Is China Capitalist?
Western leftists have long claimed that China became capitalist, or started down a path toward capitalism, in 1978. Is this true? A look at the evidence.
[This article is loosely based on a response I made to an article I recently came across entitled “China talks Marxism, but still walks capitalism.” As regular readers of this blog may have surmised, I don’t share the view that China is or has become a capitalist country; below, I explain why.]
The Claim: China Has Traveled Down the “Capitalist Road”
Recently, a US comrade asserted that China has long been on a path toward restructuring of the economy towards capitalism, “albeit a gradual entry on Chinese terms and keeping the ‘commanding heights’ of the economy in state hands.” Many other Western leftists express considerably less nuanced views, such as “China is an imperialist country dominated by private billionaires and a ‘Communist’ party that rules dictatorially on their behalf,” as another comrade recently told me. Based on reading and listening to information and views from people who have actually lived in China or are Chinese, I firmly reject both such views. Below, I explain why.
China’s Economic Growth Has Benefited Everyone
Economic inequality is a central, albeit not defining, feature of capitalism. It’s indisputable that economic inequality has grown in China during the 44 years since it embarked on an “opening up” phase during which it allowed for markets, private enterprise, and considerable foreign investment, with the purpose of developing the country’s productive forces and bringing about rapid economic growth so that it could ultimately become a prosperous socialist society. However, despite the growth of inequality, China’s economic growth has benefited everyone. Between 1979 and 2018, China's economy grew at an unprecedented annual rate of 9.4%, and its economy has continued to grow faster than any other country’s (albeit more slowly during the height of the COVID pandemic) since then. During that time frame, China, which was among the very poorest countries in the world in 1949 and still pretty poor in 1978, lifted 800 million people out of extreme poverty (the greatest anti-poverty effort in history, according to UN Secretary-General António Guterres), through a combination of economic growth and targeted poverty alleviation programs. In fact, extreme poverty has been eliminated, and that has happened precisely because of a shift in policy towards targeted poverty alleviation (coinciding essentially with the election of Xi as President/party leader). 90% of Chinese people own their own homes, and the majority own them outright with no mortgage, nor must Chinese homeowners pay property taxes. Infant mortality was roughly the same as in the US (around 5 per 1000) according to the most recent comparative figures I could find; life expectancy surpassed that in the US at 78.2 vs. 76.1 as of 2022. The US’s life expectancy was temporarily suppressed due to the effects of the COVID pandemic—but, as discussed in more detail below, it is precisely because the US’s response to the pandemic was so warped by the interests of the capitalist class but China’s was not that this discrepancy developed.
In its entire history since 1949, the People’s Republic of China has not had a major economic crisis. The "boom" and "bust" cycles that are inherent to capitalist economies do not seem to be inherent to China. Of course, China is integrated into the global economy and its economy was, therefore, adversely affected by the global recession of 2007-2009, but not to nearly the extent that Western countries or its East Asian neighbors were.
Growth Without Imperialist Exploitation
There's no capitalist country that's done anything remotely like what China has achieved in terms of raising its people's standard of living, not even the Scandinavian social democracies back before they turned in a neoliberal direction. Of course, they have been very prosperous and had much less poverty than the US, but they did it on the backs of countries in the Global South that they exploited. China hasn't done that. The Chinese government undertakes economic development projects in countries around the world that create win-win situations for both China and those other countries. China is building more than 1000 schools in Iraq, for instance, and in the long run will be building thousands more. It just completed a high-speed rail project in Laos; it is building highways, airports, hospitals, schools, etc. in dozens of countries all over the world; the vast majority of the world's countries are joining the Belt and Road Initiative. China recently completely forgave the loans it had given to a number of African countries, and sent them food aid to boot. During the pandemic, it's sent massive amounts of medical aid to over 150 countries, including the US. Its benevolent actions around the world seem very much like what Cuba has done—on a bigger scale simply because it's a bigger country. And socialists from countries in the Global South recognize and appreciate that China does not have the sort of exploitative relationships with countries in the Global South that the US and Europe long have. In fact, opinion polls indicate that people in general in the Global South have a very favorable opinion of China, whereas Westerners have an unfavorable view.
Pandemic Management: Nobody Does It Better Than China
During the first year and a half or so of the COVID pandemic, there were a handful of capitalist countries that performed very well in controlling the outbreak (whereas the vast majority did an abysmal job). However, these countries ultimately abandoned their efforts (beyond having a high vaccination rate) to exert strong control over the rates of infection, death, and other severe consequences ensuing from the spread of the virus. There is only one country (minus its island territories that operate under different governance) in the whole world that was able to pursue a scientifically-grounded zero COVID policy all the way from January 2020 to December 202, resulting in a COVID death rate a tiny fraction of that in the US: China. (Other
socialist countries, such as Cuba, no doubt had the intention of pursuing such a policy, but US economic sanctions and their general lack of economic self-sufficiency hampered their efforts. And India’s apparently low COVID death rate is likely a considerable undercount.) And for this they've been relentlessly attacked by the Western media.
Despite the strong political pressure on the Chinese government to drop zero COVID, they kept it up for three years, because they care about both keeping people alive and healthy and the long-term well-being of the country's economy—despite it costing the government tens of billions of dollars per year. And not only was it a massive undertaking financially, but it required a massive, nationwide community organizing effort. A capitalist country could not have pulled off comprehensive COVID containment for nearly 3 years. And it is noteworthy that aside from the period of time in summer 2021 when Cuba was largely unvaccinated and "open for business," and thus had a massive wave of COVID infections and deaths for a couple of months, Cuba’s success in containment of COVID was vastly superior to almost every capitalist country’s.
It's true that New Zealand did almost as well at containing COVID as China during the first year and a half of the pandemic, but ultimately it abandoned those containment efforts completely—because it's a capitalist country. As a country with an abundance of financial resources for its size and a social democratic government that at least at first seemed committed to public health, New Zealand was able to pull it off for a while. But ultimately, the Ardern government governs on behalf of the capitalist class; the Chinese government has used capitalism and foreign investment to stimulate economic growth, but in my view, there is absolutely no way China would have pursued zero COVID for nearly 3 years, only abandoning it after well over 90% of the population was vaccinated and 2/3 had received boosters if the Chinese government were the “executive committee of the bourgeoisie.”
Planning Has Made A Commitment to Ecological Sustainability Possible
Environmental policy is another area where China is head and shoulders above any other country. While on one hand, with a population of 1.4 billion and 30% of the world's manufacturing, China is not surprisingly the world's leading country in carbon emissions, on a per capita basis, it has less than half the per capita emissions of the US or Canada and also less than the vast majority of other industrialized countries. And it is the world's leading producer of renewable energy technology, producing the majority of the world's electric vehicles, solar panels, and wind turbines, and accounts for the majority of the world's hydropower generation as well as being the world's leading country in both solar and wind power generation. It also accounts for 2/3 of the world's high-speed rail mileage, and that's slated to double within the next 12 years. And with a massive reforestation program, it has increased its forest cover from 12% in the early 1980s to 23% by 2020, with much more to come. (In contrast to all that, the US just blew up, or collaborated in blowing up, Nordstream 1 and 2, resulting in a colossal release of greenhouse gases.)
Of course, China had a well-deserved reputation of growing in a fairly environmentally unfriendly way for the first 2 decades or so of its "opening up" period. The major turn toward environmental responsibility is very much a phenomenon of the 21st century, particularly the past 10 years or so. So this is yet another example of China's policies markedly changing, rather than representing a continuous path towards capitalism, as some would have it. And, importantly, if the capitalist class were in charge in China, this policy shift would not have been possible.
Whose Interests Rule in China?
In the piece I mentioned at the beginning of this article, the author asserted that the ruling Communist Party of China exerted “authoritarian party control over society” on behalf of the interests of capitalists. But how is this view compatible with the events I have summarized above—the targeted poverty alleviation and the widely shared benefits of continual economic growth, the cooperative rather than exploitative relations with other countries, the lack of military and political intervention in the affairs of other countries, the exquisitely planned and executed pandemic response that has kept COVID deaths to a minimum and facilitated continued economic growth while other (capitalist) countries have floundered, or the massive reforms of the country’s resource and energy use in the direction of ecological sustainability?
The answer is: It isn’t. There is plenty of evidence to suggest that ordinary people have significant influence on the direction of policy in China. For instance, there was a huge public uproar over air pollution in major cities, and this was shortly followed by a major shift in China's environmental policy direction toward taking the reduction of air pollution very seriously. And, much as in Cuba, there are democratic elections for local government positions (and local elected officials in turn elect officials at the next level up, etc.). There is also extensive consultation and polling of ordinary citizens by the government. And a recent opinion poll found that, in fact, 83% of Chinese people believe that their country is democratic, vs. 49% of Americans who believe that about their own government; only 7% of Chinese said their government only served the interests of a minority, whereas 63% of Americans said that; nearly 1/3 of Americans said that the US did not have free and fair elections or adequate free speech, while only 17% and 5%, respectively, of Chinese said that. Given these views of the nature of their government and society, and given that there have been many changes over the decades that have benefited the majority of the Chinese people, it is not surprising that polls have also found that they have a very high level of satisfaction with their government, with more than 95% either "relatively satisfied" or "highly satisfied."
Conclusion
None of the above is to say that there aren't significant problems in Chinese society. Although the government has taken significant and somewhat successful steps to rein in corruption in recent years (yet another example of something that is arguably significantly attributable to public pressure), corruption exists, as it does in any government. Inequality does indeed continue to be a significant problem. Pollution is still a bad problem—it was really quite striking how much clearer the air was in some of China's major cities (and major cities around the world) during pandemic lockdowns than it usually is—and greenhouse gas emissions are expected to continue getting worse for a few more years before things start to improve. Animal agriculture has grown by leaps and bounds in recent years, and accordingly this rise in meat/dairy/egg consumption has caused significant damage to people's health, the environment, and of course the welfare of animals. China has yet to adequately address the harm animal agriculture does to the environment in terms of greenhouse gas emissions and pollution, and clearly it did not effectively regulate animal markets given that both the SARS and COVID epidemics originated in Chinese animal markets. And the fact that capitalists are not in control of the government of course doesn't mean that there isn't a significant segment of the economy that's capitalist.
However, given all the facts about the nature and direction of Chinese society I've presented above, I don't see how anyone can say that China is capitalist, full stop, and I of course disagree with those who say that it is moving in that direction. At the same time, although I think China is gradually making a transition to a fully socialist economy and that this is clearly the objective of the Communist Party of China, that process, assuming it happens, is clearly going to take many years.