China and Statism
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China is politically communist with a regulated capitalist economy. Regulated means that the individual capital to create more wealth is allowed, but the excess and exploitation found in western capitalism is controlled. Governments do not create wealth, they distribute the wealth of others, albeit often unfairly, but government didn’t invent the combustion engine, penicillin or the light bulb.
When Communism Met Capitalism
Following Mao’s death in 1976, two years later Deng Xiaoping overturned just about every policy Mao had implemented and abandoned the class struggle. He created a “Socialist Market Economy” which wasn’t a free market as we know it, but state regulated capitalism often referred to as statism. Gorbachev’s economic reforms (perestroika) during the last days of the USSR also tried to implement limited private enterprise and private market initiatives, but too little too late.
In just over thirty years after Mao’s death, China surpassed the U.S. to become the world’s leading exporter in 2009 (BBC), with a GDP of 11.1% (Reuters). In that thirty three year period China lifted an estimated 500 to 600 million people out of poverty (World Bank Group) and despite western restrictions on Chinese firms, in 2025 it’s GDP was 5.1%. Britain’s GDP was 1.4%.
China didn’t abandon capitalism, it embraced it and made it work for the country and not just the individual. The price paid is living in a police state. China makes no attempt to boast of democracy and freedom of the individual, it’s collectivised and patriotic to a level unheard of in Britain since WW2.
Living in China
China subsidises essentials such as basic foods, transport, utilities, accommodation … so that even those at the bottom aren’t left out. As people progress with promotions or wage rises they want to buy more such as a computer, foreign foods or a car. These are classed as non-essential items and are heavily taxed. This tax helps subsidise the essential basics for everyone.
Conversely, in the west people are subjected to market forces. As prices rise it produces more poverty as people are priced out of the consumer market. This is what you’re seeing now in the soaring cost of living and is the visible and ugly side of laissez faire capitalism.
The point being made is that China has proved that regulated capitalism works and the USSR proved that a society without capitalism didn’t work. China’s success shows that capitalism is a reliable tool for generating wealth, but provided the state remains its master rather than its servant.
Standard textbook mythology.
Hardly out of a textbook, I was there. Which part of it don’t you agree with?
GrandpaGB, I’d be interested to read your comments about this thread:
And as Chinese capitalism develops from feudalism, through state capitalism and its current system of capitalism with the hegemony of the political classes, the emerging private capitalist class will start to become dissatisfied with moving to answer to the CP praetorian guard.
They will also recognise, as did Adam Smith, Riccardo and others, that effectively tax is a levy on capital. There will be increasing pressure on the CP to step back, reduce taxes to increase profitability.
Chinese manufacturers do not set prices in a vacuum. As other manufacturers become more competitive, the profit margins for Chinese capital will become smaller and sections of the capitalist class will argue for greater democracy (a settled democracy without the cost of a police state, is far cheaper for the state machine).
The Chinese “Communist” party will have completed the historic role (which they probably weren’t aware of) of laying the foundations of the transition from feudalism and warlordism into capitalism. Just as the Parliamentarians did in England, the revolutionaries of France did during the revolutionary period, the Bolsheviks did in Russia, the republicans in Sinn Fein did in Ireland and which the Workers Party of Vietnam are also working towards.
The Parliamentarianists use the ideology of Protestantism, the French Revolutionaries used the ideology of the enlightenment, Sinn Fein used the mythology of the Gaelic revival and Lenin, Mao and Le Duan used the ideology of Communism as window dressing for their movements. Regardless of their alleged ideologies, economic and social development forced them to follow the same path.
Lots of people are there. I’ve met Chinese who have never heard of the Ch’ing dynasty.
One doesn’t jump social systems like one jumps on a hop scotch ground.
Social systems evolve, each within its predecessor. The huge former empires of China and Russia, in both of which the national bourgeoisie was small and weak, and which were under the necessity of modernising rapidly in order to compete on world markets with the established capitalist nation-states, could only do so if the state itself took on the task of building capitalism: as per Lenin’s model.
Even during the Sino-Japanese War, capitalists were moving their workshops and factories into the Red areas, as more conducive to their businesses than the Chiang regime.
By the late 1970s the Maoist cocoon had produced a fully-fledged capitalism, just as the Bolshevik state capitalist cocoon had done in Russia.
The same processes had been followed by Mao in China and Stalin in Russia (but much more rapidly) as were carried out in Tudor England: the mass expropriation of the peasantry and other landholders (in Russia and China forced into so-called “communes” run by the state, rather than thrown onto the streets as in England), so, being forcefully deprived of the means of production for themselves, rather than on behalf of the state machine, they would have to work for the latter. China’s and Russia’s “Communist” party high officials thus became the capitalist class of those states, eventually ditching the Bolshevik model which had served its purpose.
The revolutions in Russia and China were capitalist revolutions, even though not initiated by the bourgeoisie itself.(Neither was Japan’s revolution initiated by its bourgeoisie (which was the lowest and most despised class in the country) but by the Satsuma and Chōshu samurai class.)
Bijou, have to stop you on ” And as Chinese capitalism develops from feudalism.”
Chinese feudalism had been absorbed in the Chin dynasty into a landlord meritocracy. This was a form of what Marx called “the Asiatic mode of production”, which he was examining when he died so couldn’t finish.
Mao wrongly saddled China with the European scenario, in which capitalism did emerge from feudalism, and this has become the myth preached by the Chinese “Communist” Party. But feudalism hadn’t existed in China since the third century BCE.
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