People's Democracy

(Weekly Organ of the Communist Party of India (Marxist)

Vol. XXX

No. 50

December 10, 2006

CPI(M) CC Delegation’s Visit to People’s Republic of China – V


Overcoming Problems, Strengthening Socialism


Wax statues of the delegates of the First National Congress of the CPC, young Mao presenting the political report.


Sitaram Yechury


THE last leg of the CPI(M) delegation’s visit to China was the visit to Shanghai and Pudong. Every time one visits this area, one is wonderstruck at the hectic pace of development and building construction. The skyline and the landscape are changing so fast that it is virtually impossible to recognise previously known landmarks. In the early nineties, from one of the high-rise buildings in Shanghai, I was shown a swamp land across the Huangpu river, a tributary of the Yangtze. Shanghai is on the west side of this river. The swamp on the east of the river, I was informed, will be turned into an industrial and trading hub which, looks including, will surpass Hong Kong. They showed me a model of many high-rise buildings. When I enquired as to the timeframe in which they want to convert the swamp into an ultra modern land mass, I was informed that the transformation would take place in less than a decade. To be honest, it appeared a virtually impossibility at that time. A few years down the line, in 1995, when we visited Shanghai we were taken to the then world’s tallest TV tower, the Oriental Pearl TV Tower. It is today the third highest in the world. High-rise buildings and hectic activity was visible all around. By the time we visited Shanghai again in 2002, Pudong, in reality, had already surpassed the models that were on display in early nineties. 


There are numerous bridges across the river including underground subways connecting Shanghai and Pudong. An ultra modern airport is functioning and handling an enormous amount of traffic. The centre of Shanghai is connected with the airport by a magnetic levitation train (maglev) which runs at an amazing 400 plus kilometres an hour, the fastest in the world. The distance of nearly 50 kilometres takes only seven minutes. On this occasion, I was informed that 32 kilometres off Pudong in mid ocean a deep sea port was planned to be built. Now, when we visited in 2006, the port has been built –– the world’s longest bridge over ocean, an eight-lane 32 kilometres expressway connects Pudong and this deep sea port!


In middle of 19th century, Shanghai developed as the main commercial and financial centre of European colonial powers in the Far East. The British had then described Shanghai as “Calcutta of the Far East”. Looking at Shanghai today, this was ironic indeed. Today, Shanghai province is one of the most dynamic and economically advanced areas. It has a population of about 17 million. With a GDP (in 2005) of $114 billion, it has one of the highest growth rates in China – 11.1 per cent. Pudong is an area covering 570 square kilometres with a population of 2.6 million. It has four national economic development zones. Its GDP in 2005 was $28.5 billion, roughly one-fourth of Shanghai’s GDP. Its annual growth rate, however, was more than 20 per cent in the 1990s and more than 15 per cent, on an average, in the 21st century. In 2005 it was 15.7 per cent. Interestingly, foreign direct investment (FDI) accounts for only 30 per cent of the total investment compared to around 60 per cent in the case of other provinces in China. Till 2005, the total volume of FDI was $60.33 billion.




How such huge levels of investments were possible is what we sought to understand in our discussions with the CPC local leadership. We were informed, for instance, that the investments in fixed assets in Shanghai and Pudong began with an initial central government input of 10 per cent. On this, 30 per cent of bank loans were raised. Another 30 per cent came from what the Chinese call public funds, i.e., bonds issued by the government to the public. The rest of the 30 per cent came from abroad and a big portion of this was from non-resident Chinese. Since banks in China are State-owned, this means that 40 per cent of the investment in fixed assets comes from governmental share while 30 per cent from resources raised by the government from the public. This 70 per cent is the basic input with which the construction of the world class infrastructure, i.e., roads, airports, ports, power, water etc began. Once this infrastructure was in place, investments followed which then led to the re-circulation of resources being reinvested in further strengthening of such infrastructure.


This only confirms what we have been arguing all along that whether it is in the USA or the People’s Republic of China, the investments in building the infrastructure has to come mainly from the government. The private sector, at best, can play a complementary role and even this is possible only when the basic structure is erected and raised by the government. However, in India, the Indian ruling classes have been ignoring such obvious realities. Setting aside our suggestions and in their eagerness to make quick profits, they made the Indian State progressively withdraw from such a role hoping that the private sector will step-in to build such infrastructure. Experience has now shown unambiguously that such a course has disastrous consequences which, apart from heaping misery on the vast majority of people, actually cripples growth and development. One of the reasons that China attracts hugely larger doses of FDI is precisely because of such developed infrastructure.


The advantages of such State investment in developing infrastructure is there for all to see. The truth that such investments albeit after sometime will generate greater revenues for the government is also ignored by our ruling classes. For instance, our discussions revealed that in the export promotion zone in Pudong where there are no taxes, the annual revenue collection last year, from a single Value Added Tax (VAT), was over 25 billion yuan ($3.5 billion). These revenues, in turn, are being put back into further developing the existing world class infrastructural facilities. For instance, we were informed that six new metro lines are under construction. 




However, does all this mean that the general standards of the people have increased tremendously? It is a fact that everybody is today better-off considerably than they were before the reforms began in China in 1978. But as we have noted earlier, this development has been very uneven with the sharp widening of economic inequalities. It is not only relative poverty but, in some cases, absolute poverty that can also be seen. However, one can also see a proactive State intervention in seeking to resolve such problems. For instance, the migrant workers who come here for construction are paid on an average 1000 yuan per month. It is obligatory on the part of the employer to provide such migrant workers with dormitory accommodation at least, and highly subsidised food. However, as we shall see later, an upper middle class couple earn upto 15,000 yuan a month. In order to bridge these inequalities, as we discussed earlier, the CPC has embarked on what it describes as its second long march to achieve a harmonious socialist society.


We were informed that every year, five million square meters of housing is constructed. Individual families, on an average, have 30 square metres of housing. A majority of families have a 50 square metre housing space which means that there are some who live in quarters smaller than the average of 30 square meters.


During our visit, we had the opportunity to be hosted by an upper middle class family. They live in a community called `zhabei’ which houses 25,000 such families in 752 buildings, each having 28 flats. The apartments in this community are 120 square meters, i.e., four times larger than the average.


All homes in Shanghai and Pudong are organised into communities. Each community has both a party branch and a local committee. This local committee, directly elected by the members of the community, is the liaison with the local government. The party branch functions as the core looking after the welfare of the community as well as the community-level activities like day care centres for children below the school-going age etc. Every community has a community centre which provides facilities for various cultural activities, training and enhancement of skills. The expenditure for all such activities, which from what we saw was of a very wide and rich diversity, is heavily subsidised by the local and the provincial governments. The enterprise of the Chinese people was reflected in what we saw! Retired men and women were learning English in preparation for the world trade fair to be held in Shanghai in 2010. Anticipating the requirement of English speaking interpreters and guides, they have enrolled to learn English. Beijing, which is hosting the 2008 Olympics, is also frantically teaching English and other foreign languages to hundreds of thousands of people. Every family in the Chinese urban centres will reach such levels, according to the CPC, by 2050.


Both the husband and wife who received us are engineers earning 14,000 yuan together per month. They have leased this flat for six lakh yuan on the basis of a housing loan provided by the State. Health care, which is an issue of concern in China, is sought to be treated by a system where the individual pays 30 per cent of the cost, local government subsidises 20 per cent, the county government subsidises 25 per cent and the provincial government another 25 per cent. Comprehensive health insurance schemes are being developed but public health is an issue of serious concern.




As always, a visit to Shanghai cannot be complete without visiting the house where the first congress of the Communist Party of China was held, clandestinely, in July 1921. 13 delegates representing 53 party members attended this congress. Two representatives of the Comintern also attended the congress. The congress adopted the Party Programme and the resolution on the party’s work which became the basis for the launching of the Chinese revolution and its successful triumph in the founding the People’s Republic in 1949. Mao Zedong prophetically had stated that “the founding of the CPC is an epoch-making event”. From a mere 53, the CPC membership has now grown to more than 60 million.


This house number 106 Wangzhi Road was declared a national monument in 1952. However, in 1990s, it has been largely modernised with a museum on the history of the Chinese revolution and a breath-taking tableau of wax figures depicting the congress in progress with Mao presenting the political report. It has now become an important centre for what the Chinese call as “conducting patriotic education” for the young people particularly. 


Inscribed prominently at the entrance of this memorial are the words of the former General Secretary of the CPC and President of the PRC, Jiang Zemin: “There would have been no new China without the Communist Party of China”. It is this new China – making tremendous advances, which, in the process is throwing up compelling socio-economic problems with the surfacing of trends alien to socialism like corruption, inequalities, unemployment etc – that is being built today. As communists, we in India, can only wish that the Chinese people under the leadership of the CPC will be able to overcome the negative consequences and strengthen socialism further in China.