Brief Notes from China

We are getting ready to leave Shanghai. The timing of the trip was fascinating because China seems to be ready to move to a new stage of development.

For example, just today I read that the government is instituting a 5% energy tax in the remote Xinjiang province.  The response to the Honda strike and the string of suicides at the Foxconn factory were critical of management.  Of course, the ownership of these plants was not Chinese; even so, the China Daily has pushing the line that it’s time to leave the low-wage economy behind.  China is also beginning to take more control over the strategic minerals, of which it has large share of the world’s production.

The taxes levied on real estate knocked the Shanghai stock market down quite a bit.  The papers have also been taking a critical attitude towards the wanton demolition of neighborhoods to make way for expensive commercial projects.

All of these moves are consistent with intelligent social democratic principles, but I have difficulty in seeing socialism here. At the same time, virtually everybody we encountered treated the Chinese economy and socialist.

I tried to get a feel for the real estate bubble. Real estate construction in Shanghai seems to have calmed down a bit since I was here a few months ago, but the rate of construction Suzhou and Hangzhou was phenomenal.


8 comments so far

  1. Nat Weinstein on

    Dear Michael,
    I tend to read only a few of the comments made by Marxmail subscribers and yours are among those few. Though I had never engaged in any of the prolonged mini-debates except for one very brief intervention on my part, I haven’t submitted even an occasional comment in years. But I have been skimming through the daily list of contributions which seem to be getting larger in the last year or maybe two on that website almost every day–just enough to get the feel of the political direction in which the many debates have been going. It seem to me to serve as a reflection of the radicalization of mass consciousness which appears to be deepening by the day with every new profit-driven social. economic, political, military and ecological catastrophe ranging from global warming to the poisoning of the world’s oceans and not only in the Gulf of Mexico accelerated by slogans like “Drill, Baby, Drill.”

    In other words, it seems to me that mass consciousness, which tends to register in the minds of the masses after the fact is already so far advanced that according to Professor Charles Derber, who wrote in an article posted on the Internet, titled, “Capitalism: Big Surprises in Recent Polls,” the following insightful words in his opening paragraph:

    “According to the conventional wisdom, the US is a center-Right country. But a new poll by Pew casts doubt on that idea. It shows widespread skepticism about capitalism and hints that support for socialist alternatives is emerging as a majoritarian force in America’s new generation.” (Read it yourself if you had missed it, it’s on the Internet.)

    I felt I had to give you an indication of where I am coming from before commenting on your own brief comments on China which I found very interesting since it appears to me that you think that China has gone virtually all the way back to capitalism. I say, “virtually,” only because I am sure that you must be aware that the PRC still is founded on a mixed economy in its truest sense, with a deeply rooted command–i.e., a bureaucratically planned–economy on the one side and a market-driven capitalist economy on the other.

    Based on the little more than a few of your very interesting essays I have read, I would like to hear what you have to say about the class character of the Chinese state today. Most socialists like you–who I deduce from what I have read of your work–you have more than a passing familiarity with the writings of Lenin and Trotsky I further expect that you take their positions as being well within the framework of orthodox Marxism, I respectfully ask you to shed a little more light on the Chinese question as you see it than you wrote in the following two sentences:

    “All of these moves are consistent with intelligent social democratic principles, but I have difficulty in seeing socialism here. At the same time, virtually everybody we encountered treated the Chinese economy and socialist.”

    As I remember, your general approach to Marxist theory suggests that you do not identify with the Stalinist perversion of Marxism, as you may well have already deduced from the few words I have written above, is my view. Perhaps the following question I pose to you will prompt a response from you: If you really think China is no longer a society in transition BETWEEN, not FROM, capitalism and socialism; how do you explain the fact that China has expanded at an average annual rate of around 10 percent since its inauguration of “Socialism with Capitalist Characteristics” and has so far continued its 10 percent rate of economic expansion since the beginning of the Great Recession more than two years ago?

    Another question, I think you might think worthy of consideration is this: Despite the virtual impossibility of the Chinese Communist Party’s leading Chinese workers toward what would be both a partly political revolution against its own political dictatorship, and and partly socialist revolution against the profit-driven half of China’s economic system–can anyone say with conviction that China’s economic successes so far under these circumstances is not in conflict with the view that China is just another average capitalist state? And what if it continues its economic expansion while the capitalist world–at least in the imperialist world remains locked in what may well be the Second Great Depression for the next year or too? Can it still be said that China is just another capitalist state? And what does such a future reality tell us about which half of China’s hybrid economy, its market driven and its command economy is dominant?

    I will stop here and apologize if my questions sound like a polemic against your two very honest sentences–which it is not intended to be. I know enough about your Marxist politics to know that I am trying as best I can to prod you into responding likewise in the best tradition of comradely and scientific discussion despite any other differences of opinion we may have about related and other questions. No one, not even Marx or Einstein much less ordinary mortals like myself, can find the secrets of nature and human society all by themselves.


  2. mperelman on

    I have visited China 3 times. Each time, I know less than before. Two years ago, I might have spoken with confidence about China.

    The Chinese economy is full of contradictions. Their undocumented workers have a miserable time. Many of the people I met work 12 hours a day.

    Yet the country seems to be on the verge of taking measures to address inequalities. At the same time, workers are being told not to address others on the job as comrades.

    How this will work out is an open question. In so far as China is doing by capitalist metrics is amazing.

  3. BS on

    Unfortunately for us, it will probably prove very difficult to find a english language analysis of the china situation that will properly show the situation. I’ve been trying to find analysis and comparison between the NEP and Den Xiaping’s economic reforms. There is surprisingly little. However, I found trotsky’s address to the comintern in 1922 to be quite interested and relevant.

    One relevant quote:

    It is inadmissible, however, not to recognize that here and there even a few of our friends have fallen into doubt: Isn’t there actually a masked capitulation to capitalism here? Isn’t there really a danger that capitalism might, by basing itself on the free market we restored, begin to develop more and more, and gain the upper hand over the beginnings of socialism? To answer this question it is first necessary to clear away the basic misunderstanding. The contention that Soviet economic development is travelling from Communism to capitalism is false to the core. We never had Communism. We never had socialism, nor could we have had it. We nationalized the disorganized bourgeois economy, and during the most critical period of life-and-death struggle we established a régime of “Communism” in the distribution of articles of consumption. By vanquishing the bourgeoisie in the field of politics and war, we gained the possibility of coming to grips with economic life and we found ourselves constrained to reintroduce the market forms of relations between the city and the village, between the different branches of industry, and between the individual enterprises themselves.

    Questions that have been rattling around my head for past weeks:

    Can we not apply that same logic now to China?

    As trotsky lays out in the second part of the speech, if in the bourgeois capitalist system we are ultimately concerned with who holds the reign of the state apparatus, then in the case of the worker’s state shouldn’t the most important indicator for us be if the working class still has state power?

    If from history we acknowledge that the socio economic system that will ultimately prevail is the one that can best develop the productive forces over an extended period of time? If that is our ruler, how do we measure China objectively without simply waiting to see what happens in 10 or 20 years?

    If this transitional period of china is meant to develop the productive forces to that of advanced capitalist countries, what is the next step?

    To what extent is the CPC travelling along this path consciously and to what extent is it just blindly riding the coat tails of the reforms of 30 years ago?

  4. mperelman on

    Very interesting. I do not know the answer & I wish I did.

    Each time I visit China, I know less.

  5. BS on

    I think trotsky would say the same thing about china. the debate about whether they are going from socialism to capitalism is the wrong one. they never had socialism, nor could they at that stage of development.

    so that leaves the question of what the nature of china is and what the CPC is doing…

  6. Steve Diamond on

    You know less yet you view their “reforms” as intelligent and social democratic?

  7. purple on

    I’m not sure how China is going to move to another stage of development with a per cap GDP-PPP at the level of Angola, for instance. No one is talking about Angola moving to another level of development.

    China is a large country and always has been, but multiplication does not equal power, except to a few Chinese nationalists who haven’t yet left for the U.S.

    China is treated with ‘deference’ by the West because MNC’s want the domestic market (another well-worn historical tread). Meanwhile the US just destabilized the government of an equally ‘powerful’ country, Japan and no one blinked and eyelash.

  8. mperelman on

    Scale does have an effect in development. A larger organization has a greater potential to develop a nucleus of growth, which can lead to future growth.

    The US is not fearful of Angola, yet China does seem to terrify policy makers. The anti-Chinese threat is, of course, overblown, but the fact is that the US cannot bully China as it does Angola.

    Yet, you are correct, that the ability of China to transform its system according to its own preferences is still in doubt.

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