Describe the relationship between capitalism and communism in china

Just how capitalist is China?

describe the relationship between capitalism and communism in china

How China went from communist to capitalist China's path to capitalism. It currently has free trade agreements with the Association of. Think of capitalism and communism as alternative forms of software for .. What is the relationship between these terms and the actual functioning of the. The analysis and interpretation of the Chinese Communist system, the .. differences in their duration may explain why governments in similar.

If we took this seriously, we would need to believe that the software of communism, which is the control of surplus value by the workers themselves, had been implemented in the USSR, China, and these other so-called communist nations. However, this leap of faith is avoided within the discourse by defining communism in purely polemical non-scientific fashion as synonymous with the set of political, economic, and cultural processes that developed in the USSR under the dictatorship of Joseph Stalin a definition of communism that is dependent upon the post hoc rise to power of a specific dictator and the implementation of his vision of society.

In other words, communism is not defined based on the software of labor processes and the control over surplus labor, as in Marx's definition which did not presuppose a Josef Stalinbut on the hardware of the physical social structures and institutions without regard to the underlying software. This Cold War discourse ignored prior discussions of communism in philosophy and social science, including Marx's few references to this system.

Similarly, capitalism gets defined in simple terms as the commonly recognized features of the economic and political system s prevalent in the "Western" nations, particularly the presence of relatively unregulated corporations operating in relatively "free" markets and popular voting for certain governmental positions in contested elections with at least two political parties.

In the most simplistic version of this polemic, capitalism is simply conflated with "free" markets. Indeed, there is no need for the word "capitalism" since the phrase "free markets" would capture the entire meaning for purposes of discourse and analysis. For many social analysts and commentators, their definition of capitalism is ad hoc, changing over time or occasion to meet polemical demands or simply to reflect the present set of idealized characteristics of particular high income societies, usually the United States suffices as the model.

Unlike typological work in the "hard" sciences, the typology upon which these ad hoc definitions rest are almost never subjected to much scrutiny nor required to meet even minimal standards of uniqueness non-arbirariness and clarity. It is as if an animal could legitimately be classified as a reptile based on the whims or polemical requirements of the particular biologist who deploys the term in his scientific analysis or policy statements, rather than based on non-arbitrary and easily identified criteria with unambiguous scientific implications.

It is interesting that despite Marx's perceived role in shaping the bi-polar communism-capitalism conflict his name is often invoked by one side or the other for polemical reasonshis multi-volume attempt at producing new knowledge about the specificity of capitalist economic processes where the word capitalism is produced as a social concept defining a unique set of social relationships which can occur in a variable historical context by which certain individuals perform surplus labor and a different set of individuals appropriate this surplus labor is ignored.

Thus, it may be useless, in the context of this polemical "debate" over capitalism and communism, to try to distinguish whether or not the conflict between the West and the "Communist Bloc" was a conflict between actual capitalism and actual communism, understood as strictly defined and alternative economic systems.

In the polemical debates, the terms capitalism and communism lose all social scientific meaning. The entire history of thought within which capitalism was defined as a unique economic system formed around a distinct class process and communism was defined as an alternative mode of producing and appropriating an economic surplus is absent from the arena of these debates.

Think of capitalism and communism as alternative forms of software for shaping the creation and distribution of surplus value whether in product or monetary form.

describe the relationship between capitalism and communism in china

But this is not the way capitalism and communism are discussed in popular discourse. Deeming the elimination of the market mechanism by the Soviet Union to have been a tremendous mistake, for it also eliminated the private incentive to work and innovate and, along with it, economic efficiency, Schweickart believes China's post reforms are on the right track.

China’s government may be communist, but its people embrace capitalism

Despite all the privatization and opening up to international companies that has since ensued, the scholar believes that one key-point of his Economic Democracy, the social control of investment 13is still in force in China. What the country is obviously lacking is the last component of his three-item recipe 14 for Economic Democracy, namely, democracy in the work-place.

But Schweickart sees light in the dark, for he thinks China has the right ideological resources for advancing revolutionary forms of work management.

In spite of the apparent contradictions between the CPC's rhetoric and practice, it still is publicly committed to socialism; and, despite its authoritarianism, it does allow internal debates on the possibility of creating a virtually more just and democratic society, not to mention verily socialist. It knows that speeding up the market reforms - that many in the party already believe have gone too far - will only worsen the already acute problems of income inequality, corruption, and environmental disaster.

Employing then Schweickart's definition of capitalism - which encompasses the market for goods, for labour and for capital - we shall proceed to investigate how "well" China fares in its putative move to capitalism; or, if Schweickart is correct, if China still harbors much of the socialist legacy of social control of capital, investment, and economic decisions.

describe the relationship between capitalism and communism in china

Through the price mechanism, firms buy services, raw materials and machinery from firms and sell their produce to consumers and other firms; and the environment in which these agents interact is largely free from government controls. Of course, the state still holds monopolies or quasi-monopolies in key sectors such as telecommunications, financial intermediation, energy and utilities But the State-Owned Enterprises SOEs which are responsible for the bulk of production in these important industries theoretically respond to market incentives and are profit-driven.

That means we have come a long way since the early s, when SOEs still bore a great deal of the social costs related to the transition to a market economy. According to Wangup until the early s a large share of SOE's were not turning a profit not due to some inherent inefficiency but because they bore the brunt of tax burdens 16 and had various social responsibilities, including providing workers with day-care, health care, housing services and social security, not to mention the fact that state enterprises concentrated in sectors heavily subject to price control.

describe the relationship between capitalism and communism in china

For the sake of the economy, prices of energy, transportation and other public utilities had long been kept artificially low. But what is the picture now? In the period Chinese economy expert Barry Naughton calls "Reform with Losers" presentstate enterprises were forced to resort to significant restructuring and downsizing.

From the mids onward, there ensued an era of relative macroeconomic austerity and apparent diminished patronage: The biggest losers from the mids reforms were, of course, the former state-workers that were laid off or lost many of their social benefits. The number of SOE workers decreased by half between and and already at the end of this year the urban industrial private sector, without counting foreign-owned firms, employed almost twice as many workers as the traditional state-sector: Today it is estimated that only 19 million people work in industrial state enterprises.

However, we should not underestimate the state enterprises' sheer importance in the economy. Three hundred and ten of China's biggest companies are statecontrolled, and in the combined operating revenue of those companies was four times as big as the revenue from the top private companies Social class structure china is still far from completing its industrialization process.

How ‘Communist’ China has embraced capitalism but remains Leninist at heart

Proletarians do not yet comprise the majority of the population, for China is still a semi-agrarian society. We make this statement bearing on Minqi Li's classification of Chinese social structure into three major social groups: Bearing in mind that many workers under the rubric of "semi-proletariat" live part of their lives as peasants and vice-versa, Minqi Lip.

In the last 10 years, Chinese social strata structure has not changed significantly.

How Does China's Government Work?

The Chinese Social Survey Data of 19 revealed that the peasantry number is about We cannot properly compare these data with Minqi Li's ones. After all, the terms "blue collar" and "white collar" are occupational classifications that distinguish workers who perform manual labour from those who have "professional jobs". But that doesn't mean necessarily that white collars are middle-class workers; many are low-paid "professionals" employed in the service sector With this caveat in mind, we can only regret not having more recent Minqi Li-like data about the level of proletarianization of Chinese society, for his figures tell us much about the level of capitalist development in a country.

We know, nevertheless, that by the end ofthe Chinese population of migrant workers - who would fall under the semi-proletariat group - had risen to approximately million. Their free movement into good urban employment opportunities is ever constrained by the continuing existence of the archaic Chinese house-hold registration system called hukouthat splits up the population into rural and urban residents that enjoy mutually exclusive residential rights and entitlements to land or welfare services, respectively And it is unnecessary to say that "legal" urban residents have at their disposition much higher-quality welfare services.

It is not hard to see that the hukou system is a type of control of labour flows that discriminates against the rural population. Nonetheless, the system is not "perfect" and we are likely to observe, in the coming years, the greatest proletarianization the world has ever seen. And, as the share of proletarians approaches that of other "semi-periphery" countries like Brazil, we should expect to see significant wage increases as wage workers amass the necessary political power to fight for better life conditions - and of course, as the supply of unskilled workers dwindles.

In a way, we are already observing great wage increases. Despite the fact the wages in China have been rising nominally at high rates since the beginning of the Reform Era, only more recently real gains have become spectacular. Between andfor example, real wages grew at an annual average of And, according to the China Labour Bulletin, the average monthly wage in urban areas in was 2, yuan approximately dollarssix times higher than the figure for Social control of investment China is well known for its much above average rates of gross capital formation.

It is also common knowledge that much of China's double-digit growth for the last 30 years has been spurred by investment, which has become the backbone of the economy. In effect, investment in China is said to be too high, for the counterpart of high investment rates is a permanent suppression of private household consumption 25which would more closely correspond to people's life conditions than GDP per capita.

Even compared to other East Asian countries in their period of miraculous growth China investment rates are high. The CPC's response to the financial crisis was to exhort companies, particularly SOEs over which it holds direct influence, to spur their investments to even higher rates, which was accomplished with a billion dollar stimulus plan.

Chinese State-Owned Enterprises have been responsible for most of the increase in investment in recent times. First of all, in China equating the non-directly state-controlled sector of the economy with the private sector is problematic, for sometimes boundaries between what is and what is not public are tenuous. The economy, it seems, is still enmeshed in party politics, as the Communist Party of China has the power to appoint many of the main executives of key companies, even if not majority-owned by the state.

Is China actually a communist country? -

In effect, Huang suggests that OECD's assumption that a category of firms known as "legal-person shareholding firms" 28 are privately-owned firms is a flawed assumption, as much of the legal-person share of capital originates in the state sector because SOEs, both national and local, hold significant equity in other firms.

This means that even when the government per se does not own the majority of assets of a company, it can exert substantial influence on its management through SOEs that own part of the capital of the supposedly nonstate company. This way, Huangp. What is remarkable, though, is that those figures weren't significantly bigger 10 years earlier Mattlin and Imai hint at why this is so. They believe all the privatization, corporate laws favouring private activity, downsizing, joint-venturing etc.

It becomes visible, then, how most of the "privatization" happened at the provincial and local level, and big international players like Sinopec oilChina National Petroleum, State Grid Corporation electric utilitiesChina Telecom, Bank of China etc.

Just for curiosity's sake, the telecom equipment Huawei, the largest Chinese private enterprise, generates only one tenth as much revenue as Sinopec the largest state enterprise does: It remains to be said that the influence of the State on the Chinese economy goes much beyond its ownership of assets.

According to Bardhangovernment policy still discriminates against indigenous private entrepreneurs in matters of finance, market access and regulatory approvals. Due to imperfect private property rights over assets like land and other types of infrastructure, for years the relationship between private businesses and the state has been rather clientelistic. In their study, Li et al.

The listing of shares in China's stock exchanges is also subject to government approval, namely, to the China Securities Regulatory Commission, that repeatedly favours SOEs: Lastly, it should be noted that the five largest banks in China are all state-controlled, and together they account for around one half of the Chinese banking system assets and deposits. To conclude with, over the last years the government has actually strengthened its financial control over the biggest and most strategic companies.

In it created SASAC State-owned Assets Supervision and Administration Commissiona special commission directly under the State Council that exercises ownership rights of state enterprises on behalf of the government, including appointing managers, executives, and approving mergers and sales of assets. By stipulating strict demarcations on which industries the government considers strategic, it made clear that around 40 SOEs will be indefinitely off-limits to private or foreign control.

Not surprisingly, those 40 huge enterprises make most of the profits of the state sector: In Mattlin wordsp. Markets operate competitively in most sectors and labour is very much commodified, despite imperfections in labour flows between the countryside and urban centers.

Nonetheless, China is not yet fully a capitalist economy and it does not necessarily follow that it will ever be. It is not yet a full-fledged capitalist economy due to the incomplete proletarianization of its work force, still largely composed of peasants; though that may soon not be true anymore. But if one would elect one single criterion under which China is not capitalist it would be in its management of capital. As we saw, the State still holds direct or indirect control over the larger share of loans and investments in the economy.

In other words, although China is no longer a planned economy, the State still wields great power through the allocation of massive state resources and control of large and highly profitable SOEs, which dominate key sectors of the economy.