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.

Bibliography

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).

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On David Harvey’s Neoliberalism (‘with Chinese Characteristics’)

The is the third part of my lecture text on why foreign scholars as yet do not understand China’s socialist market economy. This part focuses on David Harvey’s influential yet deeply flawed book, A Brief History of Neoliberalism (2005).

The reaction to state monopoly capitalism was – as indicated already on a few occasions – the rise of neoliberalism at the end of the 1970s and its aggressive promotion in 1980s and 1990s. It may be defined as a ‘theory of political economic practices that proposes that human well-being can best be advanced by liberating individual entrepreneurial freedoms and skills within an institutional framework characterized by strong private property rights, free markets, and free trade’ (Harvey 2005, 2). I have taken this definition from David Harvey, since his work is the main focus of this section. The elaboration on this definition sounds very much like a reiteration of Adam Smith (1776 [2000]) as interpreted through the neoclassical economists (Alfred Marshall, William Stanley Jevons, and Leon Walras): minimal state presence, except for guaranteeing the basic institutional environment for a capitalist market economy, the inherent value of ‘self-interest’ and so the primacy of the private individual, with the addition that any state with too many possessions should ‘privatise’ them. In fact, for Harvey the process of privatisation is enough to designate a government’s project as neoliberal.

A Brief History traces the way this liberalism was rediscovered as neoliberalism (Friedrich von Hayek, Milton Friedman and others) and applied with gusto first in the UK and the United States under Thatcher and Reagan, two of the places where Western liberalism itself first arose (Losurdo 2011). In the 1980s and 1990s it was copied by like-minded countries and forced on others not so like-minded, through the standard mechanisms of United States colonial power play – known as ‘regime change’. Of course, states enacting neoliberal policies are bound to be quite ‘interventionist’, as Harvey notes, as were the international bodies such as the IMF and World Bank, which were tasked with the authoritarian imposition of such policies on less-than-willing countries.

All this is reasonably well-known, although Harvey is keen to emphasise the regular crises generated by neoliberal policies. The book was published before the major Atlantic crisis of 2008, so he was unable to realise that the crises were not merely due to internal causes, but also external ones. I mean here the cumulative effect of China’s Reform and Opening Up, which was beginning to have a global effect by the 1990s. Countries following the neoliberal agenda could not help being affected by the Chinese return to being a global power of some weight. This point, of course, brings us to Harvey’s most wayward chapter, ‘Neoliberalism with Chinese Characteristics’ (2005, 120-51).

Before I engage with this chapter, we need to pause for a moment to identify some problems that have already arisen. The key problem is that Harvey refuses to countenance both Marx’s theory of labour value and the falling rate of profit in capitalist enterprises. He has been criticised for such omissions (Harvey 2017; Roberts and Harvey 2018; Das 2017), although I do not need to engage with such debates here. More significant is the ramification: what is the cause for the move to neoliberalism? For Harvey, it is nothing more than the result of the political will of the capitalist ruling class (Harvey 2005, 19; see also here). It is a voluntary act by the ruling capitalist class that makes such decisions in order to respond to economic challenges and threats from anti-capitalist opposition. Not only is this approach focused on relations of production and determined by political rather than economic factors, but I am reminded of Marx and Engels’s criticism of Bakunin. At one point, Marx observes: ‘Willpower [Der Wille], not economic conditions, is the basis of his social revolution’ (Marx 1875 [1973], 633; 1875 [1989], 518).[1]

To be sure, Harvey likes to call his approach ‘uneven geographic development’, along with the invocation of multiple, complex and interwoven factors in the capitalist market relations. But he is unable to provide an adequate Marxist reason for the turn to neoliberalism and away from state monopoly capitalism (which he calls ‘embedded liberalism’). By contrast, had Harvey deployed the falling rate of profit (from Marx), he may have been able to account for the turn to neoliberalism. The earlier tendencies towards state monopoly capitalism  – popular in the context of two World Wars with states becoming active players in social and economic life through widespread militarisation, capitalist welfare states, and a spate of nationalisations of banks, railways and public utilities – had run to its limit in terms of the ability to extract more profit. A response was needed from the Western liberal tradition: the state had to retreat so as to enable ‘private’ capital to seek new fields to generate profit. Already I have invoked another possible reason in light of the previous section: the tension between bourgeois state control of the capitalist economy and its retreat to enable private capital to come into its own for a while.

With this point in mind we come to the China chapter. Harvey espies a neoliberal turn with the Reform and Opening Up, launched by Deng Xiaoping in 1978. Why? The only answer I can find in Harvey’s work is that it was due to the political will of the CPC, which decided for some unaccountable reason to move to private enterprises alongside state enterprises. I have said enough on the inadequacy of such a voluntarist approach and have more criticisms to make, but let us pause for a moment to see how Harvey unfolds his hypothesis. To begin with, he explicitly connects the Reform and Opening Up with the neoliberal turn elsewhere in the world, although he is careful to point out that it may also have been due to issues internal to China (he does not elaborate).

Harvey is perfectly willing to admit that the result has been stunning, with one of the fastest periods of economic growth in human history, the lifting of hundreds of millions out of poverty, and China’s re-emergence as a major international power. He also notes problems that arose, such as socio-economic inequality, exacerbation of city-country differences, environmental pollution, and labour unrest (his information is limited to the period up to the early 2000s). And he notes that the government has been adept at dealing with new problems that arose. However, Harvey is committed to the idea that this is neoliberal capitalism.

Apart from the fact that Harvey neither cites any reputable Chinese language material on the topic, nor engages in careful study of what Deng Xiaoping actually said and did (apart from some decontextualized ‘sound bites’), the key problem here is that he assumes that a market economy is the same as a capitalist market economy. This may seem like a simple point, but it is fraught with implications. It is also – and unfortunately – quite common among Western economists, social scientists and philosophers – Marxists included. But it is wrong, since a market economy is not by definition a capitalist market economy. I will return to this issue later, save to point out here the multiplicity of different types of market economy is supported by Marx’s own work in Capital, historical investigation, and Chinese research. It is perfectly feasible to have a socialist market economy, which unleashes the forces of production and which is not a capitalist market economy. But Harvey is unable to make this point.

David Harvey has been profoundly influential through his lectures – worldwide – on Marx’s Capital. His method in such talks is simple yet profound: he offers a careful reading, an exegesis, of a few pages of Capital, which he invites the audience to study once again. But the problem of influence is twofold: while Harvey may have encouraged a good number to study Capital once again, this very same influence has encouraged the perpetuation of a number of profound mistakes.

Bibliography

Das, Raju. 2017. ‘ David Harvey’s Theory of Uneven Geographical Development: A Marxist Critique’. Capital and Class 41 (3):511-36.

Harvey, David. 2007. A Brief History of Neoliberalism. Oxford: Oxford University Press.

———. 2017. Marx, Capital, and the Madness of Economic Reason.

Losurdo, Domenico. 2011. Liberalism: A Counter-History. Translated by Gregory Elliott. London: Verso.

Marx, Karl. 1875 [1973]. ‘Konspekt von Bakunins Buch “Staatlichkeit und Anarchie”‘. In Marx Engels Werke, Vol. 18, 597-642. Berlin: Dietz.

———. 1875 [1989]. ‘Notes on Bakunin’s Book Statehood and Anarchy‘. In Marx Engels Collected Works, Vol. 24, 485-526. Moscow: Progress Publishers.

Marx, Karl, and Friedrich Engels. 1845-1846 [1973]. ‘Die deutsche Ideologie. Kritik der neuesten deutschen Philosophie in ihren Repräsentanten Feuerbach, B. Bauer und Stirner und des deutschen Sozialismus in seinen verschiedenen Propheten’. In Marx Engels Werke, Vol. 3, 9-530. Berlin: Dietz.

———. 1845-1846 [1976]. ‘The German Ideology: Critique of Modern German Philosophy According to Its Representatives Feuerbach, B. Bauer and Stirner, and of German Socialism According to Its Various Prophets’. In Marx and Engels Collected Works, Vol. 5, 19-539. Moscow: Progress Publishers.

Roberts, Michael, and David Harvey. 2018. Marx’s Law of Value: A Debate between David Harvey and Michael Roberts. In The Next Recession. thenextrecession.wordpress.com/2018/04/02/marxs-law-of-value-a-debate-between-david-harvey-and-michaelroberts.

Smith, Adam. 1776 [2000]. The Wealth of Nations. London: Modern Library.

[1] See also the earlier observation on Max Stirner. who was – write Marx and Engels – committed ‘to mere change of will [eine bloße Veränderung des Willens]’ (1845-1846 [1973], 317; 1845-1846 [1976], 335). This is nothing more than the ‘domination of arbitrariness [Herrschaft der Willkür]’ (1845-1846 [1973], 317; 1845-1846 [1976], 335).

On State Monopoly Capitalism

This is the second part of a lecture I am preparing on why foreigners are still unable to understand a socialist market economy. This part examines state monopoly capitalism, which was a significant part of Soviet and European Marxist debates up to the end of the 1980. The text is as follows:

State monopoly capitalism is first and foremost a Marxist category, arising in Soviet thought (abbreviated as stamocap) and gaining widespread usage after the Second World War. Notably, in this tradition ‘state monopoly capitalism’ is used almost exclusively to speak of capitalist countries in light of the evolving stages of capitalism. With one exception: I have been able to find one example – an implicit one – where a certain type of state monopoly capitalism has been used more recently in relation to socialist countries (among others). I will deal with this exception towards the end.

State monopoly capitalism may be defined as a ‘distinct stage of capitalism characterised by the fusion of monopoly forces with the bourgeois state to form a single mechanism of economic exploitation and political domination’ (Jessop 1982, 32).[1] I have taken this definition from Bob Jessop, who provides what is arguably the most comprehensive critical overview of the theory. The date of publication is also telling, for in 1982 the theory was still relatively widespread. There were two main components: a new stage of capitalism in light of its internal crises, which entailed a closer alignment of monopoly capital and the bourgeois state; a development of communist strategy to exploit the contradictions through popular front activities.

The theory initially arose in the Soviet Union (Varga 1964, 1964 [1968], 1934) and became dominant from the 1950s to the 1980s, so much so that The Great Soviet Encyclopaedia has a major 1979 entry (Cheprakov 1979). The origins may be traced back to Marx and Engels, concerning the contradiction between competition and monopoly, and Lenin’s relatively undeveloped observation that imperialism entails the growth of state monopolies (Lenin 1916 [1964], 1917 [1964]-b),[2] so much so that – and here he quotes a resolution – ‘monopoly capitalism is developing into state monopoly capitalism’ (Lenin 1917 [1964]-a, 305; 1917 [1969]-b, 443).[3]

During its heyday, the theory of state monopoly capitalism developed in a number of directions, depending on the emphasis and context. Jessop identifies four, with copious references:

1) General crisis approach, in which the capitalist world faced yet another stage of crisis, generated by the increasing number of socialist countries, the collapse of European colonialism in light of anti-colonial liberation struggles. The response of a decaying capitalism was to find new domination through the merging of the state and monopoly capitalism.

2) Monopoly-theoretical tradition (strong in the Soviet Union and Germany), in which the contradiction of competition and monopoly leads to a permanent domination of the latter. This was seen as a new stage of capitalism, beyond imperialism – as Lenin had initially argued (Lenin 1916 [1964], 1916 [1969]). Here too we find the challenge of socialism, but now seen primarily in class terms: the international challenge of socialism leads to the fusion of monopolies and state, with resultant militarism and a focus on technological development.

3) The capital-theoretical tradition (England, but also in Germany and the Soviet Union), which focuses on the basic laws of capitalist motion. This approach emphasises that state monopoly capitalism is a crisis-driven response to the contradiction between the increasing socialisation of the forces of production and private nature of the relations of production. The state’s active role at multiple levels effectively further socialises the relations of production through the state. On the British side (Fine and Harris 1979, 120-45), this entails not a new stage of imperialism (see above), but a third stage in the capitalist mode of production, after laissez-faire and monopoly capitalism. The state’s active role – through nationalisation, taxation, and state credit – not only negates working class access to real state power through direct control, but also internationalises productive capital by working with multi-national companies and establishing international organisations such as the World Bank and the International Monetary Fund.

4) The French ‘overaccumulation’ approach, which was framed in terms of the contradiction between private monopoly capital’s overaccumulation and its revalorisation through the state. Basing its approach on the cyclical crises of capitalism, which at times reach a crescendo so that structural changes are needed, the French approach identified the increasing role of the state in ensuring that the falling rate of profit (which leads to overaccumulation) is arrested for a time by comprehensive structural changes. Thus, state monopoly capitalism becomes a necessary development to ensure, through the state’s central role, that private monopoly capital is able to produce surplus-value. And it does so through reorganising the relations of production, with the resultant increase in exploitation and polarisation of classes.

To sum up, most approaches agreed on a few basics: state monopoly capitalism was a new stage, either beyond imperialism or a third stage in capitalism (after laissez-faire and simple monopoly); this new stage was yet another systemic effort to deal with unsolvable contradictions, whether in terms of the relations of production and globalised class conflict or in terms of the means of production; it entailed new types of exploitation for workers and efforts to suppress of socialism. But they also differed in many ways, with a core difference determined by whether the focus was primarily political or economic. Thus, those who saw the development in political terms (monopoly-theoretical) were keen to find new approaches to political agitation, but they ran the risk of determining the economic analysis through such an agenda. By contrast, those who preferred to focus on the internal laws of capitalism (capital-theoretical and overaccumulation approaches) at times seemed to come close to Marxist ‘book worship’ and thus a type of economism.

I would like to close with two final questions. First, are there any abiding insights from this material? At a deeper level, it was very useful in identifying the inescapable role of the bourgeois state within a capitalist economy. Debates may continue as to the changing ways this happens, but it is a useful corrective to the neo-classical (and indeed neoliberal) approach which sees the market as a separate entity, within which the state intervenes from time to time.[4] One way of seeing the tensions within capitalist economics is in light of these two theoretical approaches: while the state is deeply and structurally involved, there are at the same time constant moves to delink the state, to privatise state assets and seek a ‘small state’. Periodically – such as during wartime or extensive economic crises – one approach dominates, but then we find a reactive move in the other direction.

This point brings me to the second question: why did state monopoly capitalism as a theory virtually disappear among foreign Marxists after 1989 and the counter-revolution in the Soviet Union and eastern Europe? One reason is that it was due to the tensions within capitalism outlined above: the drive to state monopoly capitalism produced a reaction in the 1980s, with the revival of laissez-faire economics under the label of ‘neoliberalism’. Another reason is that many of the theorists saw a major contradiction at a global level between capitalism and socialism. The latter was growing at the time, with successful revolutions in Asia, anti-colonial struggles and national liberation in Africa, Asia and elsewhere, while the capitalist world was shrinking. The counter-revolution in Eastern Europe seemed to suggest that this analysis was wrong. Instead, socialism seemed to be in retreat and capitalism was gaining momentum.

Or that is how it seemed to Western eyes in the 1990s and early 2000s. Since then, of course, much has changed. Socialist countries, especially China, are now more powerful and influential than they have been for a very long time. Many formerly colonised countries have found that the economic models borrowed from the West have not worked and they are looking for alternative models adapted to their own conditions. And these countries have also been active in international bodies, from the United Nations to the World Trade Organisation, transforming them from within to suit the conditions of a rapidly changing world.

Indeed, I suspect that ‘state monopoly capitalism’ may make a comeback as a category of analysis, albeit in a different way. Thus far, state monopoly capitalism has not been applied to socialist countries,[5] but there is a beginning of efforts to do so, albeit without any awareness of the Marxist origins and development of the term. Let me give one example, although it is implicit rather than explicit. It appears in the recent work by the neo-classical economist, Kurlantzick, who works within the framework of state capitalism but seeks to delimit its application. Realising that ‘state capitalism’ potentially applies to all states, he offers this definition: ‘countries whose government has an ownership stake in or significant influence over more than one-third of the five hundred largest companies, by revenue, in that country, a situation that gives these governments far greater control over the corporate sector than a government in a more free-market oriented nation like the United States or the United Kingdom’ (Kurlantzick 2016, 9). This definition is extremely intriguing, for Kurlantzick must work very hard to exclude a number of countries – such as France, Japan and the United States – from his list. In order to so, he adds:

  1. The ownership and control of key enterprises must be direct and not indirect (since the United States provides massive indirect subsidies to its military and automobile industries)
  2. This ownership and control must be long-term and not during economic crises, as we found after 2008 in some countries.
  3. Direct government spending on items such as welfare is also excluded.
  4. Sovereign wealth funds are excluded.

Only in this way can he focus on what are implicitly seen as state-monopoly capitalist countries. A major reason for the restrictions is that Kurlantzick is desperate to save mostly Western countries from being versions of state (monopoly) capitalism, for he sees their ‘free market’ approach and its attendant liberalism as under severe threat and failing. But even with these restrictions, the number of state monopoly capitalist countries is quite large, as the following table indicates (Kurlantzick 2016, 28):

More monopolised                    Hybrid           Less monopolised

Two socialist countries make the list, China and Vietnam, although they are by no means the most ‘monopolised’ according to Kurlantzick’s criteria. The question arises as to why this implicit state monopoly capitalism should be recurring now, albeit without awareness of the Marxist tradition. Has the effort to revive laissez-faire economics under the label of ‘neoliberalism’ run its course? I will say more on this question in the section on state capitalism.

Bibliography

Bollana, Primo. 1981. ‘Some Characteristics of State Monopoly Capitalism in the Soviet Union’. In Soviet Revisionism and the Struggle of the PLA to Unmask It, edited by Institute of Marxist-Leninist Studies at the CC of the PLA. Tirana: “8 Nëntori” Publishing House.

Cheprakov, V.A. 1979. ‘Gosudarstvenno-monopolisticheskiĭ kapitalizm’. In Bolʹshaia sovetskaia ėntsiklopediia. Moscow: Izdatel’stvo Sovetskaia Entsiklopediia.

Fine, Ben, and Laurence Harris. 1979. Rereading Capital. London: Macmillan.

Herzog, Phillippe. 1972. Politique économique et planification en regime capitaliste. Paris: Editions sociales.

Hoxha, Enver. 1978 [1985]. ‘Imperialism and the Revolution’. In Selected Works, 358-707. Tirana: “8 Nëntori” Publishing House.

Jessop, Bob. 1982. The Capitalist State: Marxist Theories and Methods. Oxford: Martin Robertson.

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

Lenin, V.I. 1916 [1964]. ‘Imperialism, the Highest Stage of Capitalism: A Popular Outline’. In Collected Works, Vol. 22, 185-304. Moscow: Progress Publishers.

———. 1916 [1969]. ‘Imperializm, kak vysshaia stadiia kapitalizma (Populiarnyĭ ocherk)’. In Polnoe sobranie sochinenii, Vol. 27, 299-426. Moscow: Izdatel’stvo politicheskoi literatury.

———. 1917 [1964]-a. ‘Speech in Favour of the Resolution on the Current Situation, April 29 (May 12), 1917’. In Collected Works, Vol. 24, 305-8. Moscow: Progress Publishers.

———. 1917 [1964]-b. ‘War and Revolution: A Lecture Delivered May 14 (27), 1917’. In Collected Works, Vol. 24, 398-421. Moscow: Progress Publishers.

———. 1917 [1965]. ‘The Impending Catastrophe and How to Combat It’. In Collected Works, Vol. 25, 323-69. Moscow: Progress Publishers.

———. 1917 [1969]-a. ‘Groziashchaia katastrofa i kak s nei borot’sia’. In Polnoe sobranie sochinenii, Vol. 34, 151-99. Moscow: Izdatel’stvo politicheskoi literatury.

———. 1917 [1969]-b. ‘Rech’ v zashchitu rezoliutsiia o tekushchem momente, 29 aprelia (12 maia)’. In Polnoe sobranie sochinenii, Vol. 31, 443-46. Moscow: Izdatel’stvo politicheskoi literatury.

———. 1917 [1969]-c. ‘Voina i revolutsiia: Lektsiia 14 (27) maia, 1917g’. In Polnoe sobranie sochinenii, Vol. 32, 77-102. Moscow: Izdatel’stvo politicheskoi literatury.

Varga, Evgenii. 1934. The Great Crisis and its Political Consequences: Economics and Politics, 1928-1934. London: Modem Books.

———. 1964. Ocherki po problemam politékonomii kapitalizma. Moscow: Gospolitizdat.

———. 1964 [1968]. Politico-Economic Problems of Capitalism. Moscow: Progress Publishers.

[1] Compare the definition in The Great Soviet Encyclopaedia: ‘new, more developed form of monopoly capitalism, characterized by the joining of the forces of capitalist monopolies with the power of the state to preserve and strengthen the capitalist system, enrich the monopolies, suppress the workers’ and national liberation movements, and unleash aggressive wars’ (Cheprakov 1979).

[2] Lenin speaks of ‘the beginnings of state-controlled capitalist production, combining the colossal power of capitalism with the colossal power of the state into a single mechanism and bringing tens of millions of people within the single organisation of state capitalism’ (Lenin 1917 [1964]-b, 403; 1917 [1969]-c, 83). For a comprehensive assessment of Lenin’s contribution, see Jessop (1982, 32-36).

[3] Lenin is, however, not entirely consistent in his usage and the theory remains somewhat undeveloped. Before the October revolution, he saw state monopoly capitalism as a development, especially in the context of war, to a new level of capitalism itself, although even here it was already seen as a step towards socialism (Lenin 1917 [1965], 361-63; 1917 [1969]-a, 191-93). Later, he quotes from this 1917 text – ‘The Impending Catastrophe and How to Combat It’ – in ‘The Tax in Kind’ from 1921, where he argues for the need for a muted verison of state capitalism during the New Economic Policy. In other words, he subsumed state monopoly capitalism under state capitalism (see below), which he saw as a (major) step towards socialism. This inconsistency is most likely due to different circumstances: the initial proposal was made before the October Revolution during the last phase of Russia’s engagement in the First World War, while his later development of the idea took place after the revolution and Civil War, particularly in light of the need to develop the New Economic Policy.

[4] Indeed, one of the debates over state monopoly capitalism concerned the relation between state and economy: were they fused under state monopoly capitalism, distinct, or did they function in terms of ‘contradictory separation in unity’ (Herzog 1972, 125)

[5] One does find very occasional accusations internal to the former Eastern Bloc that the Soviet Union and Yugoslavia had descended, from the time of Khrushchev, to a type of state monopoly capitalism (Bollana 1981; Hoxha 1978 [1985], 414-15).

Time for education reform in Hong Kong

Time for some long-term reforms in Hong Kong, especially in terms of education and responsible internet use, journalism and social media.

More immediately, attention is increasingly focusing on what many are describing as a terrorist cell in Hong Kong, numbering no more than a couple of thousand and funded by external (primarily US) forces. They are the ones escalating violence, calling themselves the ‘valiant‘ and following the script of a ‘colour non-revolution’. It would be better to call them the ‘neo-colonials’, since they want Hong Kong to be re-colonised by the UK or the USA.

Obviously, they and their sympathisers are a small minority in Hong Kong.

Further, more and more groups are urging the local government to invoke emergency legislation to ensure a return to the much-cherished Chinese values of stability, security and harmony. The latest is the Hong Kong Federation of Trade Unions. Thus far, the local government has held off, since the regular police force has been very disciplined, patient and restrained, but it may yet do so – no secret here.

But I am interested in long-term reforms. One concerns changes to rules for responsible journalism and social media use, possibly drawing closer to the mainland’s model (which I strongly support).

Another concerns education, especially since parts of the school curriculum promote the corrosive effects of Western liberalism, leading to profound ignorance concerning Chinese history, culture and Marxism. On this matter, I have copied a piece of investigative journalism from the Global Times.

Hong Kong Education at Fault

Anti-government groups in Hong Kong have called for school strikes as the new semester begins on Monday, and a 12-year-old boy was found to be the youngest protester arrested at recent violent street clashes.

Parents, schoolteachers and experts are calling for deep reflection on what is wrong with the city’s education system.

While black-clad protesters returned to the streets for the 12th straight weekend, opposition forces have come up with new posters instigating university and secondary school students to join the strike from September 2 to September 13 as a way of pressuring the Hong Kong Special Administrative Region (HKSAR) government into responding to their so-called five demands.

School students are major groups in the anti-extradition bill protests of the past two months and the average age of those protesters appears lower than those who joined the 2014 Occupy Movement.

In some universities and across the city, the Global Times reporters saw that the Lennon Walls, a so-called space for free expression, encouragement and solidarity, are not only filled with messages advocating values, but also curses, nasty words and unimaginable illustrations.

More parents and school teachers are now looking into the question of why more teenagers go out and fight the government in the streets, and some even used violence as a means to protest.

Liberal studies blamed

Police have so far arrested 15 people under 16 years old for violent attacks, holding offensive weapons and unlawful assembly, according to the latest statistics provided by the Hong Kong Police Force at a press conference on Tuesday.

The youngest was 12, which was seen as shocking by the majority of Hongkongers. The protester had taken lethal weapons such as an iron branch when arrested.

Former HKSAR government chief executive Tung Chee-hwa criticized the liberal studies curriculum, introduced as compulsory for all upper secondary schools in July 2009, according to media reports.

Tung blamed the curriculum as one of the reasons for causing youth problems today.

The Global Times reporters talked with parents of secondary and college students over the past month. Some said they were shocked and saddened by problems in Hong Kong’s education system, which they think needed to be changed as soon as possible.

“We read one of the textbooks for liberal studies thoroughly a few years ago which included much anti-mainland content,” a Hong Kong resident told the Global Times on condition of anonymity.

“The textbook is designed to strengthen student’s critical thinking, but without teaching them how to think in a rational and reasonable way.”

The mother of an 11-year-old student told the Global Times that her son was bullied in school as he came from the mainland.

The mother said she worried that bullying would worsen in the new semester as she heard “many teachers from the school participated in anti-government protests.”

The mother said she was disappointed with Hong Kong’s education system and was considering transferring her son back to adjacent Guangdong Province.

There are two types of liberal studies textbooks: One is provided by the publisher and one is decided by schools, and some schools may adopt both publishers’ textbooks and its own teaching materials, a teacher of liberal studies surnamed Wong told the Global Times.

“Because it usually lacks a review mechanism for those textbooks, it depends on the head of the liberal studies department of each school to decide how to teach students,” he said.

If a teacher intends to influence his students with his own political views, it is easy to do through the curriculum, he said.

Although there is no evidence that the rising violence of teenagers amid anti-government protests is directly related to liberal studies, there are reports suggesting that some teachers, with their biased political positions, have seriously affected their students, who are likely to be aggressive on social issues.

The mother of the 11-year-old said the teacher of her son had played so-called documentaries about China’s alleged “tyranny,” which frightened many in the class into tears.

She said her son was isolated by other students when he said students should not get too involved in politics.

In one textbook published by Ming Pao Publications Ltd, there are more than 10 topics about current issues including the National Anthem Law in Hong Kong and the debate about the Hong Kong-Zhuhai-Macao Bridge.

While those topics lead to open questions, the textbook suggests answers with more negative than positive arguments.

For instance, on the Hong Kong-Zhuhai-Macao Bridge, the textbook offers arguments that the mainland would not be a suitable place for Hongkongers due to its lack of freedom of information, food safety and divergences in values.

Tang Fei, a principal at Hong Kong’s Heung To Secondary School (Tseung Kwan O), told the Global Times that when Hong Kong had not been “fully de-colonized” and the entire society including ordinary people and the media have “not established a complete understanding of the country, students can easily have a favorable impression of British colonial times.

Youngsters’ understanding of this period of history, Tang noted, “may be reinforced through “open” liberal studies. Therefore they hardly recognize their national identity, he said.

Teachers the key

Hong Kong student Wang Yiming took Hong Kong’s Diploma of Secondary Education Examination this summer and has been enrolled at Peking University.

Wang told the Global Times that the liberal studies materials he read have indeed helped Hong Kong students understand the mainland, including achievements such as the Belt and Road Initiative as well as economic development and problems such as environmental pollution and income gap.

He believed teachers of general education are the key.

“Teachers’ stance can easily influence us,” Wang said. “If they simply belittle the mainland and focus on bad things in the mainland, students will accept their views unconsciously and have a negative impression of the mainland.”

But only a minority of teachers would do that, Wang said.

The position of faculties who teach general education “should be diversified rather than being taken by politically radical staff for a long time,” Tang said.

Tang said that political subjects involve extensive professional knowledge of politics and law, “which could be beyond the understanding of teenagers.” The political subjects enlighten an untimely interest in politics among young people, “like sexual precocity,” he explained.

The term “national education” has been demonized in Hong Kong, he said. Primary and secondary schools in Hong Kong should teach the Chinese mainland curriculum as students should learn a solid foundation of basic values at schools, Tang believed.

Hong Kong: a failed palace coup by spoilt rich kids

Palace coup: when a disgruntled section of the ruling class attempts to seize power. This assumes that it no longer has power, but in the past used to have it.

I have drawn the term from Ernst Bloch and it describes very well what has been happening in Kong Kong. How so?

Let me begin with a certain Nathan Law, a leader of the protests, riots and violence in Hong Kong, who jetted off to Yale University while urging others to stay on the streets. Less than impressed, many young Chinese in Hong Kong began a series of takes on his brave act.

‘I go to Yale, you go to jail‘ is one.

‘Blockheads boycott lectures, but I must first go to class’ is another, as in the following:

Such elitism is always popular:

But underlying this effort by spoilt rich kids is the reality that Hong Kong’s moneyed elite has lost the power it once had. The cosy deal with British imperial governors, who never allowed street protests let alone any type of parliament, is over. Now there is a parliament, elections and way more free expression. So they are anxious and worried, as this article points out.

And who is out on the streets, waving US and British colonial era flags, calling on the UK to restore the colonial past, if not urging Donald Trump – believe it or not – to ‘liberate’ Hong Kong?

Spoilt rich kids and those they have duped. They are mightily annoyed they will not have the influence once enjoyed by their parents.

Problem is that it is not working, despite the deliberate misinformation being peddled in a small number of former colonial countries (known as the West). Most people in Hong Kong are singularly unimpressed, and as for the rest of the mainland, they can see right through it. As can most people outside the old colonial cabal.

Now, the Hong Kong government is in control and busy charting a way forward, and we can expect a spate of reforms to secure Hong Kong’s future and minimise the corrosive effects of Western liberalism. Meanwhile, it will need to learn to play second fiddle to nearby Shenzhen, which has been designated as a model socialist city to drive the economic powerhouse of the Pearl River delta.

 

 

 

 

476,000 people rally in Hong Kong to say “no” to violence

‘I love Hong Kong’

‘Hong Kong is part of China forever’

‘I support Hong Kong police’

‘The five-star red banner has 1.4 billion defenders’

‘Say “no” to violence’

These and more were slogans used on banners and in chants at a rally of 476,000 people in Hong Kong today (17 August). These regular rallies gain more and more participants on each occasion, indicating that the tide has turned against the relatively small number of masked, black-clad perpretators of the violence (who use home-made spears, petrol bombs, corrosive liquids, lethal slingshots and much more, having thus far injured 5,139 police officers).

A couple of pictures, but you can find the full stories here and here.

Also worthy of note is a rally of 3,000 in Sydney, Australia, also saddened by the violence and supporting Hong Kong as part of China forever.

Finally, if you are into these things, you can find what is trending on Chinese social media (which of course includes Hong Kong). Many have repeated the items with which I began, especially the one by Hong Kong resident and Global Times reporter, Fu Guohao, who had his hands and feet tied and was beaten up at Hong Kong airport. As he was surrounded, he said, ‘I support the Hong Kong police. You can beat me now’. The moment happened to be videoed and went viral.

Truth from facts in regard to Hong Kong: Liu Xiaoming (Chinese ambassador to UK)

‘Seek truth from facts’ was one of Deng Xiaoping’s key positions, and it is well worth remembering in relation to Hong Kong. Below is an articulate, sharp and factual statement from Liu Xiaoming, Chinese ambassador to the UK. It has been published in full in the People’s Daily.

Reiterating that the Central Government has enough solutions and enough power within the limits of the Basic Law to quell any unrest, Chinese Ambassador to the U.K., Liu Xiaoming, called for media from home and abroad to report the Hong Kong issue in a just and objective manner during a press conference at the Chinese Embassy on Thursday.

During the conference, Liu provided materials from different sources on the current situation in Hong Kong, with a short video clip showing protesters attack Hong Kong police and the public’s negative opinions towards these acts of violence, which are heavily neglected by the Western media. Following is the full text of the opening remarks given by the Ambassador:

Opening Remarks by H.E. Ambassador Liu Xiaoming at the Press Conference at the Chinese Embassy

Chinese Embassy, 15 August 2019

Ladies and Gentlemen:

Good morning! Welcome to the Chinese Embassy.

On 3 July, I held a press conference here to answer questions about the amendments to Hong Kong’s extradition laws and to explain China’s position. For more than a month since then, the opposition in Hong Kong and some radical forces have continued to use their opposition to the amendments as an excuse for various types of radical street protests. The violence involved has escalated and the damage to the society has expanded. The movement has gone way beyond free assembly and peaceful protests. It is posing a severe challenge to law and order in Hong Kong, threatening the safety of life and property of the Hong Kong people, undermining the prosperity and stability in Hong Kong and challenging the principled bottom line of “One Country, Two Systems”. As a result, Hong Kong now faces the gravest situation since its handover.

A handful of extreme radicals have been undermining rule of law, social order and “One Country, Two Systems” in Hong Kong. But they have taken cover under the so-called “pro-democracy movement” to hide their real intention and to whitewash their disruptive actions. This “neo-extremism” is both highly deceptive and destructive. The “neo-extremists” stormed the Legislative Council Complex, attacked the Liaison Office of the Central People’s Government in Hong Kong, assaulted police officers and brought Hong Kong airport to a standstill by illegal assembly. Their moves are severe and violent offences, and already show signs of terrorism. The Central Government of China would never allow a few violent offenders to drag Hong Kong down a dangerous abyss. We would never allow anyone to harm the rule of law and sound development in Hong Kong. We would never allow anyone to undermine “One Country, Two Systems” at any excuse. Should the situation in Hong Kong deteriorate further into unrests uncontrollable for the Government of the Hong Kong Special Administrative Region (SAR), the Central Government would not sit on its hands and watch. We have enough solutions and enough power within the limit of the Basic Law to quell any unrest swiftly.

This is a critical moment for Hong Kong. How will this end? This question is in the mind of all those who care about the future of Hong Kong. It is also hitting headlines and making “cover stories” in British media. Our answer to this question is firm and clear: We hope this will end in an orderly way. In the meantime, we are fully prepared for the worst. So how will this end in an orderly way? I think the following four points are extremely important.

First, the priority now is to support the SAR Government in ending violence and restoring order. I hope that Hong Kong people, especially the young people who have been led astray, would have a clear understanding of the current situation in Hong Kong and cherish the sound development of Hong Kong after the handover, which has not come by easily. I hope they will keep the big picture in mind, rally behind the Chief Executive and the SAR Government, uphold rule of law and justice in Hong Kong, and safeguard national unification as well as Hong Kong’s prosperity and stability. Hong Kong people from all walks of life must refuse to be used or coerced by the radical forces. They should say “no” to all violence and lawlessness. They should support the SAR Government in governing Hong Kong in accordance with law, and support the Hong Kong police in strict and rigorous enforcement.

Second, the violent offenders must be brought to justice in accordance with law. It is the basic requirement of the rule of law that all laws must be observed and all offenders must be held accountable. The violent and lawless perpetrators must be brought to justice no matter who they are or however hard they try to whitewash their actions. If anyone in this country questions this point, let me ask them this: Would the UK allow extremists to storm the Palace of Westminster or damage its facilities, and get away with it? Would the UK give permission for attacking police officers with lethal weapons or set fire to the police station without any punishment? Would the UK allow so-called pro-democracy rioters to occupy the airport, obstruct traffic, disturb social order or threaten the safety of people’s life and property? Aren’t all these regarded as crimes in the UK?

Indulging lawlessness is tantamount to blaspheming against justice. Conniving in violence is tantamount to trampling on the rule of law. No country under the rule of law, no responsible government, would sit back and watch as such violence rages on. The Central Government of China firmly supports the SAR Government and Hong Kong police in strict, rigorous and decisive enforcement, so as to bring the offenders to justice as soon as possible and uphold the rule of law and social order in Hong Kong.

Third, foreign forces must stop interfering in Hong Kong’s affairs. Evidence shows that the situation in Hong Kong would not have deteriorated so much had it not been for the interference and incitement of foreign forces. Some Western politicians and organisations have publicly or covertly given various types of support to the violent radicals, and tried to interfere in the judicial independence of Hong Kong and obstruct Hong Kong police from bringing the violent offenders to justice.

I want to reiterate here that Hong Kong is part of China; no foreign country should interfere in Hong Kong affairs. We urge those foreign forces to respect China’s sovereignty and security, immediately stop interfering in Hong Kong affairs, stop interfering in China’s internal affairs, and stop conniving in violent offences. They should not misjudge the situation and go down the wrong path. Otherwise, they will “lift the stone only to drop it on their own feet”.

Fourth, the media must shoulder due social responsibilities. Since what happened in Hong Kong, I have to say, the Western media have failed to play a credible role. Instead of reporting the situation in a just and objective manner, they have confused right and wrong, given unbalanced account and misled the public. There has been massive coverage on so-called “right to peaceful protest” but few reports on the violent offences by the extreme radicals such as disruption of social order, attacks on police officers and injuries to bystanders. There has not been a word about the extensive public support for the SAR Government and for restoring law and order in Hong Kong. The lawless and violent offenders who undermine rule of law are whitewashed and named “pro-democracy activists” in media reports. But the legitimate law enforcement measures of the SAR Government and the police to uphold law and order and protect life and property of the people are labeled “repression”.

Such selective reporting and distortion have resulted in the prevalence of wrong information and have misled the public, especially young people in Hong Kong. It is fair to say that Western media have inescapable responsibility for the current situation in Hong Kong!

I sincerely hope that Western media would reflect on the social impact of their reporting, shoulder due social responsibilities, and report the situation in Hong Kong in a just and objective manner. I hope they would stop speaking up for the extreme violent offenders, refrain from pouring oil over the flame in Hong Kong, and foster a sound environment of public opinion so that law and order could be restored in Hong Kong.

“Order fosters prosperity while unrest brews regress.” Given what is happening in Hong Kong, this ancient Chinese teaching cannot be more relevant.

It is in the interests of both China and the international community including the UK to have a prosperous and stable Hong Kong, where over three hundred thousand British citizens live and work, and where three hundred British companies are doing business.

I sincerely hope that people from all walks of life in the UK will have a clear understanding of the big picture, act in the interest of Hong Kong’s prosperity and stability, and refrain from saying or doing anything that interferes in Hong Kong’s affairs or undermines rule of law in Hong Kong. I am confident that with the support of the Central Government of China and under the leadership of the SAR Government and Chief Executive Carrie Lam, Hong Kong will bring violence to an end and restore law and order at an early date. Hong Kong, the “oriental pearl”, will once again shine brightly.

Why more and more people are looking to work with and in China

 

An intriguing article from Dr Ralf Speth, CEO of Jaguar Land Rover. He obviously has an immediate business interest, but the long-term experience of engaging with China also presents a broader picture. Note especially the comments on his daughter, who is working in Shanghai and finds Chinese medical research and technology the more advanced than anywhere else. Copied from the People’s Daily.

I visited China for the first time in the early 1980s. Back then, China had just started reforming and opening up, and was in an early stage of accelerated urban construction. There were not many cars, but the people there, many of whom were riding bikes on the streets, were showing energy in their eyes.

About 10 years later, I went to China again. The country was showing even greater signs of change, with a rapid development of infrastructure. The living standard of the Chinese people was improving everywhere you looked. There was a tremendous momentum all throughout the country.

To put it simply: one noticed right away that the roads were wider, and that automobiles were getting more affordable for average families. I started to realize that, as China’s automobile market took off, the country was seeing huge market demand. This demand would soon make China the world’s fastest-growing and largest auto market.

Subsequent visits to China gave me a more comprehensive understanding of the country’s development potential. After I became the CEO of Jaguar Land Rover in 2010, I immediately led the company to enter the Chinese market. We soon achieved leapfrog growth after entering what had indeed become the world’s largest auto market.

We started cooperation with China’s Chery Automobile Co., Ltd to produce automobiles and engines. So far, we have set up offices in four Chinese cities, including Shanghai, Beijing, Guangzhou and Chengdu, employing over 6,000 staff and authorizing 245 dealers across the country. I continue to be hugely optimistic about the Chinese market, and look forward to finding out what the future will hold.

As a witness of – and participant in – the miracle of China’s development, I am amazed by the spectacular progress achieved since the foundation of the modern nation. My daughter also developed a strong interest in China, under my influence. After she came to see it firsthand, she was immediately attracted by the dynamism and charm of the country. Now she is a doctor serving an internship in Shanghai.

As I started to learn more about this country, I came to understand why young people around the world are yearning to engage with it. My daughter often tells me that being a doctor in Shanghai means working at the forefront of medical science and having access to the world’s most advanced technologies.

This is true. It only took a few decades for China to become one of the leading countries in medical science, and ‘miracle’ has become the most frequently used word to describe China.

China has not only achieved economic development, but also advanced technological progress and an open and inclusive culture. The country is promoting world peace and development through dialogue and cooperation.

In recent years, China has lifted more than 10 million people out of poverty annually; it is seeing rapid expansion of the middle-income group, which is resulting in a growing set of expectations for the country from the world.

I believe China’s development is not only quantitative, but also qualitative. The country is leading the world in multiple areas and becoming one of the most attractive destinations on offer. Young graduates from many countries hope to work in China and get involved in the great tide of the country’s development.

Rather than focusing on only its own development, China also hopes to promote shared progress across the world. The Belt and Road Initiative (BRI) being implemented by the country has created a great opportunity for global economic prosperity. Today, the joint construction of the BRI is yielding rich developmental fruit.

In particular, the initiative is rapidly improving the infrastructure of participating countries. Infrastructure is an accelerator of commercial development, and the Belt and Road countries are seeing the benefits from it already.

Culturally, joint construction of the BRI has significantly boosted understanding and inclusiveness among different civilizations and diverse cultures. The BRI advocates for the principle of seeking shared benefits through consultation and collaboration, which not only helps innovation and fosters mutual understanding, but also improves the livelihood of the people. Besides, it also bears huge significance for promoting peaceful development.

We, as multinational enterprises, welcome the application of such principles. In our industry, the ideals being upheld by the BRI ultimately facilitate the international auto trade and the trade in auto parts. Only by sticking to this kind of reciprocal cooperation can enterprises achieve long-term development.

More reason to support China’s promotion of human rights in Xinjiang

The State Council Information Office of the People’s Republic of China recently released a white paper called ‘Vocational Education and Training in Xinjiang‘.

Well worth a read, since it reveals why developing countries, and especially Islamic countries understand and support the very successful measures in Xinjiang to curb the three evils of terrorism, extremism and separatism. The following article from The Global Times explains why:

China on Friday released a white paper on vocational education and training in Xinjiang. For the past two years, the vocational education and training centers have been the focus of debate on Xinjiang affairs. Western countries have been fiercely critical, while developing countries, including Islamic nations, have shown a general understanding and support.

Through a thorough review of the white paper, it is clear why Islamic countries support the facilities, and why they receive more significant approval worldwide amid adverse reports from Western media.

A closer examination of the white paper shows the following reasons why the vocational education and training centers are valuable.

First, they were created based on facts, while providing an objective and powerful response to the situation in the Xinjiang Uyghur Autonomous Region. Terrorism and extremism used to run rampant in Xinjiang. As mentioned in the white paper, there had been thousands of terrorist incidents including bombs, assassinations and poisonings from 1990-2016.

Violent terrorist attacks are spiritually instigated and supported by extremism and too powerful and complicated to be addressed by the general rule of law. As a result, vocational education and training centers serve as the best solution to solving this problem at its root. The facilities are a manifestation of the times.

Second, the centers are nothing like the depictions from Western media that have referred to them as “detention camps” that torture specific ethnic minorities. The centers have become a life school for the trainees and a place where they learn vital knowledge on laws and standard Chinese language while mastering one or two vocational skills. The centers provide possibilities for many impoverished trainees who were infected by extremism and have now reshaped their livelihoods. Undoubtedly, the centers will continue to change the fate of many poor people in Xinjiang.

Third, the centers are managed with care. They provide trainees with ideal conditions and are an improvement for those from impoverished places. Besides, the centers are not “closed learning” facilities. Even though they function as boarding schools, trainees are allowed to go home regularly, request time off, and communicate freely with the outside world.

Fourth, as a key governance measure in Xinjiang in recent years, the centers have achieved more than initially expected. So far, many trainees have already graduated. In doing so, not only have they strengthened their abilities to resist extremism but have also secured employment. In nearly three consecutive years, there has been no violent terrorist attack in Xinjiang, which is mainly due to the vocational education and training centers.

When looking back on recent years, the centers haven’t been crushed by the enormous pressure placed on them by Western opinion, and instead, have become even better. It shows that as long as a cause is based on facts and benefits majority of the people, it can experience continuous development.

The West-dominated discourse targeting the centers is similar to an iron curtain. But progress has been achieved in the communication over the centers. Attacks of the West have not extended beyond public opinion and went pale in the face of transparent progress by the Chinese side. Besides, the US and other Western countries have been unable to convince Islamic nations to join them to oppose the Xinjiang governance. China has gradually gained the initiative.

It’s fair to say China has conducted its most difficult human rights debate with the US and other Western countries in recent years, securing a glorious victory. China won as its efforts in Xinjiang have been pragmatic and based on facts. Proper governance has been implemented for the wellbeing of all ethnic groups in the region, rather than an attempt to win laud from the US and other Western nations. By adhering to this principle and moving forward, China has received more recognition from the international community, while its opponents are destined to become further isolated.

 

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