73rd Anniversary of the People’s Republic of China- Historical and Future Challenges

Fang Chang

Since the pandemic of early 2020 and the escalating conflict between China and the US, the Chinese Communist Party (CCP) bureaucracy has been under much greater political pressure. Especially since Pelosi visited Taiwan in early August this year undeterred, there has been doubt about China’s ability to enforce its political “bottom line”. Then, the US Senate Committee on Foreign Relations approved the Taiwan Policy Act on September 14th, and is very likely to provide military assistance free-of-charge to Taiwan in the future. These factors constitute some of the political challenges that Chinese president Xi Jinping will face after the 20th National Congress in a few weeks’ time from now.

Just like the speech that Premier Li Keqiang gave at the gathering for the last (72nd) anniversary of the People’s Republic of China (PRC), the emphasis in a speech on such important occasions often reflects big social problems. Issues such as the pandemic, poverty alleviation, the suppression of the Hong Kong movement and the escalation in the Taiwan Strait have all become heated problems for the regime. Contrary to the speculations by mainstream media, the CCP has no intention of reversing the capitalist reform and returning to a planned economy. Instead, it is seeking international hegemony under the current state-capitalist system.

On the 73rd Anniversary of the PRC, an examination of the history and development of the Chinese regime will help us understand its current political position and its rule. This article will start from 1949 to analyze its 73-year-old legacy.

The peasant revolution and its aftermath

In 1949, the peasant revolutionary army led by Mao Zedong successfully established a bureaucratic planned economy in China. Unlike the 1917 revolution, which was headed by workers, the Chinese working class had little involvement in the Chinese revolution. The reason can be traced back to the tragic mistakes of the Communist International (Comintern), which was already under the dominance of Stalinism in the second part of the 1920s.

By 1925, the revolutionary movement of Chinese urban workers was growing stronger, and the political goal had gradually shifted to the abolition of private property. Ultimately, this revolutionary wave of mass movements threatened the Kuomintang regime based on traditional gentry and landlords, and this is the reason why Chiang Kai-shek (the leader of the nationalist Kuomintang party) brought his army into Shanghai in 1927. Shanghai was the center of the Chinese working class, and Chiang Kai-shek’s army committed a massacre of revolutionary workers and Communist Party members.

The massacre destroyed the morale of the Chinese working class. Subsequently, the Kuomintang regime occupied almost every major city in China, further restricting the resistance movement of the urban working class. This also transformed the CCP from a revolutionary party based on urban workers into a guerrilla military force based on rural areas and peasants. 

During the Japanese invasion, the Kuomintang adopted a policy of non-resistance towards Japan and focused on destroying its domestic rivals, i.e., the Communists. This led to a loss of trust to the Kuomintang by the Chinese people. The Communist Party was able to absorb a large number of peasants and intellectuals who opposed Japanese imperialism and in 1949 overthrew the corrupt Kuomintang regime.

The CCP regime born on this basis was able to show progress as regards the economy and social conditions. For example, agricultural production increased from 1950 to 1952 by an annual rate of 15%. Some scholars estimate the land reform increased production by nearly 5 billion yuan a year. Some scholars pointed out that based on 1952 prices, during the first five-year plan (1952-1957), about 20% of the GDP was spent on domestic investment, while this number was only 6% under the Kuomintang regime.

Data also showσ that the illiteracy rate during the early 20th century was 85-90%, but after the establishment of the People’s Republic, it was significantly reduced. By 1959, illiteracy rate among young people and adults between the ages of 12 and 40 went down to 43%. In addition, the CCP also began to implement a modern medical system, from the beginning of its establishment as the ruling party. Studies showed that in 1965, there were more than 230 educational institutions in China that trained modern medicine professionals, and the total number of medical professionals exceeded 200,000.

However, these progressive developments were not made possible through the energetic participation of the working class. Statistics show that in 1953, less than 10% of all party members were workers or from working class families; even in 1957, when the number of industrial workers in China reached 10 million, the proportion of the working class in the Party was only 14%. The majority of party members were still peasants.

A socialist state?

In 1956, the CCP bureaucracy claimed that China had entered the end of a “socialist transition”. This was far from the truth – China had not been transformed into a socialist country. A crucial factor in this, of course, was the absence of workers’ democracy (see more on this later on). Also, even though the Chinese economy was nationalized in 1957, huge social inequality and class differences still existed and were growing, especially after the implementation of the first five-year plan.

In 1957, the social consequence of rapid industrialization was the creation of a large layer of political and technical elites, who were not integrated into worker and peasant layers, but instead became a new social group, as party leaders, career officials, and factory directors; at the same time, inequality between workers gradually widened, and the income gap between factory directors, skilled workers, and low-skilled workers began to widen. Between urban and rural areas, there was an even more insurmountable gap of development. The development speed of industrialized urban areas accelerated, but agricultural production had stagnated, and the inequality between the two in medical care and education gradually became apparent.

The above is enough to show that China at the time was quite far from a truly equal socialist society. The bureaucratic caste, in order to resolve the political differences and power struggles brought about by these differences, gave more political and economic control to Mao and the Maoists.

Power struggle inside the bureaucracy

For every regime, the top priority after coming to power is to stay in power, and the CCP is no exception. However, it is not the workers who remain in power here, but a bureaucracy that lacks a worker base. This means that the CCP as a party and as a regime lacks basic freedoms-– of speech, of universal suffrage, etc. 

Furthermore, power struggles within the bureaucracy occurred from time to time, and the development of these struggles were often reflected in institutional changes. For example, in the Hundred Flower Campaign in 1956, Mao Zedong used intellectuals as a tool against his political rivals, giving them a brief period of freedom of speech to criticize the Party, in order to achieve his goal of “cleaning up the party.” However, the criticisms eventually went beyond Mao’s limits, and their demands for a democratic system and freedom of speech him to terminate the campaign in 1957.

Earlier, Mao Zedong’s 1955 campaign for agricultural cooperation was another example of cynical manipulation of mass movements to bypass the party bureaucracy, which became Mao’s modus operandi.

A detailed examination of Maoist thought reveals the suspicion of Mao Zedong against intellectuals, cities, and the party bureaucracy which was partially beyond his control (although the masses did not gain substantial democratic rights during the Mao period). In the 1960s, after the failure of the Great Leap Forward and the subsequent fading of peasant political enthusiasm, the bureaucratization led by Liu Shaoqi and Deng Xiaoping once again threatened Mao and the Maoists.

The political goal of Liu and Deng was to rebuild the collapsed economy after the Great Leap Forward and restore “social order”. The “New Economic Policy” initiated by the bureaucracy re-emphasized the role of the market, and corporations were evaluated on profits again. A wave of austerity policies also closed thousands of factories. The wealth gap between ordinary workers and technical elites widened even more.

Under such a situation, the power struggle between Maoists and the Liu-Deng faction became more acute, and gradually spilled from within the party to society at large. In 1966, the Cultural Revolution brought these clashes to a climax. Mao’s purge of the “capitalist roaders” was no longer limited to the Party itself, but mobilized countless Chinese people to engage in actions against “capitalist elements” in society,- but in reality against Mao’s political rivals.

In the “Great Proletarian Cultural Revolution”, workers’ actual participation was severely restricted. For example, grassroots workers in Shanghai were the first to respond to the call and formed a workers’ organization, the Shanghai Workers Revolutionary Rebellion Headquarters. They demanded that the old party and government institutions be replaced by grassroots organizations. However, this demand exceeded the plans of the Beijing leadership, who were not happy with the radicalization of workers. Under Beijing’s intervention, the radical workers were forcibly driven back to the factory, and the Maoists rejected the workers’ demands for higher wages.

The series of power struggles within the bureaucracy did not have anything to do with the welfare of the working class, but were revolving around the defense of their own power. Due to the lack of democracy and collective decision-making by workers, even though the bureaucratically controlled economy achieved huge breakthroughs in productivity and progress, in education and healthcare, it was not able to unleash its full potential. The Chinese masses were the ones to bear the social cost of every bureaucratic power struggle.

Capitalist reform and crony capitalism

In 1976, the death of Mao Zedong and a series of power struggles brought about by the Cultural Revolution, disrupted China’s economic and social order. When Deng Xiaoping came to power, his goal was to revitalize the economy and restore social order. For this purpose, Deng Xiaoping launched the capitalist reform of the economy, known as “the Reform and Opening Up” in 1978, aimed at boosting industrial and agricultural productivity and giving more autonomy to the local governments (see our article on the centennial of the Communist Party of China).

It was only in 1981 that the CCP formally adopted into its official line the second historical resolution to implement the “Reform and Opening Up”, essentially abandoning the planned economy of Mao’s period. As the Reform continued, China formed closer ties with world capitalist markets. The United Kingdom, Japan and the United States became China’s largest trading partners. At the same time, Deng gradually opened up the Chinese consumer market and labor market to foreign capital and created special economic zones for foreign capital to exploit Chinese laborers. These special economic zones often became playgrounds of high-level party and government officials to seek personal gain. To facilitate foreign investment, the bureaucrats even banned Chinese workers from organizing independent unions. In terms of domestic policy, Deng declared state-owned enterprises must become profit-oriented, broke the promise of life-long employment for millions of workers, and proposed price reforms. These policies accelerated China’s transformation into a “state-capitalist system” i.e. a fundamentally capitalist economy but with a significant nationalised sector and a strong state intervention at all stages and aspects of economic and social life.

This way, the CCP not only provided Western capital with a cheap and “disciplined” labor force, but also a breeding ground for corruption. At this time, the rapidly growing private businesses and bureaucrats gradually emerged as a new layer of bourgeoisie, and the entire bureaucracy -from elementary schools to the People’s Liberation Army- started various enterprises, from local stores to export factories. The entire Chinese Communist Party became the world’s largest “bureaucratic enterprise” (see our article How an anti-capitalist revolution gave birth to a capitalist dictatorship?).

With the emergence of a new bourgeoisie, crony capitalism also became a feature of Chinese politics. Various factions competed for profits, corrupt local officials and dictatorial central government officials worked in uncoordinated unison. Big capitalists exploited workers and monopolized industries to their full extent. But the rampant crony capitalism created new worries for the Chinese establishment in the next period.

The Xi era and future challenges

As Xi Jinping came to power, he faced internal and external challenges that would factor heavily in China’s future. Domestically, many factions, big businesses, local bureaucrats, etc, vie for power, affecting people’s lives; internationally, the developing Chinese capitalism has started to threaten the hegemonic interests of American imperialism.

Xi Jinping is not facing an easy task. His top priority is to strengthen the power of the central government and consolidate his personal authority. This is the prerequisite to clean up China’s chaotic market, improve the quality of life and productivity, and to win the support of the Chinese people. This is the view of the bureaucracy as to how China can go beyond the role of “the world’s factory” and become equal to the United States in the game of international hegemony (see our article Strengthening Supervision and Prosperity for All?, and Sixth Plenary Session—What the CCP’s third historical resolution represent).

However, Xi Jinping’s move to consolidate power is not an attempt to return to Mao’s bureaucratically planned economy, but rather, as we have discussed above, to strengthen the Party’s dictatorship. Since last year, Chinese youths began to express their resentment and weariness to the wealth gap and lack of political freedom with the “lying-flat-ism” trend (a passive resistance movement that protests against the modern working and living conditions of a “rat race”). Political failures of the Zero-Covid policy, forcible closure of university campuses, and Pelosi’s visit to Taiwan all cast shadows on Xi’s prestige.

On the eve of the 20th National Congress, there was even a rumor that Xi Jinping was under “house arrest”. Whether the rumor is true or not, it reflects the ongoing nature of the power struggle within the bureaucracy. In fact, since 2020, the power struggle between Xi’s factions and anti-Xi factions has only become more apparent, posing a latent threat to Xi’s rule. Some expert pointed out that it is still unclear how many of Xi’s faction will keep their seats at the 20th National Congress, but it is possible that Xi’s grip may not be as strong as during the 19th National Congress.

On Taiwan, although the Chinese Ministry of Defense issued a whitepaper titled the Taiwan Question and China’s Reunification in the New Era, its content is merely parroting Xi’s rhetoric of a “Great Revival of the Chinese Nation”. This will undoubtedly give the anti-Xi faction an angle to attack, and give Xi Jinping greater challenges at the 20th National Congress.

Today, the working class in China, Hong Kong and Taiwan should see through the nationalist propaganda of the CCP regime, and jointly launch a democratic struggle to challenge it. History has proven that regardless of who is in power, be it Mao or Deng, as long as the bureaucracy continues to hold power, they will deny democratic rights to the people. We must fight for a planned economic system that prioritizes worker’s democracy- a truly egalitarian, democratic, socialist society. This is the only way to overcome this historical obstacle. We sincerely look forward and work towards that day.

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