Peoples’ China: What Lies Ahead?

by Greg Godels / March 11th, 2024

Whither China? was the name of a widely circulated pamphlet authored by the respected Anglo-Indian Marxist author, R. Palme Dutt. Writing in 1966, with the People’s Republic of China (PRC) in the throes of the “Cultural Revolution,” the pamphlet sought to shed light on the PRC’s tortured road from liberation in 1949 to a vast upheaval disrupting all aspects of Chinese society as well as foreign relations. To most people — across the entire political spectrum — developments within this Asian giant were a challenge to understand. To be sure, there were zealots outside of the PRC who hung on every word uttered by The Great Helmsman, Chairman Mao, and stood by every release explaining Chinese events in the People’s Daily, Red Flag and Peking Review. A few Communist Parties and many middle-class intellectuals embraced the Cultural Revolution as a rite of purification. Yet for most, as with Palme Dutt, the paramount question remained: Where is the PRC going?

Today, forty-five years later, the question remains open.

I wrote the above thirteen years ago. I contend that the question remains open today. Much has changed, however. In 2011, China-bashing was widespread especially where jobs had disappeared in manufacturing, but largely tempered by a Western business sector anxious to exploit low wages and the Chinese domestic market.

But almost simultaneously with the 2011 posting, the Obama administration made official its “pivot to Asia,” directed explicitly at Peoples’ China. As the Brookings Institute ‘diplomatically’ put it, “Washington is still very much focused on sustaining a constructive U.S.-China relationship, but it has now brought disparate elements together in a strategically integrated fashion that explicitly affirms and promises to sustain American leadership throughout Asia for the foreseeable future.” More explicitly, they intend “to establish a strong and credible American presence across Asia to both encourage constructive Chinese behavior and to provide confidence to other countries in the region that they need not yield to potential Chinese regional hegemony.”

To be sure, the officially declared Obama administration hostility to the PRC was neither a reaction to job loss nor to deindustrialization. The Administration showed no interest in recreating lost jobs or restoring the industrial cities in the Midwest. The real purpose is revealed in the simple phrase “Chinese regional hegemony.” Clearly, by 2011, ruling circles in the US had decided that the PRC was more than an economic cherry ready to be plucked. Instead, it had developed into an economic powerhouse, a true, even the true, competitor in global markets; indeed, it had become a robust threat to U.S. hegemony.

With the 2016 election of Donald Trump, the anti-PRC campaign continued, though conducted in an accelerated, cruder fashion, employing sanctions, threats, ultimatums, and even legal chicanery (the detention of one of Huawei’s executives, the daughter of the company’s founder).

The subsequent Biden administration pursued the same approach, adding another level of belligerence by stirring conflict in the South China Sea and reigniting the Taiwan issue. To anyone paying attention, successive administrations were intensifying aggression against the PRC, a process fueled by the eagerly compliant mainstream media.

It has become commonplace on the left to explain the growing hostility to the PRC by the U.S. and its NATO satellites as the instigation of a new Cold War, a revival of the anti-Communist crusades strengthening after World War II. In the past, I have suggested as much. But that would be grossly misleading.

The original Cold War was a struggle between capitalism and socialism. Whether Western critics will concede that the Soviet alternative was really socialism is irrelevant. It was a sharp and near-total alternative, and the West fought it as such. The Soviet Union did not organize its production to participate in global markets, it did not compete for global markets, nor did it threaten the profitability of capitalist enterprises through global competition. In short, the Soviet Union offered a potent option to Western capitalism, but not the threat of a rival for markets or profits. Moreover, Soviet foreign policy both condemned capitalism and explicitly sought to win other countries to socialist construction.

The same cannot be said for the Western antagonism to the PRC. The West courted Peoples’ China assiduously from the worst excesses of the Cultural Revolution through the entire Deng era. Western powers saw the PRC as either an ally against the Soviet Union, a source of cheap labor, an investment windfall, or a virgin market. But with China’s success in weathering the capitalist crisis of 2007-2009, the U.S. and its allies began to look at the PRC as a dangerous rival within the global system of capitalism. Chinese technologies more than rivaled the West’s; its share of global trade had grown dramatically; and its accumulation of capital and its export of capital were alarming to Western powers bent on pressing their own export of capital.

In contrast to the actual Cold War, even the most ardent defender of the “Chinese road to socialism” cannot today cite many instances of PRC foreign policy strongly advocating, assisting, or even vigorously defending the fight for socialism anywhere outside of China. Indeed, the basic tenet of PRC policy — the noninterference in the affairs of others, regardless of their ideologies or policies — has more in common with Adam Smith than Vladimir Lenin.

What the Soviet Union took as its internationalist mission — support for those fighting capitalism — is not to be found in the CPC’s foreign policy. Nothing demonstrates the differences more than the Soviet’s past solidarity and aid toward Cuba’s socialist construction and the contrasting PRC’s commercial and cultural relations and meager aid.

Accordingly, the PRC’s commercial relations with less developed countries can raise substantial issues. Recently, Ann Garrison, a highly respected solidarity activist, often focusing on imperialism in Africa, wrote a provocative article for Black Agenda Report. In her review of Cobalt Red, How the Blood of the Congo Powers our Lives — an account of corporate mining and labor exploitation in the Democratic Republic of the Congo– Garrison makes the following commentary guaranteed to raise the ire of devotees of the “Chinese road to socialism”:

[The author of Cobalt Red] explains battery technology and the global dominance of battery manufacture by South Korean, Japanese, and, most of all, Chinese industrial titans. Huge Chinese corporations so dominate Congolese cobalt mining, processing and battery manufacture that one has to ask why a communist government, however capitalist in fact, doesn’t at least somehow require more responsible sourcing of minerals processed and then advanced along the supply chain within its borders. I hope that Kara’s book has or will be translated into Chinese. (my emphasis)

Predictably, rejoinders came fast and furious. In both an interview and response posted on Black Agenda Report, Garrison’s critics struggled to explain why PRC-based corporations were not contributing to the impoverishment and exploitation of Congolese workers. They cited Chinese investments in infrastructure and in modernization; they noted huge increases in productivity wrought by Chinese technology; they reminded Garrison of the corruption of the DRC government and local capitalists, and even blamed capitalism itself. How, one critic asked, could the PRC be singled out, when other (admittedly capitalist) countries were doing it as well?

Yet none even made a feeble attempt to explain how the extraction of one of the most sought-after minerals in modern industry could leave the people of the mineral-rich DRC with one of — if not the lowest — median incomes in the entire world. This striking fact points to the enormous rate of exploitation engaged in cobalt, copper, and other resource extraction in this poverty-stricken African country (for a Marxist angle on this question, see Charles Andrews’s article, cited by Garrison, but seemingly misunderstood by her).

In their zeal to defend the PRC’s Belt and Road initiative, these same defenders of the penetration of Chinese capital in poor countries often cite the frequent Chinese concept of “win-win” — the idea that Chinese capital brings with it victory for both the capital supplier and those ‘benefitted’ by the capital. Theorists of the non-class “win-win” concept are never clear exactly who the beneficiaries are — other capitalists, corrupt government officials, or the working class. Nevertheless, within the intensely competitive global capitalist system, this “win-win” is not sustainable and is contrary to both experience and the laws of capitalist development. Theoretically, it owes more to the thinking of David Ricardo than Karl Marx.

The PRC’s vexing relationship to capitalism has produced contradictions at home as well as globally. The ongoing collapse of the largely private construction/real-estate industry is one very large example. Once a major factor in PRC growth, overproduction of housing is now a substantial drag on economic advance. Monthly sales of new homes by private developers peaked late in 2020 at over 1.5 trillion yuan and fell to a little more than .25 trillion yuan at the beginning of 2024.

With the private real estate sector on the verge of bankruptcy and a huge number of residential properties unsold or unfinished, the PRC leadership is caught in a twenty-first-century version of the infamous scissors crisis that brought the Soviet NEP — the experiment with capitalist development of the productive forces — to a halt. If the government allows the private developers to fail, it will have harsh repercussions throughout the private sector, with banks, and foreign investors. If the government bails out the developers, it will remove the market consequences of capitalist excess and put the burden of sustaining capitalist failure on the backs of the Chinese people.

According to the Wall Street Journal, the government, led by the Chinese Communist Party (CCP), is considering placing “the state back in charge of the property market, part of a push to rein in the private sector.” The WSJ editors construe this as reviving “Socialist Ideas” — a welcome thought, if true.

The article claims that in CCP General Secretary Xi’s view, “too much credit moved into property speculation, adding risks to the financial system, widening the gap between the haves and the have-nots, and diverting resources from what Xi considers to be the ‘real economy’ — sectors such as manufacturing and high-end technology.…”

Putting aside the question of how the private real estate sector was allowed to create an enormous bubble of unfinished and unsold homes, the move to return responsibility for housing to the public sector should be welcome, restoring price stability and planning, and eliminating speculation, overproduction, and economic disparities.

Unfortunately, there will be uncertain consequences and difficulties for banks, investors, and real estate buyers who purchased under the private regimen.

It is worth noting that no Western capitalist country or Japan has or would address a real estate bubble by absorbing real estate into the public sector.

Under Xi’s leadership, the direction of the PRC’s ‘reforms’ may have shifted somewhat away from an infatuation with markets, private ownership, and foreign capital. The former “enrich yourselves” tolerance for wealth accumulation has been tempered by conscious efforts at raising the living standards of the poorest. Xi has made a priority of “targeted poverty alleviation,” with impressive success.

Western intellectuals harshly criticize the PRC’s ‘democracy’ because it rejects the multi-party, periodic election model long-favored in the West. These same intellectuals fetishize a form of democracy, regardless of whether that particular form earns the trust of those supposedly represented. The mere fact that a procedure purports to deliver democratic or representative results does not guarantee that it actually makes good on its promise.

If China-critics were truly concerned with democratic or popular outcomes, they would turn to measures or surveys of public confidence, satisfaction, or trust in government to judge the respective systems. On this count, the PRC is always found at or near the top in public trust (for example, hereand here). Moreover, Chinese society shows high interpersonal or social trust, another measure of success in producing popular social cohesion by a government.

It’s telling that with the Western obsession with democracy, there is little interest in holding bourgeois democracy up to any relevant measure of its trust or popularity. When it is done, the U.S. fares very poorly, with a six-decade decline in public trust, according to Pew. As recently as February 28, the most recent Pew poll shows that even people who do respect “representative democracy” are critical of how it’s working. Their answer to their skepticism may be found “if more women, people from poor backgrounds and young adults held elective office”, say respondents. Those elites who so glibly talk of “our democracy,” in contrast to those including the CCP that they call “authoritarians,” might pause to listen to the people of their own country.

The PRC has shocked Western critics with the breakneck pace of its adoption of non-emission energy production. In 2020, the Chinese anticipated generating 1200 gigawatts of solar and wind power by 2030. That goal and more will likely be reached by the end of 2024. Overall, the PRC expects to account for more new clean-energy capacity this year than the average growth in electricity demand over the last decade and a half. This means, of course, that emissions have likely peaked and will be receding in the years ahead– an achievement well ahead of Western estimates and Western achievements, and a victory for the global environmental movement.

At the same time, the PRC’s successful competition in the solar-panel market makes it the target of global competitors, a brutal struggle that undermines the espoused “win-win” approach. Despite the benign tone of “win-win,” market competition is not bound by polite resignation, but aggression, conflict, and, as Lenin affirmed, ultimately war. That is the inescapable logic of capitalism. PRC engagement with the market cannot negate it.

Western leftists too often simplify the ‘Chinese Question’ by making it a parlor game revolving around whether China is or is not a socialist country, an error confusing a settled, accomplished state of affairs with a contested process.

As long as capitalism exists and holds seats of political power, the process of building socialism remains unstable and unfinished.

The 1936 Soviet constitution declared in Article One that the USSR was “a socialist state of workers and peasants,” a status that was under great duress over the subsequent following decades. The 1977 constitution stated even more boldly that the USSR was “a socialist state of the whole people…,” a state without classes and, by implication, class struggle. A decade and a half later, there was no USSR. Building socialism is a fragile process and one prone to reversals and defeats.

Thus, we should follow Palme Dutt’s sage advice and observe developments in the PRC with vigilance and a critical eye. If building socialism is a dynamic process, we should attend to its direction, rather than pronouncing its summary success or failure. The PRC is a complex creation with a complex — often contradictory — relationship with other countries as well as the socialist project. The cause of  socialism is ill served by either ignoring or exaggerating both missteps and victories in the PRC’s revolutionary path.

Greg Godels writes on current events, political economy, and the Communist movement from a Marxist-Leninist perspective. Read other articles by Greg, or visit Greg's website.