I doubt it. China saw what happened to the USSR. Theyāre unlikely to make the same mistakes. China is already integrated into the global market, some would say itās indispensable. Regions inside China canāt be turned against each other in the same way as SSRs. And while Russiaās middle classes yearned for the living standards of the west, Chinaās middle classes have an equal or better quality of life than those in the west; itās middle classes have no material reason to be disgruntled and ask for reforms.
The thing China has to watch out for is its banks, whose power is increasing. Weāll see if it fixes that problem. Still, as Chinaās imminent collapse is unlikely, itās something the US will have to work towards in the long term. But every year that passes, China becomes stronger and more resilient while the US becomes weaker.
Maybe thereās some room for it but the US is also racing against climate change. Weāre talking about a state that canāt organise its own domestic infrastructural preservation. Every year, the effects of climate change will be getting worse. But while China is preparing for it, the US is not. In ten years time, when Texas is snowed under, California in drought, Florida under water, and Arizona grid-less because the lines melted, too few people will have the attention to do Machiavellian politics with China. At the same time, the more the Chinese see whatās happening, the less likely they are to call for reforms.
One option is internal sabotage. But China has been keen on teaching Marxism and in setting up its institutions to make them harder to undermine than were the USSRās central organs. Chinese liberals are allowed relatively free rein. Which means they arenāt hiding, making them easier to keep an eye on. Iāll be upset if Iām wrong but I donāt think Khrushchev or Gorbachov would be able to get near power in China.
Deng masterminded one of its greatest tricks: convincing the west that China was already turning capitalist for long enough to become a superpower. Itās a gift that keeps on giving, too, as many western liberals refuse to accept that China is still Marxist. This can only lead to a confused analysis, which will never be the basis of a sound counter-strategy.
Good question. It was something Michael Hudson wrote. Essentially, itās to do with the way that China is financing local projects. IIRC provincial or regional authorities [The state government] could [print] money [and loan it to local governments] but China wonāt allow it [doesnāt do that]. So [local governments] have to [raise finances, which ultimately come from] borrow[ing] from banks. This gives a certain leeway to a sector that is, letās say, known to get up to shenanigans. Hudson warns that China could be taking a mis-step. Itās likely a subtler argument than I can explain [it wasāsee below]. Iāll try to find the piece [linked, below].
Edit: I got this slightly wrong but as I note that in the comment below with the link and a quote, I didnāt want to correct this comment and later readers to read the corrected version and think it was wrong. So Iāve amended it with strikethroughs and square brackets to show the changes. Old school editing, like.
So I got it slightly wrong. I think Michael Hudson is very good but his more informal talks arenāt always the clearest. That comes across in the following extract from an interview but it made sense after a couple of read throughs for me (maybe youāll have more luck the first time):
Who has benefited the most from Chinaās boom?
[Interviewer]: Letās talk about Chinaās debt problem again. Unlike the United States, China has been very cautious, some might say conservative, about expanding its debt. Although China may need more aggressive fiscal and monetary policies to boost the economy, especially now; and the central governmentās debt is quite low (some local governments are facing debt risks). China once debated whether China should also engage in fiscal monetization, especially during the 2020 epidemic. But considering the risks, the government ultimately rejected the proposal. What do you think of Chinaās trade-off between risk prevention and economic stimulus?
Michael Hudson: There are two ways for governments to create money, printing paper money or creating digital money. The use of digital currency, the Chinese government is already doing.
In the West, the state allows private banks to create credit, and the wealthy create credit and lend it to the government. But China does not want to have an independent financial class, so the central government can start printing money; however, local governments in local cities and towns cannot.
So the question is, how do local governments finance spending? This is exactly the problem you mentioned that local governments are really facing. Since local governments at the provincial, municipal, and district levels cannot print money and issue bonds, they either go to the bank to borrow money or collect taxes, but the taxes are not enough, so local governments have adopted a financing model of selling land to real estate developers. This is one aspect of the housing and real estate issues facing China today.
I think there is a simpler solution, the central government is eligible to issue currency that it can loan to local governments for government-sanctioned social spending. In this way, there is no need to rely on land sales for financing.
In fact, local governments can use propaganda to say that we should do what the 19th-century Western classical economists wanted to do, so as to drive down land prices and house prices. Economists such as Adam Smith, John Stuart Mill, and Karl Marx argued that the government could tax the gains from land rents. You donāt want to tax laborers, industrial companies, but you can tax gains on land instead of the price increase of buildings on land.
In this way, people cannot go to the bank to borrow money to speculate on housing prices, because housing prices only reflect the cost of housing construction, and housing construction will not increase land rents.
The only thing that doesnāt want China doing this right now is the banking system. The bank told the government that instead of taxing the land, it would be better to sell it. Banks will lend to developers, and local governments will purchase land from local governments, so that local governments will be able to carry out construction.
However, more and more debts in China are accumulated in banks. In addition to developers, when residents invest more and more funds in purchasing houses, they must also borrow from banks and pay interest.
At this time we found that the banks will be stronger than the government, which is what the banks want. This is basically the core of the current conflict in China. Who profited from Chinaās prosperity and got richer and richer? Is it the Chinese people and the government, or the bankers and real estate developers? This is the biggest political issue in China this year.
Iām unsure what he means by āat this timeā, whether this was a study done before the interview or just ātodayā as in the era that weāre living in.
Edit: for an example of what I mean by unclear, take this quote:
Banks will lend to developers, and local governments will purchase land from local governments, so that local governments will be able to carry out construction.
Iām unsure if this is a misstatement and whether:
it should read that āBanks will lend to developers, and local [developers] will purchase land from local governments, so that local governments will be able to carry out constructionā, or
local governments are buying and selling land to themselves, treating themselves as developers in order to make borrowing from the bank legal, perhaps, or
this is a complicated way of saying local governments are mortgaging their property, or
this is a complicated process whereby one local government borrows money from a bank as a ādeveloperā and purchases land from another local government, and vice versa, again perhaps as a legal loophole.
Iām genuinely ignorant on this: What makes China Marxist today? From my uneducated standpoint, they do seem to have a lot of the trappings of capitalism. What is their long term plan to advance communism (Iām assuming the current state of affairs is temporary and strategic)
Good question. First thing to note is that Iām no expert. Iāve just become increasingly curious and begun to try to understand the place. Second note: Iāll speak as if you have limited knowledge of Marxism for the benefit of other readers rather than assuming that of you personally.
This may seem pedantic but the answer depends what you mean by Marxism, communism, and capitalism. What counts as a capitalist state? What counts as a communist state? What does it mean to be governed by Marxists?
We call communism the real movement which abolishes the present state of things.
The present state is a class society of global capitalism. The only way to avoid that while it exists is by (extreme) isolationism. (Even then, does one really āavoidā it? Western imperialists wonāt leave you alone if you close the borders to them, soā¦.) The only way to abolish global capitalism is world revolution, which takes time.
A revolution is a transformation in the mode of production. Given the interconnectedness of human society, Iād argue itās impossible to have that revolution for as long as capitalism is the dominant political economy. Is it possible to share the world between socialism and a weaker capitalism? Time will tell. For now: capitalist social relations cannot be avoided.
The early stage of moving away from capitalism towards communism is called socialism. This socialism can be broken into several stages of āsocialist constructionā. Until Deng, China wasnāt quite isolationist but it went through two processes that made external relations difficult:
conducting a revolution and
starting the task of socialist construction.
The first was achieved. The landlords and imperialists were kicked out. The second process is well underway. China is in a stage of āprimitiveā socialism. The CPC seems reluctant to claim too much.
ā
Inviting capital inside China
The question is: where is China now i.e. where has it been since Dengās reforms or the āopening upā? These reforms saw China open its borders to foreign capital and letting domestic capital develop. This is the point at which China began to gain, as you say, the ātrappings of capitalismā.
Why did they do this? During the revolution and the early days of afterwards, China rapidly developed the relations of production (bye bye exploitative relations between foreign imperialists / local landlords and super exploited peasants). But its forces of production only developed so far.
Deng, realising something must be done, applied dialectical and historical materialism to the situation. Thereās no such thing as poor socialism but when producing the means of subsistence (food, shelter, clothing, medicine, etc) requires lots of labour-hours because you donāt have machines, computers, reliable energy sources, etc, you simply cannot lift peopleās standard of living very far.
The solution was āmarketā reforms. Foreign capital would be given favourable conditions to invest and build factories, infrastructure, etc, in return for sharing intellectual property with China (the designs and knowledge for building everything).
ā
Staying in charge
Since then, China has come to rival the āmost advancedā capitalist states in terms of research and development and has surpassed them in terms of productive capacity. This makes China well defended against sanctions. So much so that the US can cut Huawei off from chips and China will brush it off by catching up and making its own chips in a matter of months (if writing for a Chinese paper / a ~couple of~ years, if writing for a western paper).
Which is to say, Deng was right: with ācapitalistā development, China could advance more rapidly than without. Does this mean China ābecameā capitalist?
ā
What is a capitalist state?
A capitalist state is one in which ācapitalā is at the top, as it is in liberal democracies (and fascist attempts at ethno-states). Marx and Engels:
the bourgeoisie has at last, since the establishment of Modern Industry and of the world market, conquered for itself, in the modern representative State, exclusive political sway. The executive of the modern state is but a committee for managing the common affairs of the whole bourgeoisie.
In e.g. France or Japan, it goes: capitalist class > state > working class.
Since opening up (after Xiās anti-corruption drive, at least), the CPC has remained in charge of the country. In China, the executiveāthe governmentāis a ācommittee for managing the affairs of the wholeā¦ā proletariat. According to its constitution:
Article 1 The Peopleās Republic of China is a socialist state under the peopleās democratic dictatorship led by the working class and based on the alliance of workers and peasants.
The socialist system is the basic system of the Peopleās Republic of China. Disruption of the socialist system by any organization or individual is prohibited.
Article 2 All power in the Peopleās Republic of China belongs to the people.
The National Peopleās Congress and the local peopleās congresses at various levels are the organs through which the people exercise state power.
The people administer State affairs and manage economic and cultural undertakings and social affairs through various channels and in various ways in accordance with the provisions of law.
It goes, working class > state > capitalist class. The workers control the party, the party controls the state, and the state controls the capitalists.
For evidence of this, we might look at high speed rail (HSR). As you might know if you live in any other capitalist country, affordable, efficient, well-maintained, wide-spreading public transport is not profitable enough for capitalists. They want us all to buy a personal vehicle. They want to tarmac and concrete over everything to build inefficient roads and car parks.
China can avoid the profit-motive trap because itās run by Marxists who donāt much care for the profit motive, except as a tool for developing the country to prepare it for a higher, wealthier stage of socialism. Which does mean that capitalists arenāt allowed to sell cars and (I assume) lobby for building roads, etc. But their power is limited. They donāt have the power to shut down and torpedo public infrastructure projects as they do in capitalist states.
In Marxist theory, there are concepts of an economic base and a superstructure. These are connected but separate. The base āoverdeterminesā the superstructure, meaning that although the superstructure is influential, it cannot, of itself, fundamentally change the base.
Law is often said to belong to the āsuperstructureā. China appears to have built and is continuing to build a socialist legal system. It is on the path and/or road to socialist ārule of lawā construction.
Roland Boer has explained this partly means abolishing the public/private distinction in law and governance, which is distinction is characteristic of capitalist law and governance. This is related to and part of Chinaās ādemocratic centralismā. Both are based on a dialectical materialist (read: Marxist) logic of āboth thisāand thatā rather than a bourgeois logic of āeither-or or zero-sumā (Boer, page 59 citing Engels, Dialectics of Nature).
The fact that these moves are possible and coherent suggests that Chinaās political economy is not capitalist even if it contains elements of capitalism. It would not be possible to achieve the above superstructural changes within a bourgeois, i.e. capitalist state because these changes fundamentally contradict the logic of capital, private property, liberal individualism, etc.
In addition, China has opened Schools of Marxism in its universities. As communists well know: the only thing it really takes to make revolutionaries is to teach them Marxism. Thatās why itās so difficult to achieve in the west. The bourgeois prevent and propagandise against it at every turn. In China they embrace it, encourage specialists to develop Chinese Marxism, and require students to study it.
ā¦Marxism has an incomparable influence on contemporary Chinese politics, culture, and social life that no other humanities or social science disciplines can match.
ā
Conclusion
In conclusion, your intuition is correct. There are capitalists in China, which is seen as a necessary step in developing socialism. It does not contradict core Marxist theory. The CPC keeps control of its capitalists by ensuring Marxist knowledge is widespread and maintaining a dictatorship of the proletariat. A higher stage of socialism will appear in time if China continues along its present trajectory and bourgeois social relations whither away.
If a full scale war broke out that involved the US taking part, it would be WW3. It seems likely that China would lose at the moment as nothing can compare to the military strength of the US. But it would probably be a tough war that would leave China in a really bad state and the US in a pretty bad state. But then again I know nothing.
The US military LOST to Chinese and Korea troops during the Korean War when Mao, at Kim Il-Sungās request, sent Chinese military into North Korea to repel the aggressor in the warā¦ the US, who had pushed Kimās army all the way to the Chinese/Korean border.
āHow is that relevant?ā I can hear being asked.
Well, for one, itās funny. The US got its ass handed to it when it was practically at peak military production (less than a decade from WWII ending) and with veteran troops who had seen combat in WWII all over the pacific. Basically, they had the perfect army at the perfect time to absolutely destroy any other army. And yet they kept losing. They had superior weaponry and all that, and using such technology yes, they did eventually fight off Maoās troops, but the point is do not assume that dumping funding into a military budget means anything beyond having cool tech.
The Iraqi insurgents defeated the US
The Taliban and other Afghan groups defeated the US
The Vietcong defeated the US
US propaganda always spins shit like āwe agreed to end operations and leaveā when in reality they lost the war. Itās practically the calling card at this pointā¦ do a war, make billions for arms manufacturers, devastate an entire country, declare victory and leave. In a few decades wonder why those countries are āshit holesā and consider invading again.
Do you think that USA will make China collapse like they did with the USSR?
I doubt it. China saw what happened to the USSR. Theyāre unlikely to make the same mistakes. China is already integrated into the global market, some would say itās indispensable. Regions inside China canāt be turned against each other in the same way as SSRs. And while Russiaās middle classes yearned for the living standards of the west, Chinaās middle classes have an equal or better quality of life than those in the west; itās middle classes have no material reason to be disgruntled and ask for reforms.
The thing China has to watch out for is its banks, whose power is increasing. Weāll see if it fixes that problem. Still, as Chinaās imminent collapse is unlikely, itās something the US will have to work towards in the long term. But every year that passes, China becomes stronger and more resilient while the US becomes weaker.
Maybe thereās some room for it but the US is also racing against climate change. Weāre talking about a state that canāt organise its own domestic infrastructural preservation. Every year, the effects of climate change will be getting worse. But while China is preparing for it, the US is not. In ten years time, when Texas is snowed under, California in drought, Florida under water, and Arizona grid-less because the lines melted, too few people will have the attention to do Machiavellian politics with China. At the same time, the more the Chinese see whatās happening, the less likely they are to call for reforms.
One option is internal sabotage. But China has been keen on teaching Marxism and in setting up its institutions to make them harder to undermine than were the USSRās central organs. Chinese liberals are allowed relatively free rein. Which means they arenāt hiding, making them easier to keep an eye on. Iāll be upset if Iām wrong but I donāt think Khrushchev or Gorbachov would be able to get near power in China.
Deng masterminded one of its greatest tricks: convincing the west that China was already turning capitalist for long enough to become a superpower. Itās a gift that keeps on giving, too, as many western liberals refuse to accept that China is still Marxist. This can only lead to a confused analysis, which will never be the basis of a sound counter-strategy.
EDIT: This may be of interest: Carlos Martinez, Will China suffer the same fate as the Soviet Union?.
What do you mean? The biggest banks in Chinaāindeed, among the worldāare state-owned banks, including the PRCās central bank, the Bank of China.
Good question. It was something Michael Hudson wrote. Essentially, itās to do with the way that China is financing local projects.
IIRC provincial or regional authorities[The state government] could [print] money [and loan it to local governments] but Chinawonāt allow it[doesnāt do that]. So [local governments] have to [raise finances, which ultimately come from] borrow[ing] from banks. This gives a certain leeway to a sector that is, letās say, known to get up to shenanigans. Hudson warns that China could be taking a mis-step. Itās likely a subtler argument than I can explain [it wasāsee below]. Iāll try to find the piece [linked, below].Edit: I got this slightly wrong but as I note that in the comment below with the link and a quote, I didnāt want to correct this comment and later readers to read the corrected version and think it was wrong. So Iāve amended it with strikethroughs and square brackets to show the changes. Old school editing, like.
I think I can understand now. Thanks for the clarification. If you find the piece, please notify me.
So I got it slightly wrong. I think Michael Hudson is very good but his more informal talks arenāt always the clearest. That comes across in the following extract from an interview but it made sense after a couple of read throughs for me (maybe youāll have more luck the first time):
Iām unsure what he means by āat this timeā, whether this was a study done before the interview or just ātodayā as in the era that weāre living in.
Edit: for an example of what I mean by unclear, take this quote:
Iām unsure if this is a misstatement and whether:
Let me know if you have any thoughts on this!
Iām genuinely ignorant on this: What makes China Marxist today? From my uneducated standpoint, they do seem to have a lot of the trappings of capitalism. What is their long term plan to advance communism (Iām assuming the current state of affairs is temporary and strategic)
Good question. First thing to note is that Iām no expert. Iāve just become increasingly curious and begun to try to understand the place. Second note: Iāll speak as if you have limited knowledge of Marxism for the benefit of other readers rather than assuming that of you personally.
This may seem pedantic but the answer depends what you mean by Marxism, communism, and capitalism. What counts as a capitalist state? What counts as a communist state? What does it mean to be governed by Marxists?
What does it mean to be Marxist revolutionary?
Marx and Engels:
The present state is a class society of global capitalism. The only way to avoid that while it exists is by (extreme) isolationism. (Even then, does one really āavoidā it? Western imperialists wonāt leave you alone if you close the borders to them, soā¦.) The only way to abolish global capitalism is world revolution, which takes time.
A revolution is a transformation in the mode of production. Given the interconnectedness of human society, Iād argue itās impossible to have that revolution for as long as capitalism is the dominant political economy. Is it possible to share the world between socialism and a weaker capitalism? Time will tell. For now: capitalist social relations cannot be avoided.
The early stage of moving away from capitalism towards communism is called socialism. This socialism can be broken into several stages of āsocialist constructionā. Until Deng, China wasnāt quite isolationist but it went through two processes that made external relations difficult:
The first was achieved. The landlords and imperialists were kicked out. The second process is well underway. China is in a stage of āprimitiveā socialism. The CPC seems reluctant to claim too much.
ā
Inviting capital inside China
The question is: where is China now i.e. where has it been since Dengās reforms or the āopening upā? These reforms saw China open its borders to foreign capital and letting domestic capital develop. This is the point at which China began to gain, as you say, the ātrappings of capitalismā.
Why did they do this? During the revolution and the early days of afterwards, China rapidly developed the relations of production (bye bye exploitative relations between foreign imperialists / local landlords and super exploited peasants). But its forces of production only developed so far.
Deng, realising something must be done, applied dialectical and historical materialism to the situation. Thereās no such thing as poor socialism but when producing the means of subsistence (food, shelter, clothing, medicine, etc) requires lots of labour-hours because you donāt have machines, computers, reliable energy sources, etc, you simply cannot lift peopleās standard of living very far.
The solution was āmarketā reforms. Foreign capital would be given favourable conditions to invest and build factories, infrastructure, etc, in return for sharing intellectual property with China (the designs and knowledge for building everything).
ā
Staying in charge
Since then, China has come to rival the āmost advancedā capitalist states in terms of research and development and has surpassed them in terms of productive capacity. This makes China well defended against sanctions. So much so that the US can cut Huawei off from chips and China will brush it off by catching up and making its own chips in a matter of months (if writing for a Chinese paper / a ~couple of~ years, if writing for a western paper).
Which is to say, Deng was right: with ācapitalistā development, China could advance more rapidly than without. Does this mean China ābecameā capitalist?
ā
What is a capitalist state?
A capitalist state is one in which ācapitalā is at the top, as it is in liberal democracies (and fascist attempts at ethno-states). Marx and Engels:
In e.g. France or Japan, it goes: capitalist class > state > working class.
Since opening up (after Xiās anti-corruption drive, at least), the CPC has remained in charge of the country. In China, the executiveāthe governmentāis a ācommittee for managing the affairs of the wholeā¦ā proletariat. According to its constitution:
It goes, working class > state > capitalist class. The workers control the party, the party controls the state, and the state controls the capitalists.
For evidence of this, we might look at high speed rail (HSR). As you might know if you live in any other capitalist country, affordable, efficient, well-maintained, wide-spreading public transport is not profitable enough for capitalists. They want us all to buy a personal vehicle. They want to tarmac and concrete over everything to build inefficient roads and car parks.
China can avoid the profit-motive trap because itās run by Marxists who donāt much care for the profit motive, except as a tool for developing the country to prepare it for a higher, wealthier stage of socialism. Which does mean that capitalists arenāt allowed to sell cars and (I assume) lobby for building roads, etc. But their power is limited. They donāt have the power to shut down and torpedo public infrastructure projects as they do in capitalist states.
While the west gets ātrickle downā economics, China gets ā[common prosperity]ā(https://www.tandfonline.com/doi/full/10.1080/21598282.2022.2025561)'.
ā
Superstructure
In Marxist theory, there are concepts of an economic base and a superstructure. These are connected but separate. The base āoverdeterminesā the superstructure, meaning that although the superstructure is influential, it cannot, of itself, fundamentally change the base.
Law is often said to belong to the āsuperstructureā. China appears to have built and is continuing to build a socialist legal system. It is on the path and/or road to socialist ārule of lawā construction.
Roland Boer has explained this partly means abolishing the public/private distinction in law and governance, which is distinction is characteristic of capitalist law and governance. This is related to and part of Chinaās ādemocratic centralismā. Both are based on a dialectical materialist (read: Marxist) logic of āboth thisāand thatā rather than a bourgeois logic of āeither-or or zero-sumā (Boer, page 59 citing Engels, Dialectics of Nature).
The fact that these moves are possible and coherent suggests that Chinaās political economy is not capitalist even if it contains elements of capitalism. It would not be possible to achieve the above superstructural changes within a bourgeois, i.e. capitalist state because these changes fundamentally contradict the logic of capital, private property, liberal individualism, etc.
In addition, China has opened Schools of Marxism in its universities. As communists well know: the only thing it really takes to make revolutionaries is to teach them Marxism. Thatās why itās so difficult to achieve in the west. The bourgeois prevent and propagandise against it at every turn. In China they embrace it, encourage specialists to develop Chinese Marxism, and require students to study it.
The BBC isnāt a fan But it has been said that
ā
Conclusion
In conclusion, your intuition is correct. There are capitalists in China, which is seen as a necessary step in developing socialism. It does not contradict core Marxist theory. The CPC keeps control of its capitalists by ensuring Marxist knowledge is widespread and maintaining a dictatorship of the proletariat. A higher stage of socialism will appear in time if China continues along its present trajectory and bourgeois social relations whither away.
ā
Hopefully this answers your question.
A YouTube link was detected in your comment. Here are links to the same video on Invidious, which is a YouTube frontend that protects your privacy:
We wonāt know the outcome but letās hope that doesnāt happen.
The US cannot afford that since itās economy would collapse as well
If a full scale war broke out that involved the US taking part, it would be WW3. It seems likely that China would lose at the moment as nothing can compare to the military strength of the US. But it would probably be a tough war that would leave China in a really bad state and the US in a pretty bad state. But then again I know nothing.
The US military LOST to Chinese and Korea troops during the Korean War when Mao, at Kim Il-Sungās request, sent Chinese military into North Korea to repel the aggressor in the warā¦ the US, who had pushed Kimās army all the way to the Chinese/Korean border.
āHow is that relevant?ā I can hear being asked.
Well, for one, itās funny. The US got its ass handed to it when it was practically at peak military production (less than a decade from WWII ending) and with veteran troops who had seen combat in WWII all over the pacific. Basically, they had the perfect army at the perfect time to absolutely destroy any other army. And yet they kept losing. They had superior weaponry and all that, and using such technology yes, they did eventually fight off Maoās troops, but the point is do not assume that dumping funding into a military budget means anything beyond having cool tech.
The Iraqi insurgents defeated the US
The Taliban and other Afghan groups defeated the US
The Vietcong defeated the US
US propaganda always spins shit like āwe agreed to end operations and leaveā when in reality they lost the war. Itās practically the calling card at this pointā¦ do a war, make billions for arms manufacturers, devastate an entire country, declare victory and leave. In a few decades wonder why those countries are āshit holesā and consider invading again.