THREE YEARS after Tiananmen Square, China still remains an economic and poncar moder for sectons of the international Left. As opposed to the lanure or perestroika in the ex-soviet Union, economically at least 'market socialism in china scens to be a suc cess. For others, Deng's 'socialism with Chinese charactensac is do vancing rapidly towards capitalism. What is the truth or these counter-ciaims:
The short answer is that while China remains a non capitaliss country, mi portant sections of the economy have foreign capitalist penetration is growins. wame every secton or the roung bureaucracy remains committed to a harsh authoritarian style of rule, important political battles over the future course of the country are taking place behind closed doors, although part of the scope of these battles was revealed at the recent 14th Communist Party congress.
But most important Deng Xiaoping himsel is committed to a thorousa marketisation, which taken to its logical conclusion would result in the restoration of capitalism; his view were set out at the CČP conference in the keynote speech by party secretary Jiang Zemin. And Deng is doing everything possible to ensure that the political succession is in the hands of those loyal to him.
Agriculture
In the 1980s China had the fastest growing economy of any major nation averaging 7-8 per cent growth each year, and achieving a staggering 12 per cent in 1992. This was based above all on the reform of agricultural production, part of the "Four Modernisations' charted when Deng replaced Hua Guofeng as party chairman in 1978.
Under these reforms the huge peasant communes estabusned Dy mad Zedong in the 1950s and 1960s were abolsned, and agricuntara producaon put in the hands of individual peasant did not amount to a full since up to two thirds of production had to be sold to the state at negotiated prices Nonetheless peasants were allowed part of their product to deregulated markets in the cities. Very quickly family-based farming units were expanded, and a class of richer employing agricultural labourers. With class differentiation came a big growth of income inequality, beginnings of the accumulation of private capital.
The abolition of the peasant communes, and the consequent explosion of agricultural production, exploded many popular myths about the popularity of the collectivisation of the The new drive to smash up the Iron Rice Bowl system involves attempts to make millions of workers redundant, and allowing enterprises to go bankrupt. Spontaneous worker resistance led to a slowing of this process, but not to its reversal.
Dec 92- Jan 93 No. 34 State repression pr way for market peasantry.
Forcible collectivisation, and the madcap schemes imposed on the com. munes during the late 1950s 'Great leap Forward' was intensely unpopular, low living standards and poor social and wellare services combined to disrupt incentives to the peasants to develop production.
But the growth in agriculture did not facing China The country's rulers aimed at rapid economic growth, and a qualitative i industrialisation process which would put the country on the road to becoming an advanced industrial nation.
Backwardness
What stood in the way of thisaim was the backwardness of industry, and all the inefficiencies, waste and corruption associated with bureaucratic rule. 1988 official statistics said that 30 per cent of enterprises were running at a loss.
In addition, Mao's cultural revolution dislocated economic development from roughly the mid- 1960s to the mid1970s; China lost a decade to anarchy and stagnation. Stark statistics about Chinese economic growth cover up the realities of the poor quality of production and do not translate directly into rising living standards, especially in the towns and cities.
In addition, rationalisation of production in the countryside led to a anitor surplus labourers to une towns. boosting unemployment rates. And • KroWth percentage compared with India, but increased production.
The sic answer to this from the Deng camp, vigorously promoted by Far from allowing political liberalisation to go hand-in-hand with marketisation, the party leadership is set on a resolutely authoritarian model, stiffening its system of political surveillance and repression, right down to street and community level. the now-disgraced party secretary Zhao Ziyang, was to promote marketisation of industry. This has combined encouraging investment from foreign private capital especially in coastal 'special economic zones, a drive to 'rationalise' production at the expense of the workers, and allowing the establishment of private businesses.
The most important aspect of this is the drive to 'smash the iron rice bowl. Since the 1949, the industrial working class (400 million people now live in big cities and towns) has won important social gains, especially in employment. Workers were used to jobs for life, and • labour regime whích, while ofter marsh by Western standards, least stable. This went hand-in-hand with education and health care and other welfare services, at least for most industrial workers and their families.
Redundant The new drive to smash up this system involves attempts to make millions Or WorKerS and allowing enterprises to go bankrupt. Spontaneous worker resistance led to a slowingof this process, but not to its reversal.
For the moment however the overwhelming majority of industrial production remains in the hands of the state. The private sector is above all in the commercial and distribution sector, with at least 40,000 private businesses, but not in basic industry. But the even tual aim seems to be to develop jointstock companies in a gradual privatisation process. Stock markets have been established in Shanghai and Shenzhen. with about $11 billion worth of shares lass differences are now emergin in the big cities as well as the countryside. Private commercial activities have created a newly affluent layer, with increasing access to all the goodies of Western capitalist consumerism. Corruption among party offidals in endemic, allowing many to become wealty, ana some enormously rich. Business millionaires are being This contrasts with the growing army of unemployed, now tens of millions strong. and the pressure on living standards of many industrial workers.
The Tienanmen events in 1989 showed that the central party leadershe polida tonate of the ete the political monopoly of the munist Party, an organisation of 50 million people. The backbone of the bureaucracy s rule in the loyalty of the Peoples Liberation Army (PLA), an institution which has been consistently on vileged in access to resources tor ever more-modern weapons.
Deng's protege Zhao Ziyang fell in 1989, not only because the bureaucracy needed a scapegoat, but because Zhao appeared to hint publicly at concessions to the student movement. a line he almost certainly pushed in the leading But far from allowing politica liberalisation to go hand-in-hand with marketisation, the party leadership is set on a resolutely authoritarian model. stiffening its system of political surveillance and repression, right down to street and community level.
Divisions
If 'authoritarian marketisation' is the unanimous course of the party leader ship, there are certainly differences on where this marketisation is headed. The real lines of political divide are unknowable, because of the secrecy of the bureaucracy s internal debates.