa and Asia, and the Asian economic rise in the last 30 years or so, with particular focus on Singapore and South Korea (Kurlantzick 2016, 49-63; see also MacDonald and Lemco 2015, 17-42). One does begin to wonder whether ‘state capitalism’ has become a catch-all category that can be applied to all states to a greater or lesser degree.[3] Ultimately, this tendency is less of a problem than the fundamentally flawed assumptions and its oppositions – state versus market, autocracy versus bourgeois democracy, efficiency and inefficiency – that arise from the Western European liberal tradition, a tradition that has for too long seen the rest of the world in its own image. Unable to think outside this tradition, unable to seek truth from facts, they have resorted to the category of ‘state capitalism’ to try to understand the global shifts that became apparent in 2008.

Third, a few foreign Marxist scholars have continued to use the term, and to their credit they do so through careful engagement with Lenin and the New Economic Policy (which ran for almost a decade in the 1920s). More specifically, they propose that China’s Reform and Opening Up is a longer version, developed in terms of specific conditions, of the NEP (Kenny 2007). This brings us to the fourth direction arising from Lenin’s work, concerning which I need to mention Chinese scholarship. These scholars have pointed out that part of the inspiration for Deng Xiaoping’s breakthrough with the Reform and Opening Up was precisely Lenin’s New Economic Policy (Yang and Li 1998; Le 2000; Wang 2001; Tao 2008).[4] But there is one very important feature of this argument concerning the influence on Deng Xiaoping: the scholars in question rarely, if ever, use the term ‘state capitalism’. Let me put it this way: as we look back after a century, we can see certain shortcomings in Lenin’s approach. Notably, he assumed that private enterprise and market exchange were by definition capitalist, while public ownership and a planned economy were necessarily socialist. We now know that this is not the case, for market economies have existed under many different – and non-capitalist – conditions (as Marx already argued in his analysis of ancient Greece (Marx 1894 [1998], 588-605; 1894 [2004], 583-99)). At the same time, Lenin did make the crucial point that everything depends on the underlying system within which a market economy works. But in order to understand how this point remains relevant, we need to clarify the terms. Lenin called this ‘state capitalism’, in light of the evidence and knowledge available at the time, especially from Germany. But in light of subsequent historical research and current experience, especially in China, it would be better to speak of a market economy as a component of a larger socialist system (Huang 1994). Let me emphasise that this point is not made by foreign scholars, since they tend not to use Chinese sources for their work.

To sum up, state capitalism has an intriguing and complex history, with its initial development in the Marxist tradition through Lenin, its subsequent misuse by a number of Western Marxists in relation to the Soviet Union and China, its redeployment (without knowledge of the Marxist tradition) to try and understand the turn away from the neoliberal project, its Leninist sense by a small number of Marxists in relation to China, and then Chinese scholarship that fully acknowledges Lenin’s influence on Deng Xiaoping but then takes his insights a significant step further.


Chen, Zongshi. 2015. The Revival, Legitimization, and Development of Private Enterprise in China: Empowering State Capitalism. New York: Palgrave Macmillan.

Cliff, Tony. 1948 (2003). ‘The Nature of Stalinist Russia’. In Marxist Theory After Trotsky, Selected Writings, Vol. 3, 1-138. London: Boomarks.

Crump, John, and Adam Buick. 1986. State Capitalism: The Wages System Under New Management. New York: St. Martin’s.

Deng, Xiaoping. 1985 [1993]. ‘Reform is the Only Way for China to Develop Its Productive Forces’. In Selected Works of Deng Xiaoping, Vol. 3, 140-43. Beijing: Foreign Languages Press.

———. 1985 [2008]. ‘Gaige shi zhongguo fazhan shengchanli de biyouzhilu (1985.08.28)’. In Deng Xiaoping Wenxuan, Vol. 3, 136-40. Beijing: Renmin chubanshe.

Haley, Usha, and George Haley. 2013. Subsidies to Chinese Industry: State Capitalism, Business Strategy, and Trade Policy. New York: Oxford University Press.

Hooper, Michael. 2017. ‘Opposite Directions: The NEP and China’s Opening and Reform’. Australian Marxist Review: Journal of the Communist Party of Australia 64 (April).

Huang, Nansen. 1994. ‘Shehuizhuyi shichang jingji lilun de zhexue jichu’. Makesizhuyi yu xianshi 1994.11.15:1-6.

Hundt, David, and Jitendra Uttam. 2016. Varieties of Capitalism in Asia: Beyond the Developmental State. London: Palgrave Macmillan.

James, C.L.R. 1986. State Capitalism and World Revolution. Chicago: Charles H. Kerr.

Kenny, Thomas. 2007. ‘Lessons for the “Socialist Market Economy” of People’s China from the Soviet “New Economic Policy”‘. Nature, Society & Thought 20 (1):80-90.

Kurlantzick, Joshua. 2016. State Capitalism: How the Return of Statism is Transforming the World. New York: Oxford University Press.

Le, Chengyao. 2000. ‘Dengxiaoping lilun shi dui liening xin jingji zhengce de jicheng he chaoyue’. Ningxia dangxiao xuebao 2000 (3):11-16.

Lenin, V.I. 1918 [1965]-a. ‘”Left-Wing” Childishness and the Petty-Bourgeois Mentality’. In Collected Works, Vol. 27, 323-54. Moscow: Progress Publishers.

———. 1918 [1965]-b. ‘Session of the All-Russia C.E.C., April 29, 1918’. In Collected Works, Vol. 27, 279-313. Moscow: Progress Publishers.

———. 1918 [1969]-a. ‘O “levom” rebiachestve i o melkoburzhuaznosti’. In Polnoe sobranie sochinenii, Vol. 36, 283-314. Moscow: Izdatel’stvo politicheskoi literatury.

———. 1918 [1969]-b. ‘Zasedanie VTSIK 29 aprelia 1918 g’. In Polnoe sobranie sochinenii, Vol. 36, 239-76. Moscow: Izdatel’stvo politicheskoi literatury.

———. 1921 [1965]-a. ‘Report on the Tax in Kind Delivered at a Meeting of Secretaries and Responsible Representatives of R.C.P.(B.) Cells of Moscow and Moscow Gubernia, April 9, 1921’. In Collected Works, Vol. 32, 286-98. Moscow: Progress Publishers.

———. 1921 [1965]-b. ‘The Tax in Kind (The Significance of the New Economic Policy and Its Conditions)’. In Collected Works, Vol. 32, 329-65. Moscow: Progress Publishers.

———. 1921 [1970]-a. ‘Doklad o prodovolʹstvennom naloge na sobranii sekretareĭ i otvetstvennykh predstaviteleĭ iacheek rkp(b) g. moskvy i moskovskoĭ gubernii 9 aprelia 1921 g’. In Polnoe sobranie sochinenii, Vol. 43, 146-61. Moscow: Izdatel’stvo politicheskoi literatury.

———. 1921 [1970]-b. ‘O prodovolʹstvennom naloge (Znachenie novoĭ politiki i ee usloviia)’. In Polnoe sobranie sochinenii, Vol. 43, 205-45. Moscow: Izdatel’stvo politicheskoi literatury.

Lüthi, Lorenz. 2010. ‘Sino-Soviet Relations during the Mao Years, 1949–1969’. In China Learns from the Soviet Union, 1949–Present, edited by Thomas Bernstein, 27-60. Lanham: Lexington.

MacDonald, Scott, and Jonathan Lemco. 2015. State Capitalism’s Uncertain Future. Santa Barbara: Praeger.

Marx, Karl. 1894 [1998]. ‘Capital: A Critique of Political Economy, Vol. III’. In Marx and Engels Collected Works, Vol. 37. Moscow: Progress Publishers.

———. 1894 [2004]. ‘Das Kapital. Kritik der politischen Ökonomie. Dritter Band. Hamburg 1894’. In Marx Engels Gesamtausgabe, Vol. II:15. Berlin: Akademie Verlag.

Naughton, Barry, and Kellee Tsai. 2015. State Capitalism, Institutional Adaptation, and the Chinese Miracle. Cambridge: Cambridge University Press.

Norman, David. 1955. Marx and Soviet Reality. London: Batchworth.

Pannekoek, Anton. 1937. ‘State Capitalism and Dictatorship’. International Council Correspondence 3 (1):8-16.

Tao, Lin. 2008. ‘Liening de xin jingji zhengce jiqi shidai jiazhi xin tan—jian lun qi dui deng xiaoping lilun de yingxiang’. Ha’erbin xueyuan xuebao 2008 (4):11-18.

Wang, Lirong. 2001. ‘Liening de “xin jingji zhengce” he dengxiaoping lilun zhi bijiao’. Zhongnan caijing daxue xuebao 2001 (5):13-16.

Weil, Robert. 1996. Red Cat, White Cat. New York: Monthly Review Press.

Yang, Chengxun, and Zhusi Li. 1998. ‘Dengxiaoping lilun dui liening xin jingji zhengce sixiang de jicheng he fazhan’. Makesizhuyi yu xianshi 1998 (5):12-17.

[1] It was in ‘The Tax in Kind’ – as noted earlier – that Lenin subsumed his earlier usage of ‘state monopoly capitalism’.

[2] In an insightful section, Lenin identifies the many components present in Russia at the time, in which petty-bourgeois production (mainly peasants with their patriarchal tendencies) and private capitalists were at war with a coalition between state capitalism and socialism (Lenin 1921 [1965]-b, 331; 1921 [1970]-b, 207). Indeed, Lenin argued frequently that many aspects of approaches first developed under capitalism would also have a proper function under socialism: ‘Socialism is inconceivable without large-scale capitalist engineering based on the latest discoveries of modern science. It is inconceivable without planned state organisation which keeps tens of millions of people to the strictest observance of a unified standard in production and distribution. We Marxists have always spoken of this’ (Lenin 1921 [1965]-b, 334; 1921 [1970]-b, 210).

[3] Earlier, I noted the effort by Kurlantzick to limit the meaning of state capitalism in terms of an implicit state monopoly capitalism.

[4] Deng Xiaoping hints at this influence in 1985: ‘What, after all, is socialism? The Soviet Union has been building socialism for so many years and yet is still not quite clear what it is. Perhaps Lenin had a good idea when he adopted the New Economic Policy’ (Deng 1985 [1993], 143; 1985 [2008], 140). Apparently, Zhou Enlai had advocated learning from the NEP already in the 1950s (Lüthi 2010, 36).