Revolution, capitalist restoration and class struggle in China

By Chris Slee

February 24, 2019 — Links International Journal of Socialist Renewal — In 1949 the Chinese Communist Party (CP), led by Mao Zedong, came to power after more than 20 years of war.  They had fought against the reactionary Chiang Kai-shek regime, and against the Japanese invasion of China.

For a time there was an alliance between the CP and Chiang Kai-shek against Japan, but this ended when Japan was defeated.  The CP, based in rural areas, won the support of the peasants through land reform and other progressive measures.  This enabled them to win the war, despite US military aid to Chiang Kai-shek.

Initially, the revolution was intended to be democratic, not socialist.  Those capitalists who had not been closely associated with Chiang Kai-shek were allowed to continue in business.

But after the outbreak of the Korean war in 1950 there was a change.  The party’s policy became more radical

Workers were mobilised to investigate their employers, looking for things like tax evasion, theft of state property, etc.  Bosses were brought before mass meetings and confronted with accusations by their workers.  [1]

In October 1953 the CP stated that its policy was one of "transition to socialism".  By 1956 nearly all capitalist property had been nationalised.

In the countryside agricultural cooperatives began to be formed.  Later there was a push to create collective farms.

Social gains

The early years of the revolution brought big gains for the Chinese people.  Health and education were greatly improved.

Prior to the revolution, a large proportion of the people lived on the brink of starvation.  Epidemics killed thousands every year.  While there were no reliable statistics, one estimate of the average life expectancy in China was 28 years.  Another estimate was 35 years.

By 1981 life expectancy had risen to 69.6 years for women and 67.0 for men.  [2]

Massive campaigns of vaccination and public health education, stepped up medical training and widely distributed health services virtually wiped out many diseases that were rampant in the past.

Medical services were brought to rural areas which had not previously seen a doctor.  The number of doctors was rapidly expanded, and rural people were trained as paramedics (known as "barefoot doctors"), who could provide a basic level of health care to their neighbours.

Urban workers also benefited from the revolution.  In addition to the health and literacy programs, they gained job security and other benefits, such as housing supplied by their enterprise.

Bureaucratic regime

However, the transition to socialism was hindered both by objective conditions (including the backwardness of China and the pressures of imperialism), and by the bureaucratic nature of the CP.

The state created by the revolution was a bureaucratised socialist state.

In 1956, the Chinese government adopted a system of ranks for state employees that included 30 grades, with the top grade receiving 28 times the pay of the bottom grade.  In addition to their salaries, higher-level party and state officials had special housing, cars, drivers, personal servants, meals, travel, etc.  [3]

The CP used repression against people who supported the revolution but disagreed with some of the government's policies. 

In 1956, following Khrushchev's speech denouncing Stalin's reign of terror in the Soviet Union, there was a brief period of relative freedom in China.  People were encouraged to voice their criticisms.  Mao advanced the slogan:  "Let a hundred flowers bloom, let a hundred schools of thought contend".

But in June 1957 there was a crackdown.  Many of those who had spoken out were arrested, or were sacked from their jobs in the cities and sent to the countryside. 

This repression intimidated people from criticising mistaken policies of the Communist Party and the government.  This meant that mistakes were not corrected until they had become such big disasters that the leadership was forced to change course.

Great Leap Forward

One example was the so-called Great Leap Forward.  Launched in 1958, this was an attempt by Mao to force the pace of economic and social change, with disastrous results.

The transition to cooperative and collective farming was supposed to be voluntary, and was therefore expected to carried out gradually.  However, the apparent success of the early cooperatives caused Mao to call for the acceleration of the process.  This resulted in pressure being put on peasants to form collective farms before they were really convinced it was a good idea.

In 1958, collectivisation was taken a step further with the formation of the communes - much larger collectives involving tens of thousands of people.  While peasants in some areas supported the policy, in many other areas it was imposed from above.

At the same time, the CP leadership issued calls for enormous increases in production.  Workers and peasants were pushed to work at an excesssive pace.  Transport and supply systems collapsed.

Pressure on party and government officials to meet unrealistic targets led inevitably to false reporting.  Newspapers reported stories of amazing increases in production.

The result of the Great Leap Forward was a severe decline in agriculture - causing the reappearance of famine - and chaos in industry.

The Great Leap Forward reflected Mao’s voluntarist mentality.  (Voluntarism is the idea that, if we try hard enough, we can do whatever we like, regardless of objective conditions).

Beginning in 1959, these policies were partially reversed.  The communes lost much of their importance.  Smaller units became more important.  The peasants were allowed small private plots.  In some areas collectively owned land was contracted out to individual families.

China began to recover from the effects of the Great Leap Forward.  However, there was no public admission of mistakes, nor public criticism of Mao for his role in promoting the Great Leap Forward.  The cult of Mao was maintained.

Two factions

But within the leadership, a factional struggle was beginning.

One faction, headed by Liu Shaochi and Deng Xiaoping, were "moderates".  They wanted no more voluntarist adventures like the Great Leap Forward.  They emphasised increasing production through material incentives.

The other faction, headed by Mao, was still prone to voluntarism.  They wanted to revive some of the policies of the Great Leap Forward period when the opportunity arose.

Cultural Revolution

In 1966, the Maoist faction launched the Cultural Revolution.  They made use of Mao's prestige to mobilise youth to attack the wing of the bureaucracy that supported Liu and Deng.

Mao and his supporters used radical-sounding slogans to mobilise students against Mao's opponents.  High school and university students formed groups of “rebels” or "red guards".  Many party leaders at all levels were subject to denunciation, public humiliation and physical violence.

Mao's faction tried to keep control of the movement, directing it against those seen as Mao's opponents.  But some Red Guard groups got out of control and began attacking Mao's supporters as well.  Some of Mao's opponents were able to set up their own youth groups.  Some groups seized arms, and different groups began fighting each other.

The army was brought in to restore order. 

Mao had to bring back many of the old cadres who had been purged, in order to get society functioning normally again. 

Thus the Cultural Revolution ended in an uneasy compromise.

Right turn in foreign policy

At this stage, the United States government started putting out feelers to the Chinese bureaucrats.  It was looking for a deal with China at the expense of third world national liberation struggles (including Vietnam), and at the expense of the Soviet Union.

US secretary of state Henry Kissinger visited China in 1971, preparing the ground for US president Richard Nixon's visit the following year. 

The US trade embargo on China was progressively eased.  China moved towards a de facto political alliance with US imperialism, and adopted a generally reactionary foreign policy.

Deng's return

In 1976 Mao died.  The Maoists were defeated in the ensuing power struggle.  By 1978 Deng Xiaoping had become the real leader of China.

The pro-imperialist foreign policy continued and even got worse.  In February 1979, Chinese troops invaded Vietnam.  The invasion occurred shortly after Deng had visited the United States, and it is reasonable to assume it was planned in collusion with the US government.  On March 1, the formal opening of full diplomatic relations between the US and the Peoples Republic of China occurred. 

Wang Hui, a left-wing Chinese academic, later commented:  "The only reason for this otherwise senseless attack on a small neighbour was Deng's desire for a new relationship with the United States.  The invasion was offered as a political gift to Washington, and became China's entrance ticket to the world system".  [4]

The Chinese troops met strong resistance and were soon forced to withdraw, but only after causing substantial damage and loss of life.  Chinese harassment of Vietnam continued for a number of years.  China continued to support the forces of the former Pol Pot regime - a genocidal regime which ruled Cambodia between 1975 and 1979 and had been ousted by Vietnamese troops. 

Market reforms

Deng introduced "market reforms". 

In the countryside, the communes were broken up and land was contracted to individual peasant families, who could sell surplus production on the free market.

Foreign owned companies were allowed to establish joint ventures with Chinese state and collective enterprises.  As the reform process went further, some wholly foreign owned enterprises were established.  Restrictions on the ability of Chinese citizens to establish privately owned enterprises were progressively eased.

Corruption spread as bureaucrats accumulated wealth for themselves and their relatives and cronies, in the context of growing private ownership of the means of production.  Many bureaucrats began to turn themselves into private owners of capital.

The Beijing massacre

But opposition to corruption - and to the bureaucratic regime - began to grow.  In April 1989 students protested in Beijing's Tian An Men square.  They remained for more than a month and were joined by many non-students.  The army was ordered to remove the protestors, but the protestors talked to the soldiers and won many of them over.  Workers joined the protests, raising their own demands, such as job security, wages, and control over their workplaces.  [5]

Eventually the regime brought in new army units that used extreme violence to crush the movement.  A wave of repression followed.

Capitalist restoration

In my opinion, the repression of the 1989 upsurge helped prepare the ground for capitalist restoration.  The increased repression helped break the resistance of workers to the attacks on their job security, working conditions and welfare benefits.

Some Chinese intellectuals have made the link between the Beijing massacre and the subsequent intensification of "free market" policies.

Wang Hui, who participated in the Tian An Men Square protests, argued that the crackdown not only silenced calls for democracy, it also ended public debate about inequality.  Once the tanks had done their work, the process of marketisation speeded up.  [6]

Similarly Li Minqi, another participant in the 1989 protests, later said:  "  To unleash a full-blown capitalism in China, workers had to be deprived of the extensive social and economic rights they enjoyed after the 1949 revolution....

"Popular participation in the revolt did threaten to undermine the project of capitalist development.  But the failure of the movement ensured that for a long time the Chinese working class would not be able to act as a collective political force…."  [7]

The privatisation of industry proceeded very rapidly during the 1990s, and continued more slowly thereafter.  The state sector's share of industrial production fell from 100 percent in 1978 to 37.5% in 1999 and 31.6 percent in 2004.  [8]

Thirty million workers were sacked from the state sector in the late 1990sCorrupt managers enriched themselves while carrying out "restructuring" and privatisation, whereas the sacked workers got minimal compensation.

Transnational corporations increasingly used China as a base for producing goods for sale on the world market.  For example, Apple iPhones are made in China.

Today millions of Chinese workers are ruthlessly exploited by local and foreign capital.  Extremely long hours, physical punishment, fines and non-payment of wages are amongst the abuses suffered by many Chinese workers.

The most oppressed section of the working class are rural migrants working in urban areas.  According to Australian National University academic Anita Chan, writing in 2001:  "They are required to possess a ‘temporary residential permit’ and are trapped if the employer takes it away from them.  Their residential status is similar to foreign nationals living as guest workers.  They are not entitled to any of the benefits enjoyed by the local residents such as social welfare, schooling, the right to own property, to bring their spouses or children with them or even any right to residency.  Once their labor is no longer required, they are supposed to go back to their place of origin."   [9]

(Since then, there have been reforms enabling some migrant workers to become urban residents.  But migrant workers continue to be super-exploited)  [10]

Privatisation destroyed China's social welfare system.  A range of services such as health, housing, etc had been provided to workers via their workplace.  The loss of state and collective sector jobs meant the loss of these services.

The result of all these changes was a vast increase in economic inequality.  China has the second highest number of billionaires in the world, after the United States.  In 2018 it had 373 billionaires, not including those in Hong Kong, Macau or Taiwan.  [11]

The state sector

China's economy is now essentially capitalist, as indicated by the privatisation of the bulk of the means of production, and the conversion of labor power into a commodity.  Workers can only survive by selling their labor power to an employer.

But the most extreme ideologues of neoliberalism (both in China and elsewhere) are not satisfied with the degree of privatisation that has occurred so far.  State-owned enterprises remain dominant in certain strategic industrial sectors such as iron and steel, and electricity, and in the banking sector.  The neoliberals want more complete privatisation, and unfettered access to all areas of the economy for local and foreign capital. 

The Chinese Communist Party has up to now resisted these pressures.  A strong state sector helps China maintain a degree of independence from the US and its allies. 

It also helped China to recover from the effects of the 2008 global financial crisis.  The initial impact of the crisis was severe.  Twenty million migrant workers lost their jobs in the export-oriented manufacturing industries.  But the Chinese government was able to stimulate the economy by ordering state-owned enterprises to spend money, and state-owned banks to lend money.  This caused the resumption of rapid economic growth in 2009.  Government-funded construction projects provided alternative work for many of those displaced from the factories.

The continued existence of a strong state sector does not make China socialist.  In the past, before the rise of neoliberalism, many capitalist countries have had a significant sector of state-owned enterprises.  Australian examples include the Commonwealth Bank, Telstra, Qantas, etc. 

We should also note that many enterprises in China that are called “state-owned” actually have a mixture of state and private ownership.

Popular resistance

Workers have been fighting back against the attacks on their job security, living standards and working conditions.  There have been thousands of strikes and protests by Chinese workers, as well as numerous protests by peasants against land seizures by local governments and property developers.  There have also been many protests against pollution and environmental destruction, as well as protests by ethnic minorities against discrimination.

Workers struggles

Workers have taken action over the non-payment of wages or social insurance contributions, and the failure to pay the compensation prescribed by law after the termination of employment contracts.  They have demanded higher wages, improved severance packages, shorter working hours, improved welfare benefits and reductions in workload.  Some retired and laid-off workers sought higher retirement payments.  Other disputes arose over arbitrary changes to working conditions, meals and housing allowances, as well as demands for government investigations into management malpractice during the restructuring of state-owned enterprises.

Tactics used by the workers have included strikes, blockades of roads, bridges and railway lines, sit-downs at the factory gate, protest marches, and petitions.

The response of the authorities to such protests has been a combination of conciliation, promises, threats, physical force and criminal sanctions against the leaders.

Nevertheless, the workers have often been successful in winning their demands.  [12]

Peasant struggles

Under the market reforms, collectively owned land was allocated to peasants on long-term leases.  In theory this gave them security of tenure.  But in practice many people from peasant families have been forced to leave the land.

Heavy taxes were imposed on peasants by local governments.  Much of the tax revenue was siphoned off by corrupt local officials.

Prices obtained by farmers from the sale of their crops were often insufficient to meet both their own expenses and the tax burden.  Many farmers got into debt.  Younger family members sought work in the cities to supplement family income.

In many cases local authorities have evicted peasants from the land so it could be handed over to property developers.  This has been a major cause of peasant rebellions. 

Ethnic conflict

In areas inhabited by minority nationalities, discontent often takes a nationalist form.  In Tibet for example there have been numerous protests (some peaceful, others violent), and demands have been raised for independence or autonomy.

Tibetans feel that they are discriminated against.  Language is a key issue.  Mandarin Chinese is the main language used in government and in the upper levels of the education system. The Tibetan language has a secondary status.  This puts Tibetan speakers at a disadvantage in getting jobs.  The higher paid jobs are disproportionately held by Han Chinese.

In Xinjiang province, discontent amongst the Uigurs has been met with severe repression.  Hundreds of thousands of people are being held in detention centres.

Rebuilding the social safety net

Prior to the "market reforms", people had job security and a basic social welfare system provided through the workplace, which provided them with nurseries, kindergartens, schools, healthcare, pensions and funeral services.

As the market reforms deepened, workplaces shed their responsibility for social welfare.  People lost pensions, healthcare and welfare benefits, and had to spend money buying them.

China's healthcare system became one of the most commercialised in the world.  Individuals were expected to pay for their own health care.

But around the year 2000, the government began to rebuild the social safety net in areas such as health care, education and pensions.

The government's share of health care spending began to increase a little, after a long period of decline.  The government also began a drive to increase the proportion of the population covered by various health insurance schemes.  Schemes for employees require contributions from both employers and workers.

Labour legislation

In 2007 three labor laws were adopted by the National Peoples Congress.

The Labour Contract Law puts some restrictions on the right of employers to hire and fire, and requires redundancy payments to be made after termination of a contract.

The Labour Arbitration Law established a conciliation and arbitration system to rule on disputes between workers against their employers.  It was soon overwhelmed by complaints from workers, leading to long delays in hearing cases.

The Employment Promotion Law deals with issues of discrimination in employment.

According to the China Labour Bulletin:  "The unprecedented wave of labour legislation in this period was.…a direct response to the pressure exerted by the workers movement over the previous decade.  A government committed to maintaining social order and harmony could no longer afford to ignore the strikes and protests staged by workers on an almost daily basis across the country.....

"What the government has not yet done, however, is to rigorously enforce its own laws or empower workers to safeguard their rights and interests on a collective basis."  [13]

China has one officially recognised trade union federation, the All-China Federation of Trade unions. 

The ACFTU does not organise strikes.  It does sometimes challenge violations of China's labor laws by employers through legal channels.  But this is no substitute for a union that organises workers to fight for their rights.

Foreign policy

Mao used radical anti-imperialist rhetoric in the 1960s, but swung to an openly pro-imperialist foreign policy in the 1970s.  This policy was continued by Deng Xiaoping.

Since then China has moved away from its close political alliance with US imperialism.  Today China has good relations with the revolutionary governments of Cuba and Venezuela, as well as with other third world governments such as Iran that are in conflict with the US.

This does not mean that China's foreign policy is consistently progressive.  China supported the racist Sri Lankan government in its war against the Tamil independence struggle.  China supplied arms to the government and gave it diplomatic support. 

One motive for China's position was its desire to gain access to ports on China's trade routes across the Indian Ocean to the Middle East and Africa, which are sources of oil and other raw materials for China's industry.  In March 2007 Sri Lanka signed an agreement with China for the construction of a port at Hambantota on Sri Lanka's south coast.

Is China Imperialist?

There has been a rapid growth of Chinese investments overseas.  Much of this investment is aimed at supplying Chinese industry with raw materials.  This is the case with Chinese investments in mining in Africa, for example.

But it is now going beyond this – for example, Chinese companies have been investing in ports in many European countries, including Greece, Germany, Belgium and the Netherlands.  In Australia, China has bought the port of Darwin.

China has been building big infrastructure projects in many countries.  These projects are usually financed by loans from China.  If the recipient government is unable to meet its repayments, China takes ownership.  The port of Hambantota in Sri Lanka, which I mentioned before, is an example of this.

In the past I have described China as a bourgeois nationalist regime, meaning that it was capitalist, but the government was relatively independent of the imperialist powers.

But now China is starting to look like an imperialist power itself.  It has big overseas investments.  It intervenes in conflicts in other countries – for example, supporting the Sri Lankan government against the Tamils.  It has a military base in Djibouti, a small country in the horn of Africa.

On the other hand, foreign transnational corporations continue to use China as a base for production for the world market, ruthlessly exploiting Chinese workers.  In this respect China looks like a semi-colony of Western imperialism.

Thus China combines imperialist and semi-colonial features.

The need for socialism

Despite the partial reversal of some neoliberal policies, China remains a highly unequal society, where workers are ruthlessly exploited and lack job security.  The state represses the resistance of the workers to capitalist exploitation.  In my view it is a capitalist state.

The struggle for socialism will need to bring together workers, students and other oppressed groups.

An example of such unity is the solidarity of university students with workers at Jasic Technologies, who wanted to form a union and elect their representatives.  Students joined the workers in protests, and helped to publicise the case on the internet.  A number of workers and students were arrested.  [14]

This kind of solidarity, if repeated on a much larger scale, can help take China on the road to genuine socialism.

The above is was a talk given to Socialist Alliance Summer School, January 2019.


1.See Bill Brugger:  China: Liberation and Transformation, 1942-1962, p. 83-85 (Croom Helm, London, 1981)

2. Ruth and Victor Sidel:  The Health of China, p. 94  (Zed, London, 1982)

3. Les Evans, China After Mao, p. 86 (Monad Press, New York, 1978)

4. One China, Many Paths (ed. Chaohua Wang), p.65 (Verso, London, 2005)

5. John Gittings:  China Changes Face, p. 275-6 (Oxford University Press, 1990)

6. Mark Leonard, What Does China Think?, p. 30-31 (Fourth Estate, London, 2008)

7. One China, Many Paths, p. 314-5

8. Figures from retired researcher Sun Xuewen, quoted by Eva Cheng in Green Left Weekly, no. 695, 24 January 2007

9. Anita Chan, China’s Workers Under Assault; the Exploitation of Labor in a Globalizing Economy, p. 8-9 (East Gate, New York, 2001)

10. Billy Beswick, At Peking University

11. According to a survey by Swiss bank UBS and accounting firm PWC

12. Going it Alone: the Workers Movement in China (2007-2008), China Labour Bulletin, Hong Kong, 2009

13. Going It Alone, p.13

14. Au Loong-Yu, The Jasic Workers Mobilisation, a High Tide for the Chinese Labour Movement? International Viewpoint