China 2002: Building socialism with Chinese characteristics

Earlier this month, a Communist Party USA delegation – National Chairman Sam Webb, Vice Chairman Scott Marshall, African American Equality Commission Chairwoman Debbie Bell and International Secretary Marilyn Bechtel – visited China for a week on invitation of the Communist Party of China (CPC). The group was the first official party delegation since long-time National Chairman Gus Hall visited China with a delegation in 1988.

In studying China today, it is important to recall where the great-great grandparents of today’s Chinese people were a century and a half ago. Together with many Chinese visitors, we viewed that story in well-designed museums in each city we visited – Beijing and the southeastern cities of Shanghai, Suzhou and Jiaxing.

The story begins with the starved, miserable, disease-ridden existence of most Chinese in the mid-19th century, as a corrupt and crumbling empire gave way before European colonial powers who would “oversee” China’s economy, steal its riches and distort its social development. The saga continues through the many sharp struggles that led to the 1949 revolution and the enormous effort that continues today, to bring a vast, impoverished developing country into the modern world and to begin the building of socialism.

In even an exceptionally well-planned whirlwind tour, following an itinerary we requested because it let us glimpse the fast-developing southeastern area that is open to foreign investment – we could only scratch the surface. We came away realizing that before any firm conclusions can be drawn, much further study is needed of the way in which the Communist Party of China is leading the building of the New China in the world’s largest socialist country; Of how party, government and people are working to solve the very difficult, long-term problems of rural-urban and regional economic disparities, massive reorganization of major industries and participation in a capitalist-dominated global economy. Many questions remain, and time and further experiences will tell if the policies now being pursued in a very thoughtful manner will succeed.

The CPC believes that China is in the primary stages of building socialism. When the Communist Party won state power in 1949, China had been ravaged by civil war and invasion. The early years after 1949 were marked both by periods of substantial economic and social progress, and by costly mistakes. During the “cultural revolution,” from 1966-1976, continuous political upheavals dealt a grievous setback to economic and social development.

The policies of reform and opening to the outside world that underlie China’s development today began in 1978, with the renewed leadership role of Deng Xiaoping. In practice, this means a thorough restructuring of the state owned sector aimed at bringing these industries up to world standards, and a planned opening of the economy to domestic and foreign private investment.

The CPC maintains that public ownership must remain primary. In 1997, for example, over 75 percent of the Gross Domestic Product (GDP) came from the state-owned sector. Here, the future trend will be important.

In the cities we visited, construction, both commercial and residential, is booming. Architecture is attractive – often elegant – and strikingly varied. This construction boom could serve as a metaphor for the energy and enthusiasm that is apparent among people on the street as well as among the Communist Party, academic, enterprise and government leaders with whom we met.

Among the issues on our minds was the effect of opening China’s economy to transnational capital, and in particular China’s newly acquired membership in the World Trade Organization. In the 1980s, Deng Xiaoping asserted that opening up to private domestic and foreign capital was necessary to jump-start a developing economy. He emphasized that communism does not mean shared poverty, and stated that developing certain areas and industries was necessary to speed the development of the socialist economy as a whole.

We explored the issue at the Development Research Center of the State Council – the government’s top policy think tank. Director Wang Menkui emphasized the necessity for China to enter the global market in depth by trying to increase the power of developing countries and to influence policy in the World Trade Organization.

China faces major challenges because the WTO is controlled by the United States and other developed countries, but Wang and others we talked with believe that China will gain vital economic experience and information from WTO participation.

China is now much more directly affected by the global economy, Wang said. The world economic slowdown has negatively affected China’s exports, though last year China’s growth rate remained above 7 percent while worldwide economic growth stagnated at around 1.6 percent. Chinese agriculture, improvement of which is high on the priority list, will be sharply challenged, especially by U.S. agribusiness.

The impact of foreign investment was most visible in Shanghai, which was opened to international capital in the 1980s. A stroll through a brightly – even gaudily – neon pedestrian mall revealed a profusion of storefronts beckoning the strolling throngs with foreign as well as Chinese goods – electronics, clothing, furniture, appliances, consumer goods of all sorts. Had we wished a change from the Chinese haute cuisine we were served at every meal, we could have found McDonald’s, KFC, Starbucks, Burger King and more.

Another facet of foreign invest-

ment is exemplified by the Suzhou Industrial Park (SIP) – the newest and most competitive of China’s more than 40 such parks. The city of Suzhou used to be a tourist magnet. Now, industrialized, its GDP is seventh in the country.

The park itself is the only joint venture project between the Chinese government and a foreign government – Singapore. The object is to gain the up-to-date technology, commercial and management experience of Singapore with its booming economic development, while giving the foreign investors an avenue to the vast Chinese market.

We inquired about the level of unionization at SIP – the All China Trade Union Federation had said its goal is to organize all the workers in the private sector as well as the state-owned enterprises. We were informed that over 20 unions function at the industrial park, and more than 75 percent of workers are organized. Under government agreements, joint venture companies must not place any obstacles in the way of workers who want to unionize.

Our hosts seemed sure that developing a mixed economy and encouraging foreign investment is not only necessary for the economy of a vast developing country in the early stages of building socialism, but offers benefits that far outweigh the risks. Naive? Perhaps – but having state power gives them added confidence in their ability to keep the public sector dominant.

The other prong of the economic development approach is the rigorous reorganization of the state-owned enterprises, or SOEs. Though there are many small- and medium-sized SOEs, the industrial heavyweights tend to be in this sector. The one we visited, the giant Bao Steel, appears to be doing a booming business in structural and other forms of steel.

Over the country as a whole, restructuring the SOEs is in full swing, and is resulting in significant unemployment. The official figure is given as 3.6 percent, and it is stated that 90 percent of these receive some level of subsistence allowance.

But the size of the migrant population there – 3 million temporary residents beyond the city’s 13 million population, bespeaks a larger problem. Our hosts asserted – we felt accurately – that these serious problems will take considerable time to surmount, but that the restructuring of inefficient SOEs is urgent for China’s future economic progress.

Related long-term problems are the differences in economic development between rural and urban areas, and between western and eastern China. Though agriculture accounts for only 20 percent of today’s GDP, 60 percent of the population lives in rural areas. With little arable land and low productivity, it is necessary to encourage people to move to the city, at the same time agricultural productivity is improved and small and medium industries are encouraged in rural areas. The population movement puts further pressure on the cities.

At the same time, the Chinese take great pride in the reduction of the number of people living below the poverty line by about 10 percent per year. They say the number of rural poor has decreased from 250 million in 1978 to about 30 million today. However, they express great concern that urban per capita incomes rose by 8.5 percent last year, but rural incomes only by 4.2 percent.

Our visit took place at the same time the National People’s Congress – the national legislature – was meeting in Beijing. We noted that a wide range of issues received media coverage. Discussion there was for the most part very open about problems as well as successes. One such issue is corruption, which the Chinese are dealing with as a major issue for immediate correction.

Another is the need for greater environmental protection – brought home to us by the constant pall of smog in the cities. China is waking up – a little late – to the fact that environmental prevention is vastly better than cure.

A third is housing, a national priority in the current five-year plan. In addition to the new high rise housing springing up everywhere, our hosts showed us tightly packed, shabby older housing still often found even in Beijing and Shanghai.

Our hosts were eager for our views on many questions including our estimates of the future direction of U.S. society. This provided an opportunity to convey our sense of urgency about the Bush administration’s adventurous ambitions at home and abroad.

Our Chinese hosts emphasized that they seek normal, stable state-to-state relations with the United States. At the time of our visit – just before the revelation that China is a Pentagon nuclear target – the biggest problem they cited was Taiwan. They insist the island must be recognized as part of China, albeit under a “one state, two systems” policy of accepting Taiwan’s capitalist economy, as has been done in the case of Hong Kong, and they are very concerned about U.S. intervention that could necessitate a sharp Chinese response. Particular ire was aroused by Washington’s invitation to Taiwan’s head of state to participate in a U.S. arms seminar earlier this month.

Our Chinese hosts welcomed us with great warmth and prepared the itinerary with much care, scheduling meetings with a member of the CPC’s Political Bureau, the Minister of the CPC International Department and the head of the government’s principal policy think tank, as well as visits to a variety of enterprises, the trade union federation, and historical/cultural sites. We found our hosts willing to discuss both successes and potholes in China’s developmental path.

Many questions and concerns about China’s future development remain open, needing both much further study, and further time to ascertain. A short visit did not allow assessment of the level of popular participation in the grassroots organizations of the party and government.

But we came away with a new respect for the thoughtfulness, thoroughness, energy and optimism with which the Communist Party of China and the Chinese people are going about the complex, long-term process of building socialism in a vast developing country, which is of necessity part of an increasingly globalized economy.



Marilyn Bechtel can be reached at cpusainternat@mindspring.com;

Debbie Bell can be reached at Damisbell@aol.com