People's Democracy

China in the Twenty-First Century – Present and Future

Sitaram Yechury

THE Left members of the European parliament are organised as GUE/NGL (The European Left/Nordic Green Left) under the presidentship of Die Linke (German Left Party) which has the largest representation in the European parliament.  GUE/NGL organised a seminar on 'China in the 21st Century – Present and Future' on June 6-7, 2013 at the European parliament in Brussels.

Apart from the leaders of the Left parties represented in the European parliament, MPs and Communist Party leaders from South Africa, Brazil, Britain and I from India were invited.  Also participating were Left intellectuals like Samir Amin and others from Europe. This conference was also supported by Left-oriented academic foundations in Europe – Gabriel Peri of France, International Correspondence, Centre for Overseas Social and Philosophical Theories of Europe and OSPAAAL of Latin America.

The seminar was attended by a four-member delegation from the Centre of Studies in Socialist Theories and Philosophies which functions under the Central Committee of the Communist Party of China. These members participating in the discussion, however, underlined that their interventions are to be seen as interventions by Chinese academicians and not as representative of the views of the Communist Party of China. All of them, however, informed that they were members of the CPC.

There is considerable interest and expectation in Europe on the importance of China in helping the recovery of the global economy. In a way, the proceedings of the seminar and the European anxiety vindicated a joke that was popular in 2008 when the global financial meltdown took place ushering in the current crisis: In 1978, Deng Xiaoping said that Socialist China requires capitalism, in 2008 global capitalism requires Socialist China to bail it out from the crisis!

Members of the European parliament expressed concern over the fact that there is no possibility of an economic turn  around in the near future in Europe. The current policies of 'austerity' are only compounding the crisis because this is shrinking the aggregate domestic demand in the entire continent. Additionally, this is imposing severe burdens on the vast mass of the working people squeezing their purchasing power capacity. Under these circumstances, one way for the economic recovery is being seen in expanding European exports to China and thereby expand domestic production and employment. For this, the Chinese domestic market needs to be prised open further. Clearly, political pressures will also be mounted to ensure this happening.

While opposing any such political pressures mounted on China, the seminar participants had a wide ranging discussion on the future of Chinese economic miracle (an over 9 per cent GDP growth annually over three years) and how it would be in a position to pull the global economy out of the current slowdown. There was, by and large, a universal opinion that the People’s Republic of China will play a vital role in the global affairs in the 21st century. Apart from the Chinese economic development and its role in salvaging the global economy, its efforts to create multipolarity in world relations as opposed to the efforts to create a unipolarity under US hegemony is a crucial element  in the evolving global situation. A substantial part of the discussions centred around the problems related to the transition from capitalism to communism, with socialism as its initial stage. Much of this was on the lines as discussed in the CPI (M) 20th Congress resolution 'On Some Ideological Issues'.

The essence of the discussions was reflected in the following extracts from the intervention on behalf of the CPI(M):

At the very outset, let me thank the organisers for inviting me to such an important seminar, on one of the most engaging topics. India, the country I come from and China are two of the oldest civilisations in world and share historical relations since ancient times, dating back to many centuries. We feel that the world is big enough for both the giants in Asia – elephant and dragon (to use the common allegory), to grow and that development and growth of China is not inimical to our country, as many seem to project. This is in fact an opinion expressed by both the newly elected Premier of China, Li Keqiang, who chose India for his maiden foreign tour and the Prime Minister of India Manmohan Singh too.

Li Keqiang, along with Xi Jinping represent the fifth generation that had assumed the leadership of the Peoples' Republic of China (Mao Tsetung belongs to the first, Deng Xiaoping to the second, Jiang Zemin to the third and Hu Jintao to the fourth) few months back. Xi Jinping, after assuming the presidency of the country pledged to: “make persistent efforts, press ahead with indomitable will, continue to push forward the great cause of socialism with Chinese characteristics, and strive to achieve the Chinese dream of great rejuvenation of the Chinese nation”.

The phrase, Chinese dream, attracted lot of attention, with comparisons even made with the 'American dream'. Explaining what he meant, Xi Jinping continued: “The Chinese dream, after all, is the dream of the people. We must realize it by closely depending on the people. We must incessantly bring benefits to the people...it is the desire of China's people to live the same good life as all other people in the world”.

The 18th Congress of the CPC held in November 2012, in which Xi Jinping was elected as the general secretary, reiterated its goals as the attainment of a “moderately well-off society” by the time of the party’s 100th birthday in 2021; the creation of a “rich, strong, democratic, civilised and harmonious socialist modern country” by 2049, the 100th anniversary of the founding of the PRC. All these clearly explain where China is today and where it wants to reach in the near future.

China's economic achievement is so enormous that it is without parallel in human history. A country which in 1978, was one of the poorest in the world, has now reached a point where it has a higher GDP per capita than the countries containing the majority of the world's population. The Economist in its May 4th issue, acknowledges the economic development in China: in the 1960s, China’s GDP was “just 4 per cent of the world total” and now it is “about one-sixth of the world’s GDP – and at least 90 per cent of America’s – in purchasing-power parity terms”. To give absolutely precise numbers, drawing on the newly published data for the world economy in 2012 released by the IMF, only 30.2 per cent of the world's population lived in countries with a higher GDP per capita than China, while 50.2 per cent lived in countries with a lower one. China itself constituted 19.6 per cent of the world's population at this time. In 1978, when 'reform and opening up' began, only 0.5 per cent of the global population lived in countries with a lower GDP per capita than China, while 73.5 per cent lived in countries with a higher GDP per capita. The transition to a situation where China has overtaken the majority of the world's population in per capita GDP is thus the greatest economic transformation in human history, both in terms of the short time frame required and number of people affected.

China is, now in the top half of the world as far as economic development is concerned (these comparisons are at the current market exchange rate measures usually used in China – although calculations in parity purchasing powers (PPPs), which are the measure preferred by the majority of Western economists, makes no significant difference to the result). China's GDP per capita is now higher than all developing South and South East Asian countries except Malaysia. China's economy, the second-largest in the world, is now dominated by medium, not low technology. This is where China stands now in the world.

Despite the economic slowdown in China due to the global economic crisis, its growth remained at a staggering 7.7 per cent in the January-March period. Even during this period of relative slowdown, it exceeded its employment target of creating nine million new jobs – over 33 per cent. Over 12 million jobs were created in 2012. This in itself highlights the different growth trajectory pursued by China, compared to the other developed/developing countries, where growth, (that is increasingly becoming scarce) is always jobless growth and many a times, even is jobloss growth. The difference becomes all the more obvious when we look at the way the bailout packages were designed in the US, Europe and China.

In the West, all the bailout packages were biased in favour of the huge corporates that were in the first place responsible for the crisis. For the West, including the United States and the UK, the rebalancing of the economy refers to cutting back on consumption (which has been paid for by incurring debt that proved unsustainable), producing more and reversing the decline of manufacturing. This, more often than not, includes a desire to prise open the markets of the developing countries and coerce their economies into subjugation. But for China, it's the opposite. Rebalancing its economy means raising consumption and reducing its reliance on exports. The bailout package introduced by the Chinese government immediately after the crisis clearly spells out this important difference. The reason for this all important difference lies in the fact that China, as opposed to capitalism, is pursuing the trajectory of a totally different social system – building socialism with Chinese characteristics.

Many point out that the development that we are witnessing in China was possible because it had embarked upon the path of 'reforms' since 1978. The main question before the CPC was that of increasing the productive forces in a backward economy to a level that can sustain large-scale socialist construction and to rapidly bridge the gap between backward productive forces and advanced socialist production relations. A prolonged period of low levels of productive forces would give rise to a major contradiction between the daily expanding material and cultural needs of the people under socialism and backward productive forces. Thus, what is sought to be created in China is a commodity market economy under the control of the socialist state where public ownership of the means of production will remain the mainstay. These reforms have certainly produced positive results. The Chinese economy grew at a phenomenal over 9 per cent a year for the last three decades, and poverty, measured in money terms, as we had seen earlier, witnessed a fall.

However, new problems and disturbing trends are cropping up. They are mainly the growing inequalities, unemployment and corruption. As the Report of the 18th Congress of the CPC itself acknowledges: “Unbalanced, uncoordinated and unsustainable development remains a big problem. The capacity for scientific and technological innovation is weak. The industrial structure is unbalanced. Agricultural infrastructure remains weak. Resource and environmental constraints have become more serious. Many systemic barriers stand in the way of promoting development in a scientific way. The tasks of deepening reform and opening up and changing the growth model remain arduous. The development gap between urban and rural areas and between regions is still large, and so are income disparities. Social problems have increased markedly. There are many problems affecting people's immediate interests in education, employment, social security, healthcare, housing, the ecological environment, food and drug safety, workplace safety, public security, law enforcement, administration of justice, etc. Some people still lead hard lives. There is a lack of ethics and integrity in some fields of endeavour. Some officials are not competent to pursue development in a scientific way. Some community-level Party organisations are weak and lax. A small number of Party members and officials waver in the Party's ideal and conviction and are not fully aware of its purpose. Going through formalities and bureaucratism as well as extravagance and waste are serious problems. Some sectors are prone to corruption and other misconduct, and the fight against corruption remains a serious challenge for us. We must take these difficulties and problems very seriously and work harder to resolve them”.

The Chinese government has now focused its attention on the rural areas and the increased rural-urban divide and initiated measures to address these pressing concerns. If we take the problem of inequality, we notice that by 2002, the average group income of the highest 10 per cent was 22 times higher than that of the lowest 10 per cent. The last 18 years saw an over thirteen-fold increase in the urban-rural income gap in absolute terms. In 2010, the average per capita income of China’s urban residents was 3.23 times that of rural residents. China has more billionaires today than any other country other than the United States of America. In the ten years from 1997, a period which saw the remarkable economic boom, the share of workers’ wages in national income fell from 53 per cent to 40 per cent of the GDP.

In an effort to redress some of these imbalances, the Chinese government started the development-oriented poverty reduction programme in the rural areas in an organised and planned way. In line with the increase of economic and social development level and based on the changes in price index, the state gradually raised the national poverty line for rural residents from 865 yuan in 2000 to 1,274 yuan in 2010. The government also ensured that personal income continued to increase. Urban per capita disposable income and rural per capita net income reached 21,810 yuan (2011) and 6,977 yuan (2011), respectively, and rural incomes had the greatest real growth since 1985. The average monthly wage of rural migrant workers reached 2,049 yuan (2011), an increase of 21.2 per cent over the previous year.

The policies pursued by the Chinese government resulted in the employment situation remaining stable with an additional 12.21 million urban jobs created, 3.21 million more than the targeted amount. The urban registered unemployment rate at the end of 2011 stood at 4.1 per cent, meeting the target. A total of 5.53 million laid-off workers were re-employed and 1.8 million people who had difficulty finding employment found jobs. It has also taken steps to abolish agricultural tax in 2006, increase the grain price subsidy and increase spending in rural health and education.

The government also adopted a goal of providing adequate food and clothing for poverty-stricken people while ensuring their access to compulsory education, basic medical services and housing by 2020. In 2007, the state decided to establish a rural subsistence allowance system throughout the rural areas that would cover all rural residents whose per capita annual net household income was below the prescribed standard, so as to solve the problem of adequate food and clothing. The state provides the five guaranteed forms of support (food, clothing, housing, medical care and burial expenses) for those who are unable to work and have no family support. The National Development and Reform Commission (NDRC) announced on May 22, 2013 that electricity prices for all businesses in agricultural production and logistics will be cut from June 1. The move is expected to reduce soaring costs in logistics and further stabilise farm produce prices. The State Council, China's cabinet, in early January issued a circular asking local authorities to ensure the implementation of a range of measures aimed at cutting logistics costs for farm produce amid climbing food prices. All these show that, unlike what the apologists of neo-liberal philosophy advocating 'austerity' want us to believe, State planning and intervention is an effective means to redress certain imbalances by putting people first.

To sum up: During these three decades of reforms China has made tremendous strides in the development of productive forces and economic growth. A consistent growth rate of around 9 per cent on the average over a period of three decades is unprecedented even in the entire history of capitalism for any country. However, this very process has clearly brought to the fore adverse changes in production relations and therefore in social relations in China today. How successfully these contradictions are dealt with and how they are resolved will determine the future course in China and its ability to influence the global developments. The efforts to strengthen and consolidate socialism will receive solidarity from us and other well wishers the world over.