German Democratic Socialists Try To Answer the Difficult Question:
How Should We position Ourselves about China?
German Democratic Socialists Say: The World Including China is Moving Towards Authoritarian Capitalism
Democratic socialist leaders of the Left Party in Germany, Daniel Fuchs, Ingar Solty and Jan Turowski from Left Party in Germany have discussed the position towards China
December 2020
In the debate about the relationship with China, two positions on the left are seemingly irreconcilable.
One sees a “socialism with Chinese characteristics”, the other an authoritarian state capitalism.
How can a more differentiated perspective on the Chinese model be gained?
What is so urgent about a position on China from a left perspective?
INGAR: In my view, there are three main reasons for this: First, China is increasingly the focus of Western aggression.
In fact, the conflict between the USA and China will configure the 21st century and is already doing so.
Second, the attacks are aimed in particular at pushing back a certain form of state interventionism.
China’s economic policy is branded by the USA and the EU as “illegal state subsidies” and as a “systemic rival”.
And thirdly: While the EU is primarily relying on “technological optimism” and neoliberal market solutions in the fight against the impending climate catastrophe, even among the left-wing middle classes, China is seen as superior to the West in many respects on ecology issue.
The prerequisite for China’s leading role in the field of high-speed trains, e-mobility (especially in local public transport) or renewable energies, for its quite contradictory path towards “eco-civilization”, is the use of its enormous state resources.
The West is therefore at a crossroads.
West must consider whether it wants to fight China’s path or imitate it.
The confrontation with China as a power in the international system is of crucial strategic importance, not least for the left’s search for ways out of the omnipresent democracy crisis, social crisis and climate crisis.
JAN: I fully agree: the left absolutely has to clarify its relationship with China.
China has moved to the center of the global economy in recent decades.
We are therefore currently in a situation of historical upheaval.
Spatial hierarchies and dependency relationships between the individual zones of the capitalist world system and, consequently, power resources are being fundamentally newly reorganized.
Of course, this is highly conflictual and contested question, as it is the first time in generations that the global economic, military and political dominance of the West is being seriously challenged.
It is not helpful to decide the relationship with China primarily through left-wing moralism.
Of course, there are a number of crises and social injustices, exploitation, ecological destruction, etc. in China.
But the left must determine its relationship with China analytically and understand contradictions against the background of world history and the power relations of our time.
The question is what development options current socialist states have in a capitalist world market.
On the one hand, China’s self-embedding in capitalist globalization enabled the country to skip certain stages of modernization, because China did not have to produce technological and social innovations itself.
1.3 billion people were lifted out of extreme poverty into living conditions that, at least for several hundred million of them, created conditions that are quite close to those in the West.
On the other hand, the global capitalist development logic in China created new contradictions that replaced those of the isolated construction of socialism in China before 1978.
Question: So is “left moralism” the main problem in the discussion?
DANIEL: It is too easy to discredit our left-wing criticism of the Chinese development model and the critique of power and dominance relations in China as moralism.
In Germany, there are numerous scientists and activist groups that look at China’s development from a historical-materialist perspective.
Understanding China in 2020 as an authoritarian form of state capitalism has nothing to do with moralism, but means evaluating the historical prerequisites, the institutional and ideological legacy of the Mao era and the constraints mediated by the capitalist world market.
The discussion on the question “Is China socialist or capitalist or is China something in between socialism and capitalism?” must be conducted historically and empirically. Otherwise, experience shows that such debates say more about the political socialization of those involved instead of looking into real object of investigation.
Two tasks seem essential to me: First, a historical analysis of the transformation of production and class relations and their inscription in politics, which I think China’s political system is monolithic Chinese party-state; it is necessary to anaylze these 3 fields.
How do transnational capital interests show themselves with those of different capital fractions and parts of the Chinese bureaucracy?
How have power relations and techniques of rule changed under Xi?
We must go beyond “pro state interventionism” or “pro strategic development, and pro controlled development” and ask ourselves:
What concrete role do interventions play in the face of the far-reaching privatization of industry, health care, and housing in the 1990s?
What are the objectives of different levels and fractions within the state and party in the individual policy areas, which interests are taken into account and which are not taken into account?
Secondly, we must connect more closely with the diverse social struggles in China.
This requires spaces for international exchange.
Our relations will also show that repression has increased massively under Xi Jinping and that critical research has also been enormously restricted – in the last two years alone, hundreds of workers, activists, and students have been taken into police custody.
Only and only through exchange with regime critical forces in China can we develop a spirit of solidarity that cannot be torn apart by the big power blocs of China, the USA and the EU.
JAN: I am not trying to dismiss all critical assessments about China with a blanket accusation of moralism.
However, the left-wing debate is often too strongly influenced by a right-wrong grid that makes it difficult to determine a strategic position in a power-hungry world system full of contradictions.
The discussion “Is China socialist or capitalist or something in between?” actually often ends in a dead end. China’s development model is in many ways are in contradiction with common ideas.
It is true that the party and the party state are not monolithic at all, It is true that different interests are vying for power at various levels, that Chinese and international capital factions are trying to secure resources, and that diverse social struggles are being fought in China. China’s economic development since the “reform and opening policy” has therefore not been a straight line from “the state to more and more market”, but a zigzag course with different phases of experiments and corrections, a back and forth, because different interests and groups in China have always argued about the direction of economic development .
While the dismantling of the old command economy and the abandonment of the “Danwei” social system in the 1990s under President Jiang Zemin had a clear neoliberal orientation, in the 2000s under the leadership of Hu Jintao the aim was to rein in the extreme excesses of privatization and liberalization by expanding national social systems and labor market regulations.
Danwei Work units were the principal method of implementing party’s welfare and employment policy. The work unit provided lifetime employment and extensive socioeconomic welfare — “a significant feature of socialism and a historic right won through the Chinese Revolution.” The role of the danwei was modelled in part from the Soviet kombinat.
Even today, factions are fighting for more privatization, while others want to strengthen state-owned companies and municipal collectives. There are even interest groups in the party who are happy about the current trade against China war because such a trade war seems to make it possible to open up and liberalize the financial system, something that they would never have been able to achieve politically on their own. In short: In China’s development model we find capitalist and socialist elements and and interest differences, and whether China will develop more towards socialism or capitalism is still an open question.
What is left of a socialist economic order in China today?
INGAR: It seems to me that the most important bulwarks of a socialist economic order in China are, firstly, collective land ownership and, secondly, the fact that the financial system has not been liberalized, meaning that the Chinese state has retained control over monetary and interest rate policy.
It is true that Deng Xiaoping’s “opening policy” has created capitalist class relations that are softened by the expansion of the social welfare state, but in which exploitation still takes place and effects of exploitation has been the increase in wealth inequality over a longer period of time.
Deng Xiaoping said at the time that it is not a problem “if some people get rich earlier than others.”
This some people get rich earlier than others creates class interests that are effective both in the provinces open to the world market and in the Chinese Communist Party.
I cannot judge whether the fight against corruption under Xi Jinping and the wave of arrests in the Chinese Communist Party can overcome this contradiction or whether it will exacerbate this contradiction.
Question: Are there also similarities to the state capitalist models we know from Singapore, Korea, Taiwan or Japan?
JAN: It is undisputed that China showed a great similarity to these development models in certain phases of history.
But to file the Chinese model under “state capitalism” is too simplistic because it overlooks the special characteristics and very specific transformation potential of this China model. Capitalism is characterized by profit-oriented commodity production based on private ownership of the means of production and spontaneous market relations. It is only the rate of profit that determines the next investment cycle and this profit seeking periodically generates economic crises. In China’s economic model, however, public ownership of the means of production and land planning and state planning continue to dominate.
State-owned enterprises control the “commanding Heights” of the economy and private enterprises’ profits and markets are econpmically regulated by overarching state planning. Of course, social inequality has grown, although it has been declining for the last ten years.
INGAR: I would like to combine the look at China’s internal situation with a stronger focus on the current world order, because this is about questions of the survival of human civilization as a whole – in two respects.
The first is the question of peace.
Historically, the rise of a new economic power – Germany – which challenged the hegemony of Anglo-America ended in two world wars with around 100 million deaths.
After 1945, the USA then integrated the western occupation zones, Japan and South Korea into its “empire”.
The USA succeeded in this integration by its military, economic, financial and political power.
The question today is: can China’s rise take place peacefully? How will the USA react?
China has gigantic currency reserves and cannot be subjected to the rules of the western-dominated world economic order in the usual way via IMF or World Bank structural adjustment programs.
In contrast to Japan, South Korea or the Federal Republic of Germany, China is a large country.
It is also a sovereign state that sees itself an important country that was marginalized by Western colonialism for 250 years.
Its military dominance is thus the last or at least the most important power resource of the USA to keep China in a subordinate position in the hierarchy of the international division of labor.
And USA has long been using this military resource with its military bilateralism in the Western Pacific, the modernization of their nuclear weapons arsenals and their stationing in the South China Sea as a threat.
US generals like Ben Hodges assume that the US will wage a major war against China in the next 15 years.
There is therefore a real danger of war.
The second major challenge is the deepening climate catastrophe.
It will not be possible to solve it within the framework of capitalism.
Green growth is a chimera. (China-America)
The past has already shown that everything that has been achieved in terms of reducing emissions through technological innovation has not only been neutralized but also amplified by the system’s need for growth.
If I quote David Harvey: The problem is not just the growth rate, but the mass of growth.
It doubles roughly every quarter of a century.
On a finite planet, endless growth means suicide.
But the problem is also that we leave social control to the market.
In the global car industry there is a structural overproduction of around 30 percent.
In 2007 there was a global financial crisis, and the western car industries were saved with scrappage bonuses.
The solution to this problem has been postponed until the future. If it were up to the German car industry, it would have to expand, and above all automobile industry will to the country with the largest middle class, i.e. China.
If it were up to the western car industry, they would sell the “American way of life” to China.
I think we can all agree that this would mean that we would have to quickly find a habitable planet and hope that Elon Musk would take us there when space travel is dominated by billionaires. Market-liberal societies are in a very poor position for the future.
China, on the other hand, is ahead of the West in many ways in the fight against climate change.
The point is: regardless of whether you would like to live in China yourself or not, the state interventionism in China enables transport transition projects that cannot currently be realized in the West due to the market situation. There is also too much private transport in China, but at the same time, with the new Chinese Maglev trains that travel at 650 kilometers per hour, it will soon be more time-efficient to take the train between Beijing and Shanghai than to fly, while here many people continue to travel from Berlin to Stuttgart by plane. The same applies to investments in wind power and solar energy or the switch to electrically powered local public transport.
421,000 of the world’s 425,000 electric buses are in use in China, only 300 electric buses in the USA.
All of these achievments in China is not without contradictions.
China also continues to rely on nuclear and coal power, but anyone in the West who is serious about fighting climate change must also acquire this ability of long-term social planning we see in China. This does not mean we shoud adopt the Chinese system.
What is at stake is recognizing the emerging superpower China as an actor in the fight against climate change and, against the prevailing trend towards a new Cold War, We should strive for a new multilateralism that returns to “peaceful coexistence” and for a new multilateralism which is based on the fundamental assumption that there are different ways of dealing with common problems and challenges such as the climate crisis, social participation, etc. On the other hand, anyone who carelessly assigns China to the camp of “global authoritarianism” is implicitly saying that the Chinese state should not be a negotiating partner. This wrong attitude contains the attitude of Western moral superiority: here we have democracy in the West, there is authoritarianism in China, here the good guys, there the bad guys.
JAN: State interventionism in China is part of a much larger strategic development understanding that sets long-term goals, creates incentive systems through macro-planning, and has developed mechanisms for political and social learning and experimentation. Despite all the differeences, there is a basic consensus in China regarding the need for controlled economic development.
It is also the central prerequisite for a socialist-ecological transformation. The West also needs such a basic consensus. But since the neoliberal turn in 1980s at the latest, such a consensus has broken down and development is the result of conflicting interests. This is what has continually prevented ecological restructuring since the 1970s and 1980s.
DANIEL: You advocate that the level of state intervention and control in China shows a qualitative difference to forms of (state) capitalist development. But, I think this is wrong and misleading. It must be acknowledged that since the 1990s at the latest, capitalist production and class relations have prevailed in China and the character of the party and the state have also changed significantly.
Of course, the development towards authoritarian state capitalism was by no means foreseeable in China at the end of the 1970s. The process of “reform and opening up” was not straightforward and some people resisted to it contested within the party. But in China the structural capitalist transformation cannot be denied. Over the past 40 years, China has undergone a massive process of commodification of labor; private companies generate the largest share of the gross domestic product and have the largest share of employees.
It is true that in China there is still a relatively high proportion of state-owned companies compared to the West, but state-owned companies were also converted into corporations from the mid-1990s onwards, the aim of which is to appropriate surplus value under profit-driven competitive conditions in China and on the world market.
The reform of the state owned sector has produced a national capitalist class and ensured the inscription of capital interests in the state and the party.
In the Chinese state’s recent socio-ecological reform efforts, in addition to the successes in renewable energies and the ‘transportation transition’, it must also be taken into account that the “American way of life” or the “imperial way of life”, at least as far as mobility is concerned, has certainly prevailed in parts of the middle class.
This has happened with the help of state support for the automobile industry and the expansion of roads and highways. I agree that collective land ownership is an important legacy of the Mao era and important for China’s variant of capitalism. But there is a tendency towards indirect commodification through the trade in land use rights, the state-supported increase in large size agricultural corporations, thus we see the transformation of rural class relations. With regard to the high level of state intervention and control, it is also important to see this:
Everywhere in the history a strong regulatory and financial role of the state has been used in successful processes of catching-up capitalist modernization. In my opinion, the difference between China and other capitalist states is more quantitative not qualitative. I think It is right to emphasize the danger that comes with the term “authoritarian state capitalism.” We must not fall into the trap of “democratic West” versus “authoritarian East.” But not to fall into this trap is not easy, given the promotion and dominance of such images in large parts of the big media and press landscape. Most recently we see the reports from Hong Kong, for example. But taking such a position should not deter us from criticizing the increasingly authoritarian development in China, which is directed against activists, scientists and other parts of civil society. I see rhese events in the context of the global trend towards authoritarian capitalism.
The most important task for us is to build on the social struggles and existing left-wing forces in China.
Only if we deepen the exchange with them and mutual understanding, and relate the struggles and conflicts here and there to one another, is it possible for us to have a stance that opposes the authoritarian and militaristic developments in a critical and solidarity-based manner.