In the midst of an interesting post on common misconceptions people have about China, the Humanaught writes that “communism is a farce”, elaborating:
Most definitely the most overly-confused issue for Neverbeens as relating to China is the conflicting reports of capitalism running amok in what is the world’s largest communist state. Now to set the record straight, China is – in no way, shape or form – communist. State-run monopolies are at a minimum, there are no mass socialistic programs (Canada’s health care and welfare systems are more inclusive), and free enterprise is (somewhat annoyingly) rampant. It’s 100% capitalistic, but under a one-party, authoritarian system.
I’m afraid that Ryan, in an effort to correct misperceptions among non China-hands, has unwittingly fallen for a misperception himself. While China may not be purely communist, calling it 100% capitalistic simply doesn’t resonate with how the Chinese government and economy actually function.
Ryan correctly points out that Canada’s health care and welfare systems are more inclusive, which in a strict sense is true. Rural Chinese and undocumented workers in cities lack access to benefits afforded to China’s urban elite. I would argue, though, this is more a result of governmental incompetence than a policy shift toward market capitalism. Poor Chinese aren’t looked after not because China’s ruling elite is composed of privatization zealots but because its welfare system is a bloated, inefficient mess. In fact, one of the central tenets of the government’s plan is based around building a “new socialist countryside” which would in theory bring welfare benefits to the rural poor. Whether they succeed or not is anyone’s guess, but it could hardly be referred to as a deviation from socialism.
Canada is a small, wealthy country that has admirably constructed an inclusive and effective welfare state. China, if anything, would probably like to emulate Canada’s example. Its inability to do so results from it being a developing country with a lousy government rather than anything related to ideology.
I’m also not convinced that free enterprise in China is “rampant”, whether annoying or not. (I, for the record, happen to think the limited amount of free enterprise the Chinese do enjoy is the best thing to have happened to the country, but this is beside the point). People point to China’s gaudy economic statistics and its proliferation of fancy cars, skyscrapers and Starbucks and conclude that the Chinese are running around in some sort of Randian free for all.
In fact, a friend of mine who works as a financial journalist told me that most of China’s growth results from government-funded fixed-asset investment, such is in infrastructure. Very little of China’s growth seems to stem from bottom-up initiatives, such as the proverbial American example of starting a billion-dollar computer business in your college dorm room. The government still directs much of China’s economy from above and most of the winners of China’s boom have strong connections to important government officials. Without these connections, it can be very difficult for the average Chinese to get ahead.
Given the government’s role in shaping the economy, and its persistent ownership of much of China’s industry, it’s more than a little hyperbolic to call China’s economy “100% capitalistic”. Like virtually every other country on earth, China blends, or tries to blend, market capitalism with social welfare. But what makes China different from, say, North American or Western European countries is that its political leaders continue to rhetorically support Marxist ideals. The government has never repudiated communist tenets despite deviating from them, skirting this obvious contradiction between their words and deeds by altering the very definition of Marxism. For a true capitalist state with an authoritarian government, one can look at China’s own Hong Kong or Singapore as examples, though I suppose one could argue that China would very much like to resemble these places some day.
I’m not trying to pick on Ryan, and I think his views on the matter are probably shared by a lot of other foreigners who live in China. One of the principal reasons for this confusion is that China’s political and economic system is largely unprecedented in the world (although it is being copied elsewhere) and therefore not easy to define. I’d say the only correct way to answer someone’s question about China’s economic system is to shrug your shoulders and laugh.
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Matt, I wouldn’t call the Chinese government a lousy government just because it has not been able to emulate Canada’s welfare system. The CCP has run away from the belief of the old days when the government was supposed to take care of everything for its citizens, from cradle to tomb. I think they are aware of the magnitude of the problem (as you correctly pointed out, “a mess”), but they have not come up with a fix. Incompetent you might say, but I challenge anybody to be in the shoes of the Chinese government and try. It’s no easy job.
Posted 09 Jan 2008 at 3:52 am ¶Hey Matt, excellent points.
My comments regarding communism vs. capitalism in the Middle Kingdom was mostly to illustrate contrast between perceived notions in the West and the reality on the ground.
Though I agree that the CPC has their fingers in everything, and you can’t get a damn thing done here unless you’ve some solid govern’t guan xi the way I mark a capitalist society and a communist one is what drives its people.
The image of urban Chinese standing in breadlines and going to state-run businesses is still one that sits pretty strongly in Western minds (from what I’ve seen/heard at least). I was just pointing out that every Mr. Zhang and his brother-in-law has a business.
In fact registering a private business doesn’t take any more capital than one yuan.
There is definitely a fever among Chinese of the late 20th/early 21st century that money is king. You see it everywhere, in students, in business, in supermarkets, in hospitals…
I was only attempting to paint this picture, to replace the picture people seem to have of Chinese sitting in State-run businesses, doing feck all but waiting for their pittance to cash.
Haha, yep!
Posted 09 Jan 2008 at 7:28 am ¶Trouble is, you’re both right.
China is 100% capitalistic if you view it as a “state capitalist” economy with a large amount of room for free enterprise. Even so, a large amount of that free enterprise, of necessity, operates in legal and economic grey areas.
I would argue, though, that China’s welfare system is not “a bloated, inefficient mess”. Hospitals, which seem to be the example of choice, are run on an almost purely for-profit basis. I think we might actually be better off in America from that point of view- and you know how rarely I’d make an admission like that. China’s welfare system is a skeletal embryo, struggling for life in the midst of a state capitalist bureaucracy that would much rather appropriate welfare’s money for more important things, like the latest Buick or a villa in the countryside, and to hell with the people we’re supposed to be serving.
Perhaps the most enlightening conversation I ever had on this subject was with my Chinese teacher. I was ranting about the lack of communism in this “communist” country, and pointed outside at the proliferation of fancy housing estates and the cars jamming the road (my school was in SOHO, Bawangfen, Beijing’s CBD- I’ll show you if you need to see it, but there ain’t much of any real interest there) as a prime example. After laughing at me for slipping into a Hunan accent in my passion (hey, that’s where I started learning Chinese, so it’s kinda understandable), my teacher said, “Well, all societies go from primitive hunter-gatherer, through feudalism, imperialism and captilasim to socialism and then eventually communism. China’s only just ditched feudalism, and is in the beginning stages of capitalism. Patience, lad.” Or Chinese words to more or less that effect.
So I guess my political leanings have been laid bare in this comment. Anyway, I think my teacher’s analysis is the best of come across so far.
Posted 09 Jan 2008 at 11:24 am ¶Some good points, but how can you possibly call Canada a ‘small country’?? It’s one of the largest in the world, and even if you look at population it’s not really small (over 30 million).
Posted 09 Jan 2008 at 3:57 pm ¶Pfeffer- you got it backwards. China’s government isn’t lousy because it lacks Canada’s welfare state, but one of the reasons China lacks the welfare state is that its government is lousy.
Ryan- you’re absolutely right that China’s people are indeed of a capitalist mindset, though I’d say this has been true since time immemorial. (Chinese people tend to thrive wherever they go, after all). My dissent was based more on wonkish political science terms, which I like to use from time to time to prove that I actually do remember a thing or two from college.
Chris- Interesting…it’s as if Marx’s prophecy that communism was indeed the inevitable last stage of development is driving China today, even if its own previous experiment with Marxism went disastrously, as it did….everywhere else in the world.
Lu- Of course I was looking at population- a country’s land area is irrelevant when discussing politics and economics! But you’re right- by international standards Canada does have a fairly large population in raw terms. But in comparison to China it is decidedly small.
Posted 10 Jan 2008 at 1:12 am ¶Matt, you said “Its inability to do so (emulating Canada’s example) results from it being a developing country with a lousy government rather than anything related to ideology.” There will always be problems in China and I don’t know if the government will ever considered not lousy by you following this logic.
Posted 10 Jan 2008 at 4:06 am ¶Pfeffer,
I will consider the government not lousy when it begins to do a better job of serving the interests of its people. China has problems, but so does every other country. And some of them have decent governments. China doesn’t.
Posted 10 Jan 2008 at 8:57 am ¶If I had to give it a definitive quantity, I’d say China is about 70% capitalist. While private enterprise is widespread, Uncle Mao is still in charge of some of the nation’s largest industries, namely tobacco and most utilities. Then again, Westerners get way too caught up in the whole Communist/Capitalist nomenclature. The US is capitalist, right? Then what do you make of the US Postal Service and the Library System? Nobody in America wants to call it Socialism…just like nobody in China wants to refer to anything there is capitalism. It’s all part of a big continuum. All the labels do is further confuse the matter.
Posted 10 Jan 2008 at 12:21 pm ¶Matt, no country has yet implemented Marxism. So far the revolutionaries have spouted Marxist doctrine while implementing state capitalism- and then there were Pol Pot, Mao and the Kims. The point my Chinese teacher was making is that Chinese society has not yet evolved to the socialist stage, and so has to undergo capitalism in the here and now. I would say the same is true of every other “communist” country- assuming, of course, that Marx’s analysis of history is correct, and considering that no society has yet evolved beyond capitalism, we have no proof that Marx’s projections for the future evolution of human society will bear any kind of resemblance to reality.
And yes, I would say that belief in Marx’s prophecy is what drives China’s theoriticians and government. The goal right now seems to be to get through capitalism and start working on the first stages of socialism. It is in their actions, not their beliefs, that they have failed to learn from history. We’ll have to wait until humanity evolves beyond capitalism to see whether their beliefs are right or wrong.
Pfeffer: I agree with Matt, but I’ll explain it this way: What happens in my in-laws’ village determines what I think of every level of the Chinese government. The appearance of the new truck lane on 国é“110 as it runs through Yanqing County, foot-pump operated flush squatters in every farm house, and the rumours of retirement pensions starting May this year raise my opinion of the government. The dumping of a shitload of poison on half my father in law’s orchard to bully him into selling the land use rights so the village government can follow through in its seriously half-baked idea of building a carpark (a carpark!) and rumours that the village cornfields would be turned into a golf course (a golf course, for crying out loud!) do far more to lower my opinion of the government. As Matt said: “I will consider the government not lousy when it begins to do a better job of serving the interests of its people.”
Posted 10 Jan 2008 at 12:43 pm ¶I’d say China is a mutation of socialist and capitalist economics with a heavy dose of kleptocracy.
For starters, Matt, here’s another piece of evidence for your case: look at the price controls and “safety valves” all around in the system. If I buy a house, I’m not allowed to sell it for three years. Most commodities have price floors and price ceilings set to ensure stability. Gas prices are subsidized and regulated. I could go on.
Second, barriers to entry in the Chinese economy are severe. Obviously, bureaucracy remains a hideous obstacle to overcome but guanxi is an even bigger factor. This is what you’re getting at in your post when noting that most of the “winners” in the Chinese economy are well-connected to begin with. It’s almost inconceivable that an upper middle class Chinese without guanxi could become the “Chinese Bill Gates” or “Chinese Steve Jobs.”
Third, rule of law — or the lack thereof — cripples effective development in China. Companies rip each other off constantly, the property rights of small businesspersons and farmers aren’t respected, and some officials simply make up regulations (or ignore real regulations) when they have enough RMB thrust into their hand. This isn’t capitalism in the Hayekian-Friedman sense of the term. At best, China’s in the era of robber baron capitalism.
Posted 10 Jan 2008 at 10:24 pm ¶Ben,
True. As I wrote in the post, just about every country is a blend of socialism and capitalism, although some (like, pace Chris, Cuba and North Korea) are effectively completely statist. And while the argument over how to define China’s economy is indeed mostly academic, it is interesting enough to pursue.
Chris,
I’d say, if anything, history is trending away from socialism as more governments begin realizing that the market is simply the most effective and fairest method of allocating scarce resources. There are exceptions (populist “Bolivarian” movements in South America for example) but in general the era in which state-owned planned economies are treated as genuine alternatives to market capitalism appear over.
Matthew,
Posted 11 Jan 2008 at 2:04 am ¶Thanks for that, as I agree completely. I do however think the Chinese governments’ investments in infrastructure place it in a higher class than the purely kleptocratic governments ubiquitous in sub-Saharan Africa.
Matt, I understand where you are coming from, but isn’t “doing a better job of serving the interests of its people” totally subjective? I mean, are there widely-accepted standards and criteria of “doing a better job of serving the people” ? Considering the strides China has made, I don’t think its government is lousy. Of course there is plenty of room for improvement, again the question, up to what point would you consider the government doing “a better job”? Maybe when it start behaving like the US government?
Posted 11 Jan 2008 at 4:45 am ¶Pfeffer,
Whether or not China’s government is better than before isn’t the issue. I evaluate it based upon how it serves the interests of the people (a subject you haven’t yet addressed in your comments), and how it compares to governments around the world. My use of the term “lousy” is of course subjective but there are objective ways of measuring a government’s efficacy, and by these measures China’s government has severe flaws.
I’m waiting for you to explain why you think the Chinese government isn’t “lousy”.
Posted 11 Jan 2008 at 6:45 am ¶Oh, I don’t know, I would say that in most purely economic areas the market does best and government should limit itself to providing the necesary infrastructure and protections for the little guy. But you mentioned healthcare, and it would seem to me that government does a better job of fairly allocating those resources. I, for one, would much rather be poor in Canada, New Zealand or Sweden than China or America precisely because I would have fairer access to healthcare (and education) in a social democratic state. Also, many of those social democracies are doing far better economically, even with the burden of welfare states, than our Anglo-Saxon economic overlords would have us believe.
Posted 11 Jan 2008 at 9:54 am ¶Matt,
Serving the interest of the people sounds like a great benchmark, but again how do you measure that exactly? If you ask two people if the government has served the interest of the people they might have completely different answers as “serving the interest of the people” is subjective because people have different opinions, standards etc. I can tell you if it is measured by the satisfaction of the populace then the Chinese government is not lousy (according to a recent survey from PEW, close to 80% of the Chinese are contend with the national government). If you talk to people living in the big cities many people might tell you the government is fine. If you talk to people living in rural areas many people might tell you things are pretty bad. If you talk to FLG people they will tell you the government is pure evil. It really depends on who you talk to and what criteria you judge the government against. What are the “objective ways of measuring a government’s efficacy”?
And exactly how do you compare governments of different countries? The Japanese government is doing great, I think, as far as Japan is concerned. But China is a different place with her unique issues which warrant different approaches. You can only compare say the PRC government with the Nationalist government or the Qing government etc., but not with foreign governments.
I don’t think the Chinese government is lousy because it is doing a good job uplifting the Chinese people in general and advancing the interest of China. Millions of people have came out of poverty partially thanks to government policies (how the government has initiated reform and steered the economic development etc.). China is becoming a force to be reckoned with, as opposed to “sick man in Asia”. Even though I don’t believe the government should take most of the credit for the strides China made all these years, it deserves some. It takes more than a lousy government to do what it did. Of course not all is well in China, far from it, but just because there are problems in China it does not make the government automatically a lousy government, does it?
Posted 12 Jan 2008 at 5:02 am ¶@Chris_BJ: I agree, some industries need to be state-run in the sense of being run not-for-profit so the interests of their purpose are maintained – health care and education being the two primary ones.
To me privatization of such industries is a stupid answer to a stupid problem. The stupid problem being gross inefficiencies in the health and education sectors. These issues should have been addressed and cleaned up, not privatized in an effort to have the market clean up the mess for them.
@Pffefer: Are we really going to bring this to a US vs. China argument? Man, have I been around the blogging scene too long or is this the most tired argument out there? Can’t they both suck equally but in different ways?
Posted 12 Jan 2008 at 7:00 pm ¶Pfeffer: I would say access to education, healthcare, decent housing, adequate food and clean air and water, as well as protection, so far as is practical, from, poverty, natural disasters, exploitation, crime, and other forms of insecurity would make for some reasonable objective benchmarks by which to measure the “lousiness” of a government that could be fairly applied to all countries at all stages of their history.
Posted 13 Jan 2008 at 9:39 am ¶Pfeffer,
What Chris said in comment #17 pretty much speaks for me. Foreign Policy magazine, among other sources, studies government efficacy and China usually rates fairly low for some of the reasons we espouse above.
Posted 14 Jan 2008 at 12:48 am ¶Chris and Matt,
Let’s rate the Chinese government using some of your criteria, in my opinion:
Access to education: B+
Health care: B
Decent housing: B
Adequate food: A
Clean air and water: C+
Protection from, poverty, natural disasters, exploitation, crime: B
Matt, I would like to get more info on FP’s study. How was study conducted? I find it questionable that a foreign political publication is in any position to make that kind of call, which is subjective in essence.
Posted 14 Jan 2008 at 5:41 am ¶Pfeffer,
I still don’t follow. Are your grades based on how China compares to other countries, or are they based on how China compares to its own past, or what, exactly?
If the former, I’d say off hand your grades are way too high. If the latter, well, how China’s current government compares to past Chinese governments is not relevant to the point I was making in my post. China’s government can be improved and still lousy, as it really could not have gotten much worse than it was during the Cultural Revolution.
I’m not sure what else I can say on this topic to convince you, and besides: the fact that China’s government is lousy was rather tangential to my original point about Communism, anyway.
Posted 15 Jan 2008 at 1:57 pm ¶But since you asked, here’s a link to a previous “Failed State Index” by Foreign Policy magazine:
http://blog.foreignpolicy.com/fsi_06/fsi06.html
I don’t think China is a “failed state” but this shows you certain criteria that can be used to compare governments.
Posted 15 Jan 2008 at 1:58 pm ¶Pfeffer, I’m more optimistic than Matt, but your grades are undeniably on the high side. If access to education is so good, then please explain why I have to explain to my university-educated wife basic science topics, or why my Chinese students know bugger all about Chinese history and only slightly more about Chinese geography. As for housing and healthcare, come visit me at my in-laws’ place around Spring Festival, and I’ll show you pleasant by most Chinese peoples’ standards. China’s central government is making some decent policies and getting enough enforced on the ground to make a difference for most, but China has a hell of a long way to go before it matches the grades you’ve given.
Posted 15 Jan 2008 at 3:30 pm ¶Matt,
Of course that’s my own opinion as a long-time China resident (I think I know China a little bit more than the average expats or “China experts”). I have said it many times that one’s opinion on whether a government is doing a good or lousy job is completely subjective (of course you are entitled to your opinion that the Chinese government is lousy) and there should be no comparisons, especially comparisons with foreign government. If you are asked whether the Bush administration is doing a good job, do you ever consider how the Chinese, French, Japanese government etc. are doing respectively? I don’t think so.
Why would anybody want to compare one government to another? I have explained that different countries have different situations which warrant different approaches etc. How can you compare China, or for that matter any country to other countries? I’d argue it is a lot easier to govern a country like Switzerland than China and the US. How can you compare say China to the US, for example? We are talking about a third-world developing country vs. the world’s lone superpower here. By your logic, government in developing countries will ALWAYS be considered lousy as long as they remain developing countries. The Chinese government will no longer be lousy only when, and if China becomes a first-world developed country like the US or its G7 allies. Yeah right!
I don’t quite understand your last sentence: Am I correct to believe that you are saying the Chinese government is lousy because it professes communism? Wow!
Posted 16 Jan 2008 at 4:37 am ¶Chris,
Having access to education is completely different from having a robust, high quality education program. These are two different things. Thanks to the Chinese government, more Chinese kids now go to school than ever before. I have never said Chinese education is excellent. I think it is average. I am sure in the US or wherever you are from, there are millions of people who know very little about science, history and geography.
I agree that China has a long way to go, it is a developing country for God’s sake. It is no mighty United States! But China also has come a long way. It is easy for foreigners to offer their opinions and getting preachy without actually acknowledging what the government and people are up against in China. I have a friend from British who is a long-time China hand (but hardly a fan of the Chinese government) who once told me: Being in Chinese government’s shoes is extremely hard.
Posted 16 Jan 2008 at 4:46 am ¶Pfeffer, in one comment you discount the validity of comparing Chjna with the US, and in the next you do exactly that. I would agree that the situation in the US is largely irrelevant, firstly because I’ve never been there. But I will say that apples can be compared with oranges. Both are round, both are fruit…
But forgive me for expecting university students to have more general knowledge of their home country and the world around them than average regardless of which country they are from.
And access to education and access to quality education are not so different. Access to any education is better than access to none. Once you’ve established an education system accessible by all your citizens, the next step is to improve the quality of that education.
“Of course that’s my own opinion as a long-time China resident (I think I know China a little bit more than the average expats or “China experts”).”
“It is easy for foreigners to offer their opinions and getting preachy without actually acknowledging what the government and people are up against in China.”
You can drop that attitude. None of us arrived here yesterday.
Posted 16 Jan 2008 at 1:29 pm ¶Chris,
Exactly how did I compare China to the US? I have said it many times there are no comparisons since China is a third-world developing country and the US is a developed, first-world superpower.
I don’t know where you come from (maybe the average joes in your country are extremely well-informed, which I find hard to believe, whatever this country is) but in the US it is extremely common that average folks know very little or nothing about science, history and geography. I remember reading something saying the majority of American high school students didn’t know where the state of Louisiana is on the map. Watch “Jaywalk” on “The Tonight Show” hosted by Jay Leno.
I don’t have any attitude, but I have seen enough expats telling people how much they know about China and making a fool out of themselves after staying a short period of time here.
Posted 17 Jan 2008 at 3:54 am ¶Pfeffer,
To reiterate what Chris said, there’s no need to imply that we say what we say because we somehow lack experience in China. Please argue our points on their merits rather than resort to silly claims of superiority.
I’ve read your comments over again and since neither of us seems willing to budge, I’d say we’ll have to agree to disagree on this one.
But please don’t try to insult myself or any of my other readers by implying that we aren’t as experienced and knowledgable as you simply because we disagree on this subject.
Posted 17 Jan 2008 at 7:16 am ¶This otherwise rather cerebral exchange of intellectual perceptions on China vis-a-vis alternative global political trends appears to be developing some rather “feisty” characteristics.
May I dip a virtually irrelevant oar into the pool of discussion ?
In attempting to encapsulate the underlying issues in your discussions in the terms you have been using thus far, aren’t we simply picking over the bones in an elephant’s graveyard ?
Posted 21 Jan 2008 at 10:57 am ¶After all, this is the 21st century and the models of Communist Theory etc. conceived by Marx and Engels et al were fundamentally projections of “cutting edge” theories and technologies belonging to the 19th century ( i.e, largely Darwinistic and Mechanistic ).
Surely, the greatest challenge today for young, commited, socialist-minded thinkers is to rejuvenate the legacy of ideals which defined not only Marx and Engels but Kautsky, Luxembourg, Guevara and all past generations of social-justice practitioners through brand new conceptions of what I call “Neo-Materialism”.
It would necessitate the great challenges of including so much of what we live with today; Einstein’s legacy, Cyber-space and I.T, String Theory and Superstring Theory, the “Bill Gates Phenomenon”, resource depletion, Enviromentalism……. , and informed projections of what your children will be living with tomorrow.
Certainly, it seems to me that so many of those who profess to adhere to Marxist ideology nowadays deserve the response given to the smug, rich old lady who had been the recipient of innumerable face-lifts and body-tucks: Basking in the attention of her admirers at a party one evening, she proudly declared; “Do you know, I’ve had sixty-eight years experience ?. And a young man in the group replied: “Is it that you’ve had sixty-eight years experience or one year’s experience sixty-eight times”.
More optimistically, there are the words of the famous General Desaix who, upon arriving late with his division upon the battle-field of Marengo, was asked his opinion of the situation by Napoleon: “This battle is lost, sire” he replied, “but there is still time for us to win another”.
Politically, attempting to provide a “rice-bowl” and hope to a population of 1.3 billion people is analogous to attempting to control a Sunday newspaper whilst outdoors in a hurricane ( hence Tian’anmen Square ). Such an exercise is unprecedented in political history and I can’t do otherwise than salute the CPI on its gargantuan efforts to husband its population from the raw material it inherited coming out of the Opium Wars and the Qing Dynasty to the positions it occupies today.
Greece, the cradle of Democracy, was only able to implement its selective virtues within a population of not much more than a million people ( not counting its slaves ).
Despite the delusional fantasies of so many other countries around the world, true Democracy has never existed since.
In any case, Communism, Marxism, Socialism …. call it what you will, is less an economic than a moral/ethical imperative to those who judge the modern-day division of resources as nothing less than obscene.
So to the Chinese I say, what you are doing right now may not be perfect and draws its critics, but for everyone’s sake, please keep doing it.
“So to the Chinese I say, what you are doing right now may not be perfect and draws its critics, but for everyone’s sake, please keep doing it.”
Mr Lorrimar, I recently asked my wife if she thought China would have a revolution in the near future. She said no, because the Central Government’s policies are skewing more and more in favour of the peasantry. If, by the above quote, you mean that China should continue moving in the direction the Hu-Wen administration has set, then I agree whole-heartedly.
Posted 22 Jan 2008 at 10:33 am ¶Post a Comment