China: On the road to socialism or the capitalist freeway?
Chinese workers assemble cars at a plant of Dongfeng Honda, a joint venture between China's Dongfeng Motor and Japan's Honda Motor in Wuhan in central China's Hubei province. Auto sales in China are beginning to falter. Is it a classic crisis of overproduction, as predicted by Marx? | AP

Chinese President Xi Jinping stated in November 2012 that plans were in place for his country to have “a moderately prosperous society by 2021 and a modern socialist society that is strong, democratic, cultured, and harmonious by 2049.”

Getting there, however, means China must still rely for some time on private capitalist enterprises to acquire the skills, technology, and capital it needs and, in the interim, must navigate the anarchy of capitalist production.

This was made clear in a front-page story in the Dec. 26, 2018 Wall Street Journal, regarding Chinese automobile production, which operates in close association with Ford, Peugeot, Hyundai, and other giant foreign capitalist auto corporations. In 2016, China became the world’s biggest auto market, buying 28 million vehicles and surpassing the 17.5 million sales in the United States.

Foreign companies “rushed in” to maximize their share in this booming market, building new factories and “assuming growth would be endless and easy to capture,” the Journal states. But then, the boom went bust in China. Auto sales, which had grown 14 percent in 2016, grew only 3 percent in 2017 and fell further in 2018.

“‘Looking back, it wasn’t the right choice to build new factories,” bemoaned one industry analyst quoted in the report.

China now has the capacity to build 43 million cars, but it produced fewer than 29 million in 2018. Workers at a Ford Taurus plant in Hangzhou now have only “a few (shifts) a month” and are forced to find second jobs as “couriers or cab drivers.” At a new Peugeot plant in Wuhan, workers “have been cleaning or painting factory walls” or “attending Communist Party political study sessions at work.”

One foreign car maker, Suzuki, decided to simply close its plants and leave China, while Peugeot said it was “implementing a sharp reduction in fixed costs.”

Underinvestment agreements, foreign companies generally partner with private and state-owned companies in China. Although the country is continually accused of “technology theft,” these companies gladly sign agreements to share their technology to get into growing Chinese markets. They also agree to provide time and space for the factory branches of the Communist Party to meet and conduct social, cultural, and educational activities.

Obviously, in the case of the automobile overproduction crisis, there is much to discuss. The auto workers at these Communist Party meetings may well be reading the sections of Capital, Volume 1, where Karl Marx explained the inevitability of such crises under capitalist production relations or the vivid description he gave in The Communist Manifesto:

“In these crises, there breaks out an epidemic that, in all earlier epochs, would have seemed an absurdity—the epidemic of over-production. Society suddenly finds itself put back into a state of momentary barbarism…and why? Because there is too much civilization, too much means of subsistence, too much industry, too much commerce. … The conditions of bourgeois society are too narrow to comprise the wealth created by them. And how does the bourgeoisie get over these crises? On the one hand, by enforced destruction of a mass of productive forces; on the other, by the conquest of new markets, and by the more thorough exploitation of the old ones. That is to say, by paving the way for more extensive and more destructive crises, and by diminishing the means whereby crises are prevented.”

The Communist Manifesto, Capital Vol. 1, and other works by Marx and Engels are available from International Publishers.

The Journal sneers that workers affected by the crisis “spend their time in sessions undergoing ‘ideological training,’” but this is actually what the Manifesto also predicted.

“Not only has the bourgeoisie forged the weapons that bring death to itself; it has also called into existence the men who are to wield those weapons—the modern working class—the proletarians,” the Manifesto states.

“The bourgeoisie finds itself in constant battle” (with other propertied classes, competing capitalists and) at all times with the bourgeoisie of other countries. In all these battles, it sees itself compelled to appeal to the proletariat, to ask for its help, and thus, to drag it into the political arena. The bourgeoisie itself, therefore, supplies the proletariat with its own elements of political and general education, in other words, it furnishes the proletariat with weapons for fighting the bourgeoisie.”

“What the bourgeoisie, therefore, produces,” it concludes, “above all, are its own grave-diggers. Its fall and the victory of the proletariat are equally inevitable.”

Despite intense efforts by the Trump administration to stifle China’s growth, the country’s economy already essentially equals that of the United States and grows at a rate triple that of the latter. China is well on its way to achieving its goal of moderate prosperity by 2021 and a modern socialist society by 2049, the hundredth anniversary of its Communist revolution.


Rick Nagin
Rick Nagin

Rick Nagin has written for People's World and its predecessors since 1970. He has been active for many years in Cleveland politics and the labor movement.