No Deng without Mao
By: Karde Scott
Tags: Economics, Communism, Socialism, China

The Actions of Deng erupt forth as the true consequence of Mao era China.

Introduction

Broken into Four sections is a new perspective on the interactions of China on the global stage and its relations when shifting towards the Socialist Market Economy. One will find what is means to reject the stark division of the centrally planned Mao era economy and the modern Socialist Market economy.

1. Sino-Soviet Relationship and Split (1945 — 1959)

Long live the friendship between the peoples and the armies of China and the Soviet Union, early 1950s

Basing research on the work of Zhihua Shen and, the book “Mao and the Sino–Soviet Partnership, 1945–1959” the true place of China in the Socialist bloc is revealed.

Stalin’s Tepidness and the Korean War

With her brother on her back a war weary Korean girl tiredly trudges

by a stalled M-26 tank, at Haengju, Korea., 06/09/1951

National Archives

One must begin at the understanding that Stalin as a figure was admired by the Chinese people but also Mao himself, and, even up to the Secret Speech by Khrushchev there remained an air of admiration for Stalin and tension erupted about the question of his uncovered the cult of personality. Mao’s resolution to this was to describe Stalin as 70% correct and 30% wrong.

The Korean War remains to be an instance of Stalin being wrong despite him originally giving his blessing over it. This is because Stalin often stalled giving direct support such as during the retreat of his Korean allies where instead he looked to Mao for support.

Mao had been organising for this moment as he knew were the Americans determined to win they would surely send 30 or 40 divisions to fight the Korean front and was ready to send Chinese volunteers, yet when it came to truly throw the USSR’ weight into the ring Stalin delayed the usage of the Soviet air-force for several days.

In reading Shen’s book there are three reasons as to why Stalin delayed intervention into the Korean war.

Stalin did not want to directly engage U.S. Forces Stalin hoped to solve the Korean Problem Peacefully Stalin hoped the Korean War was not going bad enough as to need the Chinese intervention, plus this intervention may bring about a shift in the balance of power on the Korean Peninsula to China

Here a tone is set for the rest of the USSR’s foreign policy, one of never truly confronting the Americans, here too are sown the seeds for the division of the Sino-Soviet Alliance. While Mao is willing to mobilise the masses of China to fight for Korea an active player in the Asia arena, Stalin became a mere passive actor.

One ought not to be entirely inconsiderate to Stalin as he is not without other overarching reasons, such as the devastation of the Soviet Union following World War 2 which tempered the Soviet spirit, and created a focus towards their own nation’s security.

In the end, what this episode of the Korean War proved to Mao was dare to struggle dare to win while, for Stalin it was clear China had shifted from a guerrilla force to a component, and reliable partner something a later Soviet leader would lean upon in time.

Zhou’s Shuttle Diplomacy and the Socialist Bloc

Corvin köz, Budapest Hungary, Central Europe. In october 1956 this place was an important defence stronghold of hungarians against the invading Soviet army. By The American Hungarian Federation

The true extent of this influence in the socialist bloc can only be understood following the tragedy that broke the Socialist bloc’s fraternity known as the Hungarian uprising (1956).

Khrushchev in the secret speech denounced the Stalin cult, but did not prepare for further critique, and anger from the ensuing ideological confusion. His ideal action was denouncing Stalin and to be able to introduce new ideas such as peaceful co-existence with capitalist nations a move that would only result in deepening the tepidness that existed within the Soviet union.

Polish resistance inspired by the Hungarians rose up and this dual crisis worsened relations with the Soviet Union and the Warsaw Pact while compromising its position as leader. In the midst of this chaos one figure rose to importance, Zhou Enlai.

Zhou Enlai, foreign minister of China was heavily involved in the relations between China and the Soviet Union. Khrushchev whilst still upholding their alliance sought the support of China immediately, and their hand in solving this increasingly unfavourable situation.

Zhou was sent as a third-party to the interests of the Hungarian and Polish states, relaying to the Soviets a means by which they could over-come the ill-blood that had formed. A summary of Zhou’s critiques centre around 2 main points.

The CPSU had guts to expose Stalin, but the party should take responsibility and not shift all blame to Stalin. Soviet Polish Relations are tarnished because of Soviet army’s advances toward Warsaw and historical pretext mixed with the current Hungarian Crisis.

Zhou at the time repeated the earlier affirmation that Mao and the CPC at large had accepted on Stalin, but critiqued the form and direction by which Khrushchev had launched his attack.

Zhou’s strategy also involved visiting Hungary and Poland to meet the local governance and, discuss raising China’s notoriety by bringing unity to the socialist bloc on mutual understanding. Shen argues this new status can be realized in the Soviet slogans of the time.

A study by the Sino–Soviet Studies Group of the CIA noted, “In Soviet slogans since October 1957, only China has been differentiated as to status, China comes first, followed by the other Communist countries in Russian alphabetical order."

Here again, China shows that they are becoming closer to an equal partner with equal weight in the Socialist Bloc to the USSR. A result of Khrushchev’s swift use of violence to suppress protestors contrasting China’s actions of extending the olive branch.

China’s standing by then reached its zenith, but it was not without moments when China damaged its standing with the Socialist bloc predating the eventual split in 1960 .

Mao and Nuclear Weapons

Project 596 China’s first nuclear Bomb 1965年第1期 by 《人民画报》

Going towards the Moscow Conference (November 1957) China lifted itself to the position of the 2nd power or equal power to the Soviet Union as a result of Mao’s critique of great-power chauvinism where China strove to remove it wholly completely placing it as a counter-weight to the Soviet Union.

Despite this Mao, remained in a position of humbleness putting forward at the start of his speech:

Although today China is a major country politically and as far as the size of her population is concerned, economically she is still a small country. But our people are willing to exert themselves and work enthusiastically to turn China into a truly major country. Khrushchev has told us that the Soviet Union can overtake the United States in 15 years. I can also tell you that in 15 years, we may have caught up with or overtaken Great Britain.

Mao radiates humility not being one to out-right state that China is equal to the Soviet Union, but there precisely lies an undercurrent amongst this whole display. It echoes a sentiment that Mao said that China ought to use the Soviet Union as a mirror implying the point that they should never fall behind.

A more crucial point is that Soviet aid both in low-interest loans, and technical experts should continue to lay a foundation for China’s economy and expand all critical sectors of the economy especially nuclear power. Strangely though Mao’s attitude to nuclear power at this conference juxtaposes this urgency in calling for Soviet aid in nuclear technology. Famously at that Moscow conference Mao said:

If fighting breaks out now, China has only hand-grenades and not atomic bombs — which the Soviet Union has, though. Let us imagine, how many people will die if war should break out? Out of the world’s population of 2,700 million, one-third — or if more, half — may be lost. […] if the worst came to the worst and half of mankind died, the other half would remain while imperialism would be razed to the ground and the whole world would become socialist; […] We Chinese have not yet completed our construction and we desire peace. However, if imperialism insists on fighting a war we will have no alternative but to make up our minds and fight to the finish before going ahead with our construction.

This very upfront, and cutthroat attitude to the nuclear question very much differs from the sentiments of Khrushchev and the Socialist bloc. Mao continues to dip into the ace up his sleeve of mobilising at will the Chinese people to overcome even nuclear-hell fire. Mao at a critical moment following the lull in tensions Hungarian Uprising was stressing that critical difference in the Soviet/Socialist Bloc and Chinese approaches to confrontation.

One of the onlookers to this speech First Secretary Antonín Novotný of Czechoslovakia critiqued Mao’s boldness arguing that China had 600 million people yet his state had only 12 million. In this sense the energy to mobilize the and sacrifice the masses was not one to be found in the rest of the Socialist Bloc.

Yet one must ponder, if Mao saw nuclear weapons as no obstacle why did he invest in a Chinese project of their own when offered nuclear security by the Soviets? Mao at a large meeting in front of the Central Military Commission (21 June 1958) Mao can answer these thoughts.

The atom bomb is not really a big deal. Without it, some people say you count for nothing. Well then, good. We’ll make some. We’ll make some atom bombs, hydrogen bombs and inter-continental missiles. With ten years of effort, this is entirely possible.

Mao asserts the way to China’s prominence in the world may be found in nuclear weapons, but it is no loss to them if they equally do not have the bomb. For it is hinted that, just as in that previous speech Mao still had the masses on his side.

Overall Mao on one hand stress China’s rise, but also on the other hand allows it to be a measured rise based on the financial and technical aid given by the Soviets totalling in 6.6 billion roubles in investments and a peak of 11,000 Soviet technical experts in China. This to Mao was how China could see the East Wind prevailing over the West wind and become a true world power.

Soviets “as leader”, the Great Leap Forward, and The Taiwan Crisis

In order to exceed 10.7 million tons of steel! , Description: Photographed by Daye Steel Plant in Huangshi City. 《中國攝影藝術選集》(1959) p12 by 李九龄

Khrushchev having realised the rising power of China proposed to see China as equal in leadership of the Socialist bloc, but the wise Mao rejected this. stating in November 1958:

China cannot be the leader: we lack the necessary qualifications. We have little experience. We have the revolutionary experience but not any experience in construction. As far as the size of our population is concerned, we are a large country, but economically we are a small country. We have not launched even half a Sputnik. To be a leader under these circumstances would be very difficult. If we were to call a meeting, no one would listen.

The stirring fact loomed that China still lacked the productive forces, realistically to assert their position. In this way by acting humble and continuing to receive Soviet Aid China could continue in swift rise to economic power without going it alone.

The Issue is Mao would declare the Soviets as leader yet contradict this declaration with two main actions specifically the Great-Leap Forward and Taiwan Straits Crisis (1958). Mao, eager to rush ahead economically had overseen what could only be described as disaster. Khrushchev reminiscing about his private criticism of this commune scheme states:

It was patently clear to us that Mao Zedong had started down a wrong path that would lead to the collapse of his economy and, consequently, the failure of his policies. We did all we could to influence the Chinese and stop them before it was too late.

Consequences of the GLF will be investigated more in the next section, but with regards to this Soviet relationship it shook the power-positions once more and set China back. Shen in his book does explore a theory that the Soviets took extra effort to purposefully see the failure of this scheme, but concludes Khrushchev was giving as much aid as possible to this project. In effect this gave Mao no excuse for failure from the Soviet side.

This proves not to be the only incident that which Mao leapt to contradict himself on “Soviets as leader.” With regards to his treatment of Taiwan he described it as an internal issue and so pressed on wards with liberation without informing his Soviet ally. Shen describes the surprise attack as the ultimate turning point in Sino-Soviet relations.

Within the context, the Chinese bombardment of Jinmen in 1958 shocked Khrushchev, and led him to realize that there were serious divergences between Chinese and Soviet foreign policies. It was the straw that broke the camel’s back.

With both incidents it showed that China was better suited to following a new independent path from Soviet policy. The Soviets valued stability ,and peaceful co-existence; while Mao was unshaken by the paper-tiger imperialists would push back against them. This situation was further compounded by China’s rise as the next socialist power directly threatening the Soviets’ position.

On China’s side the cutting off of aid first nuclear (June 1959) then completely cemented the Soviets as becoming the primary antagonist to socialist construction an ideological hallmark that haunted Chinese foreign policy for decades on wards.

2. Discovering The New Chinese Path (1960 — 1965)

Long live the General Line! Long live the Great Leap Forward! Long live the People’s Communes!

In this section the references are mostly pulled from Shen’s book and Xue Muqiao’s China’s Socialist Economy to illuminate an understanding of the new path that Mao had effectively been sent on, by being forced out of the Sino-Soviet Pact.

Consequences of the Great Leap Forward

Farewell to Decentralized Cadres, Description: On December 5, 1957, Taiyuan citizens sent off 7,000 cadres to the countryside to build a new socialist countryside. 《中國攝影藝術選集》(1959) p9 by 赵仰山

Khrushchev’s criticism in dramatic tones describes the utterly collapsing Chinese economy of the GLF, but one would be mistaken not to note the famine and other natural elements that tied into that. Looking past this the there were still errors and distortions in the economic make up of China. Xue focuses on the three sectors of the economy and their place in the country of agricultural, heavy industry and light industry.

He notes the tendency to focus greatly on heavy industry which then peaked in 1960 then with readjustment was balanced out proportionally with light industry and agriculture once again.

pg 164 Xue Muqiao China’s socialist Economy

Xue then points to a simple correlation between this uneven development, and the overall economic mood of China under the GLF saw in thr years of 1961 and 1962 economic growth plummeting by 30% and 10% respectively.

The optimistic basis in China of building backyard steel-production were intensified by the break up of the Sino-Soviet relations, but even with such eagerness they were not wholly rewarded. In spite of this disaster, there still remained a subtle goal to surpass the primary Socialist power.

To Surpass the USSR?

Yuri Gagarin before lift-off Ministry of Defence of the Russian Federation

(Russian Ministry of Defence) by Минобороны РФ

In questioning the GLF Shen’s book extracts two interesting points further stressing the importance of China’s new path without the Soviet Union based in the mass mobilisation of the Chinese people. Shen reports Mao as believing that the larger human capital and different political conditions mixed with the recent pull of Marxism towards the East should tell the world that China could become economically powerful.

Here an image of the stagnant Soviet union against the backdrop of a dynamic and committed Chinese people is drawn by Mao, and a great sentiment of the student outshining the master is present. These lines though sidestep a grave unsettling issue. Despite China’s previous rise to prominence in the Socialist Bloc when shut off by the Soviets China’s new Friends were not moved enough to join its side and, China remained in a state of isolation post Sino-Soviet pact. An exception to this torturous isolation was the DPRK which continued to play the diplomacy game between the Soviets and China for decades on end.

Even if one continues to sidestep the issue of isolation one can still sense troubles within the economics of Mao’s mass mobilisation itself.

Earlier before the GLF and isolation had taken place Mao believed he unlocked what was the secret formula to transitioning from socialism to communism in the form of the people’s Commune saying in 1958 as a critique of Stalin:

He did not find the right solution. Now we have the People’s Communes, which will accelerate our socialist construction and become the best form for the countryside to make the transition from collective to public ownership, and from socialism to communism”

However, when the GLF came to pass as less successful than anticipated, and Mao lost prestige in the party, Mao then sought to account for the issues found in the GLF in 1962 stating:

Socialist society covers a considerably long historical period. In the historical period of socialism, there are still classes, class contradictions and class struggle, there is the struggle between the socialist road and the capitalist road, and there is the danger of capitalist restoration. We must recognize the protracted and complex nature of this struggle, distinguish the contradictions between ourselves and the enemy from those among the people and handle them correctly. Otherwise a socialist country like ours will turn into its opposite and degenerate, and a capitalist restoration will take place.

This message’s audience is seemingly the Chinese people yet it is an open jab towards the Soviets, a challenge to those filthy capitalist restorers, and further strengthening the competitive and antagonistic angle at which China approached the Soviets.

Overall it also echoes an earlier line of class-struggle being the key-link [to complete the transformation of socialist society] that Mao raised building on this point of constant turmoil, and fighting against the class-enemies internally and externally which would come about again in a new campaign of the Cultural Revolution.

3. The Hope and Despair of the Great Proletarian Cultural Revolution (1966 — 1976)

Scatter the old world, build a new world

Having focused so greatly on the broader aspects of China it may be strange to start once again at the smaller units within society. The issue is that there still remains great controversy surrounding the Great Proletarian Cultural Revolution (GPCR). To resolve that and the question of the transformation from socialism to communism one must resurrect a specific contradiction explored by Engels with regards to the contradiction between town and country and its resilience during the 10 year period.

To do so there are elements taken from Dongping Han’s Unknown Cultural Revolution, Xue Muqiao’s China’s Socialist Economy and, a personal account by Aleksei N. Zhelokhovtsev on the “Cultural Revolution” a Close Up.

Town and Country?

Engels is quite clear on what precisely the town-country distinction is with regards to the development of communist society in Anti-Duhring (1877):

Only the abolition of the capitalist character of modern industry can bring us out of this new vicious circle, can resolve this contradiction in modern industry, which is constantly reproducing itself. Only a society which makes it possible for its productive forces to dovetail harmoniously into each other on the basis of one single vast plan can allow industry to be distributed over the whole country in the way best adapted to its own development, and to the maintenance and development of the other elements of production.

The exploration of this question of rational planning, and the productive forces tell us ultimately why the Communes are not the true path to socialism, but a pre-mature implementation of it what ultimately resulted in asceticism which put a lid on China’s economic development.

GPCR in the Country. (Hope?)

Ahfaz with farmers during the Chinese cultural revolution by {Rameez Rahman}

Dongping weighs into our conversation of the GPCR in his book which follows an extensive look on the many features of the countryside such as education, and worker empowerment, but this is beyond the scope of this one article. Instead one should focus on the major aspect of economic development.

In some Communes like Jimo’s the collective system worked adequately to develop modern techniques and agricultural production, and success was based on improvements of education and local decision allowing some degree of mechanisation in the countryside.

During the Cultural Revolution decade agricultural production more than doubled in Jimo County. At the same time, rural industry, which had been negligible before 1966, grew to become nearly 36% of the Jimo economy. [The] two key factors were products of the Cultural Revolution — a change in political culture, which empowered ordinary villagers and enhanced collective organization and rapid improvement in education…

Why the situation differed to the GLF according Dongping was the means by which China had implemented its economic projects which was top-down, and not bottom up.

During the Cultural Revolution decade, rural collectives in Jimo once again took up the kind of large-scale economic projects that were attempted during the Great Leap Forward. This time, however, the decision-making; process was different. During the Great Leap Forward production decisions were typically handed down by higher level authorities. […] During the Great Leap Forward, Jimo built three big reservoirs. But in the planning process, little input came from ordinary villagers. Villagers were press-ganged to construct these projects, often without direct benefits in sight.

Stalin had stressed during the period of collectivisation in the Soviet Union about the voluntarism involved in the confiscation of property, and mobilisation of masses under the process of collectivisation, so it would not be out of the question to say the critical factor could possibly have been the lack of direct participation of the masses in shaping their economic destiny in China.

He also noted in Dizzy with Success the pre-mature socialisations that occurred which resulted in distortions of the economy where socialisations was done by decree, and not by actual need, an intriguing point that may come back in our analysis later.

To explore any other of said distortions one should not focus only on the countryside in terms of one county or to focus on just the country in general as it would spell out a very one-sided analysis of the GPCR. One must continue and go onto explore the question of town under the GPCR.

GPCR in the Town. (Despair?)

Inaugural meeting of the Revolutionary Committee of Ningxia Hui Autonomous Region 1968年6月 by 《人民画报》

In investigating our other books by Xue Muqiao’s China’s Socialist Economy and Aleksei N. Zhelokhovtsev account in The “Cultural Revolution” A Close Up one is presented with a less rosy image than Dongping of the GPCR especially in the towns.

At this junction, one should take into account that Aleksei is a clearly biased perspective on the GPCR due to being a Soviet. However, equally so it presents an unprecedented window into Sino-Soviet attitudes during the GPCR. Aleskei recounts an event with the local rally similar to ones led by the revolutionary committees that had sprung up where a speaker points out the fact that he is clearly a Soviet.

“Attention, comrades! Here comes a foreigner!” It appeared that pickets had been posted in the lane running along the building, and a picketer had warned the meeting of my approach. As the speaker fell silent, all heads turned in my direction and all eyes were fixed upon me. A ripple of murmurs ran through the crowd: “He’s Soviet.” Then something seemed to snap, and several voices broke out in sing-song: “Mao Tse-tung! Ten thousand years to Mao Tse-tung!”

The awkwardness of this encounter merely serves to show the underlying tension between the Soviet and Chinese people, but also a self-inflicted isolation with a focus on praising Mao present in China.

This was not the only unusual encounter. Even with Aleksei’s handler Ma fierce debates went on many sensitive issues. For example with regards to space travel when visiting a museum Aleksei questioned whether the man in the space-capsule was meant to be Yuri Gagarin, but Ma would only answer vaguely over this fact insinuating a subtle element of jealously towards Soviet technological achievement in China.

Another moment Aleksei shocked locals when he told them that the Soviet’s diet was rich and plentiful and not poor as local propaganda had led them to believe tying into the imagery of isolation produced in the GPCR.

This culminates in an opening the flood-gates of rage moment where Aleksei declares his final verdict on the whole Cultural Revolution, finally echoing this notion of isolation that he had felt especially compared to the earlier friendliness some brought to him.

In the -cultural revolution” period, the Maoist leadership’s cultural policy was designed to isolate the Chinese from the rest of the world, above all, from the achievements of the human mind and the treasure-house of world culture. The Maoists were terrified of the influence that the living example of the socialist countries could exert, and so vented their hatred on Soviet culture, a vehicle of humanistic traditions and an embodiment of vibrant progressive thought which looks to the future. […] Every blow dealt at some classic of the arts meant that the Chinese were being deprived of access to his works.

Aleksei spits harshly at how not only is China isolated from the world, on a cultural level and political level, but also isolated from its own culture by destroying cultural heritage. Earlier his troubles were equally affected by how he had confronted another person on the logic of this revolution as tautological, the sake of revolution was revolution itself they had told him. He had in these moments unnerved an element of desperation that hung like a stench underlining these displays of loyalty to Mao Zedong.

It remains clear that one would be performing an error in focusing merely on anecdote so to restore balance, it serves well to focus on the economic side where Xue weighs in again:

Interference by the Lin Biao and Jiang Qing counter-revolutionary cliques again caused ups and downs in industrial and agricultural production. The annual rate of accumulation reached 26 per cent in the Illrd FYP period and exceeded 30 per cent from 1970 onward. Too many capital construction projects were undertaken with poor returns on investment, making it impossible to improve the people’s livelihood. Things came to a head in 1976 when chaos reigned supreme in production, state enterprises suffered great losses, the government incurred a big financial deficit and the whole economy experienced serious setbacks.

Ultimately, despite the efforts of the GPCR to resolve the differences between the town and country the fear of capitalist restoration, distortions persisted and, finally led to the social and economic decline of urban China.

Xue sees away from the romantic image of the GPCR and instead towards the over-accumulation of capital created by the Cultural Revolution in the countryside that did not overall pay good returns, but by end of this disaster Mao had already died and someone new had to come to reform the Chinese system.

4. Deng and The International System of Capital (1977–)

Uphold the party’s basic line unwaveringly for a hundred years

This final section must now explore the question of building Socialism with Chinese Characteristics, and the Socialist Market Economy tying in elements from Xue Muqiao, Deng’s own writing and, The Basic Economic System of China by Changhong Pei.

The Capitalist World System?

On Jan. 31, 1979, Vice Premier Deng Xiaoping and President Jimmy Carter sign historic diplomatic agreements between the United States and China. (Photos: Jimmy Carter Library)

After Mao’s death in 1976 the directionless and desperation in the GPCR was ultimately revealed when famously Hua Guofeng took over from Mao he stated his often parodied line of Two Whatevers:

We will resolutely uphold whatever policy decisions Chairman Mao made, and unswervingly follow whatever instructions Chairman Mao gave

The problem was that Mao Zedong Though had now become a straitjacket for China and the problems and distortions of Chinese society still held a grip on China. During the 1950s Chairman of the PRC, Liu Shaoqi’s old line had been that there were two worlds, the socialist world and the capitalist world. If one is to uphold a similar this line now then evidently the moment Mao had rejected the Soviets put China’s future into great peril, which could only be resolved by finding a new path on the international stage based on defeating China’s issue of being small economically,. If such path failed they could only then find themselves integrating into the capitalist world.

In retrospect, the GPCR was a 10 year mission to see China on the new independent path, one which had previously only been followed by the Yugoslavians equally having been unceremoniously banished from the Socialist Bloc for their own difficult line.

Deng instead approached the question of China’s isolation very carefully such as in Build Socialism with Chinese Characteristics where he sets out his foreign policy lines as follows:

China’s affairs should be run according to China’s specific conditions and by the Chinese people themselves. Independence and self-reliance have always been and will always be our basic stand. While we Chinese people value our friendship and co-operation with other countries and other peoples, we value even more our hard-won independence and sovereign rights. No foreign country should expect China to be its vassal, nor should it expect China to accept anything harmful to China’s interests. We will unswervingly follow a policy of opening to the outside world and actively increase ex- changes with foreign countries on the basis of equality and mutual benefit. At the same time, we will keep clear heads, firmly resist corruption by decadent ideas from abroad and never permit the bourgeois way of life to spread in our country.

Here, Deng sees the prospective danger in challenging China’s isolation whilst not being able to return to their fraternal Socialist allies in the Socialist Bloc. Effectively Mao’s anti Soviet foreign policy had still held its grip over China and, continued the idea that the Soviets were not only China’s competitor but also China’s greatest antagonist forcing only one option left, that of normalisation with the capitalist-imperialists including the USA.

Though it does remain to be noted the question does Deng’s reform and opening up and normalisation demonstrate him taking the capitalist road and allowing full capitalist restoration in China?

Deng’s Turn?

The Third Plenary Session of the Eleventh CPC Central Committee was held in Beijing from December 18 to 22, 1978. The plenary session unanimously endorsed the policy decision put forward by Comrade Hua Guofeng on behalf of the Political Bureau of the Central Committee on shifting the emphasis of our Party’s work and the attention of the people of the whole country to socialist modernization.. / Photo by Xinhua

It is necessary to explore Deng’s supposed turn through two of the most controversial actions which are de-collectivisation/dismantlement of the iron-rice bowl system, and also the denying of “Class Struggle as the Key Link” to begin to answer the question of capitalist restoration.

Returning this analysis to Xue, the issue underlined with the iron-rice bowl and communes in retrospect following Deng’s rise to power is the overall the development of labour productivity in China.

In the reform of China’s employment system, it is a most important and arduous task to abolish the above-described “iron rice bowl” system, which has its origin in the “supply system” practised during the years of revolutionary war. With such a long history, it has made it difficult for us to employ people according to their competence or allocate labour force according to work quotas, posing a great obstacle to improvement in labour productivity. […] It is now time for us to do away with this system, which hampers the modernization of our national economy.

The point Xue makes is that there was effectively an upper-limit placed on the economic development of China set by this early-socialisation of society. Not unlike the earlier distortions mentioned by Stalin in Dizzy with Success. In a sense it was difficult to organise people effectively to meet the rising demands of Chinese industry and develop an effective commodity driven economy. At least one may consider that had they socialised at a more developed point than automation of production would’ve covered this short-fall and, truly go towards eliminating commodity production, but at this very critical point this was not a realistic expectation.

Overall, Deng’s household responsibility system allowed a different kind of specialisation and new division of labour which allowed a shift from agrarian production to industrial production.

The implementation of various forms of the agricultural production responsibility system, which has greatly promoted labour productivity, not only makes intensive cultivation possible but also releases a lot of labour force for use in developing a diversified economy. In the past few years, many specialized households have appeared in the rural areas, breeding poultry, pigs and fish, growing fruit trees, and so on. […] labour productivity has doubled and redoubled, hastening the upgrading of the natural economy in the rural areas to commodity production

One critique of people who uphold the communes is detachment to the wider geopolitical reality. The communes can only be understood with the spectre of isolation of China, in contrast to Open and Reform which necessitated reform in the agricultural sector . Here an inseparable bond between local conditions and geopolitical reality is formed such that to focus purely on the success of the Communes at the expense of the rest of China’s strategic position is a grave mistake.

Another episode which has seen controversy is the line that class-struggle is not the key-link which is intentionally distorted and dragged outside of its meaning and context. Originally Deng in Uphold the Four Cardinal Principles (30 March 1979) says very clearly that:

Class struggle in Socialist societies objectively exists, and should not be reduced, and should also not be exaggerated. Practice demonstrates that regardless of whether it is reducing or exaggerating, both will mean making grave mistakes.

What Deng truly means by rejecting or more correctly negating Mao’s line is that Mao constantly saw internally and externally the need to fight and confront at that very instant. This is the critical feature that distinguishes Mao from even Stalin. Despite this in early Mao there was patience, and an attitude to wait his chance and play a much grander tactical game being able to expand productive forces and the class-struggle.

Late Mao seemingly had sacrificed a realistic path for developing productive forces in the name of continuous class-struggle, and gave a risky formula to communism which left China bare to imperialists, failing to solve the contradiction featuring the inequality between nations.

What Mao had left behind simply put, is the reality that the capitalist world was what China would integrate into and the only way Deng could complete this is the realisation of the Socialist Market Economy.

Socialist Market Economy

Laurence Brahm (L) meets with foreign investors and advising on their China investment strategy at Diaoyutai State Guest House in 1995. [Photo provided to chinadaily.com.cn]

Deng did a lot to separate a dogmatism that existed in the Marxist left, the connection between planning and socialism vs markets and capitalism.

Since the mention of planning was brought up with the housing crisis one ought to realise there is no rejection of planning’s ultimate role in realising the communist vision in China, as contradictions such as town-country are impossible to resolve without sufficient productive forces and, the right relations of production under rational planning of society.

What must be also considered is realising that middle ground with which the economy at large is lead by the public-sector, but uses the market as a system of distribution. There are often great heated debates in this arena pertaining to two fundamental groups which are covered in the China’s Basic Economy

Firstly the tendency of market-fundamentalism is realised in China aligning with neo-liberal tones suggesting further privatisation until the economy has wretched entirely the grip of the Chinese state, otherwise the spectre of inefficiency and economic stagnation will soon come to haunt China and bring about its demise.

On the other hand the tendency of Marxian fundamentalists also persists in China who argue that public-ownership is compromised, and,that markets are entirely incompatible with realising the modernisation of the socialist economy:

It is then strange to note that these positions both agree against Deng on the compatibility of markets, and the techniques of markets as a part of the wider socialist economy or capitalist economy depending on what perspective you are looking down.

Possibly it would help to underline Xue’s work again in the discussion of early Mao’s China where things were far more fluid and up in the air. There existed a private, and socialist state sector yet petty production still remained significantly important to the output of China and fixed assets were dominated by the public sector.

“When New China was just founded, its economy was composed of three main sectors: the socialist state sector, the capitalist sector and the sector under ownership by individual peasants and handicraftsmen. Although the individual sector accounted for nearly 90 per cent of the gross value of industrial and agricultural output, it occupied a subordinate position in the economy because of antiquated methods of production. The socialist state enterprises, converted from the Kuomintang’s bureaucrat-capitalist enterprises, enjoyed predominance over the national capitalist ones in fixed assets.”

When investigating the question of whether assets are still publicly owned ownership in the public sense in China is in the form of state-owned entirely, mixed ownership (joint-stock companies dominated by state shares) and, collectively owned enterprises as demonstrated by this pie-chart taken from The Basic Economic System of China.

Looking further into the discussion of assets the research presented in that book directly states that:

The total amount of operating assets in the three sectors of the economy in China was 489.64 trillion yuan (including self-employed businesses and excluding nonoperating assets) by 2012, as described above, among which 262.39 trillion, or, 53.58%, was publicly owned. The size of non-operating assets that is publicly-owned is also considerable as we are, after all, a socialist country. [Including several other assets excluded in the original study] the total size of China’s social assets would be 520.34 trillion yuan (excluding the assets of undeveloped, non-arable-land resources), among which 293.09 trillion were publicly owned, a share as high as 56.33%.

In this sense, Modern China is close to early Mao’s China not only in foreign policy sense, but equally so parallel slightly in an economic sense. A step backwards, then step forward may be understood in how China has reconnected itself to the world and, how it will possibly play a decisive part in future proletarian revolutions.

Conclusions

Mao plays a predominant part in this article taking just above 3 of the 4 sections, but not without good reason. Mao is seen as a romantic rebel in the West breaking from the Soviet Union and, in truth only a positive light is shone on this action. By understanding the distortions created in the actions of Mao and, pulling away from the romantic image of a revolutionary to a more boring handling of geopolitics one is able to dissect precisely why China adopted socialist market economics in section 4.

One is definitely informed of an unfortunate haunting truth that all socialist revolutions have arisen from this capitalist world-system and, may at times find themselves struggling within it and, so the question of how to preserve socialism under siege arises. The issue is the siege of socialism is an unsustainable situation as proven by the Soviet Union where resources were piled into military defence at the expense of other industries to always keep imperialists at bay (even under “peaceful co-existence”). Modern China learning from the USSR has sought instead prosperous and, harmonious economic development on the pre-tense of relatively peaceful-co-existence with the West.

It would not have been possible to undertake such a path without the experience of the GLF, GPCR, and isolation from the world economy proving the difficulties of Socialism under siege, but China proves a telling lesson to all other socialist projects that still exist and may come in the future.

From market reforms and, the recognition of private-property in Cuba to communist led Nepal trapped under the politics of the Federal Democratic Republic despite their 10 year Maoist insurgency, the tendency for Socialist projects to be gravely affected by geopolitics is clearly there.

The question lies that if all these projects are doomed how will the workers possibly ever settle matters with their own bourgeoisie as suggested by the Communist Manifesto? What follows is a discussion on the question of simultaneous revolution against revolution under periods of siege and, peaceful coexistence. A discussion for a later time.

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