China’s Realities from the Aspect of Social Formation

Marxist theory of Social Formation and Development Stages in a Given Social Formation

November 2022

Authors Prof. Xie Fusheng and Doctoral Candidate Kuang from Xiaolu Renmin University of China and Zhao Min, Lecturer, School of Economics, Nankai University.  Prof. Xie Fusheng is Deputy Director of the National Research Center for the Political Economy of Socialism with Chinese Characteristics, Renmin University of China; Vice Dean of the School of Economics, Renmin University of China

The development of human economic social formations is a natural historical process. Marxist theory of social formations provides two ways to classify social formations. (See Das Capital)

The first way is the “three major social formations theory,” which divides the grand historical era of social formations into three major forms based on the state of human development: “human dependence,” “material dependence,” (Capitalism) and social formation wherein “the free and all-round development of human beings” is realized.(Communism)

The second way is the “five social formations theory,” which, based on the specific nature of the mode of production, “distinguishes the social structure into different economic periods through the specific ways and methods of combining laborers and means of production.” Marx wrote that “the Asiatic, ancient Greek and Roman, feudal, and modern bourgeois modes of production can be seen as several epochs in the evolution of economic social formations.” Engels (2018), Lenin (2020, pp. 24-40), and Stalin (1979, pp. 424-454) argued that human history develops in the sequence of primitive clan society (primitive society), ancient slave society (slave society), medieval serf society (feudal society), modern wage labor society (capitalist society), and the future communist society (socialist society). See Short Party History of the CPSU ultimately edited by Stalin (1938)

Later, Marxists including Lenin divided capitalist social formations into several stages of development based on different criteria. For example, Lenin divided the capitalist mode of production into three stages: free competition, private monopoly, and state monopoly; the regulatory school in France, based on the different characteristics of production and consumption in different historical stages of the capitalist accumulation system, divided it into extensive accumulation systems, intensive accumulation systems without mass consumption, intensive accumulation systems accompanied by mass consumption, and accumulation systems with large-scale personalized consumption; the social structure of accumulation school, based on whether the social structure of American accumulation has regulatory or liberal characteristics, divided it into regulatory SSA in the Progressive Era, liberal SSA after World War I, regulatory SSA after World War II, and the current neoliberal SSA; the Uno school of Japanese Marxist economics (Makoto Itoh) based on the different dominant use-value production, and thus the different industrial technologies and accumulation models, divided capitalism into mercantilist, liberal, imperialist, and consumerist stages (See. Xie Fusheng, 2017).

However, Marxist theories of social formations and stages of development cannot be directly or simply applied to determine the historical position of underdeveloped countries. 

Classical Marxist theories of social formations often overlook the theoretical connections between the “three major social formations” and the “five major social formations” theories, many interpretations of the classical Marxist theories of social formations see the development of human economic and social formations as a “single-line” model, thus assuming that the historical development model of Western Europe is universal and does not conform to Marx’s true thought (See. Melotti, 1981, p. 21).

“The development of human economic and social formations possesses a “monistic multi-line” characteristic, combining historical unity with spatial diversity” (Melotti, 1981), meaning that social formations develop forward in a time span to form the “three major social formations,” while different social formations coexist in space to form the “five major social formations.”

The development of social formations is geographically spatially uneven; some countries develop into capitalist societies, while others remain feudal societies. Capitalism, as an expanding socio-economic order, “exploits the markets of the whole world…making production and consumption in all countries global.” Marx, using British colonization of India as a case study, explained that the global expansion of the capitalist mode of production “destroyed the local Indian commune, destroyed the local industry, and leveled everything great and prominent in the local society,” and “destroyed the entire structure of Indian society,” thus proposing a historical call for a “great social revolution.” (Marx)

However, Marx did not further analyze how the expansion of the capitalist mode of production altered the nature of the social formations in the backward countries. Trotsky, drawing on the experience of the Russian Revolution, pointed out that “the unified process of the development of world capitalism…Trotsky wrote: “world capitalism swallows up all the countries it encounters along its path, and combines with local conditions and the general laws of capitalism,” connecting with other backward social formations. From the perspective of the development of world capitalism, this is a geographical combination of advanced capitalist social formations and backward social formations, creating a mixed social structure, “forming a social hybrid.” 

Due to the invasion of imperialist powers, modern China was in a mixed social formation. Determining the nature of modern Chinese society became a primary problem that the Chinese Communist Party needed to solve during the revolutionary war period. At the same time, Marxist theory of developmental stages did not provide a unified theoretical standard for judging different stages of development of the same social formation. After China transitioned from a “mixed social formation” to a socialist society, understanding the social development stage of backward socialist countries became another major question that the Chinese Communist Party needed to answer.

The Formation of the Theory of Historical Position with Chinese Characteristics: The Analysis Method of the Basic and Principal Contradictions of the Communist Party of China and Its Development

Following the Opium War of 1840, with the invasion of imperialist powers and the influx of foreign capital, the nature of Chinese society underwent profound changes. Understanding the nature of China’s social formation became the primary question that needed to be answered to guide the Chinese revolution. Some Chinese intellectuals developed Trotsky’s views, arguing that imperialist invasion had broken down the feudal system, conquered feudal forces, and propelled China into capitalist society, leading to erroneous claims such as “we should reject the revolutionary task of anti-imperialism and anti-feudalism in China” (Xie Benshu, 1987; Wu Huaiyou & Liu Yan, 2013).

Other Chinese intellectuals, through social surveys and analysis of the nature of the rural economy, correctly recognized that China was a semi-colonial and semi-feudal society (Qu Qiubai, 1985; Zhang Wentian, 1985), but lacked a solid theory for judging the nature of this social formation.

The fundamental contradiction and the Principal contradiction

The publication of Mao Zedong’s “On Contradiction” in 1937 marked the establishment of the Chinese Communist Party’s method of analyzing fundamental and principal contradictions, providing a theoretical basis for analyzing the nature of Chinese social formations and forming the theoretical foundation of the theory of historical orientation with Chinese characteristics. Mao Zedong pointed out that “contradictions exist in the process of the development of all things,” and that “a large thing, in its development process, contains many contradictions.” The fundamental contradiction runs through the entire process of development, determining the fundamental nature of the process, and “will not be eliminated until the end of the process.” When the fundamental contradiction is resolved, the entire process of development ends, and the fundamental nature of the thing undergoes a fundamental change. The fundamental contradiction “takes the form of gradual intensification at each stage of development… the process then shows stages. If people do not pay attention to the stages in the process of development, they cannot properly handle the contradictions of things.”

Many contradictions exist in the development process of the same thing, with the principal contradiction playing a leading and decisive role; “its existence and development determine or influence the existence and development of other contradictions.”

The principal contradiction exists only in the development process of the fundamental contradiction; changes in the principal contradiction distinguish different stages of development, and the emergence, development, and changes of the principal contradiction are determined and influenced by the fundamental contradiction. The fundamental contradictions of society can only be gradually resolved through the resolution of the principal contradictions at each stage.

The degree to which the principal contradiction and its principal aspect are resolved will have a certain impact on the development of the fundamental contradictions of society. The development of contradictions is uneven, and there must be principal and secondary aspects. The principal aspect of a contradiction is the aspect that plays a leading role and determines the nature of things. “The principal and secondary aspects of a contradiction transform into each other, and the nature of things changes accordingly.” “When the new aspect gains dominance over the old aspect, the nature of the old thing changes into the nature of the new thing.” Based on the analysis of fundamental and principal contradictions, using fundamental contradictions to judge the nature of social formations and principal contradictions to judge the stage of social development, a preliminary theory of historical orientation with Chinese characteristics has been formed.

The Chinese Communists, represented by Mao Zedong, correctly understood the nature of modern Chinese society and the tasks of the revolution by applying the method of analyzing fundamental contradictions. However, they failed to accurately grasp the principal contradiction after China entered socialist society in 1956. 

The intrusion of foreign capitalism, while “destroying the foundation of China’s self-sufficient natural economy, destroying urban handicrafts and peasant household handicrafts… and promoting the development of commodity economy in urban and rural areas,” also “colluded with Chinese feudal forces to suppress the development of Chinese capitalism” in order to “turn China into their semi-colony and colony,” manipulating China’s finance, economy, military, and politics. Therefore, the fundamental contradiction of modern Chinese society was “the contradiction between imperialism and the Chinese nation, and the contradiction between feudalism and the masses of the people,” and the nature of the social formation was a semi-colonial and semi-feudal society.

“The struggle of these contradictions and their intensification inevitably led to an increasingly developing revolutionary movement,” and the revolution had to proceed in two steps. The first step was the New Democratic Revolution, aimed at changing the semi-colonial and semi-feudal social formation of China and overthrowing the three mountains of imperialism, feudalism, and bureaucratic capitalism.

The second step would be to advance the revolution forward and establish a socialist society. Mao Zedong and other Chinese Communists judged that the Chinese revolution at that time was taking its first steps, and based on this, they formulated the basic program of New Democracy, leading the Chinese New Democratic Revolution to victory, overthrowing the rule of imperialism and feudalism, and establishing the People’s Republic of China.

After the founding of the PRC, with the establishment of the basic level of the socialist system in 1956, how to judge the stage of development of Chinese socialism based on the principal contradiction in society became the primary issue.

Although the resolution of the Eighth National Congress of the Communist Party of China (1956) correctly recognized the principal contradiction in society at that time, but later the Third Plenum of the Eighth National Congress of the CPC (1957) failed to adhere to this correct understanding, mistakenly took “the struggle between the proletariat and the bourgeoisie, and the struggle between the socialist road and the capitalist road” as the principal contradiction in Chinese society.

This confusion between the basic contradiction and the principal contradiction led the Communist Party of China to fail to follow the laws of socio-economic development in subsequent economic construction, attempting to transcend the stage of development. This was the root cause of the errors in the Great Leap Forward, the People’s Commune, and even the Cultural Revolution, which put forward the slogan of “continuing the revolution under the dictatorship of the proletariat.”

After the reform and opening up, the Chinese Communists, represented by Deng Xiaoping Theory, correctly distinguished between the fundamental contradiction and the principal contradiction in Chinese society, corrected the error of exceeding the stage of development, proposed the concept of the primary stage of socialism, and developed the theory of historical orientation with Chinese characteristics from three aspects.

First, Deng Xiaoping Theory clarified that the development of socialist society is phased. In terms of social development, “socialism itself is the primary stage of communism, and China is in the primary stage of socialism, which is an underdeveloped stage.”

 Second, Deng Xiaoping Theory distinguished between the fundamental contradiction and the principal contradiction in the primary stage of socialism. 

Deng Xiaoping pointed out that “consolidating and developing the socialist system will require a very long historical period, requiring the unremitting efforts of several generations, even dozens of generations,” indicating that the primary stage of socialism will last for a long time. Therefore, the primary stage of socialism also has fundamental and principal contradictions, while “class struggle will continue to exist within a certain scope for a long time, but it is no longer the principal contradiction.”

Third, Deng Xiaoping Theory clarified the specific content of the principal contradiction in the primary stage of socialism. The fundamental purpose of the Chinese Communist Party to serve the people wholeheartedly determines that in the primary stage of socialism, the principal contradiction is subordinate to the fundamental contradiction: ” The principal contradiction in our society is still one between the ever-growing material and cultural needs of the people and the backwardness of social production. Our productive forces, science, technology and education are still relatively backward, so there is still a long way to go before we achieve industrialization and modernization”. Jiang Zemin  

Since the 18th National Congress of the Communist Party of China (2012), the Chinese Communists, represented by Xi Jinping, have further clarified that the principal contradiction in the primary stage of socialism is dynamic and evolving. Therefore, the primary stage of socialism also has stages”  and Xi Jinping proposed the concept of “a new development stage”, thus he perfected the historical orientation theory with Chinese characteristics. 

The 18th National Congress said: “therefore, adjusting the relations of production and improving the superstructure need to continue accordingly… The development of practice is endless, the liberation of thought is endless, and reform and opening up are also endless; reform and opening up is an ongoing process, not a completed one.”

The transformation of the principal contradiction “will not change our judgment of the historical stage of socialism in our country; the basic national condition that our country is still in and will remain in the primary stage of socialism for a long time has not changed.” “The primary stage of socialism is not a static, unchanging, stagnant stage, nor is it a stage that can be spontaneously, passively, and naturally crossed without much effort. Rather, it is a dynamic, proactive process, always brimming with vitality; it is a process of quantitative accumulation and development that is progressively advancing step by step, constantly developing and progressing, and increasingly approaching a qualitative leap.” The new development stage “is one stage within the primary stage of socialism.”  (Xi Jinping)

Consequently, the 20^th Congress of the CPC said: “principal contradiction” facing Chinese society, a maxim that has stood for 36 years, has changed. It is a shift that “affects the whole landscape.” “principal contradiction we now face is the contradiction between unbalanced and inadequate development and the people’s ever-growing needs for a better life..” Xi Jinping

Application of the theory of historical positioning with Chinese characteristics: The historical positioning of China’s social development since the founding of the People’s Republic of China

Following the victory of the New Democratic Revolution, China successively experienced the period of New Democratic economic construction and national economic recovery (1949-1952) as well as the transition period of socialist transformation of property relations (1953-1956). 

Before and after the founding of the People’s Republic, Mao Zedong and other central leaders correctly recognized that the fundamental contradiction in Chinese society remained the contradiction between the old-era relations of production and the development of productive forces. They proposed that “the revolutionary task of New Democracy… domestically, is to eliminate the exploitation and oppression of the landlord class and the China’s bureaucratic monopoly bourgeoisie (big bourgeoisie), change the comprador feudal relations of production, and liberate the bound productive forces,” thus establishing a New Democratic economic system. During this period, it was necessary to recognize the dual nature of the national bourgeoisie, fully utilize its positive role, and rapidly restore the national economy. With significant development of productive forces in China, “after the great prosperity of the national economy and culture, and after all conditions were met… we can calmly and properly approach the new socialist era.” Between 1949 and 1952, the Communist Party of China led the people to complete land reform, completely eliminating feudal land ownership. Under the leadership of the state-owned economy with socialist characteristics, various economic components, including semi-socialist cooperative economy, private capitalist economy, individual economy, and state capitalist economy with cooperation between state and private capital, cooperated and each got what they deserved. The proportion of industry in the economy increased, and the state-owned economy rose. By the end of 1952, a historic victory was achieved in restoring the national economy.

In September 1952, based on the favorable situation that “the world peace and world’s democracy camp has been further consolidated and expanded” and that “various social reforms have been basically completed domestically…the proportion of socialist costs is increasing day by day, and the leading position of the state-owned economy is strengthening day by day,” as well as the increasingly obvious conflict of interest between capitalist industry and commerce and the national economy and people’s livelihood, and the objective requirements of “the socialist industrialization of the country,”

Mao Zedong proposed that “we should now begin to basically complete the transition to socialism within ten to fifteen years.” In June 1953, Mao Zedong criticized the three formulations of “establishing a new democratic social order,” “moving from new democracy to socialism,” and rejected the idea of “ensuring private property,” clarifying that “the Party’s general line and general task during the transition period is to basically complete the national industrialization and the socialist transformation of agriculture, handicrafts, and capitalist industry and commerce within ten to fifteen years or more,” thus formally initiating the transition period of socialist transformation. 

During the transition period, the fundamental contradiction in Chinese society transformed into the contradiction between the proletariat and the bourgeoisie. Consequently, the nature of the revolution underwent a fundamental change. 

The revolutionary task was “to transform bourgeois ownership, to transform the small-scale private ownership which is the root of capitalism,” and “to make socialist ownership of the means of production the sole economic foundation of our country and society.”

Socialist Transformation 1953-1956

Based on China’s specific circumstances, the Communist Party of China creatively employed “the form of state capitalism and the policy of peaceful redemption to transform capitalist industry and commerce, and to transform individual agriculture and individual handicrafts through a gradual transition. In the process of socialist transformation, social productive forces continued to develop, and the living standards of the broad masses of people improved.” In 1956, the Central Committee of the Communist Party of China announced that “the socialist transformation had achieved a decisive victory, which indicates that the contradiction between the proletariat and the bourgeoisie in our country has been basically resolved, the history of the class exploitation system that has lasted for thousands of years has basically ended, and the socialist social system has been basically established in our country,” marking China’s entry into socialist society.

The socialism stage in China

After entering the socialist stage, the Eighth National Congress of the Communist Party of China in 1956 correctly recognized the principal contradiction in society at that time, declaring that China had entered the period of socialist economic construction. The principal contradiction was described as “the contradiction between the people’s demand for building an advanced industrial country and the reality of a backward agricultural country; the contradiction between the people’s need for rapid economic and cultural development and the current inability of the economy and culture to meet those needs. The essence of this contradiction, given the establishment of our socialist system, is the contradiction between the advanced socialist system and the backward social productive forces.” However, the Communist Party of China later failed to uphold this correct understanding, leading to errors in its exploration of socialist construction.

After the reform and opening up, (1978) the Communist Party of China promptly reflected on the historical position of Chinese society and, by accurately grasping the fundamental and principal contradictions, determined that China was in the primary stage of socialism. Deng Xiaoping pointed out that the fundamental contradictions of the primary stage of socialism “are better described in the way Comrade Mao Zedong put it in his article ‘On the Correct Handling of Contradictions Among the People’… ‘In socialist society, the fundamental contradictions remain the contradiction between the relations of production and the productive forces, and the contradiction between the superstructure and the economic base.’… Of course, pointing out these fundamental contradictions does not completely solve the problem; further in-depth and specific research is needed.” The primary stage of socialism ” had emerged from a semi-colonial and semi-feudal society” and the primary stage of socialism ” is still in a stage of “material dependence.”

The primary stage of socialism is “a specific stage that China must inevitably go through in building socialism under conditions of backward productive forces and an underdeveloped commodity economy… It is different from the transitional period before the socialist economic base was established, and also different from the stage after socialist modernization has been achieved.”

Under the premise of upholding the leadership of the Party and the socialist system, and following the laws of socio-economic development, the economic system must be reformed to “liberate and develop productive forces, eliminate exploitation, eliminate polarization, and ultimately achieve common prosperity,” (Deng Xiaoping) creating conditions for the free and all-round development of people. The primary stage of socialism faces two paths: the old, rigid path of focusing solely on socialism without considering the primary stage, and the wrong path of changing the red flag and direction by focusing solely on the market economy without considering socialism. Both paths would alter the nature of our society, thus constituting the fundamental contradiction of the primary stage of socialism (Xie Fusheng, 2017).

The principal contradiction in the primary stage of socialism is “the main problem or central task that the whole Party and the people of the whole country must solve.”

The 13th National Congress of the Communist Party of China (1987) stated that “the principal contradiction we face at the present stage is the contradiction between the people’s ever-growing material and cultural needs and the backward social production.” Solving the principal contradiction is the key to resolving other contradictions. “To solve the principal contradiction at the present stage, we must vigorously develop the commodity economy, increase labor productivity, gradually realize the modernization of industry, agriculture, national defense, and science and technology, and for this purpose, reform the parts of the relations of production and the superstructure that are incompatible with the development of productive forces.” (1987)

Since the 18th National Congress of the Communist Party of China (2012), with the transformation of the principal contradiction, “socialism with Chinese characteristics has entered a new era.”

The “14th Five-Year Plan period” was the first five years after China has achieved its first centenary goal of building a moderately prosperous society in all respects and is a crucial period for embarking on a new journey of building a modern socialist country in all respects and marching toward the second centenary goal.

China enters a new stage of development 

20^th Congress of the CPC (2022) said: the basic national condition of China’s primary stage of socialism has not changed, and the fundamental nature of the basic contradictions in society has not changed, but “the principal contradiction in society has transformed into the contradiction between the people’s ever-growing needs for a better life and unbalanced and inadequate development.” Under this new stage of development, China’s task is to comprehensively build a modern socialist country with Chinese characteristics and in accordance with China’s realities, “a modernization with a huge population, a modernization of common prosperity for all the people, a modernization of coordinated material and spiritual civilization, a modernization of harmonious coexistence between humanity and nature, and a modernization based on the path of peaceful development.”

From Industrialization to Modernization: On the Construction of Socialist Economy with Chinese Characteristics

Since the founding of the People’s Republic of China, based on the theory of historical context with Chinese characteristics, the Communist Party of China has focused on the main task of socialist economic construction, committed itself to resolving the principal contradictions under different historical contexts, and answered the question of sustained and effective economic development in backward countries that classical Marxist writers had not addressed in practice. CPC has created a socialist economic development model of “from nothing to something, from something to excellence, and from excellence to refinement”, and has respectively formed the theories of building an independent industrial system, the socialist market economy, and high-quality development, which together constitute the theory of socialist economic construction with Chinese characteristics.

The theoretical dilemmas of socialist economic construction in underdeveloped countries and China’s breakthrough

Marx and Engels revealed the laws of economic movement in capitalist society and proposed that socialism and communism were inevitable trends. However, due to historical and practical limitations, Marx and Engels did not, and could not, delve into how to build a socialist economy and ensure its sustained and effective development (Jian Xinhua & Nie Changfei, 2021).

Marx and Engels’ initial conception was that, based on the great development of productive forces in a developed and civilized capitalist society, “the proletariat will, through its political rule, step by step seize all the capital of the bourgeoisie, concentrate all the instruments of production in the hands of the state, that is, the proletariat organized as the ruling class, and increase the total productive forces as quickly as possible.” 

However, for backward countries like China, where socialist society emerged from a semi-colonial and semi-feudal society characterized by a small-scale peasant economy, and had not experienced the great development of capitalist society and its productive forces, how could socialist economic construction be carried out on the basis of a backward agricultural country? 

Although Marx proposed that socialist economic construction can be carried out on the basis of a backward agricultural country “by absorbing all the positive achievements of capitalism without going through the Caudine Fork of capitalism,” (Marx’s Letter to Russian Narodnik Vera Zasulich )   suggesting the possibility that backward socialist countries could build socialism by absorbing all beneficial achievements and experiences of advanced capitalist countries”, Marx did not answer the question of how to do it. Lenin also pointed out that no one has yet answered the question of “what specific practical difficulties the working class, which has seized power, will encounter when it sets out to transform all the richest accumulations of culture, knowledge and technology that are historically necessary for us from the tools of capitalism into the tools of socialism.” (Lenin) It is clearly not the right answer to replicate the history of capitalist countries plundering overseas and colonizing others to achieve economic and social development.

Soviet Union

Lenin and Stalin led the Soviet people in establishing the world’s first socialist state through practice, completing the industrialization of the socialist state, laying the material foundation for socialist economic construction, and developing the theory of socialist economic construction. Lenin and Stalin clearly stated that the prerequisite for economic development in a socialist state was industrialization; “the material foundation of socialism can only be large-scale machine industry that can simultaneously transform agriculture,” and “industry is the foundation, beginning, and end of socialism and socialist construction.” Furthermore, “the center and foundation of industrialization is the development of heavy industry (fuels, metals, etc.), ultimately, the development of the production of means of production, the development of domestic machine manufacturing.” Only in this way could “the independence of the country be maintained,” otherwise, “the Soviet system would perish.” How to build socialist industrialization on a foundation of poverty and backwardness?

Lenin and Stalin led the Soviet people down a path of “socialist accumulation through domestic thrift,” establishing an independent and powerful industrial system. However, with the failure of the transition to a market economy in the 1990s, the collapse of the Soviet Union, and the dramatic changes in Eastern Europe, the process of socialist economic construction in the Soviet Union came to an end, and the question of how to achieve sustainable socialist economic development remained unanswered.

As Deng Xiaoping said, “The cause of ‘transforming China into a modern socialist country’ is a new undertaking. Marx didn’t talk about it, our predecessors didn’t do it, and other socialist countries haven’t done it either. Therefore, there is no ready-made experience to learn from. We can only learn by doing and explore through practice.” 

China has answered the question of how a backward socialist country can sustainably and effectively develop its economy using the experience of more than 70 years of socialist economic construction since its founding.

Based on the changes in the principal contradiction under different historical circumstances, the core tasks of socialist economic construction have also changed, practicing a development path of “from nothing to something, from something to excellence, and from excellence to refinement,” thus forming the theory of socialist economic construction with Chinese characteristics. China’s development experience “has broadened the path for developing countries to achieve modernization, provided a brand-new choice for countries and nations in the world that both hope to accelerate development and maintain their independence, and contributed Chinese wisdom and Chinese solutions to solving human problems.”

“From Nothing to Something” – Laying the Foundation for Socialist Economic Construction: On the Construction of an Independent Industrial System

During the period of socialist revolution and construction, facing the contradiction between the need to build an advanced industrial country and the reality of a backward agricultural country, the Communist Party of China utilized the planned economy system, prioritized the development of heavy industry as its development strategy, used state and government intervention as its main means, relied on agriculture to support industry as its mechanism, and cooperated with the Soviet Union as its basic policy. China built an independent and relatively complete industrial system from scratch, laying the material foundation for socialist economic construction and forming the theory of building an independent industrial system.

A nation’s modernization is often driven by industrialization (Liu & Cai, 2015). Marx revealed that the significance of modern production progress lies in establishing a large-scale system of human cooperation, thereby overcoming the physiological limitations of individual labor and developing the productive forces of social labor. With technological evolution, the means of labor have undergone various transformations, ultimately culminating in automated machine systems. Only by “using machines to produce machines” can large-scale industry acquire a “technological foundation suited to itself” and become “self-reliant.”

Simultaneously, in developing economies like in the Global South, the distortions caused by market deficiencies accumulate through backward demand linkages, leading to upstream industrial sectors becoming the convergence point of these deficiencies and exhibiting the largest-scale distortion effect (Liu, 2019). This indicates that for developing countries to overcome the limitations of small-scale production and develop modern production, the prerequisite is to establish an industrial system, prioritizing the development of heavy industry under state and governmental intervention to lay the material foundation for economic development.

As early as the revolutionary period, the Chinese Communist Party recognized that “the main reason for China’s backwardness was the lack of modern industry,” and that “industrialization was essential to ensure China’s national independence.” With the founding of the People’s Republic of China (1949), China achieved national independence, national unity, and the liberation of the people, providing the fundamental social conditions for establishing an industrial system. In the early years of the PRC, the Chinese Communist Party formulated a strategy prioritizing the development of heavy industry, “focusing on the planned and step-by-step restoration and development of heavy industry, such as mining, steel, power, machinery manufacturing, electrical appliances, and major chemical industries, to establish the foundation for national industrialization. Simultaneously, China aimed to restore and increase the production of textiles and other light industries beneficial to the national economy and people’s livelihood to meet the daily consumption needs of the people… It was imperative to rapidly restore and gradually expand railways and highways, dredge rivers, promote water transport, improve and develop postal and telecommunications services, and plan and step-by-step construct various means of transportation and establish civil aviation.” However, the Chinese Communist Party discovered that developing heavy industry in a poor and backward agricultural country would face numerous difficulties. The construction of heavy industry required huge investments, had long construction periods, and slow capital returns. Furthermore, the war severely damaged China’s heavy industry; in 1949, its output was 70% lower than before the war (Dong Zhikai, 2009). Private capital “always seeks only special conditions for its own value appreciation (capital accumulation), while pushing common conditions onto the entire nation as national needs.” In the resource- and technology-scarce new China, industrialization could only be led by the state, “strengthening the people’s state apparatus… to consolidate national defense and protect the people’s interests,” and “solving the problem of national industrialization step by step.”

Under the guidance of the state and government, China gradually built an independent industrial system from scratch. Since industrialization is a process that cannot be replicated, establishing an industrial system required assistance from predecessors in technology and personnel. Before the founding of the People’s Republic of China, Mao Zedong envisioned economic cooperation between China and the United States—China exporting industrial raw materials and agricultural products to the United States in exchange for heavy industrial products and corporate investment (Dong Zhikai et al., 1993, pp. 114-115).

However, the post-war international situation prevented this plan from being realized. In the early years of the PRC, China formulated an economic construction policy of introducing capital and technology from the Soviet Union through equal and mutually beneficial trade. By the First Five-Year Plan period, 156 construction projects had been gradually established. To carry out industrial construction under extremely difficult economic conditions, China learned from and implemented the Soviet-style planned economy system, establishing planning agencies to formulate economic development strategies and plans, formulate industrial and pricing policies, monitor and regulate the operation of the national economy, ensure overall economic balance, optimize major economic structures, and arrange major national construction projects (Dong Zhikai, 2003).

Meanwhile, the thorough land reform, which led to agricultural transformation and governance model changes, also ensured a mechanism for agriculture to support industrial development (Sun Leqiang, 2021).

From 1952 to 1966, in 14 years under the guarantee of the planned economy, the new China concentrated national resources and utilized Soviet technology, equipment, and funds to carry out large-scale industrial construction. The Soviet-aided “156 Projects” were matched with more than 1,000 projects exceeding the quota completed independently by China, establishing an independent industrial system in the new China, which had an extremely weak industrial base and almost no experience in industrial construction (Dong Zhikai, 1999).

In this process, the Chinese Communists did not completely copy the Soviet model but incorporated important concepts such as overall planning and comprehensive balance based on China’s national conditions. Overall, during the planned economy period, “China made significant achievements in industrial construction and gradually established an independent and relatively complete industrial system and national economic system.” Fixed asset investment in industry and the output of industrial products increased greatly.

“A number of new industrial bases were built in the vast inland areas and ethnic minority regions.” “The national defense industry was gradually built up from scratch.” Resource exploration, “railways, highways, waterways, air transport, and postal and telecommunications services all developed significantly.” This laid the material foundation for socialist economic construction “from nothing to something.”

“From Existence to Excellence”—The Engine for Socialist Economic Growth: On the Socialist Market Economy

In the new era of reform and opening up (1978) and socialist modernization, facing the contradiction between the people’s growing material and cultural needs and the backward social production, the planned economy system suppressed the release of potential production capacity. The Communist Party of China, through gradual reform, established a socialist market economy, stimulated the endogenous driving force of economic growth, started the “engine” of rapid socialist economic growth, and formed the theory of socialist market economy.

In developing countries of Global South establishing a complete industrial system using a planned economy is a fundamental prerequisite for the rapid transformation of investment into productive capacity. Once the industrial system is established, how to stimulate the vitality of various economic entities and mobilize the endogenous driving force of economic growth becomes the primary issue in socialist economic construction. As Marx said, “The conditions that initially manifest themselves as the generation of capital cannot arise from the activity of capital as capital,” but when these conditions are met, “capital, in order to generate, no longer proceeds from the premises; capital is the premise itself, capital creates, preserves, and multiplies itself– multiplies the premises.”

China’s socialist economy originated from a backward small-scale peasant economy. Looking from the perspective of the temporal development of human economic and social forms, socialism with Chinese characteristics is still in the “material dependence stage,” indicating that China should learn from the beneficial experiences of modern production and introduce market regulation mechanisms to endogenous economic growth and accelerate the cyclical operation of the economy. Looking from the perspective of the spatial development of human economic and social forms, socialism with Chinese characteristics is neither the capitalist society with private ownership of the means of production nor the ideal communist society that eliminates the commodity economy. This indicates that the state and government can neither completely withdraw nor the state should take over everything, but state should actively formulate policies to guide economic development while intervening in the economy in a way that conforms to market laws—that is, an organic combination of an active government and an effective market.

In the late 1970s, the Chinese Communist Party recognized that, limited by the actual level of productive forces, fully adhering to Stalin’s principle of “planned and proportional” development of the socialist economy had certain limitations.

“The current plan is too rigid, encompassing too many things, inevitably resulting in a lack of market self-regulation… Because market regulation is restricted, and planning can only make planned figures for common goods and major varieties, production cannot be diversified, and the daily necessities needed by the people become very monotonous,” leading to the inability to unleash the production capacity of the industrial system. The planned economy system and the strategy of prioritizing heavy industry development became obstacles to economic growth. Based on the historical context of the primary stage of socialism and the judgment of the principal contradiction in society, the central leadership with Deng Xiaoping at its core “shifted the focus of the Party’s work and the attention of the people nationwide to socialist modernization,” creatively proposing that socialism is not equal to a planned economy and a market economy is not equal to capitalism. This idea by Deng Xiaoping combined socialism with a market economy, breaking the Soviet model of “public ownership + planned economy” and overcame the theoretical framework of the binary opposition between public ownership and market economy in traditional Marxist political economy and Western neoclassical economics. 

Deng Xiaoping pointed out that “we, as socialist countries, should inherit the advanced management methods, operational methods, and scientific development methods of capitalist countries,” and that ” socialism having a market economy cannot be called capitalism. We have a planned economy as the mainstay, combined with a market economy, but this is a socialist market economy.” (Deng Xiaoping)

To unleash the vitality of economic growth, the socialist market economy reform was carried out “in a planned, step-by-step, and orderly manner under the leadership of the Party and the government.” The reform began in rural areas and then moved to cities and factories. The principles and policies of the reform evolved from “planned economy as the mainstay, market regulation as a supplement” to “consciously basing and applying the law of value… a planned commodity economy based on public ownership,” and then next step was establishing “a socialist market economy system… enabling the market to play a fundamental role in resource allocation under the macro-control of the socialist state.” This gradual and progressive approach continuously resolved the contradictions between supply and demand in the economy, making China the only country to successfully transition from a planned economy to a socialist market economy.

The establishment of a socialist market economy has initiated economic growth in four aspects. First, the basic economic system of public ownership as the mainstay and the common development of diverse forms of ownership has created a competitive structure among enterprises conducive to economic growth (Xie Fusheng & Wang Song, 2020). In the 1980s, with the implementation of a series of policies, the highly prevalent state-owned ownership structure gave way to a new pattern of coexistence of multiple economic components under the public ownership system, with 900.000 township and village industrial enterprises (cooperative and small scale enterprises) becoming the main force of economic growth. In the 1990s, with the establishment of the policy of public ownership as the mainstay and the common development of diverse forms of ownership, state-owned enterprises gradually withdrew from the industrial sectors where they did not have a competitive advantage through the reform of “grasping the large and letting go of the small,” while enhancing their scale effect in areas with competitive advantages and national basic needs. Private enterprises fully demonstrated their advantages, filling the gaps left by the withdrawal of state-owned enterprises, forming a highly collaborative vertical industrial structure of state-owned enterprises and private enterprises, and greatly improved the level of specialization and cooperation and the degree of social division of labor among large, medium, and small enterprises.

Second, the macroeconomic control framework of the socialist market economy system provided the institutional foundation for economic growth. In the 1990s, China made great strides in reforming its fiscal, financial, foreign trade, foreign exchange, planning, investment, pricing, circulation, housing, and social security systems. The market’s fundamental role in resource allocation was significantly strengthened, and the 15th National Congress of the Communist Party of China (1997) announced that “the framework of China’s macroeconomic control system has been initially established.” 

Third, the distribution system, with distribution according to work as the mainstay and multiple distribution methods coexisting, mobilized the enthusiasm of various economic entities. “Distribution according to work and labor income should be combined with allowing and encouraging capital, technology, and other factors of production to participate in income distribution, adhering to the principle of efficiency first while taking fairness into account,” and “allowing some regions and some people to get rich first, leading and helping those who are less fortunate to gradually move towards common prosperity.” 

Fourth, adhering to and improving opening-up enabled China to seize opportunities and achieve rapid economic growth in the process of integrating into the global production network. 

Since the reform and opening-up, China has established and gradually improved a comprehensive, multi-level, and wide-ranging pattern of opening-up to the outside world. China’s accession to the World Trade Organization at the end of 2001 marked a new stage in its opening up to the outside world, signifying its participation in economic globalization on a larger scale and at a deeper level. Downstream processing and manufacturing enterprises in China integrated into the global production network by producing modular components. Under the guarantee of a market economy and a strong industrial base, manufacturing investment was rapidly transformed into production capacity. This, along with the vertical industrial structure of state-owned and private enterprises, drove overall economic growth, attracted a large number of surplus rural laborers to urban areas, promoted urbanization, boosted housing and automobile demand, and stimulated infrastructure investment.

This created a virtuous cycle in the national economy, where products had markets, investments yielded returns, enterprises generated profits, people had income, and the government generated tax revenue, ushering in a golden age of economic growth for China. Overall, the establishment of a socialist market economy created favorable institutional conditions for modernization, opened up vast market demand and sources of funding, and further unleashed the new creative vitality of hundreds of millions of people, thus launching the “engine” of socialist economic growth “from having to being better.”

“From Excellence to Refinement”—Transforming the Mode of Socialist Economic Development: Theory of High-Quality Development

Since the 18th National Congress of the Communist Party of China (2012), socialism with Chinese characteristics has entered a new era. Faced with the contradiction between the people’s ever-growing needs for a better life and unbalanced and inadequate development, the Communist Party of China has gradually transformed the socialist economic development model and moved towards high-quality development by continuously developing and improving the socialist economic system and strategic measures with Chinese characteristics, thus forming the theory of high-quality development.

An independent and relatively complete industrial system of China laid the material foundation for economic construction, while the establishment of a socialist market economy ignited the “engine” of economic growth. However, sustained and effective economic development is not a process that can be naturally achieved under the regulation of the market economy and the law of value once a material foundation is established. “Economic development is a spiral upward process; the upward movement is not linear. After a certain stage of quantitative accumulation, it must shift to qualitative improvement. China’s economic development must also follow this law.” Historical experience shows that since the 1960s, “only a dozen or so of the more than 100 middle-income economies worldwide have successfully entered the ranks of high-income economies. Those countries that have succeeded have achieved a shift from quantitative expansion to qualitative improvement in economic development after a period of rapid growth. Those countries that have stagnated or even regressed have failed to achieve this fundamental transformation.” Therefore, transforming the mode of socialist economic development and moving towards high-quality development “is an inevitable requirement for development in accordance with economic laws,” and China’s “economic development must also follow this law.”

Since the 18th National Congress of the Communist Party of China, the CPC has deeply recognized the prominent “imbalances, incoordination, and unsustainability” in China’s socialist economic development, as well as various problems such as “weak technological innovation capabilities, an irrational industrial structure, a still weak agricultural foundation, and intensifying resource and environmental constraints,” necessitating a “transformation of the economic development model.” 

Based on the shift in the principal contradiction facing Chinese society and the historical position of China’s social development, General Secretary Xi Jinping pointed out that as “socialism with Chinese characteristics has entered a new era, China’s economic development has also entered a new era… China’s economy has shifted from a stage of high-speed growth to a stage of high-quality development,” and promoting high-quality economic development “is an inevitable requirement for maintaining sustained and healthy economic development… and an inevitable requirement for adapting to the changes in the principal contradiction facing Chinese society and for building a moderately prosperous society in all respects and a modern socialist country in all respects.” (Xi Jinping)

In contrast to capitalist countries that transform their development models to promote capital accumulation, the high-quality development of socialist countries is people-centered, embodies the new development philosophy, and is “a development where innovation becomes the primary driving force, coordination becomes an inherent characteristic, green development becomes a universal form, openness becomes an inevitable path, and sharing becomes the fundamental purpose.” In line with high-quality development, the 2017 Central Economic Work Conference proposed a number of measures, including deepening supply-side structural reform, stimulating the vitality of various market entities, implementing the rural revitalization strategy and the regional coordinated development strategy, promoting the formation of a new pattern of comprehensive opening up, improving the level of guaranteeing and improving people’s livelihood, accelerating the establishment of a housing system with multiple suppliers, multiple channels of security, and a combination of renting and buying, and accelerating the construction of ecological civilization. The core of these measures is to continuously meet the people’s growing needs for a better life by improving the quality and efficiency of the supply system, and to move towards the free and comprehensive development of people and common prosperity.

Since 2020, General Secretary Xi Jinping has further proposed to “deeply understand the new characteristics and requirements brought about by the development and changes of the principal contradiction in Chinese society, and to deeply understand the new contradictions and challenges brought about by the complex international environment,” accelerating the construction of a new development pattern with the domestic cycle as the mainstay and the domestic and international cycles mutually reinforcing each other, and “striving to achieve higher-quality, more efficient, fairer, more sustainable, and safer development,” thus giving new connotations to high-quality development. Building a new development pattern is a comprehensive response to the new situation and new problems under the new development stage, and a systemic and profound transformation concerning the overall situation. Since the 21st century, China has adapted to the transformation of the production structure of developed countries, participated in the international economic cycle and driven the domestic economic cycle, forming a development pattern dominated by the international cycle and achieving leapfrog economic growth. However, this is based on large-scale standardized production methods by enterprises with low labor costs, and the rapid economic development relies on the quantity and scale advantages of the “world’s factory.” With the contraction of global markets, the rise of trade protectionism, and the impact of the COVID-19 pandemic, coupled with changes in domestic consumption patterns, rising production factor costs, resource carrying capacity reaching its limits, and the comprehensive enhancement of the importance of science and technology, the internal circulation of the production system is becoming increasingly sluggish, and supply and demand are becoming disconnected. “Bottleneck” problems are becoming more prominent, the complexity of structural transformation is increasing, and economic growth is slowing down (Liu He, 2020). This indicates that “the old production function combination is no longer sustainable,” and “the environmental conditions for large-scale imports and exports have changed, necessitating the development of new ideas based on the new situation.”

The new development paradigm, at the strategic level, answers the question of how China, in the new development stage, should implement the new development philosophy, transform its economic development model, promote high-quality development during the 14th Five-Year Plan period, and ensure a good start for building a modern socialist country in all respects.

 Specifically, firstly, the new development paradigm implements the guiding principles of the new development philosophy, taking innovation, coordination, green development, openness, and sharing as its action guidelines to address issues such as development drivers, unbalanced development, harmony between humanity and nature, internal and external development linkages, and social fairness and justice, thereby promoting high-quality development and meeting the people’s growing needs for a better life.

 Second, new development paradigm adheres to the strategic direction of supply-side structural reform, reducing ineffective supply and expanding effective supply, focusing on improving the quality of the entire supply system, enhancing its innovation and interconnectivity, meeting the demand structure of both standardized and personalized domestic needs, connecting all links of the economic cycle, and enabling production, distribution, circulation, and consumption to rely more on the domestic market, achieving a high level of integrity in the national economic system. 

Third, new development paradigm focuses on expanding domestic demand as a strategic priority, continuously consolidating, strengthening, utilizing, and leveraging the advantages of a large-scale market, strengthening demand-side management, releasing the potential of domestic demand, and making the construction of a super-large-scale domestic market a sustainable historical process. 

Fourth, we must grasp the essential characteristics of achieving high-level self-reliance and self-strengthening, vigorously promote scientific and technological innovation, move from technology import to independent innovation, solve various “bottleneck” and bottleneck problems, and ensure the security and stability of the industrial and supply chains. 

Fifth, we must implement high-level opening up to the outside world, build a strong domestic economic cycle system, form a solid foundation, become a huge magnet for international goods and resources, better connect domestic and international markets, better utilize both domestic and international markets and resources, achieve stronger and more sustainable development, and drive the recovery of the world economy. What we must seize is the momentum and what we must not miss is the opportunity. By firmly grasping important strategic opportunities and accelerating the construction of a new development pattern, we will continue to write a new chapter in China’s comprehensive construction of a modern socialist country and have the opportunity to make China a model country for world economic development and modernization.

III. From Imperialism Theory to the Conception of Community with a Shared Future for Mankind: On the Economic Relations between Socialism with Chinese Characteristics and World Capitalism

The practice of China’s socialist modernization and the struggle towards the ultimate goal of communism mean that the Communist Party of China (CPC) must, based on its historical position, answer the question of how to handle China’s economic relations with the world’s capitalist economy. This question cannot be answered directly from the classic theories of Marx and Engels, nor can it be simply solved by adopting the Soviet theory of foreign relations based on imperialism. In its practice of engaging with the capitalist world, the CPC, based on the transformation of contradictions and the demands of reality at different historical stages, rediscovered the idea of ​​interdependence and universal interconnectedness among nations, an idea overlooked by imperialism and inherent in Marxist theory of community. It transcended the ideological division of imperialism and successively proposed a series of theories that are both consistent and progressive. These include the theory of the middle ground and the Three Worlds, the theory of peace and development, and the theory of a community with a shared future for mankind. The concept of a community with a shared future for mankind, as the culmination of China’s thought on foreign relations, represents the CPC’s systematic summary and latest development of Marxist theory of community.

(I) The dialectical relationship between socialist countries and world capitalism

Marx’s concept of global interaction unfolds based on an analysis of the logic of capital and the class communities it forms. Marx argued that the essence of human society is a community of interests. According to the laws governing the development of human economic and social formations, the development of this community of interests manifests sequentially as a natural community characterized by “human dependence,” a class-based community of interests based on “material dependence,” and a human community characterized by “the all-round development of the individual,” corresponding to pre-capitalist society, capitalist society, and communist society, respectively (Huang Jin, 2019; Xu Bin, 2019). In capitalist society, based on material dependence, as primitive and closed modes of interaction gradually disappeared, “every nation depends on the transformation of other nations,” giving rise to modern global interaction based on nation-states. This ever-expanding global interaction creates the “absolutely necessary practical premise” for the formation of a true communist community.

However, the widespread interaction within the capitalist world cannot form a genuine true human community. Marx used the term “true community” in two senses. The first is the “association of free individuals” in future communist society. “Common interests have become fundamental principles; there is little difference between public and individual interests,” and only then does the community truly liberate all people from the old relations of production. The second is the “genuine community” formed by the bourgeoisie, who “have common interests as a class,” in the form of a state and a bourgeois international alliance. The class relations in capitalist society are simplified to “two directly opposed classes: the bourgeoisie and the proletariat,” and “the whole society is increasingly divided into two hostile camps.” To conceal the conflict of class interests, the bourgeois state represents the bourgeois interest community in the “form of a fictitious community,” its essence being “a committee managing the common affairs of the entire bourgeoisie,” “a union of one class against another.” The interaction within the capitalist world unites the bourgeois state “into a unified nation with a unified government, unified laws, unified national class interests, and unified tariffs.”

Since Marx and Engels outlined the stages of human social development using the methodology of historical materialism, many Marxist scholars have deeply considered how the human world can transit from a community of class interests to a genuine human community. Classical writers such as Lenin and Stalin, using the contradictory relationship between the two major class communities of interests as their main thread, attempted to achieve the transition of future society through the revolutionary means of the proletarian community over the bourgeois community, and used this to guide the foreign relations of socialist countries.

Against the backdrop of the late 19th and early 20th century monopoly capitalism, Lenin created his theory of imperialism, developing the antagonistic relationship between two major class camps into an antagonistic relationship between socialist states representing the interests of the proletarian community and capitalist states representing the interests of the bourgeoisie camp. Lenin emphasized the destructive role of developed countries, representing the interests of monopoly capital, in the development of backward countries and regions. Although Lenin pointed out that the objective laws of universal global interaction are not limited by the subjective desires of any class, and that socialist countries should actively utilize the advanced technology and management experience of capitalist countries even at a certain cost, in Lenin’s theory, the relationship between the Soviet Union and capitalist countries was still based on the contradictions of class camps. Their interaction was only for the purpose of backward countries absorbing and utilizing the achievements of advanced civilizations, essentially seen as a “continuation of war in the economic sphere.” Lenin analyzed the international situation at the time, pointing out that “all events in world politics necessarily revolve around one central point… the struggle of world capitalism against the Russian Soviet Republic,” in which the anti-imperialist proletarian forces mainly came from oppressed countries and their working classes.

Stalin further developed the antagonistic relationship between the two major class interest groups into a conflict between the socialist and capitalist camps, and changed Lenin’s theory of “the eve of the socialist revolution” into the theory of “the era of the socialist revolution” (Zhong Zheming, 2006). The coexistence of socialist and capitalist countries was seen as a temporary phenomenon, with these two different types of states representing the two major class camps, exhibiting a direct antagonistic relationship. After the 1950s, the theory of the antagonism between the two major class interest groups evolved into Cold War thinking based on ideological lines, manifested as an antagonistic relationship between the socialist camp represented by the Soviet Union and the capitalist camp represented by the United States. The two camps waged a decades-long struggle through “cold” methods such as local proxy wars, technological and arms races, the space race, and diplomatic rivalry.

(II) The Period of Socialist Revolution and Construction: The Middle Regions Idea and the Theory of the Three Worlds

The “Middle or intermediate Regions” and “Three Worlds” ideas represent the first innovative development and exposition of Marxist theory on global interaction by the Chinese Communist Party using Chinese discourse. It broke through the then-held doctrine of a two-camp opposition, re-emphasizing the long-neglected theory of universal global interaction by Marx and Engels, proposing that countries with different social systems can become communities of shared interests, and thus securing broader practical space for the proletarian party to understand and handle the foreign relations of socialist countries.

Mao Zedong argued that after World War II, there were two intermediate (middle) regions in the world: “Asia, Africa, and Latin America constitute the first intermediate zone; Europe, North America (Canada), and Oceania constitute the second intermediate zone. Japan also belongs to the second intermediate zone.” In 1974, based on the intermediate zone theory, Mao Zedong further proposed the Three Worlds theory, pointing out that there are three interconnected yet contradictory worlds: “The United States and the Soviet Union are the First World. The middle powers—Japan, Europe, Australia, and Canada—are the Second World. We are the Third World…Asia, except for Japan, is the Third World. The whole of Africa is the Third World, and Latin America is also the Third World.”

The theories of the “middle regions” and the “three worlds” transcend the simplistic view that ideology determines the primary contradictions in global relations. They point out that contradictions also exist within class-based communities of interest, and that global relations should not be confined to the binary opposition of class communities. As early as the beginning of the Liberation War, Mao Zedong recognized that the primary contradictions of the world transcended the dual division of class communities, proposing that colonies and semi-colonies between capitalism and socialism constituted a middle zone. After the founding of the People’s Republic of China, as the contradictions between the US and the Soviet Union deepened, the US “implemented a policy of power” in this vast middle zone. Not only did the forces opposing the US grow stronger in oppressed nations, but the contradictions between Western countries and the US also intensified, with France and other Western countries increasingly opposing US hegemonic behavior. Contradictions also existed within the socialist camp. Sino-Soviet relations deteriorated due to the Soviet Union’s great-power chauvinistic policy towards China (Wang Shuyin, 2015, p. 426). Mao Zedong pointed out that many nationalist countries were “neither imperialist nor socialist,” and that different class communities shared a common interest in opposing hegemonism that transcended social norms.

In the 1960s, China provided as much support as possible to the anti-colonial and anti-imperialist struggles of the peoples of Asia, Africa, and Latin America, and offered as much assistance as possible to the newly independent friendly countries in Asia, Africa, and Latin America, maintaining a relatively proactive strategic position amidst the complex international situation (Li Jie, 1993). After the start of the First Five-Year Plan, apart from socialist countries such as the Soviet Union, China’s international trade with Southeast Asian countries and some Western countries gradually developed, especially with Japan and Western European countries such as Britain and Italy, achieving breakthrough progress in international economic and trade relations. Taking Japan as an example, the total import and export trade volume between China and Japan was US$9.92 million in 1953, which increased to US$810 million in 1970.

The Middle Regions and Three Worlds ideas pointed out that China should expand its scope of exchanges as much as possible according to the needs of socialist construction, including strengthening exchanges and cooperation with capitalist countries. In 1954, Mao Zedong proposed “cooperating with all those who are willing to make peace,” not only establishing friendly relations with the vast number of developing countries, but also establishing formal diplomatic relations with countries such as Britain and France, actively consolidating and strengthening friendly relations with neighboring countries, and correctly handling the relationship between self-reliance and learning from foreign experience. In 1956, the Eighth National Congress of the Communist Party of China proposed adhering to a foreign policy based on the Five Principles of Peaceful Coexistence (Wang Shuyin, 2015, p. 425). China not only developed economic and trade relations with socialist countries but also saw rapid growth in trade with Second World countries such as Japan and the Federal Republic of Germany. In the mid-to-late 1970s, the complete sets of industrial equipment that China imported from Western countries became an important foundation for China’s economic development (Pei Changhong, 2021a). In 1978, the total trade volume between China and Japan and between China and Germany increased from US$880 million and US$230 million in 1971 to US$4.82 billion and US$1.36 billion, respectively.

The theory of the Middle Regions and the Three Worlds Ideas answered the dialectical relationship of contradiction and dependence between the new China and the capitalist world, pointed out the existence of a community of interests beyond ideology, and was a major theoretical breakthrough in Marxist theory of world interaction after Lenin’s theory of imperialism. It laid the theoretical foundation for China’s all-round participation in world interaction and also won China an international environment conducive to its survival, development and socialist construction (Liu Shan & Xue Jun, 1998, p. 34; Hu Weixiong, 2013).

(III) The period of reform and opening up and socialist modernization: the ideas of peace and development and the trend of world multipolarity

After the 1970s, Deng Xiaoping and other Chinese Communists, based on China’s historical position and the needs of domestic economic development, re-examined the reality of the long-standing existence of two opposing class communities in the capitalist world. They pointed out that the economic community of interests between China and the capitalist world would not only not affect China’s socialist system, but could also promote socialist construction, further developing Marxist thought on global interaction. Under the overall strategic judgment of “peace and development,” China began the great historical practice of gradual opening up in areas such as regions, industries, trade, and investment (Pei Changhong & Liu Bin, 2020; Jiang Xiaojuan, 2021), innovatively solving the problem of how China could build socialism in the capitalist world.

The concept of peace and development posits that “the truly major global strategic issues in the world today are the issues of peace and economic development.” Inheriting the Three Worlds theory, it points out that the antagonistic relationship between the two major class communities is no longer the primary concern. China should seize the opportunities presented by the universal development brought about by capital, promote the development of Chinese socialism, and create conditions for a true community of shared future for mankind. Compared to Marx and Engels’ derivation of the inevitability of universal global interaction from the socialized large-scale production of capitalism, and Lenin’s ideas on socialist countries engaging in economic exchanges with developed capitalist countries to escape backwardness, Deng Xiaoping’s discourse on the inevitable maintenance of extensive global interaction by all countries based on the logic of development is distinctly innovative (Gu Longsheng, 2014, pp. 696-698). 

The concept of peace and development indicates that China’s relationship with the capitalist world is primarily based on cooperation, laying the foundation for the subsequent unwavering expansion and deepening of opening up to the outside world.

The concept of peace and development answered the question of the relationship between socialist construction and foreign capital, pointing out that socialism could be built within the capitalist world. Building upon Lenin’s theory of monopoly capital, Deng Xiaoping elaborated on the dual nature of capital in developed countries, laying the theoretical foundation for China to utilize foreign capital in its socialist construction. The newly established socialist China possessed a vast “socialist economic base,” enabling it to cooperate with international capital independently and autonomously, no longer a victim of exploitation and powerlessness. “Opening up to the outside world is conducive to strengthening and developing the socialist economy.” For the Chinese economy, lacking advanced production technology and modern management experience, absorbing international capital investment within China could quickly solve the problem of insufficient capital accumulation and improve the technological level of national capital. This means that, in the context of globalization, China’s socialist construction and the capital of capitalist countries are not mutually exclusive based on opposition, nor is their cooperation a stopgap measure under antagonistic thinking. Socialist countries achieving their own development through participation in the capitalist world is an inherent requirement of socialist commodity economy (Gu Longsheng, 2014, pp. 696-697). 

Between 1979 and 1984, China utilized US$2.963 billion in foreign investment through joint ventures, cooperative operations, foreign investment, and cooperative development projects. As the degree of openness continued to increase, this figure rose to US$32.405 billion between 1985 and 1992.

After the 1990s, based on changes in the global situation, the Communist Party of China broke free from ideological constraints and proposed the idea of ​​a multipolar world, actively promoting China’s gradual opening up to the outside world. The concept of “multipolarity” was first proposed by French scholars, and Nixon also proposed a five-polar world order, positioning China as one pole of the global balance of power. 

World’s multipolarization

However, the trend of world’s multipolarization proposed by the CPC has a different meaning.

First, it is guided by the value of a “free association of mankind,” proposing that the democratization of international relations guarantees world peace and development, emphasizing the joint participation and equal consultation of all countries. “This multipolar structure is different from the historical situation of great powers vying for hegemony and dividing spheres of influence. All countries should be independent and autonomous.” 

Second, it places the trend of multipolarity within the framework of a three-world division, rather than a bipolar world order centered on the US and the Soviet Union or on the US. This means that the understanding of multipolarity is not based on two opposing ideological camps, avoiding the cognitive pitfalls that might arise from analyzing the world solely through the lens of two major class interests. 

Third, it links the trend of multipolarity with globalization, pointing out that “the trend of multipolarity and economic globalization is developing in a tortuous manner,” and that China’s economic exchanges with the world are becoming increasingly close. Guided by the ideology of multipolarization, the Communist Party of China accurately grasped the trend of globalization of production networks based on “fragmented production,” and persisted in expanding opening up to the outside world, resulting in a continuous increase in China’s participation in the global market. From 1993 to 2000, China ranked second in the world in terms of attracting foreign investment, second only to the United States. In 2000, China’s actual utilization of foreign capital increased from US$19.2 billion in 1992 to US$59.4 billion, accounting for approximately 10.3% of China’s total fixed asset investment that year.

The trend towards a multipolar world order places China at one pole, meaning that China must not only achieve development within the global arena but also participate in the construction of the world order. Since joining the WTO in the early 21st century, China’s integration with the world has continuously increased. Between 2000 and 2011, China continuously innovated new ways of utilizing foreign investment, with foreign direct investment in China increasing from US$40.7 billion to US$116 billion. China’s more proactive participation in the construction of the international order stems from two main reasons.

First, China’s relationship with the capitalist world has become more complex.

Beyond conflicts arising from differing class interests, closer international economic exchanges have led to more shared interests beyond ideology, and countries occupying different positions in the “three worlds” face deeper disagreements on issues such as global economic governance mechanisms. 

Second , China has gradually acquired the power to participate in the reform of the international political and economic order.

Especially after the international financial crisis pushed China to the forefront of international discussions and the handling of major issues, China needs to move from imitation to a more mature application of international rules to safeguard its own interests.

(IV) The New Era of Socialism with Chinese Characteristics: The Concept of a Community with a Shared Future for Mankind

After 2012, socialism with Chinese characteristics entered a new era, transitioning from high-speed growth to high-quality development, while the Western world remained in a period of adjustment following the international financial crisis. The world is undergoing profound changes unseen in a century, and China is closer than ever before in history to the great rejuvenation of the Chinese nation. The Communist Party of China, standing at the height of the destiny of all humanity, examines its relationship with global capitalism, systematically summarizes its foreign policy thought, draws inspiration from the Chinese nation’s ideal tradition of a “Great Harmony” society, and has put forward the theory of a community with a shared future for mankind. This theory clearly answers the major historical questions of what kind of open economy China should develop and how to better build a better world for humanity.

The concept of a community with a shared future for mankind systematically summarizes the Chinese Communist Party’s ideas on foreign relations, pointing out that humanity can build a community with a shared future that transcends the antagonistic relationship between two major class communities on the basis of universal interaction, thus developing Marxist community theory. A community with a shared future for mankind means that people of different countries and nations around the world share common values ​​that transcend social systems and ideologies. “Peace, development, fairness, justice, democracy, and freedom are the common values ​​of all mankind.” It does not possess an inherent ideological attribute but emphasizes the commonality of interests. Although the economic base plays a decisive role, the superstructure also has a powerful counter-effect. “Ideas guide actions, and direction determines the way forward.” Humanity can consciously and jointly transform the world and transition towards a community of “comprehensive individual development” (Sun Laibin, 2019; Huang Jin, 2019). The Belt and Road Initiative is a prime example of China’s pioneering practice of a community with a shared future for mankind. It not only overcomes the drawbacks of capitalism’s “material dependence” in terms of principles and concepts but also provides support for moving from “material dependence” to “comprehensive individual development” in its construction model. The Belt and Road Initiative, focusing on connectivity and based on infrastructure, accurately grasps the laws governing the development of developed commodity economies. “The more production is based on exchange value, and therefore on exchange, the more important the material conditions for exchange—transportation—becomes to production.” The more the world market is based on large-scale industrial production, the more necessary developed road transportation and various infrastructure constructions become. “Large-scale industry should first produce the necessary means, namely large industrial cities and inexpensive and convenient transportation.” For relatively underdeveloped countries, China’s use of infrastructure construction as the cornerstone of connectivity is key to breaking the bottleneck of their continued stagnation. Currently, the framework of “six corridors, six routes, multiple countries, and multiple ports” has been basically formed.

Positive progress has been made on projects such as the China-Laos Railway, the China-Thailand Railway, the Hungary-Serbia Railway, and the Jakarta-Bandung High-Speed ​​Railway. The construction and operation of cooperative ports such as Gwadar Port and Hambantota Port are progressing well, and the construction of projects such as the China-Russia East Route Natural Gas Pipeline is steadily advancing.

Global production relations

The concept of a community with a shared future for mankind highlights the issue of global production relations, which has been avoided by mainstream international economic theory, emphasizing win-win and shared development. Mainstream international economic theory, based on the “economic man assumption” and the theory of comparative advantage, attempts to conceal the unequal economic relations between developed and underdeveloped capitalist countries since the establishment of the capitalist mode of production. 

However, as Marx revealed, the essence of man “is the sum total of social relations,” and all economic behavior occurs within specific production relations. The “economic man assumption” avoids the fact that man is the sum total of social relations (Pei & Liu, 2018), and the theory of comparative advantage ignores the fact that international trade occurs within a capital-dominated international division of labor system (Smith, 2016). If these theories guide practice, China, as a developing country, will easily be locked into the low end of the international division of labor, becoming a victim of the “core-periphery” world system (Liu & Wang, 2019). The concept of a community with a shared future for mankind argues that, under the trend of economic globalization, all countries should build an open world economy and jointly create a prosperous world. China is promoting mutually beneficial cooperation with the world through a higher level of opening up, namely high-standard trade agreements, high-quality global cooperation platforms, highly liberalized free trade zones, and highly open trade rules (Jiang Xiaojuan, 2021). From 2013 to early 2021, China established 21 free trade zones, including the world’s largest RCEP (Regional Comprehensive Economic Partnership) free trade zone. In September 2021, China submitted its application to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).

The concept of a community with a shared future for mankind overcomes the narrow perspective of mainstream Western international political economy theory, which is based on “hegemonic stability theory” and aims to protect the interests of its own capital. Since the emergence of capitalist production, hegemonic powers such as Britain and the United States have played the role of maintainers of the international order to protect their own capital interests (Pei Changhong, 2014, 2018; Cox, 2004). However, this does not mean that there is only one form of international order. The concept of a community with a shared future for mankind is precisely a new international order initiative guided by the values ​​of mutual benefit, win-win cooperation, diversified balance, security and efficiency (Pei Changhong, 2021a), which regards “upholding and practicing multilateralism” as the way to solve world problems. China’s Belt and Road Initiative, as a new model of international cooperation, provides ideas and solutions for building a community with a shared future for mankind based on the principles of consultation, joint construction and shared benefits, and the concepts of green, open and clean governance. Since its inception, the Belt and Road Initiative has received increasing affirmation and response from more and more countries. As of January 2021, China had signed 205 cooperation documents on jointly building the Belt and Road Initiative with 171 countries and international organizations, and established financial organizations such as the Asian Infrastructure Investment Bank (AIIB), the Silk Road Fund, and the “16+1” Financial Holding Company. From 2013 to 2020, China’s cumulative direct investment in Belt and Road countries reached US$136 billion, while actual investment from Belt and Road countries in China reached approximately US$60 billion. In 2020, business with Belt and Road countries accounted for more than half of China’s overseas contracted engineering business, with newly signed contracts amounting to US$141.46 billion and completed turnover reaching RMB 91.12 billion.

In a capital-dominated global market, the logic of capital exposes humanity to common challenges that threaten its very survival. The increasingly acute contradictions and challenges facing human society, such as peace deficits, development deficits, and governance deficits, cannot be resolved by any single nation acting alone. As Marx revealed in his theory of “two things that will never happen,” the capitalist world cannot spontaneously perish while capital remains dynamic; the construction of a community with a shared future for mankind requires the joint efforts of all nations.

Conclusion

The entire theory of the proletarian party “derives from the study of political economy,” and “the degree to which a theory is realized in a country always depends on the degree to which it meets the needs of that country.” During the expansion of capitalism worldwide, through aggression and colonization, it connected the advanced capitalist social forms of the time with the social forms of backward countries, hindering the development of those backward countries and creating mixed social forms. On this basis, the establishment and continuous development of socialism generated a series of new problems that Marx and Engels’ classic theories could not solve. New historical practice required the Chinese Communists to “unite adherence to and development of Marxism with the specific realities of China and continuously make new theoretical creations in conjunction with new practices.” 

It is precisely on the basis of independently applying the Marxist standpoint, viewpoint, and method, that the Chinese Communist Party, combining the specific practices of the Chinese revolution, construction, and reform, scientifically applied the method of analyzing basic and principal contradictions, accurately grasped the historical position of China’s social development, coordinated the domestic and international situations, solved various problems in socialist economic construction and exchanges with the capitalist world, created a new path to Chinese-style modernization, and formed the theory of historical position with Chinese characteristics, the theory of socialist economic construction with Chinese characteristics, and the theory of the relationship between socialism with Chinese characteristics and the world capitalist economy, thus opening up a new realm of Marxist political economy. The theoretical creations of the Communist Party of China (CPC) are characterized by a unity of stages and continuity, and a succession of quantitative and qualitative changes. 

Stages mean that the CPC, based on the different historical stages of the Chinese revolution, construction, and reform, developed and formed economic thought adapted to the actual conditions of each stage. Continuity means that the economic thought formed by the CPC in each stage integrates the economic thought of the previous stage and the latest practices of China’s economic development, demonstrating both continuity and continuous innovation. The development and application of the method of contradiction analysis is precisely the secret to the CPC’s ability to continuously create theories and maintain the vitality of its economic thought, reflecting the CPC’s problem-oriented dialectical thinking and its general principle of seeking progress while maintaining stability. As contradictions continue to develop and move, the content of the CPC’s theoretical creations will be further enriched and developed through accurate judgment and resolution of the principal contradictions.

Since the 18th National Congress of the Communist Party of China (2012), facing profound and complex changes in the domestic and international environment, General Secretary Xi Jinping has scientifically grasped the general trend of world development and the stage-specific characteristics of China’s development, and has made a series of expositions on the construction and development of socialism with Chinese characteristics, initially forming a multi-level and composite scientific theoretical system composed of “general, specific, and individual” elements. From the perspective of the general principles of socialism with Chinese characteristics, this exposition is firmly based on the primary stage of socialism, summarizing adherence to the centralized and unified leadership of the Party as the essential characteristic of socialism with Chinese characteristics; clarifying the fundamental position of implementing the new development philosophy centered on the people; establishing the basic economic system of the primary stage of socialism, including public ownership as the mainstay and the common development of diverse forms of ownership, distribution according to work as the mainstay and the coexistence of multiple distribution methods, and the socialist market economy system; taking the building of a community with a shared future for mankind as the starting point for a new type of world political and economic relations under socialism with Chinese characteristics; and clarifying that the construction of socialism with Chinese characteristics must adhere to a problem-oriented and steady-progress dialectical thinking method. 

Looking from the perspective of the development stages of socialism with Chinese characteristics, facing the complex changes in the domestic and international situation, General Secretary Xi Jinping, based on the new starting point of the Party’s centenary history, established that socialism with Chinese characteristics has entered a new stage of development; accurately grasped the transformation of the principal contradiction in Chinese society, clarifying that the main aspect of the principal contradiction lies on the supply side; clarified that the development of socialism with Chinese characteristics must coordinate the overall layout of the “Five-Sphere Integrated Plan” and the strategic layout of the “Four Comprehensives”; planned new goals and roadmaps for China’s socialist modernization, and embarked on the great journey of the “new three-step strategy”; and made the major strategic judgment that the world is undergoing profound changes unseen in a century. 

Looking from the perspective of the strategic policies of socialism with Chinese characteristics, since the 18th National Congress of the Communist Party of China, General Secretary Xi Jinping has put forward a series of major strategies and measures for the current stage of socialist economic development with Chinese characteristics. The core is to take supply-side structural reform as the main line, thoroughly implement the new development philosophy, build a new development pattern with the domestic cycle as the mainstay and the domestic and international cycles mutually reinforcing each other, and achieve high-quality development. This includes implementing the innovation-driven development strategy, the regional coordinated development strategy, the green development strategy, the targeted poverty alleviation strategy, the rural revitalization strategy, the “Belt and Road” initiative, and the establishment of a modern economic system, etc. “The entire spirit of Marxism, its whole system, requires that every principle be examined (α) historically, (β) in connection with other principles, and (γ) in connection with specific historical experience.” 

General Secretary Xi Jinping’s discourse on the political economy of socialism with Chinese characteristics represents the culmination of the Chinese Communist Party’s century-long economic thought and a peak in the Party’s century-long inheritance, development, and innovation of Marxist political economy theory. It not only scientifically reveals the essence and general provisions of the development of socialism with Chinese characteristics, but its series of assertions and viewpoints also form a theoretical system with internal logical connections. It profoundly responds to the call of the great practice of socialism with Chinese characteristics in the new era, provides Chinese solutions to common problems facing humanity, and contributes Chinese wisdom to building a better world. Xi Jinping’s discourse on the political economy of socialism with Chinese characteristics has become a leading ideological and theoretical high ground for the innovative development of Marxism worldwide and it is Marxist economics of the 21st century.