State-owned Enterprises as an Important Political Foundation of the Party and the State: Analysis of the Ideas of China’s Neoliberalism
Yang Chengxun, School of Marxism, Wuhan University of Science & Technology, January 2016
The Guiding Opinions on Deepening the Reform of State-owned Enterprises issued by the CPC Central Committee and the State Council (August 24 , 2015, hereinafter referred to as the Guiding Opinions) clearly stated: “State-owned enterprises belong to the whole people, are an important force in promoting national modernization and safeguarding the common interests of the people, and are an important material and political foundation for the development of our party and state.” This is the first time that it is clearly stated that state-owned enterprises are not only an important economic foundation of the Communist Party of China and the socialist state, but also an important political foundation.
As an important “political foundation”, it requires us to view the reform and development of state-owned enterprises from the perspective of economic and political unity and from a political perspective. At this time, China’s neoliberal representatives also put forward their political program: in the next 10-20 years, “China may become a market economy based on private ownership”, and repeatedly proposed that the “Three Peoples” (owned by the people, operated by the people, and enjoyed by the people) are the ruling foundation of the Communist Party, and then realize the “democratic constitutionalism” of “non-party power”. They also mislead the “reform” of state-owned enterprises from the perspective of economic and political unity, and in fact they also want to lay their economic and political foundations. The sharp opposition between these two viewpoints and goals has deepened the theoretical game: we must seriously overcome the tendency to downplay politics, prevent and stop the impact of privatization, and while clarifying the economic significance of state-owned enterprises, we must further reveal their important political status and political functions to ensure the correct political direction of state-owned enterprise reform.
The economic foundation that directly supports the regime
Xi Jinping has an important point, which is to adhere to the unity of economy and politics: “The socialist system with Chinese characteristics insists on organically combining the fundamental political system, the basic political system with the basic economic system and various institutional mechanisms and other specific systems.”
The reform of state-owned enterprises must also follow this principle, which is determined by the nature of state-owned enterprises. Dialectics tells us that the most important thing to understand the nature of things is to grasp its particularity. State-owned enterprises or state-owned economy are a very special economic form. It has a direct connection with politics, regimes, and political parties. We can understand its particularity at three levels.
The first level is the relationship between politics and economy during social changes.
Generally speaking, the economy is the foundation and the political regime is the superstructure. The economic foundation determines the superstructure and the superstructure reacts to the economic foundation, or the economy is “primary” and the superstructure is “secondary”. However, during the period of drastic changes in the social system, a special situation occurred: politics played a decisive role and the economic foundation required the regime to protect and develop it. This is what Lenin said, “Politics is the concentrated expression of the economy” and “Politics must take the first place compared to the economy”.
When we look at the period of socialist consolidation and development, especially the period when international capitalist forces are still dominant, we must adhere to this view to understand the relationship between the public economy, especially the state-owned economy, and politics, the regime, and the ruling party, and recognize that it is the pillar of the socialist economic foundation and political system. In this sense, it can also be understood as the political foundation at the same time.
The second level is the direct relationship between the state-owned economy and the state power. Except for primitive society, almost all societies and countries have state-owned economy. Slave society has state-owned manors and factories; feudal society has royal factories, manors, money houses, etc.; capitalist countries have a considerable number of state-monopoly capitalist enterprises in various forms, state banks, etc.; China’s semi-colonial and semi-feudal society has a bureaucratic capitalist economy represented by the four major families (including large state-owned private enterprises); socialist countries have a huge state-owned economy. Their common characteristics are that they are owned by the state power, controlled by it, entrusted to officials for operation and management, and directly provide certain funds and materials for the state. This is the economic foundation that directly supports the superstructure, and determines the nature and fate of the two. That is to say, the attributes of the state-owned economy are determined by the class attributes of the state. Feudal state ownership is feudal, capitalist state ownership is capitalist, and socialist state ownership is socialist. When the nature of the regime changes, the nature of the state-owned economy will also change (such as the changes after the disintegration of the Soviet Union). It can be seen that the state-owned economy itself is the most political economy, and it has a stronger political function than the non-state-owned economy. It is precisely for this reason that we cannot confuse the socialist state-owned economy with the capitalist state-owned economy, and this confusion is often a tactic of neoliberalism. In fact, more than 100 years ago, Engels criticized this method of confusing the nature of different state-owned enterprises (for example, the state-owned enterprises of Napoleon in France and Bismarck in Germany were also regarded as socialism), “sometimes even degenerating into a certain servility.” Now the servility of China’s neoliberals has reached an unprecedented level.
On the third level, socialist state ownership has a stronger and more intense political character. Because the socialist state economy is owned by the whole people, it was created by the power of the state power to confiscate and transform the old state economy (China’s bureaucratic capital), part of the private economy and a new economic component created with the help of state power, directly serving the government’s politics.
(1) Socialist state-owned enterprises are directly linked to the people’s state power.
Even after the separation of government and enterprise during the Reform and Opening period (which belongs to the management system), the state still appoints agents of asset owners and appoints and removes key cadres to implement the state’s basic policies, sometimes sacrificing some interests when the state needs them.
(2) The state relies first and foremost on the working class, and the backbone of the industrial working class mainly lives in state-owned enterprises, which are the base of the class that the state relies on.
(3) The main economic foundation of a socialist state is public ownership, and the backbone of public ownership is the state-owned economy. Therefore, its proportion in the national economy is much larger than that of state ownership in capitalist countries, and it controls the economic lifeline of the entire country. This determines the nature of the entire socialist system and its political regime. If state-owned enterprises are weakened or abolished, the people’s regime will become a tree without roots and water without a source.
(4) State-owned enterprises are directly led by the Communist Party.
From a basic level, the party commands state-owned enterprises just as the party commands the gun. Generally speaking, the people’s democratic dictatorship has two most powerful pillars: the people’s army commanded by the Party in the military and the state-owned economy that controls the lifeline of the national economy in the economy. Although the latter and the former adopt different leadership and operation methods in different fields (commercial state-owned enterprises also have dual characteristics, that is, the national economic force operated in the form of enterprises), neither is dispensable. Moreover, national defense is mainly supported by the state-owned economy.
(5) In the international arena, an important part of the socialist economic strength and economic strategy is China’s state-owned economy. It is a competitor to international capital in the world market, a major economic carrier for winning the people of all countries, and a display of the strength and image of the socialist state on the international stage.
In 2014 , China accounted for 96 of the world’s top 500 companies , of which state-owned enterprises accounted for 91.6%. The most important thing that can compete with large Western multinational corporations is state-owned enterprises, which are the backbone of safeguarding the economic security of socialist China.
(6) The existence and strength of state-owned enterprises reflect the essence of socialism, that is, the ultimate realization of common prosperity. State-owned enterprises are owned by the whole people. The basic distribution method is distribution according to work. State-owned enterprises bear social responsibilities to the greatest extent possible. They are the foundation of equality and justice and the leading force in achieving common prosperity. At the same time, they play the role of “universal illuminator” as mentioned by Marx, serve as a model and guide for other economic components (mainly private enterprises), and guiding the general trend of the rich leading the common prosperity. It can be said that without state-owned enterprises, there will be no common prosperity, and the essence of socialism will definitely change. This is the biggest politics.
The analysis of the particularities of the above three levels can reveal the political function of socialist state-owned enterprises. Here, we should deepen our understanding of Engels’ important assertion: the state power “is also an economic force” . ⑤
The state power can not only maintain and control the economic foundation, but also directly create a unique economic foundation; conversely, this economic foundation directly supports the state power. There is no doubt that it is both the material foundation of the socialist system with Chinese characteristics and the political foundation of this system. These two foundations are inseparable. If this solid foundation is removed, socialism will have no place to stand. Therefore, it is no surprise that the focus of the debate between Marxism and neoliberalism is on state-owned enterprises.
Please Download for Full Text