The socialist road of the reform and opening up (Deng Xiaoping)

In the 1980s, Deng Xiaoping made many statements concerning the reform and opening up, which had begun only a few years earlier. As he points out again and again, its core purpose was and is to liberate the forces of production – inescapable for socialism – in order to improve the socio-economic lives of everyone. And he is also clear that the reform and opening up is following the socialist road. For example, this talk from 21 August, 1985, points out:

People abroad are making two kinds of comments about China’s economic reform. Some commentators maintain that the reform will cause China to abandon socialism, while others hold that it will not. These last are far-sighted. All our reforms have the same aim: to clear away the obstacles to the development of the productive forces. In the past we carried out the new-democratic revolution. After the founding of the People’s Republic, we completed agrarian reform and conducted the socialist transformation of agriculture, handicrafts and capitalist industry and commerce, thus establishing the socialist economic base. All this was a great revolution, which lasted for more than three decades. But in the many years following the establishment of the socialist economic base, we failed to work out policies that would create favourable conditions for the development of the productive forces. As a result, they developed slowly, the material and cultural life of the people did not improve rapidly enough, and the country could not free itself from poverty and backwardness. Under these circumstances, in December 1978, at the Third Plenary Session of the Eleventh Central Committee of the Party, we were compelled to decide on a course of reform.

Our general principles are that we should keep to the socialist road, uphold the people’s democratic dictatorship, uphold leadership by the Communist Party and uphold Marxism-Leninism and Mao Zedong Thought. These principles have been written into China’s Constitution. The problem is how to implement them. Should we follow a policy that will not help us shake off poverty and backwardness, or should we, on the basis of those four principles, choose a better policy that will enable us to rapidly develop the productive forces? Our decision at the Third Plenary Session of the Eleventh Central Committee to carry out reform meant that we were choosing a better policy. Just like our past revolutions, the reform is designed to clear away the obstacles to the development of the productive forces and to lift China out of poverty and backwardness. In this sense, the reform may also be called a revolutionary change.

… Of course, the policies of invigorating the economy and opening to the outside may have certain negative effects, and we need to be aware of that. But we can cope with that; it is nothing serious. This is because from the political point of view, our socialist state apparatus can safeguard the socialist system. And from the economic point of view, our socialist economy already has a solid basis in industry, agriculture, commerce and other sectors. That is how we look upon the possible negative effects of our policy.

Our reform is an experiment not only for China but also for the rest of the world. We believe the experiment will succeed. If it does, our experience may be useful to the cause of world socialism and to other developing countries. Of course, we do not mean that other countries should copy our example. Our principle is that we should integrate Marxism with Chinese practice and blaze a path of our own. That is what we call building socialism with Chinese characteristics.

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An insight into the socialist market economy

This year marks the 40th anniversary celebrations of the reform and opening up and the development of the socialist market economy (which is different from a capitalist market economy). As part of the celebrations, 100 people who have contributed significantly to the reform and opening up were nominated for awards. As the People’s Daily reports:

The award candidates come from a wide range of professions, including scientists, economists, grass-roots Party cadres, model workers, state firm managers, and private entrepreneurs.

Feedback is being sought until 30 November, after which the final list will be announced. Nothing remarkable in such an exercise, although some attention has been directed to the nomination of the drivers of China’s world-leading e-commmerce, such as Ma Yun (also known as Jack Ma) of Alibaba. Everyone in China knows that he is a long-standing member of the communist party, so nothing new there.

More significantly, the award exercise opens a window into the functioning of China’s socialist market economy. Although proper research goes much deeper, engaging with Marxist economists in China, the following, from the People’s Daily, is a helpful start. It concerns what may be called an enmeshed economy, where state, society and economy are so intertwined that it is almost impossible to speak of separate entities.

Party not meddling in running of firms: experts

The Communist Party of China (CPC) branches inside private companies help enhance corporate management and improve teamwork without meddling in decision-making processes, and concerns over any executive affiliated to the Party reflect a lack of knowledge about how the Party functions at the grass-roots level, experts said on Tuesday.

Jack Ma Yun, founder of Chinese e-commerce giant Alibaba Group, was identified as a Party member on Monday, which sparked heated discussions online. Some media reports said it was an example of how the Party penetrates into every aspect of Chinese business.

This is actually not the first time it has been revealed that Ma is a Party member, media reports said. When the Zhejiang Merchants Association was first established in October 2015, Ma was appointed as the first head of the organization and introduced as a Party member.

Those who are worried that growing Party branches and committees inside private companies might jeopardize the interests of shareholders or affect decision-making have no basic knowledge about how grass-roots Party cells operate and what their roles really are, Su Wei, a professor at the Party School of the CPC Chongqing Municipal Committee, told the Global Times on Tuesday.

“Before the CPC implemented the ‘Three Represents’ and allowed private entrepreneurs who had met the requirements to join the Party back in 2001, the number of private businessmen who were Party members accounted for a large proportion of the total number of private entrepreneurs. And many had already become Party members even before they started their own business,” Su said.

It is unknown whether Ma joined the Party before he started Alibaba. The e-commerce firm was contacted by the Global Times but did not comment on this matter by press time on Tuesday.

Membership of the Party and corporate management are two unrelated things, Su noted. “The board of shareholders is in charge of decision-making and daily operations, while Party cells are set up to make sure the company’s operations are in line with the principles and policies of the CPC,” he said.

China recently released a trial regulation for Party branches stating that Party cells inside private firms can help guide and supervise enterprises to follow the country’s laws and regulations and safeguard the legitimate interests of all parties, according to a document released on Sunday.

The cells will also contribute to team building inside companies and boost corporate development, the document showed.

“It’s crystal clear what role Party branches play in private companies,” Su said, noting that Party cells are not established with the aim of replacing management teams or meddling in decision-making processes.

Party benefits

Alibaba established its Party branch in 2000 and upgraded it to a Party committee in 2008 due to the company’s growing number of Party members, according to media reports. Alibaba now has nearly 200 Party branches and about 7,000 Party members. Ma highlighted the importance of Party construction work with younger generations, pledging to explore Party building inside high-tech firms in the new era.

Over the past few years, more and more private companies, especially tech start-ups, have set up Party branches and committees to improve management and enhance team building. Some entrepreneurs also admitted that Party members, who are usually hardworking employees, have become role models at workplaces.

“We hire graduates every year and some of them are Party members, who usually work hard and are eager to learn, creating a positive work environment,” Liu Ren, vice general manager of Dailywin Watch Group, told the Global Times Tuesday.

Tech firms such as iFlytek and smartphone maker Xiaomi have been strengthening their Party construction work. “The rapid development of iFlytek is thanks to the correct guidance of the CPC and the hard work of Party comrades, who are also the backbone of our management team,” Wu Dehai, Party chief of the CPC committee of the company, told the Global Times in a recent interview.

The trial regulation for Party branches said that if there are at least three Party members in an organization, it should set up a Party branch.

The private sector is a key part of China’s reform and opening-up, and it has been developing with Chinese characteristics, Su noted.

“The interests of shareholders of listed private companies do not contradict the core interests of the CPC, as the Party also wants to pursue opening-up and economic growth,” he said.

What About the Chinese Workers?

A question I am asked from time to time when talking about Chinese Marxism is: what about the workers?

The short answer is that 700-800 million of them have been lifted out of poverty in the last 40 years – the time of ‘the reform and opening up’ initiated by Deng Xiaoping.

The long answer requires some more detail.

The question with which I began often implies a certain potted narrative: once upon a time, the workers were treated well, with the ‘Iron Rice Bowl’ (not originally a Chinese term) providing full employment and cradle-to-grave support. But then everything was turned on its head with the ‘reform and opening up’. Workers were treated badly, lost their jobs and the communist party morphed into yet another exploiting ruling class.

The problem with this assumed narrative is not so much its mixture of half-truths and distortions, but more its underlying assumptions and deliberate neglect of crucial facts.

To begin with, it assumes a ‘Eurofied’ Marxism, in which the working class is well-developed in the context of an over-ripe capitalist market economy. Marxism is thus supposed to be all about the working class – the proletariat – and a communist revolution will be driven by them.

The catch is that the successful communist revolutions happened in places that did not have a large or well-developed working class. Instead, they had a vast majority of peasants. What was to be done?

The first real effort can be dated back to Engels’s often neglected piece from 1882, ‘The Mark’.  Here he recovers the old practice of subsistence survival economics, in which the land was held in common, reallocated on a regular basis, and in which pasture lands and forests were common land. The trace of all this Engels finds in the German ‘mark’. Crucially, he ends the piece with a call to recover at a whole new dialectical level this version of rural communism. He closes the piece with these words: ‘Think well on it, German peasants. Only the Social-Democrats can help you’ (MECW 24: 456). In other words, the communists are the real friends of the peasants.

Despite this insight, the first successful revolution in Russia struggled to come to terms with the peasants. The revolution happened in the cities, based on the fledgling working class and it was only with significant struggle and not a little disruption (in the 1930s) that the peasants became collective farm workers in the new class formations under socialism.

How is all this relevant for China?

There too the initial communist movement focused on the small number of workers, leading to the failed revolution of early 1927. In reply, it was Mao’s breakthrough to pick up some of the emphases from Engels, Lenin and Stalin and focus on the peasants as the core of the communist movement. With the Nanchang Uprising on 1 August  1927 – the first successful armed insurrection of the Chinese Revolution mounted in response to the Shanghai massacre – Mao had already organised a red base with peasants in the nearby Jinggang mountains. The fabled meeting there between him and Zhu De’s armed force from Nanchang marks the origin of the Red Army.

Let me push this a little further. For Mao and the others, it was not so much a combination of workers and peasants, but the breakthrough that peasants too are workers, rural workers. As a result, the communist movement massively expanded its base.

Even so, this is only a beginning. The initial phase after 1949 relied heavily on the model of the Soviet Union: planned economy; full collectivisation of agriculture; a socialist offensive that would lift China into an industrial superpower (Great Leap Forward and so on). The catch was that Mao’s policies tended to focus on the relations of production, with radical equality for all.

This is all very well, but it is only one half of the equation. The other concerns the means of production. The problem that remained was that the economic condition of the vast majority improved only marginally and at a very slow pace.

It was Deng Xiaoping’s insight that the means of production needed attention, that socialism is as much about improving the socio-economic conditions of the rural and urban workers. Hence the reform and opening up and the transformation into a socialist market economy.

Along the way, mistakes were made and new contradictions arose (as Mao has already foreseen in 1937). These included the breaking up of the inefficient collective conglomerates (more Owenite cooperatives than full communes), some workers losing their jobs, protests by workers against conditions and law-breaking management, the absence for a time of adequate medical care in rural areas, parents leaving children under the care of grandparents in order to work in cities. But the mistakes and contradictions were not insuperable. Workers have been compensated, protests listened to (since they routinely invoke the communist tradition) and managers who break the law punished, all people now covered by medical insurance as well as old-age pension. Above all, a concerted and well-honed effort continues to deal with rural poverty.

All of this brings me to the final point: during the time of the reform and opening up, between 700 and 800 million have been lifted out of poverty. The Chinese prefer the lower figure, since the standard required is higher than international standards.

Not only has this been designated as the greatest human rights achievement in memory, but it is precisely workers – urban and rural – who have been lifted out of poverty.

As they like to say, without the Community Party there would be no new China.

Xi Jinping’s Boao Forum speech: key ideas

The texts of this speech will be available soon, in many languages. In his first major international speech after being re-elected president, Xi Jinping presented a keynote at the Boao Forum, held in Hainan Province. It is known as the ‘Asian Davos’. A few of the key observations, remembering that 2018 celebrates forty years of the ‘reform and opening up’. Let me add that we are planning a conference later this year called ‘The Marxist Philosophy of the Reform and Opening Up’, especially since Marxism has become again the focus of so many researchers and the best students.

The reform and opening up, initiated by Deng Xiaoping in 1978, has significantly unleashed and enhanced productivity in China, blazed a path of socialism with Chinese characteristics, demonstrated the strength of the nation, and actively contributed China’s share to the world, according to Xi.

Over the past 40 years, China has recorded an averaged annual GDP growth rate of around 9.5 percent, fostered a middle-income population of 400 million, and lifted more than 700 million Chinese people out of poverty, accounting for more than 70 percent of the global total.

China contributed over 30 percent of global growth in recent years.

Hailing it as “China’s second revolution,” Xi said the reform and opening up had not only profoundly changed the country but also greatly influenced the whole world.

In terms used for none other than Chairman Mao (although the background picture of this blog suggests an older history):

As the country’s helmsman, Xi launched the new round of reform and opening up, the largest in scale around the globe, at a time when the giant vessel of China has entered “a deep-water zone.”

And any country that seeks to isolate itself will be consigned to the ‘dustbin of history’:

“Humanity has a major choice to make between openness and isolation, and between progress and retrogression. In a world aspiring for peace and development, the cold-war and zero-sum mentality looks even more out of place.”

“We must dispel the clouds to see the sun, as we say in Chinese, so as to have a keen grasp of the law of history and the trend of the world.”

Xi said we live at a time with an overwhelming trend toward peace and cooperation as well as openness and connectivity.

Xi said we also live at a time with an overwhelming trend toward reform and innovation, adding that those who reject them will be left behind and assigned to the dustbin of history.

No prizes for guessing to whom he might be referring. Sourced from Xinhua News and Global Times.