holdsengaged in industry, commerce, communications, construction and services, their capital accumulation is growing. Rich peasants, private commercial entrepreneurs and even loan sharks have appeared, and 'millionaires" eulogised by the regime obtained publicity. By 1986, the fixed assets of
"When the
CCP changed its previous
'ultra-left' policy it swung to the other extreme, encouraging individual peasants to enrich themselves without restraint, and giving them assistance"
Pare 19
"The
People's
Commune policy of the
Mao Zedong era and the
Dengist policy of assisting the competent to enrich themselves
•.. appear to go to two extremes, and yet in essence they are the two alternatives of Stalinist bureaucratic rule"
A complaint prevalent among the masses is
'Nine years of reform;
nine years of price inflation'
S UP certain private enterprises reached several million yuan. Economic consortia were also developing rapidly. The CCP cadres the countryside make up. quite a significant portion of the rich, using the power in their hands to obtain the most favourable conditions. Beaucrat capital is gradually lomming:
Alongside social differentiation in the countryside, the gap between the backward and developed regions (in particular between the inland mountainous regions and the coastal provinces) is widening, and class contradictions are breeding.
In some state-run farms, the family responsibility system was also practised. The state farm was divided into small farms, and the state permitted the sale of farming animals, small and medium farm tools, trucks and staff quarters to the staff members. This means part of the state property of the farms is disintegrating and reverting to private ownership.
In sum, the Deng faction's rural policy has struck a way out of the stalemate created by the People's Commune policy, yet it breeds new contradictions. The burcaucracy's laissez faire type of market refor which violates socialist principles; the comruption; the privatisation and concentration of wealth, micans of production and some land; the appearance of large numbers of hired labourers: the accumulation of private capital; the expansion of capitalist production on the basis of exploitation of hired lahourers, and unevenness of the market economy - all these cause further class differentiation and constitute the motive force for capitalist restoration in China.
In the past we opposed the Poople's Commune policy of the Mao Zedong era. Now we also oppose the Dengist policy of assisting the competent to enrich themselves. These two policios appear to go to two extremes, and yet in essence they are the two alternatives of Stalinist bureaucratic rule. The same vacillations have appeared in the
USSR and in the East European
Weoppose the regression of collecfive production to small production based on the family unit. We propose that bureaucratic control by the CCP over the stale fami and extortion of far workers must be abolished: all fame workers should enjoy the rights
LE = Former allies now in deadly contest: Zhao Ziyang with Li Peng and benefits of the democratic and collective management of the farm. Agriculture should go on the road of collectivisation and mechanisation. Towards this end, the stute must assist the peasants with material resources, coupled with democratic management. Examples must be set for the peasants, and idcological education must be conducted. After long periods of effort, the superiority of collectivisation and mechanisation will show itself and attract peasants to go voluntarily onto the road of collectivisation, since they will see from experience that it brings tiem rcal
The urban economic
The Deng faction decentralised power to bureaucrats in enterprises, and separated the administration from the enterprises which now enjoy greater autonomy, bearing responsibility for their own profits and losses, submitting profits in lieu of taxes. In some enterprises, a shareholding system is heing attempted. Some state-run and collec tive enterprises are contracted to indifferentials are widening The contract system of employment is being
What the CCP tried to promote in the enterprises is not the autonomy of the workers or the expansion and functioning of the power of workers" councils, but the concentration of power in the hands of the factory directors to breed a layer of tech nocrats who will act ax supporters of the ruling caste. Some of the decision making powers enjoyed by the workers councils, as stipulated in state ordinances, are no longer mentioned. The party leadership no longer exercises restraint over the factory directors, but neither is there the practise of "leadership by workers' councils': In the absence of democratic decision-making and supervision by the workers, the operation of industries and enterprises is more and more subject to the law of the market, and they compete for resourcos and for the market under the domination of the Taw of value. Under such competition, the pursuit of profits becomes the aim of tion, and making enterprises respon sible for their own profits and losses leads inevitably to price rises, elimination of the weak by the strong. speculation and protiteening.
The contract system means the hiring for private operation of means of production and facilities which are state owned or collectively owned The operators employ large numbers of workers, run the enterprises on capitalist methods, increase the intensity of labour, and squeeze the maximum surplus value out of the workforce. The relations between the contractors and the workers they employ is in reality one of employer and employee, not qualitatively different from the exploitative relations in capitalism.
Today the right of ownership of some brigade-run enterprises in changing. Peasants can invest and hold shares in the collective enterprises. This isbasically similarto the bourgeoisie holding shares in capitalist society, gaining surplus value without working.
Price reform
A major part of the Deng Faction's cconomic programme was price reforu: gradual abolition of the state's uniforn setting of prices, which were to he changed to free floating prices. The result was that the prices of the great majority of products and commodibies soared, with commodities in short supply soaring the most, and serious consequences for people's living standards.
A complaint prevalent among the masses is "Nine years of reform; nine years of price inflation'. In May 1988 the CCP stated that the difficult barrier of price reform must be crossed" and must not be circumseribed". Thus control over prices was further relaxed, people's conditions of Living tumed more tough, there were mas Hive withdrawals from the banks, and
Page 20 SOCIALIST OUTLOOK no 16, June 1989
a rush for commodities. With this aggravation of the crisis of hureaucratic rule, price reform was slowed down in September: In a difficult situation, the CCP's policy on prices vacillated,
The problem of prices is essentially a question of insufficient products to meet national needs. If the problem is not tackled at the roots, and production is not increased to meet the needs of the people, and instead state price setting is abolished, the con sequence can only he runaway prices, greater disequilibrium in production and even more dif ficulty in meeting people' surgent needs
While there is no significant general rise in the actual income of the people, and especially while there are no concrete state measures to protect against price rises, the state has an obligation to maintain a subsidy on the basic cost of living"
As for the peasants, the general risc on the prices of industrial goods causes a substantial increase in the production costs of agricultural and subsidiary products, thus reducing peasant incomes. This will reduce peasant incentives to grow grain and Icad to decreased grain Safeguarding workers' rights
By the end of 1987, the number of workersin China mached 130 million, with wer half of them being industrial workers, This figure is over ten times the number of workers in 1949: moreover they are concentrated in big industrial regions, and their weight is
The CCP has set a quota for every state-owned enterprise fixing its total wage bill, which can only vary according to the success of the enterprise in accomplishing the state plan and itsef ficiency. The CCP has also set out to widen wage differentials within each enterprise in order to introduce competition. The redistribution of wages within a sct total amount was designed to increase the intensity of labour, making workers work harder to gain more wages at the expense of other workers, Workers with weaker labour poweror those engaged in unskilled or simple labour faced a reduction in
This was a conscious effort to intro duce differentials. competition and inequalities within the working class. In addition, employment on contract terms was introduced for newly recruited workers in state owned enterprises in the winter of 1986. These workers now resemble casual workers, with no safeguards on their right to work or social security. All un LE these measures are detrimental to the interests of workers and should be
Although the CCP has. always proclaimed that the proletariat was master of the country, it has always deprived it of its power to be the master. Since 1980, due to the impact of the workers" movement in Eastern Europe, and especially Poland, the Tangshan miners: workers rights eroded struggle of the Chinese workers for their rights has also developed. In order to prevent the eruption of a Polish-type labour movement in China, and in order to stimulate workers to help raise production, the CCP promulgated the "Temporuy ordinance on workers' councils in state owned industrial enterprises' in July 1981. This gave workers some powers: yet the promises were very limited, existing more in formality than in reality, and the workers' coun cils that were set up were in general devoid of power and were basically used by the authorities to implement their policies and to raise production.
Despite this, the promulgation of the ordinance retlected the fact that workers' discontent had pressurised the CCP into making some concessions; the workers could make use of this opportunity to fight for their own rights. Workers in many enterprises not only pressed the authorities to implement the ordinance, tempted to go heyond it, For example, it was officially provided that workers could elect their rank and file leaders in the enterprise: however workers more and more demanded the election of all leaders, including the factory director. The authorities in fact practised a system where the Inctory dircotor was the one responsible for the factory under the direction of the party committee: in a numher of enterprises workers pressed instead for a system in which the factory director would be responsible for the factory committee - under the guidance of the workers'
The defence of workers' interests should have boen the central task of
M LL 2 the trade unions. However in China as in other bureaucratised workers' states, the trade unions do not take up thistask, and are instead the tool of the party's bureaucratic rule, assisting the ruling caste to implement its policies. In China the working class and its vanguard should draw from the experience of the Polish trade union, and fight to organise a union independent of the govemment. In the past two years the workers have ignored the cancellation of the right to strike: with increased discontent over price reform. the frequency of strikes and the numbers of workers participating in them have increased. Go-slows are also more generalised and acute. This shows that the working class has increasingly risen to op pose the policies of the bureaucracy that are detrimental to their interests.
Under pressure from strikes and go-slows, the existing trade union leadership was compelled to change its tone or some of its methods of work. For example, it proposed that the govemment-run nature of the trade union should be reformed in order to realise the mass nature of the of the trade union'. It also proposed the establishment of a minimum wage and a sliding scale of wages corresponding with prices.
We propose that the working class should stan its struggle with the fight Lo organise a democratic trade union. building a structure to fight for workers" rights, consolidating its strength and combativily, from which it can proceed to the fight to establish democratic relations of production and the control of political power.
The individual economy and the private economy
In the past the CCP used administrative measures forcibly to climinate the private economy, while the state cconomy and the collective economy, under bureaucratic oppression and with workers deprived of any right to decide, became bogged down in stagnation, resulting in further shortages of goods. It was this objective situation which forced the Deng faction to change its policy.
However the Dengist policy is to stimulate the commodity economy and allow private enterprises to develop in a spontancous and unorganised way under the domination of the law of value. The commodity
"While there is no significant general rise in the actual income of the people, and especially while there are no concrete state measures to protect against price rises, the state has an obligation to maintain a subsidy on the basic cost of living"
"With increased discontent over price reform, the frequency of strikes and the numbers of workers participating in them have increased.
Go-slows are also more generalised and acute"
SOCIALIST OUTLOOK no 16, June 1989 Page 21
"by the end of 1987, 30 million workers were hired by private enterprises in China" October Review, which publishes in Chinese, with key articles translated into English, can be contacted c/o GPO Box 10144, Hong Kong
SU P econumy inevitably leads to the emergence of exploiters and social polarisation. A small proportion becomes small capitalists, while the majority of people are reduced to hired labourers (according to the estimates of Ge Lin, Professor at Nanjing University, by the end of 1987 30 million workers were hired by private enterprises in China).
Under this policy the development private enterprises is very rapid. In some towns their output value comprises a big proportion of the total industrial output. In the national economy, the weight of state in dustries has fallen from 83 percent in 1978 to 67 percent in 1987, and fur ther to 64 percent a few months later. andicating the tendency of private and other non-state enterprises to gain strength. This implies that the advantageous position of state enterprises will gradually he replaced, and that the gains of the 1949 revoluLion are continuously being eroded, Halting this tendency requires the or ganination and mobilisation of the proletariat to take control of the running of the state economy.
Open door policy and the special economic
The setting up of four special economic zones, the opening of Hainan Island and 14 coastal cities to the external world, and varying degrees of opening of many other places, all show the exiensive opening of China to international capitalism.
can develop its cconomy with its doors closed. However, because the labour produc tivity of China is relatively low, the monopoly of trade becomes a necessary means to protect national industry from competition from capitalist cconomies with a higher labour productivity. Under the protection of a monopoly of trade, the state can selectively trade with imperialist countries to utilise forcign technology and resources much needed for national economic construction, as well ar learning management methnds.
Production items that are in demand but for which there are no state funds for development, can be produced jointly with foreign capital, but under certain principles. The overall guiding principle should be that a project is beneficial to the overall Chinese econony, not hannful to the system of state property or the planned cconomy, making no harmful conces sions to foreign capital, and carrying no heavy political or economic price.
L Ш Li Peng: conservative on prices The people must fully grasp the relevant information, know how much is being paid and why during economic transactions with advanced capitalist economies, and be able lo make timely revisions under their own supervision and discussion.
Severe damage was done when China develaped its coonomy in autarchic fashion under the cconomic blockade. However the need to maintain economic relations capitalist countries does not mean that China should fully open itself up to the extemal world. Unprincipled openings to forcign capital by the ruling faction also cause unneces-
Under increasing pressure from Loreign busineases, concessions made by China are increasingly significant Initial proposals for joint capital ventures or joint operations are becoming sole operations by foreign capital: joint operation periods of several years (with the enterprise retamed to China at the end) are being extended to several decades: plans only to export goods produced by foreign capital are giving way to production panly or even entirely for domestic consumption. The state monopoly of forcign trade is also under atlack. This not only provides a very favourable investment ground for foreign capitalists, bur also concedes part of the domestic maket, hence dealing a severe blow to national industry.
The profits which foreign The profits capitalists make in China can be converted to foreign currency and frecly remitted out of the country: this means that the wealth produced by Chinese workers, and national resources can he appropriated legally and without
The CCP has made big concessions, but the actual gains are small. The balance is unfavourables the investment of forcign capital is small and mostly concentrated in the nonproductive sectors such as tourism and rcal estate. China even has to provide Joans, or invest jointly. The import of industrial technology and equipment falls far short of the level expected.
The activities of foreign capital in China and the interests of the econonuc system it represents arc in acute conflict with China's state cconomy. The more foreign capital invests in China and coor dinates in activities with the growing individual economy and private industries and commerce, the greater their strength and the more threatening the crosion of the state economy will become:
Since the productivity of labour of foreign capitalism is much higher than that of China, when
China spontancously adapts to and integrates itself with the world capitalist market, suplas value will flow out of China in massive volume and China's national economy will Find it difficult to develop independently as well as becoming affected by the periodic crises of world capitalism. The experiences of some Eastern European countries have
When the CCP argues for unprincipled opening up to forcign capital, it misleads the people into believing that capitalism is superior to state ownership and the planned economy, and Fosters illusions in capitalism along with loss of faith in true socialism. meanwhile, under the coordination of foreign capital, the system of exploitaLion is reviving in different areas of China, More labouring people are exploited: social differentiations increase, incqualitics expand, the mentality of privatisation is strengthened, the concept that "money is the top priority becomes more widespread, and the social mood worsens.
Some bureaucrats are looking to convert their parasitic basis from the state mownership system to the market economy: instead of pursuing their private interests with power in their hands, they turn to becoming property owners making capitalist private investments. When large amounts of foreign capital enter China, comprador capital may form.
If capitalist forces develop in China more rapidly and extensively, and there is no powerful intervention from the people, then at a certain moment of crisis, the CCP will have to choose between two alternatives: either it changes its present rightist policies and restrains the activities of forcign and Chinese capitalist forces, or it continues to be swept away by capitalin forces and undergoes trans Formations until the private ownerhip system assumes predominance and capitalism is reinstated.
The final showdown will be inevitable. This is the inescapable trend of development of the Chinese
Page 22 SOCIALIST OUTLOOK no 16, June 1989