The
Marxist
Volume: 15, No. 04
Oct.-Dec. 1999
The
Road
to
Socialism
in
China
Sitaram
Yechury
The
tremendous
strides
made
by
the
Chinese
economy
during
the
last
two
decades
have
been
recognised,
even
by
its
worst
critics,
as
being
incomparable
in
the
20th
century.
The
average
annual
rate
of
growth
during
the
last
two
decades
registered
an
amazing
9.8%.
The
Chinese
economy
continues
to
grow
over
and
above
this
record
at
roughly
8%
in
the
current
year.
The
IMF
has
predicted
that
by
the
year
2007,
People's
Republic
of
China
will
surpass
the
United
States
of
America
as
the
largest
economy
in
the
world
(World
Economic
Outlook,
IMF,
1997).
How
was
such
a
remarkable
development
possible?
Particularly,
in
a
period
when
the
mighty
Socialist
Soviet
Union
was
dismantled?
When
all
pen-pushers
of
imperialism
and
the
bourgeoisie
were
busy
seeking
to
nail
the
coffin
of
socialism
and
claiming
that
"capitalism
is
eternal",
socialist
China
continued
to
register
such
impressive
economic
successes.
In
a
period
when
imperialist
ideologues
are
churning
out
theories
such
as
the
`end
of
ideology',
socialist
China
continues
to
speak
of
upholding
Marxism-Leninism.
While
the
right-wing
intellectuals
and
academicians
are
in
a
haste
to
state
that
China's
successes
have
nothing
to
do
with
either
Marxism
or
socialism,
some
amongst
the
Left
are
also
concerned
whether
these
successes
in
China
represent
the
restoration
of
capitalism?
Has
Mao's
China
been
abandoned?
Have
`capitalist
roarders'
taken
over
China?
What
are
the
consequences
of
the
current
economic
reforms
for
the
future
of
socialism
in
China?
These
are
some
of
such
questions
that
we
seek
to
explore.
I
At
the
outset,
it
is
necessary
to
note
that
Marx
and
Engels
had
projected
the
triumph
of
world
socialism
as
the
post-capitalist
stage
in
human
evolution.
The
process
of
this
worldwide
transformation
was
conceived
of
as
following
the
overthrow
of
capitalism
in
at
least
some
of
the
major
developed
capitalist
countries
to
begin
with.
However,
the
maturing
of
capitalism
to
the
stage
of
imperialism
and
the
sharpening
of
its
inherent
world
contradictions
permitted
the
possibility
of
breaking
the
imperialist
chain
of
world
bondage
at
its
weakest
link.
The
Russian
working
class
under
Lenin's
leadership,
applying
the
inviolable
Marxist
tool
of
"concrete
analysis
of
concrete
conditions",
converted
this
possibility
into
an
epoch-making
reality.
However,
the
triumph
of
socialist
revolution
in
Russia
(and
subsequently,
following
the
defeat
of
fascism
in
the
second
world
war,
in
the
relatively
less
developed
Eastern
Europe;
semi-feudal
semi-colonial
China;
northern
Korea;
Vietnam
and
Cuba)
did
not
and
could
never
have
meant
the
automatic
transformation
of
the
backward
economies
and
low
levels
of
productive
forces
into
high
levels
(higher
than
that
of
capitalism)
of
socialised
means
of
production.
Lenin
himself
was
acutely
conscious
of
this
and
was,
in
fact,
hoping
that
the
German
revolution
and
revolutions
in
other
capitalistically
developed
countries
would
triumph
soon
after
the
October
revolution
and
lead
the
backward
Russian
working
class
in
the
process
of
socialist
construction.
When
revolutions
in
various
countries
of
Europe
did
not
materialise,
then
the
Russian
revolution
was
confronted
with
the
stupendous
task
of
transforming
the
low
levels
of
productive
forces
through
the
concept
of
`socialism
in
our
country'.
(This
epic
saga
of
human
endeavour
is
best
captured
in
EH
Carr's
classic
work
of
nine
volumes.)
That
a
backward
Russia
could
transform
itself
into
the
mighty
economic-military
bulwark
against
imperialism
is
itself
a
testimony
to
socialism's
superiority
as
a
social
system.
It
is
a
different
issue
that
this
mighty
and
unprecedented
human
creation
was
dismantled
after
70
long
years.
(The
reasons
and
the
circumstances
leading
to
this
are
discussed
in
detail
in
the
CPI(M)'s
14th
Congress
resolution
"On
Certain
Ideological
Issues".)
For
the
purpose
of
our
discussion,
however,
it
needs
to
be
noted
that
every
socialist
revolution,
based
on
a
concrete
analysis
of
concrete
conditions,
worked
out
its
approach
towards
developing
rapidly
the
productive
forces.
How
this
can
be
done
is
specific
to
the
concrete
realities
faced
by
the
specific
revolutions,
both
domestically
and
internationally.
Lenin,
himself,
noted
on
the
4th
anniversary
of
the
October
Revolution:
"Borne
along
on
the
crest
of
the
wave
of
enthusiasm,
rousing
first
the
political
enthusiasm
and
then
the
military
enthusiasm
of
the
people,
we
expected
to
accomplish
economic
tasks
just
as
great
as
the
political
and
military
tasks
we
had
accomplished
by
relying
directly
on
this
enthusiasm.
We
expected
--
or
perhaps
it
would
be
truer
to
say
that
we
presumed
without
having
given
it
adequate
consideration
--
to
be
able
to
organise
the
state
production
and
the
state
distribution
of
products
on
communist
lines
in
a
small-peasant
country
directly
as
ordered
by
the
proletarian
state.
Experience
has
proved
that
we
were
wrong.
It
appears
that
a
number
of
transitional
stages
were
necessary
--
state
capitalism
and
socialism
--
in
order
to
prepare
--
to
prepare
by
many
years
of
effort
--
for
the
transition
to
Communism.
Not
directly
relying
on
enthusiasm,
but
aided
by
the
enthusiasm
engendered
by
the
great
revolution,
and
on
the
basis
of
personal
interest,
personal
incentive
and
business
principles,
we
must
first
set
to
work
in
this
small-peasant
country
to
build
solid
gangways
to
socialism
by
way
of
state
capitalism.
Otherwise
we
shall
never
get
to
Communism,
we
shall
never
bring
scores
of
millions
of
people
to
Communism.
That
is
what
experience,
the
objective
course
of
the
development
of
the
revolution,
has
taught
us."
(Lenin,
Collected
Works,
Vol.
33,
pp.58
emphasis
added)
Further,
he
proceeds
to
state:
"Capitalism
is
a
bane
compared
with
socialism.
Capitalism
is
a
boon
compared
with
medievalism,
small
production,
and
the
evils
of
bureaucracy
which
spring
from
the
dispersal
of
the
small
producers.
In
as
much
as
we
are
as
yet
unable
to
pass
directly
from
small
production
to
socialism,
some
capitalism
is
inevitable
as
the
elemental
product
of
small
production
and
exchange;
so
that
we
must
utilise
capitalism
(particularly
by
directing
it
into
the
channels
of
state
capitalism)
as
the
intermediary
link
between
small
production
and
socialism,
as
a
means,
a
path,
and
a
method
of
increasing
the
productive
forces."
(Lenin,
Collected
Works,
Vol.
32,
pp.
350)
But,
does
this
mean
the
restoration
of
capitalism?
To
this
Lenin
answers
quite
candidly
that:
"It
means
that,
to
a
certain
extent,
we
are
re-creating
capitalism.
We
are
doing
this
quite
openly.
It
is
state
capitalism.
But
state
capitalism
in
a
society
where
power
belongs
to
capital,
and
state
capitalism
in
a
proletarian
state,
are
two
different
concepts.
In
a
capitalist
state,
state
capitalism
means
that
it
is
recognised
by
the
state
and
controlled
by
it
for
the
benefit
of
the
bourgeoisie,
and
to
the
detriment
of
the
proletariat.
In
the
proletarian
state,
the
same
thing
is
done
for
the
benefit
of
the
working
class,
for
the
purpose
of
withstanding
the
as
yet
strong
bourgeoisie,
and
of
fighting
it.
It
goes
without
saying
that
we
must
grant
concessions
to
the
foreign
bourgeoisie,
to
foreign
capital.
Without
the
slightest
denationalisation,
we
shall
lease
mines,
forests
and
oilfields
to
foreign
capitalists,
and
receive
in
exchange
manufactured
goods,
machinery
etc.,
and
thus
restore
our
own
industry."
(Lenin,
Collected
Works,
Vol.
32,
pp.
491)
II
To
a
certain
extent,
what
we
find
in
the
post-reform
socialist
China
is,
a
reflection
of
the
theoretical
positions
Lenin
had
taken
regarding
state
capitalism.
The
main
question
involved
is
that
of
increasing
the
productive
forces
in
a
backward
economy
to
a
level
that
can
sustain
large-scale
socialist
construction.
In
other
words,
what
is
being
sought
is
to
attain
the
conformity
between
the
levels
of
productive
forces
and
the
relations
of
production
under
socialism.
The
advanced
socialist
production
relations
cannot
be
sustainable
at
lower
levels
of
productive
forces.
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.
The
Chinese
Communist
Party
(CPC)
has
concluded
that
if
this
contradiction
remains
unresolved,
then
socialism
itself
in
China
would
be
under
threat.
It
is
necessary
to
note
at
this
stage
that
following
the
triumph
of
the
socialist
revolution
in
China,
Mao
himself
had
undertaken
the
task
of
achieving
speedy
growth
of
productive
forces.
China,
prior
to
the
revolution,
was
what
Marx
had
once
called
"a
society
vegetating
in
the
teeth
of
time".
The
Chinese
Revolution
decisively
broke
the
chain
of
subservience
of
China
to
imperialist
interests
as
well
as
the
chains
of
stagnating
backwardness
thus
freeing
China
from
semi-feudal
exploitation
and
its
associated
social
consciousness
amongst
the
people.
Mao
had
once
concluded
that:
"only
socialism
can
save
China".
It
is
with
such
clarity
that
Mao
embarked
on
an
economic
plan
of
`socialist
self-reliance'.
But
soon,
in
less
than
a
decade,
came
the
unfortunate
rupture
in
Sino-Soviet
relations
and
in
the
international
Communist
movement.
Any
success
in
achieving
socialist
self-reliance
in
China
was
inconceivable
without
substantial
assistance
from
the
socialist
Soviet
Union.
Following
the
rupture
and
the
consequent
tensions
between
these
two
socialist
giants,
Mao,
forced
to
rely
purely
on
domestic
resources,
experimented
with
many
indigeneous
adaptions
like
the
`great
leap
forward'
to
rapidly
develop
productive
forces.
These
efforts
ultimately
ended
in
the
disastrous
experiences
of
the
cultural
revolution.
However,
it
must
be
noted
that
the
single
thread
of
Mao's
and
socialist
China's
concern
was
to
bridge
the
gap
between
the
expanding
material
and
cultural
needs
of
the
people
and
the
backward
productive
forces,
notwithstanding
some
erroneous
methods
they
chose
to
achieve
this.
Following
the
political
turmoil
that
took
place
during
the
cultural
revolution
and
after
the
dethroning
of
the
`Gang
of
Four'
a
serious
introspection
was
begun
by
the
CPC
on
political
and
economic
issues.
In
1978,
clearing
confusion
and
incorrect
understanding
on
many
political
issues
and
practices,
the
CPC
adopted
a
comprehensive
ideological
line
that
culminated
in
what
they
call
`one
central
task
and
two
basic
points'.
`One
central
task'
is
economic
development,
the
`two
basic
points'
are
adherence
to
the
four
cardinal
principles
(Marxism-Leninism
and
Mao
Zedong;
socialist
road;
people's
democratic
dictatorship;
and
leadership
of
the
Communist
Party)
and
the
implementation
of
reforms
and
open
door
policy.
Soon
after
the
initiation
of
the
reform
process,
in
a
conversation
with
Kim
Il
Sung
in
1982,
Deng
Xiaoping
says:
"In
a
country
as
big
and
as
poor
as
ours,
if
we
don't
try
to
increase
production,
how
can
we
survive?
How
is
socialism
superior,
when
our
people
have
so
many
difficulties
in
their
lives?
The
Gang
of
Four
clamoured
for
`poor
socialism'
and
`poor
communism',
declaring
that
communism
was
mainly
a
spiritual
thing.
That
is
sheer
nonsense!
We
say
that
socialism
is
the
first
stage
of
communism.
When
a
backward
country
is
trying
to
build
socialism,
it
is
natural
that
during
the
long
initial
period
its
productive
forces
will
not
be
up
to
the
level
of
those
in
developed
capitalist
countries
and
that
it
will
not
be
able
to
eliminate
poverty
completely.
Accordingly,
in
building
socialism
we
must
do
all
we
can
to
develop
the
productive
forces
and
gradually
eliminate
poverty,
constantly
raising
the
people's
living
standards.
Otherwise,
how
will
socialism
be
able
to
triumph
over
capitalism?
In
the
second
stage,
or
the
advanced
stage
of
communism,
when
the
economy
is
highly
developed
and
there
is
overwhelming
material
abundance,
we
shall
be
able
to
apply
the
principle
of
from
each
according
to
his
ability,
to
each
according
to
his
needs.
If
we
don't
do
everything
possible
to
increase
production,
how
can
we
expand
the
economy?
How
can
we
demonstrate
the
superiority
of
socialism
and
communism?
We
have
been
making
revolution
for
several
decades
and
have
been
building
socialism
for
more
than
three.
Nevertheless,
by
1978
the
average
monthly
salary
for
our
workers
was
still
only
45
yuan,
and
most
of
our
rural
areas
were
still
mired
in
poverty.
Can
this
be
called
the
superiority
of
socialism?
That
is
why
I
insisted
that
the
focus
of
our
work
should
be
rapidly
shifted
to
economic
development.
A
decision
to
this
effect
was
made
at
the
Third
Plenary
Session
of
the
Eleventh
Central
Committee,
(1978.
Ed.)
and
it
represented
an
important
turning
point.
Our
practice
since
then
has
shown
that
this
line
is
correct,
as
the
whole
country
has
taken
on
an
entirely
new
look."
(Selected
Works
of
Deng
Xiaoping,
Vol.
3,
pp.
21-22)
It
is
essentially
such
an
understanding
that
led
to
a
theoretical
conceptualisation
of
the
primary
stage
of
socialism.
This
in
fact
conforms
to
what
Marx
and
Engels
themselves
had
stated
and
what
is
accepted
by
all
subsequent
Marxists:
that
socialism
is
the
transitory
stage
between
capitalism
and
communism
and
hence
constitutes
the
first
stage
of
a
communist
society.
The
CPC
however
has
gone
a
step
further
to
formulate
that
within
this
transitory
stage,
there
will
be
stages
depending
on
the
levels
of
productive
forces
at
the
time
of
the
revolution.
This
was
systematically
elucidated
in
the
13th
Congress
of
the
CPC.
Basically,
what
it
meant
was
that
China,
being
a
backward
semi-feudal,
semi-colonial
country
at
the
time
of
the
revolution,
was
at
a
stage
where
the
socialist
transformation
of
its
economy
will
have
to
be
conducted
from
very
low
levels.
The
World
Bank,
in
1980
sent
an
investigation
team
to
China
which
estimated
that
the
per
capita
GNP
in
1952
was
US
$
50,
even
lower
than
that
in
India
and
only
slightly
more
than
one-fifth
of
that
in
the
Soviet
Union
in
1928.
In
a
country
with
the
largest
population
in
the
world,
the
effort
for
a
transformation
into
a
modern
socialist
economy
is,
indeed,
a
stupendous
task.
The
CPC
estimated
that
this
process
would
take
atleast
a
hundred
years
from
the
time
of
the
revolution
to
reach
the
stage
of
a
modern
socialist
economy.
It
is
this
process
which
they
call
`the
building
of
socialism
with
Chinese
characteristics'.
In
order
to
achieve
such
a
transformation,
the
CPC
put
forward
another
theoretical
formulation
that
of
building
a
socialist
market
economy.
By
now,
it
is
clear
that
as
long
as
commodity
production
exists,
there
would
be
a
need
for
a
market
to
exchange
these
commodities.
The
CPI(M)
at
its
14th
Congress
noted
in
its
Ideological
Resolution:
"It
would
be
erroneous
to
conclude
that
under
socialism
the
market
will
cease
to
exist.
So
long
as
commodities
are
produced,
the
market
exists.
The
crucial
question
is
not
planning
versus
market
but
which
dominates
what.
Under
socialism,
market
is
one
of
the
means
for
the
distribution
of
the
social
product.
Centralised
planning,
utilising
the
market
forces
and
the
market
indicators,
will
be
able
to
efficiently
develop
the
productive
forces
and
meet
the
welfare
demands
of
the
people.
Therefore,
ignoring
market
indicators
leads
to
greater
irrational
use
of
resources
which
will
adversely
affect
the
plan
process
itself".
It
is
this
sort
of
a
combination
of
market
and
planning,
but
under
the
leadership
of
the
socialist
State
power
that
the
CPC
seeks
to
achieve.
These
efforts
are
summed
up
in
the
following:
"Since
China
is
still
in
the
primary
stage
of
socialism,
we
must
develop
the
commodity-money
relationship,
raise
the
level
of
marketisation
and
establish
and
perfect
the
system
of
a
socialist
market
economy.
As
experiences
throughout
the
world
testify,
the
development
of
a
commodity
economy
is
a
stage
that
cannot
be
by-passed
in
the
process
of
socio-economic
development.
On
its
road
to
modernisation
every
country
must
go
through
the
stage
of
commercialisation
and
marketisation
of
socio-economic
relationships.
All
attempts
to
by-pass
this
stage
are
doomed
to
failure.
The
greatest
advantage
of
developing
a
market
economy
is
that,
regulated
by
the
law
of
value,
the
subjects
of
economic
activity
will
compete
with
each
other
in
adopting
advanced
technologies,
and
improving
the
quality
of
products,
services
and
management,
so
that
they
can
survive
amid
intense
competition.
This
will
invigorate
the
economy
and
promote
prosperity.
Of
course
market
mechanisms
are
not
omnipotent,
interference
and
macro-economic
control
and
regulation
by
the
government
will
be
inevitable
in
cases
of
improper
market
operations.
The
market
will
therefore
play
a
crucial
role
under
the
control
and
regulation
of
the
state
--
an
inherent
requirement
of
the
socialist
market
economic
system.
We
are
now
striving
to
turn
enterprises
in
China,
including
those
owned
by
the
state,
into
legal
entities
and
market
subjects
responsible
for
their
own
decisions
in
terms
of
operation
and
expansion,
and
for
their
own
profits
and
losses
in
five
to
ten
years.
An
open,
orderly
and
competitive
market
system
will
also
be
established,
and
the
extent
of
socio-economic
marketisation
will
be
increased
from
the
present
50%
to
over
60%.
Much
improved
social
security
and
macro
regulation
systems
will
also
be
introduced.
Social
productive
forces
will
then
be
developed
more
rapidly
and
the
process
of
modernisation
speeded
up."
(Social
Sciences
in
China,
Vol.
XX,
No.2,
pp
22)
In
other
words,
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;
by
which
the
CPC
means
"firstly
that
public
capital
predominates
in
total
social
capital;
secondly,
the
state
economy
controls
the
economic
lifeline
and
plays
a
dominant
role
in
the
national
economy".
Through
this,
they
seek
to
prevent
the
economic
polarisation
and
growing
inequalities
created
by
private
market
economy
and
ensure
the
common
prosperity
of
the
working
people.
It
is
in
this
process
that
they
are
currently
engaged
in
the
transformation
of
the
state
owned
enterprises
in
China
which
is
attracting
attention
of
economists
world
wide
and
causing
concern
amongst
socialist
China's
well
wishers.
The
Chinese,
however,
are
confident
that
they
"will
successfully
blaze
in
a
new
trial
that
will
integrate
public
ownership
and
a
market
economy."
IV
It
is
on
the
basis
of
these
theoretical
inputs
that
socialist
China
has
embarked
on
its
path
of
reforms
and
achieved
tremendous
successes.
Its
net
rural
per
capita
income
increased
12-fold
from
134
yuan
to
1578
yuan
during
the
period
1978-95.
According
to
China's
State
Statistical
Bureau,
31%
of
its
population
were
below
the
poverty
line
defined
by
the
consumption
of
2100
calories
in
1978.
By
1985,
this
was
cut
to
half
and
the
World
Bank
estimated
the
numbers
to
be
89
million.
Such
improvement
in
the
livelihood
of
nearly
150
million
people
in
a
span
of
seven
years
has
no
historical
precedent.
This
was
done
without
any
specific
poverty
alleviation
programmes.
The
general
growth
of
the
economy
has
had
an
effect
like
the
`tide
lifting
the
ship'.
By
1985,
however,
the
Chinese
government
put
into
practice
a
specific
poverty
alleviation
programme
called
`Yigong
Daizhen'
(YD).
Through
this,
during
the
Seventh
Five
Year
Plan,
they
targetted
331
backward
counties
for
specific
rural
development
and
public
work
programmes.
During
1985-91,
these
contributed
1,31,000
km
of
roads;
7,900
bridges;
2,400
km
of
inland
river
water
generations
and
water
supply
for
20
million
people
and
13
million
animals.
By
1994,
they
estimated
that
around
80
million
people
or
6.5%
of
the
population
was
below
the
poverty
line,
mainly
in
far-flung
mountaineous
areas.
The
target
is
to
eliminate
this
by
the
year
2000.
Thus,
by
beginning
the
reform
process
in
the
rural
areas
and
converting
the
old
`communes'
and
`brigades'
into
township
and
village
enterprises
(TVEs),
socialist
China
has
achieved
a
tremendous
transformation
of
its
rural
sector.
According
to
the
World
Development
Report,
1996,
the
TVE's
share
in
Chinese
GDP
rose
from
13%
in
1985
to
31%
in
1994;
output
increased
25%
every
year
since
mid-eighties;
TVEs
account
for
one-third
of
the
total
industrial
growth
in
China
and
in
the
past
fifteen
years,
they
have
created
15
million
jobs.
A
fact
that
generated
great
interest
worldwide
has
been
the
ability
of
China
to
attract
foreign
direct
investment.
In
1984,
1.3
billion
US
dollars
of
FDI
came
into
China
mainly
in
the
special
economic
zones
created
along
the
East
Coast.
By
1998,
this
rose
to
45.6
billion
US
dollars.
Of
this,
nearly
64%
came
through
joint
ventures.
36%
was
wholly
foreign
owned
enterprises,
whose
production
was
mainly
for
exports.
Of
this
45.6
billion
FDI
in
1998,
only
3.9
billion
came
from
US
and
3.4
from
Japan.
The
rest
came
from
overseas
Chinese
in
Hongkong,
Taiwan,
and
Macau.
Now
with
both
Hongkong
and
Macau
having
re-joined
the
mainland,
this
contribution
can
no
longer
be
considered
as
`foreign
investment'
in
the
future.
Despite
such
huge
amounts,
FDI
in
the
nineties
constituted
only
15%
of
the
domestic
investment.
Thus,
to
attribute
China's
successes
to
foreign
capital
alone
would
be
untrue.
In
fact,
during
1978
to
1993,
the
gross
domestic
savings
in
China
averaged
over
41%
of
the
GDP,
more
than
adequate
to
fund
its
domestic
investment.
It
is
for
this
precise
reason
that
China
has
been
able
to
maintain
a
balance
of
payments
surplus
through
this
entire
period
which
touched
15.7
billion
in
1996.
China
today
has
a
foreign
exchange
reserves
of
more
than
44
billion.
As
a
result
of
these
reforms,
China
over
the
last
two
decades
has
achieved
tremendous
successes.
Material
standards
of
living
have
grown
by
leaps
and
bounds.
Poverty
levels
have
come
down
sharply.
In
health,
higher
education,
scientific
research
and
technology
development,
China
has
moved
ahead
at
a
commendable
rate.
All
these
have
been
possible
not
because
China
`broke
from
thee
Maoist
past'
but
because
it
developed
on
the
solid
foundations
laid
by
the
People's
Republic
of
China
during
the
first
three
decades
of
centralised
planning.
(This
point
is
more
competently
dealt
in
an
accompanying
article
in
this
issue.)
However,
new
problems
are
also
cropping
up
as
a
result
of
these
developments.
They
are
mainly
the
growing
inequalities,
unemployment
and
corruption.
The
CPC,
cognizant
of
these
dangers,
is
taking
measures
to
overcome
these
problems.
But
the
fact
remains
that
with
the
current
transformation
of
the
State
owned
enterprises,
there
is
a
net
accretion
to
the
unemployed
every
year.
While
the
State
maintains
a
minimum
subsistence
allowance
and
offers
re-training
programmes
for
retrenched
workers,
unemployment
is
a
serious
problem.
The
main
question
that
emerges
is
whether
these
growing
inequalities
will
take
the
form
of
the
formation
of
an
incipient
capitalist
class?
Lenin,
while
talking
of
State
capitalism
and
emphasising
the
need
to
rapidly
expand
the
productive
forces,
also
warned
of
the
risks
to
the
socialist
State
that
such
a
period
of
transition
will
bring
about.
Characterising
the
process
of
building
state
capitalism
as
a
war,
Lenin
says:
"the
issue
in
the
present
war
is
--
who
will
win,
who
will
first
take
advantage
of
the
situation:
the
capitalist,
whom
we
are
allowing
to
come
in
by
the
door,
and
even
by
several
doors
(and
by
many
doors
we
are
not
aware
of,
and
which
open
without
us,
and
in
spite
of
us)
or
proletarian
State
power?"
(Lenin,
Collected
Works,
Vol.
33,
pp
65)
He
proceeds
further
to
state:
"We
must
face
this
issue
squarely
--
who
will
come
out
on
top?
Either
the
capitalists
succeed
in
organising
first
--
in
which
case
they
will
drive
out
the
Communists
and
that
will
be
the
end
of
it.
Or
the
proletarian
state
power,
with
the
support
of
the
peasantry,
will
prove
capable
of
keeping
a
proper
rein
on
those
gentlemen,
the
capitalists,
so
as
to
direct
capitalism
along
state
channels
and
to
create
a
capitalism
that
will
be
subordinate
to
the
state
and
serve
the
state."
(Lenin,
Collected
Works,
Vol.
33,
pp
66)
Similarly,
Deng
Xiaoping
in
a
talk
during
his
visit
to
southern
China
says:
"The
crux
of
the
matter
is
whether
the
road
is
capitalist
or
socialist.
The
chief
criterion
for
making
that
judgement
should
be
whether
it
helps
promote
the
growth
of
the
productive
forces
in
a
socialist
society,
helps
increase
the
overall
strength
of
the
socialist
state
and
helps
raise
living
standards."
(Social
Sciences
in
China,
Vol.
XX,
No.
2,
pp.
29)
Further,
in
1985,
addressing
some
of
the
apprehensions
of
growing
inequalities
Deng
Xiaoping
says:
"As
to
the
requirement
that
there
must
be
no
polarisation
(read
growing
economic
inequalities),
we
have
given
much
thought
to
this
question
in
the
course
of
formulating
and
implementing
our
policies.
If
there
is
polarisation,
the
reform
will
have
been
a
failure.
Is
it
possible
that
a
new
bourgeoisie
will
emerge?
A
handful
of
bourgeois
elements
may
appear,
but
they
will
not
form
a
class.
"In
short,
our
reform
requires
that
we
keep
public
ownership
predominant
and
guard
against
polarisation.
In
the
last
four
years
we
have
been
proceeding
along
these
lines.
That
is,
we
have
been
keeping
to
socialism.
"Let
me
add
that
our
socialist
state
apparatus
is
so
powerful
that
it
can
intervene
to
correct
any
deviations.
To
be
sure,
the
open
policy
entails
risks
and
may
bring
into
China
some
decadent
bourgeois
things.
But
with
our
socialist
policies
and
state
apparatus,
we
shall
be
able
to
cope
with
them.
So
there
is
nothing
to
fear."
(Selected
Works
of
Deng
Xiaoping,
Vol.
3,
pp.
142-143)
VI
Clearly,
the
CPC
is
in
the
midst
of
a
serious
creative
experience
of
building
socialism
with
Chinese
characteristics.
This,
in
other
words,
is
precisely
what
Lenin
characterised
Marxism
as
"the
concrete
analysis
of
concrete
conditions".
Lenin,
during
his
time,
on
the
basis
of
the
concrete
international
and
domestic
situation,
consistently
endeavoured
to
rapidly
bridge
the
gap
between
backward
productive
forces
and
advanced
socialist
production
relations.
The
course
of
this
Soviet
history
of
socialist
construction,
however,
took
place
under
different
historical
circumstances.
Encirclement
of
the
Soviet
Union,
the
preparations
for
the
second
world
war
by
the
fascist
forces
did
not
allow
the
Soviet
Union
a
peaceful
period
for
such
consolidation
of
socialist
productive
forces.
The
pace
of
the
socialisation
of
the
means
of
production
had
to
be
hastened
for
the
very
survival
of
the
socialism
itself.
The
fact
that
it
did
succeed
in
socialising
the
means
of
production
through
`collectivisation’,
bore
the
brunt
of
fascist
assaults
during
the
Second
World
War
and
decisively
defeated
them
will
go
down
as
one
of
the
most
remarkable
and
liberating
experiences
of
the
20th
century.
The
present
political
circumstances,
confronting
China
however,
are
very
different.
The
Sino-Soviet
rupture
and
the
compulsions
of
the
cold
war
ironically,
permitted
the
possibilities
of
China
opening
up
economically
to
the
capitalist
world.
Additionally,
the
massive
concentration
and
internationalisation
of
finance
capital
meant
the
search
for
new
markets
and
China,
the
most
populous
country
in
the
world,
was
an
obvious
attraction.
Thus,
a
variety
of
factors
converged
to
allow
China
to
implement
its
policies
of
economic
reforms.
The
CPC
is
endeavouring
to
rapidly
expand
the
productive
forces
and,
thus,
consolidate
and
strengthen
socialism
in
China
through
these
reforms.
On
the
other
hand,
as
noted
above,
this
very
process
engenders
certain
tendencies
which
seek
to
weaken
or
even
destroy
socialism.
Imperialist
finance
capital
is
there
in
China
not
to
strengthen
socialism
but
to
earn
profits
and
to
create
conditions
of
adversity
to
socialism.
They
would
certainly
seek
the
weakening
of
socialism
or
its
dismantling
in
order
to
earn
greater
profits.
This
is
the
current
struggle
between
imperialism
and
socialism
that
is
taking
place
in
the
theatre
of
China.
And,
in
this
struggle,
the
forces
that
seek
to
strengthen
and
consolidate
socialism
will
receive
solidarity
from
the
Communists
the
world
over.
For,
the
strengthening
of
socialism
in
China
is
the
biggest
contribution
that
China,
under
the
leadership
of
CPC,
can
make
to
advance
the
international
Communist
movement.