PETE GLOVER explores the debate on the class nature of China and shows how an understanding based on Marx’s Capital is vital.

Introduction

In the discussion on China, the current Socialist Party/CWI position appears to be as follows: Categorizing China as capitalist or as a deformed workers’ state is extremely difficult. Contradictory tendencies are evident, especially in Bonapartist states. The dialectical method is able to interpret apparent contradictions and is never too categorical.

Our analysis may appear more ‘complicated and ponderous’ than the simple assertion that China is now a ‘fully’ capitalist state. However, it is necessary, in our view, to take account of the contradictory features of the transition and foresee possible variants of developments, and find in this foresight a basis for action.”

“First, there is the issue of method. Marxists should strive to analyse social phenomena (in this case, the changing Chinese state) in a rounded-out, scientific manner, not attempting to fit new developments into old stereotypes” (Socialism Today issue 122.) This article in Socialism Today was an honest, valiant and, at times, perceptive attempt to resolve the problem of the nature of China.

However, if we try to abandon some of the essential constituent categories that define capitalism outlined by Marx in “Capital” we can become lost. We then see night when it is day. The leaders of the Chinese Communist Party have tried to use the “dialectical” method in a distorted, dishonest manner to solve some of their own contradictions.

Our revolutionary teachers Marx, Lenin and Comrade Mao always stressed the importance of concrete historical conditions and the need to study those of both the past and the present in order to ascertain objective laws to help us guide the revolution. To ignore the new historical conditions is to cut things off from their historical context, to divorce oneself from reality, and to abandon dialectics…” (Deng Xiaoping Speech at the All army conference on Political Work June 2, 1978)

More honestly- and with frightening self-consciousness- other Chinese “Communists” have overcome their own theoretical contradictions in comic fashion: “I appointed myself party Secretary of Haier so I can’t have any conflicts with myself, can I?” (Zhang Ruimin, Chief Executive of Haier, China’s largest white goods manufacturer)

Another way of using “dialectics”, Chinese CP style is to use euphemism: “Ask any entrepreneur whether their company is private or “siyang”, literally “privately run”, it is striking how many still resist the description in favour of the more politically correct tag “minying” which means “run by the people”. (MacGregor, The Party: The secret world of China’s Communist rulers, p200)

The article quoted from Socialism Today was a serious attempt in the Marxist tradition. However, others on the Left appear to have taken what the Communist Party says about itself at face value: “We are the Communist Party and we will define what Communism means”. (Chen Yuan,China Development Bank)

After Tienanmen a document was circulated including this key phrase: “The Party must grasp not only the gun, but the asset economy as well”. This was a charter for the theft of the workers’ state property by the gangster Chinese CP opening up the way for their emergence as a capitalist class.

“In other words the title to the vast sprawling assets of the Chinese state, everything from giant energy and industrial companies and land-holdings should not be held in the name of the Chinese government but of the party itself”(MacGregor, The Party: The secret world of China’s Communist rulers, p34)

Beginning in 1979 the Communist Party, under Deng Xiaoping, began its conscious journey towards capitalism.  In the 1980s an ambitious plan of counter-revolutionary economic reforms accelerated the market model, while the leaders maintained socialist rhetoric. The defining event in the transformation to capitalism was 1989. The Tienanmen Square slaughter smashed the revolutionary working-class. Student leaders were arrested but the workers were murdered. The CP were able to use this defeat to accelerate and complete the development of capitalist relations on the land and small scale local industry and to usher in foreign investment. The state machine used its power to enrich itself (for example using so-called Collective enterprises as a cover for a capitalist enterprises).

The Definition of Capitalism

“The wealth of those societies in which the capitalist mode of production prevails, presents itself as “an immense accumulation of commodities,” its unit being a single commodity. Our investigation must therefore begin with the analysis of a commodity.” (Marx, Capital Volume 1, Chapter 1, p1)

How do we analyse the class nature of China? I am going to approach this question from the perspective of Karl Marx’s Capital. Marx asks the question himself. How do we understand the nature of the society we live in? He doesn’t begin his analysis of society with the state. He begins with the most basic economic unit- the commodity. Why? Because the commodity is an immense source of economic power. It shapes the destinies of states and classes. Marx chose to begin Capital with an analysis of the commodity- not the state, not the world market, not competition, not the rate of profit.

“The circulation of commodities is the starting-point of capital. The production of commodities, their circulation, and that more developed form of their circulation called commerce, these form the historical ground-work from which it rises.” (Marx, Capital Volume 1, Chapter 4)

Marx emphasises that the circulation of commodities provide us with a definition of the capitalist mode of production. The circulation of commodities only arises when society has reached a certain form of development. If we look at China today it produces more commodities than any other country in the world. The scale of commodity production outstrips by a factor of many hundreds anything Marx could have envisaged in the leading capitalist economies of its time.

“China became the world’s biggest trader in goods for the first time last year, overtaking the US for all of 2013 and finishing the year with record trade figures in December 2014…The total value of China’s imports and exports in 2013 was $4.16tn” (Financial Times, Jan 10 2014)

If we ask ourselves the question: does the wealth of Chinese society present itself as an immense accumulation and circulation of commodities? The answer must be a resounding affirmative. Marx continues:

“If we abstract from the material substance of the circulation of commodities, that is, from the exchange of the various use-values, and consider only the economic forms produced by this process of circulation, we find its final result to be money: this final product of the circulation of commodities is the first form in which capital appears.” (Marx, Capital Volume 1, Chapter 4)

Marx explained that commodities have a dual nature. They have a use value and an intrinsic value. Their value is (indirectly) reflected in another commodity when placed in an exchange relation to it. The “exchangability” of the first commodity expressed in terms of the second commodity is called exchange-value. The exchange-value of a commodity is expressed as its price. He then described how the value of commodities are arrived at. The values of commodities are related to the socially necessary labour time it takes to produce them. Socially necessary labour time is the amount of time it takes a worker of average skill to produce a commodity. So Lamborghinis have a greater value than an apple. You can’t compare which is more useful- an apple or a Lamborghini. Commodities, when they have a social use are exchanged on the market. Many of us probably have our homes filled full of commodities which originate in China. If you’ve wanted a PC or mobile phone, you have realized this need in the market place. The market is essential for capitalism and goods are circulated in greater numbers and at greater speed than ever before.  Is China a completely developed marketplace?

“The country became the world’s biggest goods exporter in 2009 and Chinese imports and exports now account for more than 10 per cent of global goods trade, up from just 3 per cent in 2000.” (Financial Times, Jan 10 2014)

Can there be any question at all about the scale of the circulation of commodities? Again, even the most die-hard Maoist would have to agree that market relations penetrate every aspect of Chinese society from education, health care to Chinese Communist Party membership.

In Marx’s explanation of the movement of the capitalist economy in its totality, the role of money is not just essential but is the ultimate purpose of production. We, of course, see a developed money economy in China. Money is accumulated and invested to make more money.

“The exact form of this process is therefore M-C-M’, where M’ = M + Δ M = the original sum advanced, plus an increment. This increment or excess over the original value I call “surplus-value.” The value originally advanced, therefore, not only remains intact while in circulation, but adds to itself a surplus-value or expands itself. It is this movement that converts it into capital.”  (Marx, Capital Volume 1 Chapter 4)

The purpose of production of commodities under capitalism is not to produce for social need. The purpose of capitalist production is to convert a sum of money into a larger sum of money: M-C-M’. This is the formula for the circuit of capital. The capitalist buys means of production and labour power to produce commodities which are sold for a greater sum of money that the capitalist originally laid out. This process continues and is expanded as commodities and money-capital fly around the world in ever growing quantities seeking sales and profitable investment opportunities. The conversion of money into more money through the labour process has reached yet higher peaks.

How can the investment of money in production create a bigger amount of money on sale on the market?  Marx showed that in the process of exchange commodities are sold for a profit.  He identified the source of profit in surplus-value. This was part of the commodity’s value, but how does it get there? The capitalist advances money-capital to buy raw materials and labour-power which he then puts to work in a process whereby capital consumes the labour power to augment the value of the invested capital through a process called valorisation.

The worker labours to produce commodities but isn’t paid the full value of their labour-power. Only labour-power has the ability to add additional value to the product. Surplus-value is therefore the unpaid portion of the working day. Commodities leave the factory augmented by surplus value over and above the cost of the raw materials and the paid portion of labour power.  It is this indispensable link in the chain of capitalist production that allows profits to be made and it is the proof that capitalist production rests on the exploitation of unpaid labour.  Without valorisation, without this exploitation, there can be no profit.

Given that both private and state owned industry in China are run on the basis of profit generation, this is proof that China must be capitalist. The exploitation of labour power has to lie at the heart of the system but it then asserts itself through generalised commodity exchange in a developed capitalist market. It is irrelevant if there are industries that are state owned or even if they are less profitable or subsidised by the state. If they produce any profit they are run on lines of capitalist exploitation.

“The process of production, considered as the unity the labour process and the process of creating value, is the process of creating commodities; considered as the unity of the labour process and the process of valorisation, it is the capitalist process of production, or the capitalist  form of the production of commodities”  (Marx, Capital Volume 1)

Wage Labour and Capital

There are many conditions required for capitalist production, too numerous to discuss in the article, but one of them, wage-labour, is a crucial. Wage-labour, the worker’s enforced sale of his/her labour power, is a consequence of the capitalists owning the means of production. Marx description used the concept of “variable capital” to describe wage-labour. The state can interfere with wage levels by granting a minimum wage and developing a variety of social security schemes but wage labour remains.

“Variable capital is therefore only a particular historical form of appearance of the fund for providing the necessaries of life, or the labour-fund which the labourer requires for the maintenance of himself and family, and which, whatever be the system of social production, he must himself produce and reproduce.” (Marx, Capital Volume 1 Chapter 23)

Marx points out that variable capital, or wage-labour, is a specific form of appearance of the labour process under capitalism. With capitalism we find wage-labour as the dominant or most widespread form for the reproduction of the labour process. He makes a clear distinction between capitalism and other modes of production:

“Let us take a peasant liable to do compulsory service for his lord. He works on his own land, with his own means of production, for, say, 3 days a week. The 3 other days he does forced work on the lord’s domain. He constantly reproduces his own labour-fund, which never, in his case, takes the form of a money payment for his labour, advanced by another person. But in return, his unpaid forced labour for the lord, on its side, never acquires the character of voluntary paid labour. If one fine morning the lord appropriates to himself the land, the cattle, the seed, in a word, the, means of production of this peasant, the latter will thenceforth be obliged to sell his labour-power to the lord. He will, ceteris paribus, labour 6 days a week as before, 3 for himself, 3 for his lord, who thenceforth becomes a wages-paying capitalist ”  (Marx, Capital Volume 1, Chapter 23)

Wage-labour conceals a social relation. The wage itself is an expression of the dominant position of the capitalist class who own the means of production. Wage labour is completely dominant in China. Nicholas Lardy, author of “Markets Over Mao” points out: “Prior to the late 1970s there was no market for labour in China…Labour mobility and labour turnover were nil.” In 1978, in urban areas, the combined number of workers who voluntarily left their jobs or were fired was less than 0.05%. (ibid) Rural workers were rarely allowed to leave their home villages.

Permanent employment was done away with in the 1980s. But by 1995 contract workers accounted for 39% of total employment. Employment, although higher overall, in Chinese state firms in urban areas has shrunk to just 13%! (ibid)

In 1992 the Government gave state owned enterprises more freedom to set their own wage structures and in 1995 the Ministry of Labour passed new regulations allowing even more “freedom” for state companies.

The separation of workers from the means of production affected all parts of society. From the mid-1990s to mid-2000s, an estimated 40 million Chinese peasants were affected by land requisitions- theft for primitive capitalist accumulation. The mass privatisations of state companies in the 1990s also amounted to the robbery of state property: a new bourgeoisie emerged. As Marx put it in:

The capitalist system presupposes the complete separation of the labourers from all property in the means by which they can realize their labour. As soon as capitalist production is once on its own legs, it not only maintains this separation, but reproduces it on a continually extending scale. The process, therefore, that clears the way for the capitalist system, can be none other than the process which takes away from the labourer the possession of his means of production; a process that transforms, on the one hand, the social means of subsistence and of production into capital, on the other, the immediate producers into wage labourers. The so-called primitive accumulation, therefore, is nothing else than the historical process of divorcing the producer from the means of production.” (Marx, Capital Volume 1, Chapter 26)

In addition to the creation of a property-less migrant proletariat a supplementary purpose was the introduction of the whip of capitalist competition and the imperative of profit into the remaining state companies.

In the USSR the working class owned the means of production. State property was organized to carry out a social plan of production. Despite the bureaucracy bearing down parasitically on the backs of the workers, nevertheless, as Trotsky explained, the USSR was a workers state and the bureaucracy did not form a separate class, only a privileged stratum of society. The working class did not sell its labour-power as there was no class who owned the means of production to sell it to.

The Law of Value

What about the law of value? This law formulated by Marx, roughly expressed, means that the exchange values of commodities, expressed in prices, are proportional to the average amount of socially necessary labour-time necessary to produce them. The law of value along with commodity production does not operate in anything like the same way in a planned economy compared to a market economy. The market drives China.

“The share of industrial output produced by state firms (including both traditional state-owned enterprises and enterprises in other registration categories where the state is the majority or dominant shareholder) fell from 78%…to 26% by 2011. (Lardy, Markets Over Mao: The Rise of Private Business in China)

In the industrial sector in 1996 there were 443,000 registered private enterprises which accounted for a fifth of all enterprises. By 2012 private companies accounted for 5,918,000, that is seven tenths of all firms. (ibid)

In 1978 over 95% of investment was financed through the state budget. “…as early as 1985 the share of investment financed by the state budget had fallen to less than one fifth”! (ibid) The idea that state companies have some decisive strategic power over the private sector is therefore completely wide of the mark.

Lynn Walsh in issue 122 of Socialism Today, replying to Vincent Kolo said “There is still a legacy of Maoism-Stalinism in China. Though fostering capitalist development, the state still controls powerful levers of economic influence.”

In such key industries as coal where the strategic power of the state should be at its most powerful, state enterprises number 880. This is dwarfed by the number of private companies- a staggering 4,420! The coal industry, one of the so-called sacred “nine pillars” of the economy is now only just over 50% state owned and falling.

As long ago as 2002, even the distribution of natural gas in China’s cities was opened to private companies (including foreign owned companies). This percentage has been dramatically shrinking despite fierce “Communist” pronouncements. The tail can’t wag the dog. The state’s share of industrial output standing at just 26% of the total is in no position to dictate to the market.

In a capitalist economy, the rate of profit is the mechanism which expresses the law of value. Companies compete against each other to maximize profit. Capital flows toward those areas where the rate of profit is above average and flows away from those areas where the rate of profit is below average. Production is regulated in this way- increasing in areas of higher profits and decreasing in areas of lower profits. Workers are thrown on to the scrap-heap by those lower profit industries. And workers are taken on in the higher profit sectors. Capital acts like an automatic flow. Like wage labour, competition is another condition for the existence of capitalism. Profit is the thing that makes capitalists go and buy new machines. The coercive laws of competition in China disciplines all sectors of the economy, state and private, despite the edicts and wishes of the state. State enterprises are forced to conform. Given the shrivelled state sector they must. Nationalised industries are driven to operate on the same profit motive under conditions of competition as private industries in China.

The Nature of Money in the USSR

The USSR stands in qualitative opposition to present day China.

It exercised extremely tight control over foreign trade and the use of foreign currencies. Unless you were a high-ranking party official, one could not convert roubles into dollars. That is no longer the case. Marx maintained that money had two functions. 1. as a means of exchange and 2. as a store of value. Money fulfils both of these functions in the Chinese economy. For this particular, point 2. “Store of value” is key. In the USSR you could store as much of the stuff as you wanted (roubles) but you still couldn’t buy anything in the shops. You were also likely to be arrested if caught in possession of large quantities of money. There was no possibility for capitalists to hoard money in order to accumulate. Today, in China, money acts as money in the true sense that Marx described. That’s one of the reasons why we see savings being poured into the shadow banking sector and why there is a housing bubble. This would not have been possible in the USSR because money could not be accumulated.

“China’s decade-long housing boom looks nothing short of a gigantic bubble familiar to many countries: In big cities the price-to-income ratio reached 30 to 1 and the vacancy rate stood at 30% or above.” (Chen and Wen, The Great Housing boom in China)

The paper continues on the theme of the role of money: “We argue that the very expectation that China’s high capital returns driven by cheap labour and resource relocations are not sustainable in the long run can induce investors to seek alternative store of value for their growing wealth, thus triggering a self-fulfilling housing bubble.”

“We show that the great housing boom in China can be a rational bubble arising naturally from China’s unprecedented economic transition which features phenomenal rates of return to capital driven largely by newly emerging private firms and massive relocations of cheap labor from rural to urban areas, from poor to rich cities, and from SOEs (state-owned enterprises) to private enterprises during the transition.” (ibid)

International trade has altered social relations. The ratio of imports to GDP in China has overtaken even the USA. This increases competition in the domestic market (including the shrinking state sector). The amount of inward direct investment in China is second only to the US. Again this adds to competition within China and reasserts the capitalist relations. And China’s huge export trade means that the companies exporting goods are subject to huge global competitive pressures, again reinforcing all the laws of capitalism. The current Five Year Plan does not even have a single target for even one industrial product.

When the means of production are nationalized there is neither a market for capital nor its free entry and withdrawal, nor even the formation of an average rate of profit with which the rate of each particular branch can be compared, clearly there is no longer a possibility for the “law of value” to be directly the “regulator of production.”

In China, capital overwhelmingly flows towards those sectors where profitability is the highest in relation to prices on the world market. Inequality, a direct product of capitalism, is beyond levels in the USA.

Russia and China

Why do some say that China is deformed workers’ state and not use the same criteria for Russia? Is it the proportion of state employees overall? Is it the size of the state sector’s assets or is it because the state is able to direct the private sector? I hope to prove that on these accounts the descriptions are false. The only basis to believe this would be to take the Chinese CP at its word.

Although the current CWI majority-position deems Russia a capitalist state, Putin and his cronies, even without the fig-leaf of a “Communist Party”, wield enormous power in the direction of the Russian economy, more perhaps than the Chinese Communist Party.

The OECD in a recent paper (Sprenger, State-Owned Enterprise in Russia)  analysed the relationship between state and private business. In Russia State owned enterprises take many forms such as Joint Stock Companies like Gazprom, Sberbank, Russian Railways and Transneft: “Unitary Enterprises at the federal, regional, or municipal level share this model too such as Rosoboronexport, Post of Russia and Rosspirtprom.”

Over 10% of the economy is in state hands. This accounts for 39% of all employment in Russia and just as significant 32% of all capital investment. This is greater than in China! In manufacturing 20% of the economy is state or partially state owned. Oil and gas is 47% state owned. Utilities: 37%state owned . Metallurgy is 11% state owned. The Chemical industry: 25%. In the Banking Industry 45% assets of are held by state controlled banks.

Federal and regional governments control about 40% of the stock market capitalization in Russia in 2007 ,compared to only 24% in 2004 (Estimates by TroikaDialog).

Privatization and new share issues require explicit approval of the President.There is now a law on foreign investment in companies with a strategic impact on the national security of the Russian Federation. But why stop there?

Some studies suggest that the Singaporean Government has been able to control 60% of the country’s savings and investments. So successful is this policy some have called it Singapore Inc. (Workshop on State-Owned Enterprises in the Development Process, OECD)

What about Saudi Arabia? Most Saudis are actually employed by the government. Saudi Arabia is an Absolute Monarchy ruled by a huge Royal Family. Saudi Aramco, the state controlled oil and gas producer, has total assets estimated at US$30 trillion. Petroleum accounts for 40% of Saudi GDP, 88% of the country’s exports and 90% of Government revenues. The Monarchy’s control over the economy is greater than the Chinese CP. But it’s not a deformed workers’ state!

Neither does looking at the size of public sector employment help support the view that China is a deformed workers’ state. Governments in Norway and Denmark employ close to 30% of the labour force.

As an interesting and not irrelevant aside the percentage of state employees in freedom-loving Alaska is a staggering 28%. (States With the Most Government Employees By Samuel Weigley and Alexander E.M. Hess, 247wallst.com, March 11, 2013))

Each economy has its own idiosyncrasies but there is no index in the Chinese economy- other than state propaganda- that indicates it is not capitalist.

The CCP and the State

The legislature China is almost certainly the wealthiest in the world. There are 83 dollar billionaires among the delegates to China’s parliament. 90% of Chinese billionaires are CP members. The Chinese state protects Capital and private property. It doesn’t have the power (nor the intention) to defeat the powerful billionaire class. Neither can it arbitrarily transform the social relations that have arisen.

Meanwhile, in America there is not a single billionaire in the House of Representatives or the Senate. The wealthiest member, Texas Republican Michael McCaul, is estimated to be worth a paltry $500m.

In an irony of history, some comrades have forgotten the experience of post-war Britain: Labour was able to introduce widespread state control in 1945. It nationalised the Bank of England, Steel, Coal, Railways, the National Health. We even had nationalised car companies. We had British Aerospace in public hands until the 1980s along with British Ports, British Petroleum (BP) and British Telecom.

The Party is an adjunct of the state which acts in the interests of capital. China is clearly capitalist. The Chinese Communist Party is already enforcing capitalist property relations and using force to repress the growing power of the working class.

Eight immortals and Yin and Yang – Chinese Capitalism and Revered Party Heroes

In Chinese philosophy, yin & yang, describes how apparently opposite or contrary forces are actually complementary. Bloomberg, after trawling through a mass of financial documents produced a spectacular picture of the emergence of crony or capitalism with Communist Party characteristics. The family ties of the so-called “Eight Elders” or “Eight Immortals”, now deceased who represented the backbone of the Chinese Communist Party leadership and led China’s migration to capitalism after Mao Zedong’s death is a killer indictment. (Source bloomberg, http://go.bloomberg.com/multimedia/mapping-chinas-red-nobility/)

The Wang family

Wang Zhen, is credited with saving the Communist Revolution by carving farms from wasteland near Mao’s redoubt of Yan’an. His sons were all business executives: Wang Jun ran Citic Group and now spends his time promoting golf; Wang Zhi founded a computer company; and Wang Bing was in aviation.

The Li family

Li Xiannian backed Deng Xiaoping’s decision to suppress the student protests on Tiananmen Square in 1989. Son Li Ping became a major general. Daughter Li Xiaolin studied at UCLA, married an outspoken Air Force general, and, like one of Deng’s daughters, spends her time running a semi-official diplomatic organization. His son in law is a director of a group in the “State Owned” Everbright group. The Company provides portfolio management services for institutional and individual clients, such as China Everbright Dragon Fund, or it’s SeaBright China Special Opportunities Fund series of direct investment funds, the first of the series that was launched in 2004 in a joint venture with Seagate Global Advisors, LLC. It provides financial advisory services, such as share placements, mergers and acquisitions (M&A), privatization and project financing. This summarises the relationship between state and capital.

The Peng Family

Peng Zhen, the longtime Communist Party boss of Beijing, was purged, like most of the Immortals, during the 1966–1976 Cultural Revolution. Son Fu Liang is a scion of capitalism runs a Shenzhen golf club and a yacht club and is on the board of a Citic-owned TV and satellite communications company. His other son is a scion of the workers state and was party personnel chief before becoming a director of the China National Nuclear Corporation a state owned company (up the workers!). A good party man. His daughter Fu Yan is another embodiment of the Stalinist bureaucracy which has transformed itself into a capitalist class and is comfortable moving between State and Capital. She ran a state owned trading company in the 2000s, but also, to avoid contradicting herself is a private businesswoman and is the director of a Honk Kong Investment company along with her husband. Certainly this family have no truck with the “fixed categories” I am employing.

The Deng family

Deng Xiaoping emerged as leader after Mao’s death, overseeing China’s economic opening.. Grandson Zhuo Di, used to work with U.S. law firm White & Case. Another grandson, Zhuo Su, is chairman of a company invested in an Australian iron ore mine. Son-in-law He Ping was a former army officer and attache to the embassy in Washingto and also owns 22 million shares in the Hong Kong listed Poly group. I am not being too simplistic in saying that the regime is simply the repressive agent or servant of the Chinese bourgeoisie.

Lynn Walsh in Socialism Today 122 makes the point: “The Chinese state, a product of Maoism-Stalinism, has a large degree of autonomy in fostering and steering the development of capitalism while striving to preserve its own power.” That is correct. But what I hope to have shown here is that state and party are intertwined and inseparable. Lynn said:“The burgeoning capitalist elements are very diverse, ranging from small family businesses to the owners of giant corporations. At this stage, they lack social cohesion and, as yet, have not developed any independent political representation.” They do have political representation. It is called the CCP.

The Song family

Purged in the 1960s, Song Renqiong lived in a mud-brick house, later returning to power with Deng Xiaoping. Three of his daughters left in the 1980s to study in the U.S. and became American citizens: Binbin, a famous Red Guard, worked for the State of Massachusetts. Zhenzhen lives in San Francisco and is developing an e-commerce company. Song Qin , his daughter was an executive at a state owned coal trading company. Now she runs, amongst other things, a private diary business in Heilongjiang province, once ruled by her father. His son, Song Kehuang is miraculously able to balance the contradictions of party and private. While working in the state sector for two decades he was also able to own shares in Hong Kong companies while his children own million dollar homes in California.

The Bo family

Bo Yibo was the last Immortal to die, at age 98. He was Mao’s first finance minister and later a vice premier. Son Bo Xilai entered the ruling Politburo months after his father’s death in 2007. He was ousted in 2012 and accused of taking bribes, after his wife was found guilty of murdering a British businessman. His grandson Bo Guagua attended Harrow and Oxford as well as coming under the media spotlight for enjoying an extravagant lifestyle. Bo’s son Xicheng served as an independent director of the Critic group which was headed by another “Immortal” Wang’s son Jun.

The Yang family

As president of China and a PLA leader, Yang Shangkun, together with his brother General Yang Baibing backed the decision to crush the Tiananmen Square protestors. Son Yang Shaojing followed his father into the army. Daughter Yang Li was honorary chairman of a company partly owned by CITIC Group and is married to a top executive at China Poly Group, the state-owned arms-to-real estate conglomerate. Daughter Yang Li is the director of at least four Hong Kong registered companies.

The Chen family

A typesetter before the war, Chen Yun was lauded by Mao for stabilizing the economy after 1949 and was an architect of economic planning. While Chen frowned on the pace of Deng’s reforms, his family took to capitalism. Son Chen Yuan runs China Development Bank. Grandson Xiaoxin works in private equity, as does his sister Xiaodan, who wore an Oscar de la Renta dress at a 2006 debutante ball in Paris.

Conclusion

The Chinese bourgeois class uses the convenient cover of “Communism” to keep the working class in check- to disarm them ideologically- to remove from them their most potent weapon- the ideas of Marxism.  Red capitalism is, nevertheless, capitalism. The role of workers in China is not “critical” support for the Chinese state, but its overthrow and the replacement with workers’ democracy and a socialist planned economy.

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