World Politics

The Communist Party of China at 90

By Heiko Khoo

Although this piece paints, in our opinion, an overly rosy picture of Chinese society, we feel it does shed light on the basic nature of the Chinese economy and how it differs from the U.S. and other capitalist countries. And why its partly-nationalized economy has been better able to adapt to the current economic crisis. —Socialist Viewpoint

In the spring of 1921 the Communist Party of China was just an idea in the minds of a handful of revolutionaries led by Chen Duxiu. Today its membership stands at more than 78 million. This is greater than the memberships of all communist and social democratic parties in the rest of the world at the peak of their popularity combined. For the last 30 years, the CPC presided over the fastest economic growth of any country in history, and within a decade China will be the world’s No. 1 economy. This shift in the global balance of power will have profound consequences for mankind.

When Marx wrote the Communist Manifesto, the working class of England was only two million strong. Today China’s urban working class is well over 450 million strong. China has more workers than the United States and Europe combined. There is no country better placed to validate or negate Marx’s prediction that the increasing power of the working class will usher in a socialist world of plenty.

The creation of the largest proletariat in the world is an outstanding achievement of the CPC in recent times. This working class is not an ideological construct nor a proletariat defined by its “redness” or by quoting Mao Zedong, but one forged out of the planned development of the means of production; a real, industrious, educated and cultured working class, whose home is urban modernity, whose means of communication are mobile phones and the Internet, and whose world outlook is scientific and universal.

The CPC rules over an economy in which the commanding heights, the banks and major industries, are owned and controlled by the state. It is on this material foundation of public property, enshrined in the constitution, that the party and state rest. This has facilitated the macroeconomic guidance of the economy and enabled China to avoid collapse when export markets contracted in the great recession of 2007-2009.

Many prominent Marxist economists believe that underlying the world financial crisis was another crisis caused by the long-term tendency for the rate of profit to fall. Under capitalism as competition for profit drives investment, expenditure on machinery rises relative to expenditure on labor. This causes the average rate of profit to decline over the long term, eventually leading to sharp economic contraction as capitalists “go on strike.”

China’s planned economy does not abide by the same laws of motion as capitalist states do. Despite the low profit margins of state-owned companies in China, these companies continue to make massive investments for the medium- and long-term future of the nation as a whole. One stark example illustrates the comparative advantages of planned economics. China will spend 67 times as much on low-cost housing this year as India plans to spend over the next five years!

Marx thought that the working class would seize control and ownership of society in the advanced capitalist countries and that modern industry would rapidly produce abundance following such revolutionary change. However, the revolutions that Marx envisaged broke out in countries without developed industry.

Vladimir Lenin and Leon Trotsky, the leaders of the Russian Revolution, believed that their revolution would spread to the advanced capitalist world. Then the educated and cultured working class of Western Europe would help the USSR through the creation of a common plan for development and progress. The Russian Communists originally believed that without the assistance of such a world revolution the restoration of capitalism would be inevitable. This either/or theory enabled Stalin to play the role of socialism’s national savior against the apparently utopian advocates of world revolution.

When the Russian Civil War ended in 1921, the problem of Soviet economic development was acute. The peasant could not simply be forced to give their surplus to the city indefinitely, yet industrialization required the accumulation of capital for investment. Concessions to the peasantry were the foundation of the New Economic Policy, and this reinvigorated the Russian economy from 1921 to 1928 but also created social forces opposed to socialist economic organization.

The experience in China since 1979 reveals that the economics first tested in the Russian NEP are the most effective means of organizing an economy during the transition to socialism.1 In the transition to socialism, the laws of socialist economics operate simultaneously with the laws of capitalist economics. This means that planning (the socialist means of organizing production) and the law of value (the capitalist market means of organizing production) coexist and compete. During the transition to socialism the planning principle gradually gains the upper hand through improvements in the productive capacity and productivity of labor in socialist public enterprises. When these enterprises outstrip capitalist enterprises, more and more of the economy becomes subject to planning.

Capitalist states, no matter how democratic, systematically favor the private sector out of ideological choice, which corresponds to the material interests of the ruling class. Thus widespread fraud and recklessness by private banks before 2008 was rewarded by transferring their debts onto the shoulders of the working classes of Europe and the United States. In China the CPC-led state systematically favored the public sector and the needs of economic development as a whole over private interests. The different behavior of the government and state in China and the United States is based on a natural and organic self-reproduction of the social system.

English capitalists acquired the original resources needed to fund the industrial revolution by means such as robbing the peasantry, enslaving colonies, swindling indigenous people out of precious metals, and enslaving millions to work in plantations. Marx called this primitive capitalist accumulation. Primitive socialist accumulation in China takes the form of using private savings stored in state banks to fund investment for socio-economic development as well as a myriad of other means by which the state transfers resources from the private to the public sphere.

What the CPC has shown since Deng Xiaoping initiated reform and opening of the economy is that capitalist forces can be kept in check by the increasing strength of the working class. For every capitalist born there are tens-and-hundreds of workers. A key question confronting modern Chinese communism is how can workers exercise democratic control over productive forces and realize their constitutional rights as masters of the state?

In this respect, the increasing militancy of Chinese workers should be welcomed. Workers fighting for their rights as defined by the law are precisely the new social classes that the CPC needs to win if it is to expand its influence within the working classes. An influx of grassroots and front-line workers into the party would provide important new reserves of support for communism among the masses. In this respect the mass unionization drive and increasing support within the All-China Federation of Trade Unions for workers engaged in direct struggle against exploitation is a very positive sign.

The idea that the working class should lead the liberation of the Chinese masses was the inspiration for the founding of the CPC. The 90th anniversary will inspire a new generation to boldly investigate Marxist thought and develop it to help solve the problems of Chinese society and the world. The critical, scientific and internationalist outlook of the founding revolutionaries should be an inspiration to a new generation of Chinese Communists and workers. The task of creating a socialist world of peace, freedom and plenty, in harmony with the ecology, is in their hands.

The author is a columnist with For more information please visit:

Opinion articles reflect the views of their authors, not necessarily those of, (Beijing, Peoples Republic of China), June, 2011