The left cannot ignore China’s achievements, but neither can it be too celebratory

Rural poverty in China is much higher than urban poverty.

By Michael Karadjis

November 24, 2010 – Links International Journal of Socialist Renewal – I strongly agree with Reihana Mohideen (“The left cannot ignore China’s achievement in poverty reduction”), that the left cannot simply ignore China’s impressive achievements in poverty reduction and other related social development. I also agree very much with Reihana that the main source of China’s outstanding success as a Third World capitalist power is to be found in the Chinese revolution itself, despite the undoing of its socialist basis and the uncontrolled capitalist development that has taken its place.

I would make a few points about poverty reduction.

First, it is true that China’s success has been outstanding, and Reihana claim that no other country has made such a significant contribution to reducing global poverty as China has is entirely true. Indeed, while global poverty fell from 1.45 billion to 1.1 billion over 1980-2000, if China is excluded, global poverty actually rose from 845 million to 888 million. However, such figures can hardly be separated from China's size – a large proportion of the world's poor live in China.

Second, regarding the incidence of rural poverty allegedly dropping from 30.7% in 1978 to 1.6% in 2007, this should be treated with extreme caution. This is based on 60 cents a day, not the international US$1 a day standard (itself an absolute minimum). Actually, Reihana makes a slight mistake in her article when she says that urban poverty, based on the $1 a day standard, fell from 31.5% in 1990 to 10.4% in 2005; this is in fact the fall of overall poverty in China, not just urban poverty, as can be seen from the chart Reihana supplies and from its original source. Given that rural poverty is much higher than urban poverty, we can surmise that the rural poverty rate is much higher than 10%, so I see little value in quoting the unreal 1.6% rate, except for the size of the reduction.

Reihana is completely right to point out that the most radical decline in poverty occurred during the first phase of China’s market reform, from the end of the 1970s to the mid-1980s, and that since then the decline has been more gradual. Indeed, according to the World Bank, while China reduced poverty by 400 million people in 1980-2000, a full half of this occurred in the first quarter of that period, the first half of the 1980s.[1]  This is not surprising – this was precisely the least capitalist period, when the major reforms were the end of the super-centralised collectives and allowed small peasants to farm their own plots, while largely leaving the rest of the socialised framework intact. Rural poverty began declining far more slowly after more radical market reforms began in 1985, and especially in the very capitalistic 1990s.

Third, while China certainly should be congratulated for cutting poverty from 30% to 10% over 1990-2005 (indeed from much higher than 30% if we go back further than 1990), this is not entirely a unique achievement, especially in Southeast Asia. It certainly contrasts fabulously with the only other very large country China is comparable with in size, capitalist India, and indeed with most countries in Africa, Latin America and South Asia. However, countries such as Vietnam, but also capitalist Thailand and Indonesia, have had huge successes in poverty reduction (not to mention the more historically exceptional cases of Taiwan and South Korea). Based on the international standard, Vietnam reduced its poverty rate from over 75% before 1988 to 16% in 2005, probably the world record, and this in a country that in 1990 was in ruins, close to being the poorest country on Earth.

The achievements in social indicators China has made are also impressive and should not be ignored. Nevertheless, we also ought not exaggerate this, given the extreme plight of many millions of people who fall into that 10%, meaning a rather large number of people in China’s case. It is true that under the Hu-Wen leadership since 2003, some progressive changes have been made to fix the ultra-liberal approach of the previous Jiang Zemin regime, including the new initiatives in health and education Reihana discusses. However, according to Jonathon London, who did a PhD on Vietnam’s health and education market liberalisation – about which he was rightly highly critical – Vietnam still compares well with China. Despite the serious regional inequality that has occurred in Vietnam, according to London it maintains a degree of equality via central funding for health care and for basic programs, and even expansion to allow “unprecedented access to primary and lower-secondary education as well as preventative health services”, which he contrasts with the “Hayekian nightmare in many parts of rural China”.[2]

Specifically, for example, according to UNDP’s Human Development Report 2005, Vietnam has overtaken China in reducing infant and child mortality. Between 1970 and 2003, China improved from 85 deaths per 1000 life births to 30 for infants and from 120 to 37 for the under fives, while Vietnam progressed from 55 to 19 (infants) and from 87 to 23 (under fives). Even much richer Thailand had only brought infant and child mortality down to 23 and 26 respectively, both higher than in Vietnam. In the Philippines, the figures were 36 and 27, and in Indonesia, 41 and 31. Thus Vietnam, the poorest country in the region, comes out best in this; China comes out average for the region, about where its level of per capita GDP stands (though this is still far better than most of the Third World). The numbers in Bangladesh are 69 and 46, and in Pakistan, 103 and 81, these being countries with a similar level of per capita GDP to Vietnam.[3]

Vietnam’s life expectancy is the same as that quoted for China in the article; Vietnam’s literacy rate of 93 per cent was close to that of Thailand, and better than that of China, Indonesia and even Malaysia, which had literacy rates of around 85-87 per cent several years ago.[4] If China’s literacy rate is now well over 90 per cent, as Reihana’s article shows, this is an important gain, but it is only now catching up.

In the fight against TB, a most devastating disease in Asia, Vietnam has been the star and China a laggard; figures from several years ago show that while Vietnam was diagnosing 82 per cent of cases, the highest in Asia and the highest of a list of 22 highly populated countries with a serious TB problem, Thailand only managed 73 per cent, the Philippines 58 per cent, Indonesia 30 per cent and China only 27 per cent.[5] Vietnam also had the highest success rate in curing TB, at 93 per cent.

The point is not, of course, simply to compare China and Vietnam as such. However, the fact that Vietnam has achieved this on a much lower level of GDP per capita than China is testament, in my opinion, to the fact that for most of the market reform period, at least let’s say from around 1990 to 2005, Vietnam’s reforms had a markedly less outright capitalist nature than China’s, and the stronger social commitment stemmed, I believe, from the influence of large numbers of cadres still alive with direct links to the revolution, in positions of authority at all levels throughout the country.

Indeed, the progressive changes to health and education in China under the Hu-Wen leadership since mid-decade are in many ways catching up with initiatives already adopted by poorer Vietnam: the fees that had been introduced in Vietnam in early market reform for primary education were abolished a decade ago; a system of health care for the poor (covering a quarter of the population), ethnic minorities, children and other groups was introduced and added to the existing health cover system in official workplaces so that some 60% of the population is now covered. In 2005, the Politburo of the Vietnamese Communist Party declared that by 2010 the whole population should be covered by some form of health insurance and up-front fees should disappear.

However, in saying this I am far from giving a free pass to Vietnam. On the contrary, for anyone living here, it is easy to see that the realities are often far different from the policies. Unofficial fees are regularly paid to low-paid medical personnel and to schools for a variety of reasons too complex to go into here, but generally related to the poverty of government administration services; the 2010 target has in any case been moved to 2014. It would be good if Reihana could provide some more information on China’s plans to cover 90 per cent of the population with health insurance; it sounds like a good move, but I nevertheless imagine they are quite similar to Vietnam’s policies, and I expect we will find the same problems. The same goes for the new schooling policies.

One important pattern I can detect here is that, in both countries, more radical market and capitalist reform (i.e., China 1985-2003, Vietnam since 2006) corresponds to relative social stagnation or regression (even if still better than much of the world), while far less radical market reform still within a more socialist framework (China 1978-1985, Vietnam 1992-2005), or attempts to turn back from extreme liberalism and partially re-statise the economy (China since 2003) correspond to far more radical social gains in poverty reduction, health, education etc. I think this is important for socialists to understand when discussing these issues.

For the record I believe that Vietnam’s pro-capitalist regression in 2006-2010, combined with Hu-Wen’s current turn back from the more radically capitalist period in China, has meant the two countries have met in the middle with a kind of state-capitalist “market-socialism”. It is no coincidence that, despite friction over the “South China Sea” (or “East Sea”), political, economic, military and ideological relations between the two countries and ruling parties is currently extremely close.

The China question is a fascinating one concerning one fifth of the world and I’m glad Reihana has raised it in this way. China is without question rapidly developing in a capitalist way but built on the remnants of the structure established by the revolution, and that is what gives it both its special dynamic, and its special importance for socialists to better understand. Ignoring China is wrong, and impossible; celebrating it too much, however (I’m certainly not suggesting Reihana is doing this), can however be interpreted as celebrating a new capitalist, if not semi-imperialist, “model” of development which in many ways has shown itself to be quite ruthless, in particular towards its own workers and peasants, and increasingly workers and peasants elsewhere in the Third World, as examples from as far afield as Zambia, Cambodia and Papua-New Guinea attest to.

[Michael Karadjis is an Australian socialist resident in Vietnam.]