SocialismToday           Socialist Party magazine

Socialism Today 131 - September 2009

China – capitalist or not?

In a further contribution to our debate on China, Andy Ford poses the question ‘capitalist or not?’, examining the class character of the Chinese state. Recognising the enormous importance of developments in China, the debate was initiated in Socialism Today No.108, April 2007, "on the nature of the Chinese state and economy; on how long [China] can continue down this road; and to what final destination". So far, this exchange has included the following contributions: China’s future, by Peter Taaffe (No.108, April 2007); Can China be a new tiger? by Ron Groves (No.109, May 2007); China’s capitalist counter-revolution, by Vincent Kolo (No.114, December-January 2007-08); and The character of the Chinese state and China’s hybrid economy, by Lynn Walsh (No.122, October 2008). All are available on our website at

THERE IS A widespread discussion amongst socialists as to whether China is now capitalist or is still a deformed workers’ state. This is an important discussion with different views. The debate is not sterile or arcane as it has implications for socialists’ approach to work in China.

The debate also has implications for the theory of ‘proletarian bonapartism’, advanced by the Committee for a Workers’ International (CWI) in the post-war period. This theory was a great achievement that allowed an understanding of developments in the neo-colonial countries such as Cuba and Vietnam. Marxism is a science and its theories should be kept logically consistent and capable of dealing with new developments. The recent changes in China are a new development requiring a Marxist explanation.

Trotsky’s theory of the state

THERE ARE MANY good reasons to still understand China as a deformed workers state, albeit one that is uniquely and extensively deformed. China has not yet gone through the transition to capitalism. We have to remember and build on Trotsky’s points in his article, The Class Nature of the Soviet State (1933): "Against the assertion that the workers’ state is apparently already liquidated there arises, first and foremost, the important methodological position of Marxism. The dictatorship of the proletariat was established by means of a political overturn and a civil war of three years. The class theory of society and historical experience equally testify to the impossibility of the victory of the proletariat through peaceful methods, that is without grandiose class battles, weapons in hand. How, in that case, is the imperceptible, ‘gradual’, bourgeois counter-revolution conceivable? Until now, in any case, feudal as well as bourgeois counter-revolutions have never taken place ‘organically’, but they have inevitably required the intervention of military surgery.

"In the last analysis, the theories of reformism, insofar as reformism has attained to theory, are always based on an inability to understand that class antagonisms are profound and irreconcilable; hence, the perspective of peaceful transformation of capitalism into socialism. The Marxist thesis relating to the catastrophic transfer of power from the hands of one class into the hands of another applies not only to revolutionary periods, when history sweeps madly ahead, but also to periods of counter-revolution, when society rolls backwards. He who asserts that the soviet government has been gradually changed from proletarian to bourgeois is only, so to speak, running backwards the film of reformism".

This is not to rely on dusty quotes from the archives against the reality facing us; it is to seek to understand reality using Marxist theory consistent with its history and development. Our analysis of China has to base itself on our previous descriptions.

To suddenly perceive a gradual transition from one form of society to another in China would be to throw out previous positions without acknowledging or analysing where or why these theories were in error. It is not really a serious way to proceed in any science.

Those who wish to describe China as capitalist today all use the same method. They start from the current picture, using numerous figures and estimates from bourgeois academic sources to show that China, now, this year, is capitalist. They then work backwards to try and identify a point of transition. Was it Tiananmen Square in 1989, or Deng’s speech at the XIV Party Congress in 1992, the incorporation of Hong Kong in 1997, or China’s accession to WTO in 2001, or even the passing of laws explicitly protecting private property in 2004? They prioritise present day impressions over historical analysis and understanding.

The case of China

CHINA WAS DEFORMED from the start. It started in 1949 from the model of Stalin’s Russia of 1945 not October 1917. As was said by our comrades at the time, nothing was left of the October revolution in Russia by 1949 except the nationalised planned economy and the monopoly of foreign trade.

As has been previously discussed, most of China’s progress from impoverished semi-colony to superpower was actually made under Mao, not in the recent development incorporating elements of capitalism. It was precisely this superpower status which gave China the independence from imperialism to undertake its path towards capitalism. Yet we should still regard China as a deformed workers state, but one in which capitalism has been let loose.

China is like a Soviet Union of the 1920s, but in which there is not even a residual element of workers democracy and with an uncontrolled New Economic Policy (NEP), which has been allowed to develop far beyond the NEP in 1920s Russia. Deng’s slogan for the peasants, ‘To get rich is glorious!’, was an echo of Bukharin’s slogan of the 1920s, ‘Peasants enrich yourselves’. Yet Russia in the 1920s was still a deformed workers state.

The NEP-type process in China has probably gone too far to be reversed, whatever the wishes of the bureaucrats of the Chinese Communist Party (CCP). But this does not mean that the country is capitalist now, although it is likely that a capitalist overturn is more or less inevitable in the future.

An interesting point in Peter Taaffe’s article (Socialism Today, April 2007) was that in China the working class has now experienced capitalism and the market, and therefore should be less likely to support a transition to full-blooded capitalism. In fact workers in China are increasingly fighting back against the nascent capitalists using the traditional weapons of working class struggle such as strikes and trade union organisation.

In the USSR Gorbachev attempted to combine Perestroika (restructuring) with Glasnost (openness), using elements of the market within the deformed workers state, only to be rewarded with a coup and eventual dismissal. The Chinese bureaucracy drew the conclusion from the coup and the subsequent disastrous restoration of capitalism that they had to proceed with ‘perestroika’, restructuring, but without the political reform of ‘glasnost’.

As a result the Chinese working class are having to wage an underground struggle against the restructuring of the economy, against the effects of the capitalist elements introduced by the bureaucrats. We see strikes, protests and nascent illegal trade unions.

Peter Taaffe introduced a very interesting and fruitful idea into the discussion – that in China we have two different compartments of the economy, with sectors of rampant capitalism co-existing with sectors of the planned economy.

The state itself is of a mixed character with capitalist elements co-existing with the deformed workers state; and so the working class has to adopt different methods of struggle depending on which element confronts them. In fact the two elements have co-existed in fully-fledged form in China since the re-incorporation of Hong Kong into the ‘People’s Republic’ in 1997. At that time the CCP proclaimed ‘One country, two systems’. Of course such an amalgam must be inherently unstable, but it has lasted for twelve years so far. It would be quite possible for a ‘Chinese Solidarity’ to be formed, hence the ferocious repression of those workers who do organise their workmates into illegal unions and protests against unpaid wages. But the state in China is still a deformed workers’ state not a capitalist one.

The main task of the Chinese workers therefore is a political revolution along the lines of Hungary 1956 or Poland 1980, and the task of Marxists is to assist this development.

On the other hand the task for those workers in China who find themselves in the capitalist compartment of the Chinese economy, such as workers in Hong Kong, is to organise for socialism and the expropriation of the capitalists.

There is nothing contradictory or eclectic in describing two elements in co-existence in one society. In Eastern Europe the events were a dual process – a political revolution developing dialectically in tandem with a capitalist counter-revolution.

Other countries also have elements of the different historical stages of society co-existing together. In India we can see hunter-gathering, slavery and feudalism all co-existing with capitalism. We have described India as a living museum of historical materialism. But the Indian ruling class is a capitalist class and it is a capitalist state.

In China capitalism co-exists with a deformed workers’ state; but the state is still ruled by the bureaucracy of the CCP. The question is which element predominates and which class controls the state. As the Chinese state is still a deformed workers’ state it is the demands and analysis of the political revolution which should predominate in the workers’ movement and in theoretical discussion of China.

Transition occurs by qualitative change, not gradual evolution

ON RUSSIA SOME have claimed that the transition to a capitalist state was accomplished gradually by a ‘cold transition’ and without forcible revolution.

On the contrary surely the transition in Russia was accomplished by a series of major events – the failed coup, the attack on the parliament, and the deposing of Gorbachev and break-up of the USSR – to make a qualitative change in the state. Because the state and the bureaucracy had so little support the transition can be seen as ‘cold’, especially when compared with October 1917, but a cold transition is completely different from a peaceful evolution.

It is not a question of the use of force itself in the transition but of its qualitative character. The state has to be reconstituted as part of the transfer of power from the hands of one class to another. In 1917 the revolution in Petrograd was almost totally peaceful. The overturn in Petrograd was followed by the assumption of state power by the Bolsheviks and the construction of a new state apparatus, which had been forged by the soviets in the months after February 1917.

A military struggle was not necessary in Petrograd because of the preparations made and the overwhelming strength of the working class, but the important thing is that the old state of Kerensky was dispersed and a new one formed. The qualitative step in Petrograd occurred almost without military force and could be described as a ‘cold transition’; but it was not a peaceful evolution.

Even so the initial overturn in Petrograd was accompanied by quite extensive fighting in Moscow, and then followed by a savage civil war, at the end of which capitalism had been overthrown across the USSR. A new state was constructed, with the leaders of the old state arrested or in exile.

We have seen no such events in China, and the state apparatus has remained of essentially the same character since 1949.

In summary, the Marxist theory of the state asserts that the state is always a class state, and serves the ‘economically dominant’ ruling class. Therefore a new ruling class has to create its own state, although the new state may incorporate elements of the previous state at the lower levels.

To suddenly assert that China has become a capitalist state without a social counter-revolution is to strip the Marxist theory of the state of its class content. It is to allow present day impressions to overrule proper understanding and explanation of the situation in China in its historical context.

A coherent Marxist reading of present-day China would describe it as a uniquely deformed workers state, with major capitalist elements growing and strengthening within it.

Chinese society is therefore heading towards a huge confrontation between the working class and the nascent capitalist class, in which the CCP will be destroyed or split apart. The important practical point then is that the workers’ movement, and our commentary on that workers’ movement, has to prepare for such a confrontation, because the transition has not yet occurred.

Those who believe it has occurred risk disarming the movement into believing that the decisive event has already happened.


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