A Look at the Chinese Model of Communism – Market Socialism

You are starting to see a lot of articles in the capitalist press bashing China now, saying their economy is not as good as they say, that it cannot be sustained, and that it is headed for crash. They base this on a comparison to other Communist countries, but those economies fell behind far before China’s did.
China has sustained Communism under various forms, including presently under market socialism, for 70 years now. That’s as long as the Soviet Union, and the Soviets started stagnating a long time before that. China is an example of a smashing success for a Communist country, and the capitalist press is freaking out because that shows that their anti-Communist propaganda has been crap for all of these years.
Incidentally, Deng Xiaoping emphatically stated that he was a Communist. Deng’s idea was to create “a rich Communist country.”. In an interview in 2005, a top party official was asked if China was still committed to spreading Communism all over the world.
“Of course,” the minister beamed. “That is the purpose of the Communist party (CCP).”
Incidentally, China still has 5-year plans and the whole economy is planned. The business sector has to go along with the plan, and if you do not go along with it, they can confiscate your business. A party committee sits on the board of all large corporations. The government owns every inch of land in China. The state invests an incredible amount in the economy and also overseas where it makes vast investments. This is because some Chinese government companies are very profitable. A number of Chinese government companies are on the list of largest companies in the world.
Capitalists in the US openly complain that they cannot compete with Communist Chinese government  corporations, crying that they get subsidies so it’s not fair. So here we have US corporations openly admitting that they can’t compete with Chinese government Communist state-owned companies.
45% of the economy is state owned and it is very profitable. 87% of all investment in the economy is made by the state. This figure includes all Chinese private investment and all foreign investment.
Much of the state sector is owned by small municipalities, and this works very well. Further, cities compete against each other. For instance, City A’s steel mill will compete against City B’s steel mill, and both will compete against a private sector steel mill, if there is one. Successful enterprises bring in a lot of money to the city, which it uses to upgrade the city, which results in more workers moving there, which grows the economy more with more workers and more demand.
There are also still a number of pure Maoist villages in China that are run completely on a Maoist line. Everything is done as it was right out of the Mao era. I understand that they do very well, and there is a huge waiting list to move to those villages.
I did a lot of research on China recently, and the party is literally everywhere you look every time you turn around. The party itself still runs many enterprises all over the country, especially in the rural areas. There are party officials in every village and city, and they take a very active role in developing the municipality in every way, including culturally. They have an ear to the ground and are typically very popular in the villages and cities.
Party officials lobby the state to try to solve any urgent problem in the area. The government is always spending a lot of money all over China on public works, on fixing various environmental problems, or on really any societal problem or issue you can think of. This of course includes economic development, which tends to be state-led. I read synopses of many dissertations coming out of Chinese universities, and most were on how to deal with some particular societal problem or issue. Many others dealt with technology and industry. So a lot of the research on technology and industry that is driving economic development is coming straight out of state universities.
Instead of leaving it up to the private sector to deal with the problems in society, create public works, and even plan the economy, the government does all of that. Incidentally, the way the US leaves the planning of the economy, such as it is, up to the private sector is insane. All sensible economic planning in any nation will always be done by the state with a view towards allowing the country to prosper. Capitalists have no interest in whether the country profits or not, so they engage in no economic planning at all. Leaving economic planning up to the whims of the capitalists is economic malpractice.
There are 1,000 protests every day in China. Yes, there is corruption and there are government abuses, but if protests last long enough, the party usually gets alarmed and tries to do something about the problem because they don’t want serious unrest. This is party that does everything it can to serve the people and try to remain popular with citizens by giving them as much as they can and doing as much for them as possible. The party spends every single day of its rule literally trying to buy off unrest and keep its citizens satisfied.
It’s illegal to be homeless in China. If you end up homeless in China, they will try to put you in a homeless shelter, or if they cannot do that, they will send you back to your village because most homeless are rural migrants who moved to the city. The state is now investing a vast amount of money in the rural areas because these places have been neglected for a long time. The state still wants to own all the land because they want to keep the rural areas as a secure base where rural migrants to the city can always return if they fail in the city.
How can a government in which 45% of the economy is publicly owned, 87% of investment is done by the state, and every inch of land is owned by the state possibly be called as capitalist country? No serious political economist anywhere on Earth considers China to be a capitalist country. The only people who say that are ideologues and liars, which includes almost all political conservatives and most businessmen.
The state spends an unbelievable amount of money on public works all over the country all the time. Many projects that in the US have “conclusively proven” to be too costly to be implemented have been done in China quickly and easily. And China’s per capita income in less than 10% of ours.
Most ethnic minorities are still allowed to support their culture, and in most cases they are allowed to have education in their native language. In these areas, the native language is co-official with Mandarin.
In recent years, the Chinese government has begun to support a lot of the Chinese dialects, of which there are over 2,000 main ones, many of which are actually separate languages. Cantonese is still an official language in Hong Kong, and it is widely used in Guangdong. The other major Chinese languages or macrolanguages still have millions of tens of millions of speakers. Lately the Chinese government is telling people they can preserve their dialect as long as they also speak Mandarin. Many schools now have classes in the local dialect.
Cheap medical insurance is available and it covers 85% of costs. State medical centers are still very good. However, if you have a serious medical condition in China, you will quickly run out of money with no recourse.
This is a serious problem but it is much better than earlier in the Deng Era when millions were dying from lack of health care. However, the state still need to cover everyone. They got away from universal coverage  when they moved away from Maoism early in the Deng era. In addition, tens of thousands of schools, many of which were built during the Cultural Revolution, were closed early in the Deng era.
The introduction of a market had a lot of problems in the early days. The capitalist press was cheering wildly as thousands of schools were closed all over China, medical care was cut off from or reduced for hundreds of millions of people, while millions of Chinese died from lack of medical care. This was all cause for celebration! Isn’t capitalism wonderful? What’s millions of humans dying from lack of health care as long as a few rich people can buy ridiculously expensive, useless items that they don’t even need?
A recent good survey done by a Western polling firm found that 87% of the population supported the Communist Party.  The excesses of the Mao era, especially the Great Leap and the Cultural Revolution, have been widely discussed and the party has admitted that many errors were made and resolved not to do this again. These excesses are being blamed by the party on what they call “ultra-Leftism.”
The economic model of China is called Market Socialism and a lot of modern day Leftists and even Communists support it and agree that this is the way forward for the left and Communist movement. Like all words, the word Communism has no inherent meaning. It means whatever people who use it say it means. So the definition of Communism can clearly change with the times as Communists update their definitions of what the word means.
China cannot be called capitalist in any way. Their model is far more socialist than anything in any European social democracy. It also goes far beyond the US in the New Deal and of course beyond beyond the social liberalism and its more left analogue in Canada, not to mention beyond social democracy in Australia or New Zealand.
Interestingly, Japan is not a capitalist country. They don’t have neoliberalism. That country does not operate on the capitalist mode of development. Instead the resemblance is, I hate to say, to Nazi Germany. Nazi Germany also did not have a capitalist mode of development. I’m not sure what you call it, but it’s not capitalism. For instance, in Japan, the commanding heights of the economy, including almost all of the banks, is owned by the state.
The state still plans the economy. They plan the economy together with the business community and the state allocates a lot of funds and loans to areas of the economy it wishes to develop. There is probably a similar model in South Korea, which also is not capitalist and instead operates on a series of monopolies that are owned currently by large corporations and the government. The South Korean economy is also planned, and the plan is worked out by the government and the business sector working together.

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