China: In who's interest does the state serve?

By Mark Vorpahl

July 2, 2010 – Workers' Compass – The recent wave of strikes in China, most visibly at Honda factories, are testament to a growing movement of labour unrest in the country. This development is of great importance for international working-class struggle.

For the capitalists, China holds a key position in the global system of generating profits. The demands of China's workers for better conditions and a higher standard of living are in direct conflict with the international capitalists' desire to use China as a source of cheap labour. For the world's big business elite, already shaken by an international economic crisis of their own making, the growing militancy of China's workers is a great threat.

For the world's workers, the unrest in China is to be welcomed. China has the largest working class of any country. The fact that this massive social force is on the move and that its power is growing creates opportunities for workers' struggles across the globe. Frequently, it is the same big business owners who exploit Chinese workers who are exploiting and laying off workers in, for instance, the United States. By organising united campaigns and actions in solidarity with one another, Chinese and US workers will be in a more powerful position to oppose the conditions capitalism is forcing on them.

Furthermore, the Chinese working class has long and deep revolutionary traditions. The latest wave of labour actions could prove to be a spark for these traditions to re-emerge on a much more massive scale. This would thrust the Chinese working class to the forefront of a global struggle that can lead to the victory of socialism where working people would democratically run the country.

Class and state

To understand and take advantage of this process, it is necessary to understand the situation China's workers are struggling within. China's state has gone through immense changes over the last decades. What class does this state serve?

The capitalist state can take many forms, from parliamentary democracies to military dictatorships. What they share is that they promote and defend property relations that favour capitalist control and above all profits at the expense of workers. While the wealth of such states is produced collectively by the vast majority, this wealth and the means of production are owned and run by a tiny few capitalists. A capitalist state's repressive apparatus exists to make sure that things stay this way through coercion and brute force if all else fails.

Karl Marx considered that a socialist state would be one where the means of production and the wealth labour produces would be collectively owned and run democratically by workers for the benefit of society as a whole. The state's repressive apparatus would be used to protect the interests of the vast majority against counterrevolution by the few who hoped to profit from capitalism once again. Because a socialist state, democratically run by majority rule of the entire working class, would be free from the brakes that capitalism places on society's productive ability, as we witness, for instance, in its cyclical downturns, the wealth such a state could produce for all would greatly exceed what can be achieved under capitalism. So far, no socialist state has been created. However, there have been advances that went beyond capitalism.

The Russian Revolution did nationalise its means of production and develop state planning over the economy. However, it succumbed to a bureaucratic degeneration, led by Stalin, that replaced workers' democratic control with control by the bureaucracy, which ran the socialised means of production according to their own narrow interests. Socialism needs workers' democracy like the body needs oxygen to survive. As a result of Stalin’s policies, the Soviet Union became a totalitarian repressive parody of socialism. Consequently, Russian revolutionary Leon Trotsky concluded that the Soviet Union would either have a political revolution where the workers would sweep aside the bureaucracy and take control over the nationalised economy and state planning to be run according to their own interests, or it would give in to capitalist counterrevolution. As can be seen today, Trotsky has been proven right. While the Soviet Union started out as a state controlled by democratically elected institutions created by workers themselves, albeit with some bureaucratic deformities, it degenerated under the leadership of Stalin. That is why Trotsky characterised it as a "degenerated workers' state".

The Chinese Revolution of 1949 did eventually manage to nationalise the economy and develop state planning. However, from the very beginning, there was no workers' control over its socialised means of production, but rather a bureaucratic caste that ran the state. Though the Chinese Revolution was a tremendous step forward, it did not have even a relatively healthy birth. As a result, many characterise it as a "deformed workers' state". The alternatives of working-class political revolution or capitalist counterrevolution were as true for China as they were for the former Soviet Union.

The debate over China

Today there is a debate among Marxists over whether China has gone the way of the Soviet Union and succumbed to capitalist counterrevolution to a qualitative degree, or whether it remains a deformed workers' state. What are some of the arguments for considering China the latter?

If China is now capitalist, wouldn't it be necessary for it to dismantle the last remnants of state-owned industry? Yet in an article published by Fortune entitled "China's Top 100 Companies" on August 28, 2007, it is observed that, "state-owned companies continued to dominate the list, taking the top ten spots. Furthermore, these dominating State Owned Enterprises (SOEs) are in key sectors such as banking, raw materials such as oil, gas, and metals, as well as telecommunications."

In an article in Time by Austin Ramzy, on April 29, 2009, entitled "Why China's State-owned Companies Are Making A Comeback" he reports:

China's long economic rise began in the 1980s when the Communist government began dismantling inefficient state-owned companies and expanding the private sector, allowing greater scope for unfettered capitalism. But in recent years, the pendulum has began to swing the other way. Many of China's state-owned enterprises have grown into giants, eclipsing the relatively young private companies that have contributed heavily to the country's progress. That trend is being reinforced as China implements economic stimulus measures that in practice boost state-owned giants while private companies are left largely to fend for themselves.

Not only are the largest SOEs not being dismantled, they are being provided the benefit of China's stimulus measures. On the surface, this would appear to contradict the actions of a state committed to pursuing private property relations in the interests of a capitalist class.

In an apparent further contradiction to the position that China is now a capitalist state, there is an interesting article from China's The People's Net, the online version of The People's Daily. The article's title is "Is China Taking the Path of Privatisation?", written on May 20, 2009. In the commentary section reporter Qin Hua states:

To understand the official CPC’s (Communist Party of China) viewpoint, it is necessary to understand how it differentiates between "capitalist" and "socialist". Unlike many Western commentators, the Chinese Communists have precise definitions of these terms. When differentiating between "capitalist" and "socialist" economies, they use the Marxist term "means of production", which refers to the sum total of all "means of labour" (i.e. natural resources, raw materials, etc.) in the economy. They consider any economy in which the majority of the "means of production" are owned by private citizens (i.e. "private ownership") to be "capitalist" and any economy in which the majority of the "means of production" are owned by the state (i.e. "public ownership" at the national, local, or collective level) to be "socialist". According to official statistics, all of China's natural resources, all the land, and about 50 percent of all company assets (even including the assets of foreign companies in China) still belong to the state, so the CPC leadership still considers China to be socialist. Using this same metric, the CPC views the USA as still being capitalist, despite the recent bailouts and nationalisations.

Qin Hua's comments would not have appeared on an official site of the CPC if it did not reflect, in part, its line. The CPC is still compelled to characterise China's economy as socialist using a criterion that will be examined later. Implicit in this position is the CPC's commitment to maintain the public ownership of the SOEs in, at least, the key sectors of China's infrastructure.

Could it be, perhaps, that the international economic crisis has changed what appeared to be China's march towards capitalism, forcing a ruling caste to again defend the property relations of a deformed workers’ state even if in a bureaucratic way?

Trotsky thought that if the Soviet Union were to fall to capitalist counterrevolution, it would result in the collapse of the Soviet Union's industrial and cultural levels. This has proved to be correct. However, China has been a motor force for economic growth over the last two decades with an average growth rate of 9.5 per cent, outpacing the US and Europe. If China really was a capitalist country now, how has this been possible?

No one is challenging that there has been a process of capitalist restoration taking place in China. What the above points do challenge is the question of how far this process has gone. Is the Chinese state, that is, with its multitude of political and economic institutions along with its own ideological propaganda machine along with the army, police, courts and jails, committed to defending the interests of the capitalists at the expense of the working class? Or, does China remain a deformed workers' state because the bureaucracy that runs it is compelled to protect its own power by falling back on socialised property relations, regardless of its intentions? Coming at it from another direction, is the task of the Chinese working class political revolution, that is, overthrowing a bureaucratic caste to democratically run the state's institutions according to workers' own interest? This would be the case if China remained a deformed workers' state. Or, must China's workers struggle for a social revolution which would require both a thorough transformation of China's political as well as its economic institutions?

Even if one holds the position that the state apparatus in China is now capitalist, as Workers Action does, the issues that are brought up need to be addressed to deepen our understanding of a complicated dialectical process so as to develop the correct class struggle perspectives. The state in China is not a classical capitalist state such as emanated from absolute feudal monarchies in Europe. Instead, the deformed workers' state in China gave way to counterrevolution under particular international circumstances with its own national history marking its transition. Consequently, it still retains some forms of its past though they are now filled with a new political content.

The problem with percentages

What are we to make of Qin Hua’s claim that, in the opinion of the CPC, "They consider any economy in which the majority of the ‘means of production’ are owned by private citizens (i.e. ‘private ownership’) to be ‘capitalist’ and any economy in which the majority of the ‘means of production’ are owned by the state (i.e. ‘public ownership’ at the national, local, or collective level) to be ‘socialist.’”

The dominance of state-owned means of production is an important factor for determining the class nature of a state, but not the only one. It is only through state-owned means of production that an economic plan can be put into effect according to the needs of society as a whole rather than the profit of a few big business owners.

However, the CPC's static approach towards statistical information is, at best, very partial. A snapshot of the percentage of public ownership cannot, on its own, provide any decisive insight into the class nature of a state. It tells us nothing of the historic movement of property relations within a nation, which is necessary to understand and to determine which class interests the state serves.

As a result it is an easy matter to demonstrate how such a static approach can lead to ridiculous conclusions when applied to dynamic processes. For instance, after the Russian October Revolution of 1917 it was six months before the Bolsheviks began to massively nationalise the means of production. With Hua’s method we could not consider the Soviet Union to be a workers' state until after the process of nationalisation had passed 50 per cent.

Coming from the opposite direction, there have been many countries where the percentage of public ownership of the means of production was over 50 per cent that never were considered workers' states. For instance, the economies of South Korea and Israel were for decades dominated by industries and banks that were state owned. This was necessary in order for the national capitalist class to accumulate enough capital to be able to compete with its more established international rivals. Just because such countries had to rely on the public ownership of major industries never put in doubt that their states were a mechanism to exploit and oppress workers for the benefit of capitalist class profits.

Therefore, the CPC's claim that China is still socialist because roughly 50 per cent of the means of production are in state hands obscures the question of which class the state serves and which direction the states’ political and economic institutions are moving. Just because a large percentage of the means of production are state owned, tells us nothing of how they operate and how in fact they may benefit the capitalist class’s interests and not workers.

The methodological error of the CPC's and other’s arguments is that they believe the state is defined by existing property relations in the means of production. In contrast, Leon Trotsky took a very different approach.

The class character of the state is determined by its relation to the forms of property in the means of production and by the character of the forms of property and productive [social] relations which the given state guards and defends. Leon Trotsky, Writings, 1937-38.

That is, the state is not simply a reflection of a country's apparently predominant economic base. Rather, the relationship is dialectical. The class character of a state does not depend merely on how far along it is in transforming property relations in the means of production, but, rather, in the type of property and productive social relations it seeks to promote and defend. What kind of property relations in China's economy is China's state promoting and defending?

China's SOEs

The process of privatisation of China's SOEs has been dramatic. The number of SOEs has fallen from 300,000 in 1995 to less than 150,000 in 2005. Their share of total employment fell from 62 per cent in 1998 to 38 per cent in 2003. In 2008 the great majority of value added in the all-important manufacturing sector was produced by private firms. This onslaught of privatisation has also been accompanied by the restructuring of China's remaining SOEs.

There is an enlightening 2008 article entitled "Reforming China's SOEs: An Overview", by Weiye Li and Louis Putterman. These authors are supporters of the process of capitalist restoration taking place in China. Therefore, they are compelled to investigate how the SOEs have changed and how these changes fit in with the development of capitalism in China. They look at how the SOEs actually function rather than proclaiming them as socialist entities as some analysts on the right and left do.

In regards to the types of restructuring China's SOEs have gone through and how far it has progressed, the article says the following:

According to a retrospective panel survey of 683 firms in 11 cities reported by Garnaut, et al., (2005, p. 5), 86% of all SOEs had been through the new restructuring process called gaizhi (change of system) by the end of 2001. It took various forms, including internal restructuring, corporatisation, and public listing of shares, sale, lease, joint ventures, and bankruptcy. Among the surveyed mid- and large-scale SOEs that were restructured, 13% had gone through bankruptcy or debt-equity swaps, 28% were sold or leased out to private owners, 27% introduced employee share holding, 20% went through internal restructuring, 8% went through ownership diversification including public offerings and private placement to outside investors, and the remaining 4% became joint ventures. In more than 70% of these cases, gaizhi involved the transfer of at least a portion of ownership from the state to private hands (Garnaut, et al., 2005, pp. 50-51).

Most, if not all, of the remaining SOEs are not publicly owned in the same way they were under Mao. This is also true of the top 10 China companies that Fortune listed as state owned. Clearly, the restructuring measures described above are to compel the SOEs to be more competitive according to the dictates of the free market. They are intended as transitional steps towards enabling them to prosper as private enterprises.

In a workers' state, state-owned industries would produce according to a state plan for the benefit of society as a whole, even if distorted by the narrow interests of a self-serving bureaucracy. What does "Reforming China's SOEs" say about how they are now operating?

During the more than quarter century of system change in China, the role and nature of state-owned industrial enterprises has been continuously evolving. In 1980, SOEs were at the heart of China's industrial sector, accounting for 76% of gross industrial output (Jefferson and Singh, 1998, p. 27) and 57% of industrial employment (China Statistical Yearbook 1999, Chapter 5.) The SOE share of total industrial output declined steadily from 77% in 1978 to only 49.6% in 1998. Industrial profits were 15% of GDP in 1978, but fell below 2% of GDP in 1996 and 1997. By 2004 few SOEs remained in their original form, yet some 38% of industrial output was being produced by firms classified as state-owned and by corporations the majority of whose shares were owned by government entities. More privatisation is in the offing yet a large role for state ownership seems assured at least into the next decade.

SOEs also have changed qualitatively, from being units in a command economy tasked with meeting quantitative targets and providing comprehensive services to their employees, to being (in the 1980s and early 1990s) enterprises responding to price signals of a market economy but retaining the basic SOE organisational form and enjoying easy access to bank credit, to their most recent incarnation as corporations, often with some private shareholders, facing at least a somewhat more disciplined banking system and, for many of the largest among them, an active stock market.

The planning principle of the SOEs has been transformed into a series of compromises between state power, the SOEs' shareholders and other players promoting capitalism in China. These compromises have aimed at, with some success, lining up the functioning of the SOEs with what is necessary to compete on the market economy. In other words, the SOEs are not so much producing according to what is necessary to fulfil a plan for the benefit of society, they are producing according to what makes the most profit. In a workers' state, profit could still be used as a gauge to measure efficiency. In China profit is not simply a gauge but a major, if not the only, criteria by which success is judged.

The article concludes with the following paragraph:

The last chapter remains to be written on China's reform and opening, and in particular on the role played in it by the country's state-owned enterprises. But it is clear from the large body of studies to date that the SOEs, while hardly the cutting edge of the reforms, have also not been static entities blocking the way to economic change and growth. Although underperforming relative to other sectors, they have played their part in China's massive growth surge, have been through an ongoing process of institutional transformation, have at least gradually improved their efficiency, and have weathered and (for their surviving remnant, at least) partly recovered from a severe crisis of plummeting profitability.

Though the SOEs' rate of profit may not be as high as private firms, it is clear they are attempting to achieve this regardless of the social costs. On the whole, they have contributed to China's capitalist growth and they have helped shelter China's economy from the international economic crisis because of state funding. For the pro-capitalist authors of "Reforming China's SOEs", they are, for now, a necessary tool for China's process of capitalist restoration.

If the SOEs were to be completely opened up to the free market now, the Chinese capitalist class would be overwhelmed by their international competitors. However, by maintaining some elements of state ownership, this emerging class is provided a buffer from more powerful corporate players and time to improve their competitiveness. Furthermore, given the international economic crisis, it is predictable that the Chinese state would make all the more efforts to protect its SOEs from the storm. The state is not doing this to preserve the conquest of China's workers' revolution, they are doing this to protect and build the strength of its own capitalist class.

China's capitalist class

How is it possible that the bureaucracy in China has taken this path without fracturing? Trotsky wrote in The Revolution Betrayed that if the Stalinist bureaucracy maintained power, this inevitably would lead to capitalist counterrevolution with the bureaucracy leading the process because:

Privileges have only half their worth, if they cannot be transmitted to one's children. But the right of testament is inseparable from the right of property. It is not enough to be the director of a trust; it is necessary to be a stockholder. The victory of the bureaucracy in this decisive sphere would mean its conversion into a new possessing class.

It is exactly this transformation from bureaucracy to new possessing class that we are seeing in the CPC. Peter Kwong observed in the 2006 article "The Chinese Face of Neoliberalism":

To be sure, the wealth that can afford such luxuries was not created by enterprising efforts of individuals with unique abilities or skills. According to a report by the China Rights Forum, only 5 percent of China's 20,000 richest people have made it on merit. More than 90 percent are related to senior government or Communist Party officials. The richest among them are the relatives of the very top officials who had used their position to pass the laws that have transformed state-owned industries into stock holding companies, and then appointed family members as managers. In this way the children of top party officials — China's new "princelings" — took over China's most strategic and profitable industries: banking, transportation, power generation, natural resources, media, and weapons. Once in management positions, they get loans from government-controlled banks, acquire foreign partners, and list their companies on Hong Kong or New York stock exchanges to raise more capital. Each step of the way the princelings enrich themselves not only as major shareholders of the companies, but also from the kickbacks they get by awarding contracts to foreign firms.

From this, it is clear that the privileges of the upper layers of the CPC bureaucracy are no longer linked to defending the remnants of a deformed workers' state. They have converted themselves into the most powerful sector of the new Chinese capitalist class. Consequently, the commanding sector of the state is incapable of reversing course. They are compelled to determine policy according to their own capitalist interests, rather than as bureaucratic administrators of a state owned planned economy.

The Chinese workers can no longer hope to liberate themselves by only purging the leading sectors of the state, the pro-capitalist, anti-democratic bureaucracy, thereby laying their hands on the mechanisms of the existing state apparatus to administer according to their own needs. They must replace this capitalist state apparatus from the ground up, including radically restructuring the SOEs under workers' control along with the rest of the private elements of the economy. The SOEs must be operated as part of a thorough nationalisation of the economy and operate according to a democratically arrived at state plan that places societal needs above free market dictates.

In short, the task of the Chinese working class is both social and political revolution. Their demands for higher wages, better conditions and independent unions will build their capacity to fight for demands that challenge the existence of the capitalist state. Along with demands to radically restructure the SOEs and nationalise privately owned large enterprises, there would also be demands aimed towards the expropriation of the new rich and the creation of workers' councils to coordinate the revolutionary struggle and, ultimately, take power.

Why no collapse?

China once again has a capitalist state. It has been thrown backward. However, this process has been dialectical rather than resembling a simple linear reversal of historical developments. Capitalist restoration in China is being built on the basis of its having been a deformed workers' state and the historical developments of international capitalism since Mao took power. In looking at this we can begin to understand why capitalist restoration hasn't resulted in an economic collapse but, rather, has transformed China into one of the main engines of the world capitalist system. Furthermore, this growth itself needs to be examined since it contains contradictions that expose capitalisms reactionary and unstable character.

When the Soviet Union and the Eastern bloc fell to capitalist restoration, the possibilities for imperialist business expansion appeared endless. Not only had opponents fallen that countered the imperialist powers' ability to exploit and dominate the semi-colonies in their own spheres of influence, now the workers' states themselves appeared ripe for the taking. However, when it came to profitably investing especially in the former Soviet Union, things did not work out so easily. Transforming the workers' states' industrial base into a collection of profitable and competitive enterprises at the drop of a hat proved to be an expensive long-term investment. This was not such an attractive investment prospect for capitalists in search of short-term profit.

This situation was made all the more difficult because the Soviet bureaucracy had crumbled apart. While many of these bureaucrats maintained their directing positions over the industries they had managed in hopes of converting themselves into capitalists, there were no established connections, no clear system of ownership or no clear chain of command to facilitate imperialist investment. As a result, international capital was slow in making it into Russia and the nation suffered the greatest rate of deindustrialisation of any country in history other than as a result of war.

In China, developments worked out differently. The bureaucracy had survived its greatest challenge, the 1989 uprising known as Tiananmen Square. The threat of political revolution that Tiananmen Square demonstrated convinced the leading sectors of the CPC that they could no longer balance their positions on top of a bureaucratically planned economy that they were incapable of controlling. On the other hand, the devastating consequences of "shock therapy" capitalist restoration in Russia and Eastern Europe demonstrated the need for the Chinese bureaucracy to maintain some organisational structure and control over the process of counterrevolution if they were to preserve their privileges.

The imperialist powers took a sceptical view of the CPC's path initially. No imperialist power likes checks on its ability to dominate a less powerful nation. Nevertheless, they saw in China a vast reserve of potentially exploited workers in the peasantry. The profits to be made from converting these peasants into workers made the difficulties of dealing with the CPC worth the risk as long as the CPC was willing to negotiate favourable conditions for the imperialists.

It is beyond the scope of this paper to speak in any detail of the measures the CPC took to encourage investment. However, the results were dramatic. While the amount of net foreign direct investment in China amounted to only US$4.4 billion in 1991, in 1992 this shot up to $11 billion and continued to grow until it had reached $60.6 billion in 2004.

It is these levels of imperialist investment that have led to China's rapid growth rates, making it a continuing success story in the eyes of pro-capitalist pundits. Yet, as with so much in regards to China, it is necessary to look beneath the surface of these figures to understand their real meaning.

The contradictions of China's growth

In reality, this growth, while benefiting a tiny minority, has come at the cost of the standard of living for Chinese workers and peasants. According to the South China Morning Post:

The growing disparity between the mainland's urban rich and rural poor has created one of the world's most pronounced national income gaps. It is on a par with the poverty stricken African nation of Zimbabwe... [W]hile some urban residents are buying luxury homes and cars, the vast majority of the 800 million peasants live on less than US$1 a day.

Unable to survive under these conditions, millions of peasants have been moving to the cities in search of jobs. This mass influx of new workers in China has helped to keep wages and working conditions poor as they are forced to compete with one another for what jobs they can find. According to one study quoted in Business Week, workers in the manufacturing sector make an average US$1.06 an hour with manufacturing workers in the suburban and rural areas averaging only 45 cents per hour.

State workers used to expect what was called the "iron rice bowl”, that is, a guaranteed job for life with full medical and retirement benefits as well as housing paid for by the state. Those days are long gone. From 1998 to 2004 30 million SOE workers have been laid off. An All China Federation of Trade Unions survey of re-employed state workers found that:

18.6 percent were odd-job manual workers, 10 percent did various sorts of hourly work (which usually refers to activities such as picking up others children from school), 5.2 percent had seasonal jobs, 60 percent were retailers operating stalls, and a mere 6.8 percent had obtained formal, contracted employment.

Since capitalist restoration, while the absolute amount of China's economic growth is unquestionable, its relative ability to benefit the vast majority has proven impossible. Ultimately, it is the ability of an economic system to raise the material and cultural level of society as a whole that determines whether it is progressive or not. Capitalist restoration has resulted in a deterioration of conditions for China's vast majority. The only progressive result has been the creation of a larger working class with the ability to overthrow it.

China's growth has not been aimed at promoting its ability to sustain its own economic development. China is part of an Asian supply line for the production of export commodities. The initial manufacture of parts and components are assembled in countries such as Taiwan, Malaysia, the Philippines, and then sent to China where further assembly takes place for export to places such as the US. This division of labour leaves the workers in these countries subject to increasing exploitation. Furthermore, each country's place in this system makes it impossible for their capitalist governments to break out of it as things stand now. That is, production is locked into being guided by what US consumers are buying rather than what the people of these countries need to sustain themselves and their economies.

China is the lynchpin in Asia of this supply line that creates a spiral of increased exploitation and dependence on foreign capital. True, the ruling circles of the state have been able to demonstrate some independence from Western imperialism because of the unique situation China finds itself in. Nevertheless, the limitations of China's path to economic growth in regards to sustainability and national sovereignty are impossible to escape. The ruling class has made China enormously vulnerable to increased economic efforts by imperialism to completely dominate it while ignoring the needs of workers and peasants.

When China was a deformed workers' state, achieving for a time even greater rates of growth, this growth greatly benefited its workers and peasants. It also supported China's independence despite imperialist hostility. This potential was strangled by the bureaucracy. In spite of this bureaucracy’s reactionary nature, the growth China experienced under a planned economy was progressive. The growth its economy is experiencing as a capitalist state is at the expense of China's workers, peasants and its national sovereignty.

Conclusion

China is in transition. We should do our best to follow the developments there so as to better understand the unfolding social revolution against capitalism. The fates of the US and China are economically as well as politically linked. Therefore, it is all the more important to understand the process China is experiencing and its potential consequences for the struggles of workers in the US. The recent labour struggles in China portend greater events in the future, not only in China, but internationally as well.

[Mark Vorpahl is an anti-war activist and writer. He especially wishes to thank Martin Hart-Landsberg for his lectures and many writings on China. Hart-Landsberg teaches economics at Lewis and Clark College, Portland, Oregon, and is the author with Paul Burkett of China and Socialism (Monthly Review Press, 2005). This article first appeared at Workers' Compass, website of the US socialist organisation, Workers Action.]