The thesis of the restoration of capitalism in China after Mao is too simple. The policy of the Communist Party after Mao reflects the changes in the principal contradiction in the world system and the development of internal contradictions in China’s economy. In the first part of the Deng era, from 1976 to the early 1990s, after the tumult of the Cultural Revolution, Chinese leaders were preoccupied with getting the economy running again and upgrading the level of technology. At the same time, capitalism launched neoliberal globalization, with the demand for capitalist investment connected with the outsourcing of industrial production from the global North to the South. But China did not accept the demand for “structural adjustments.”
The Communist Party had its own strategy to maintain the Chinese national project. If the transnational companies wanted access to the Chinese labor force and infrastructure, then China demanded access to the technology and science behind production. With this, China would be able to develop the next generation of technology by itself. The transnational companies were so eager to take advantage of low-wage labor that they accepted Chinese partners in the companies. The result is that China today produces the most advanced solar power systems, 5G networks, smartphones, artificial intelligence, industrial robots, high-speed trains and electric cars.
This was made through the exploitation of the working class and peasants. This tradeoff, between the extreme exploitation of the Chinese working class on one side, and the development of the forces of production on the other side, was done consciously by Deng. The Chinese working class had to endure the hardships of capitalist exploitation for a generation in order to continue the transfer toward socialism.
This may seem to be a cynical position. But was there an alternative at the time? The anti-imperialist wave of the 1960s was running out of steam; the world revolution was a distant goal. The left wing was in crisis globally. The Soviet Union had entered its death-spiral and the global neoliberal offensive seemed unstoppable.
China needed to develop its productive forces. Not only to eradicate poverty in China itself, but also because it is necessary to possess the most developed technology to break the dominance of capitalism, and thus promote a global transformation towards socialism.
Yet by neoliberalism’s crisis in 2007-8, China was capable of producing not only simple industrial products but also advanced electronics. More importantly, Chinese leadership was aware that internal contradictions started to erode the power of neoliberalism. The world market could no longer be the driver of Chinese economic development. China ha[d] to change its economic strategy both on the national and global levels. On the global level, it had to reduce its dependency on exports to the U.S. to avoid being dragged down by crises in the capitalist world economy. On the national level, it had to roll back neoliberal policies and repair the damage done to Chinese society—a kind of “soft delinking,” following Samir Amin’s advice for engaging with the capitalist world system on the way towards socialism:
…the organization of a system of criteria for the rationality of economic choices based on a law of value, which has a national foundation and a popular content, independent of the criteria of economic rationality that emerges from the domination of the law of capitalist value that operates on a world scale.
The Communist Party charted a zig-zag course in terms of delinking and relinking strategies according to the economic and political developments in the world system. From 1949 until 1971, delinking was presented as a policy of self-reliance, but it was more the result of necessity than of choice.
The relinking from 1978 was a reaction to the challenge of neoliberal globalization, to modernize China, and to counter imperialist domination in the longer run. It was for sure a deviation from the strict socialist course. It made China the “factory of the world,” but with the consequences of environmental degradation, rural-urban inequalities, and an enlarging gap between the rich and the poor. The course had to be adjusted by adopting policies of “rural reconstruction,” “dual circulation,” “elimination of extreme poverty,” and “common prosperity.” All policies which are “putting people’s needs first.” In this sense, the state is rejecting the capitalist law of value.
I have presented the Chinese revolution and its effort to build socialism as a long process influenced by the interaction of the principal contradictions in the world system with local contradictions. It has created breaks, but there is also a continuity, as Ali Kadri states:
The past is alive in the present. It is neither the person of Mao nor Deng who endures, but the revolutionary ideology that charted the recent course of history. Whether Deng’s cat was catching mice or whether China was feeling the stones as it crossed the river, it did so under the ironclad fist of the Communist Party. To falsify the structural continuity in modern Chinese history is an ideological position that aligns with imperialism.
No other country has managed to develop its productive forces both in qualitative and quantitative terms faster than China. Most importantly, China has broken the polarizing dynamic in the capitalist world system, which for centuries, on one hand, has relegated the Third World to poverty, and on the other hand, concentrated wealth and power in the imperialist center. This gives new prospects for the development of socialism and heralds the end of capitalism. No small achievement for a political party.
-Torkil Lauesen, The Long Transition Towards Socialism And The End Of Capitalism Pgs. 271-274
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