Let us look now at the viewpoint of the majority leadership of the Communist Party of China on the question of the transition from the bourgeois-democratic revolution to the proletarian-socialist revolution.
In opposition to the Marxist-Leninist thesis that the Party, having led the bourgeois-democratic revolution to victory, should strive to make the revolutionary process continuous into the socialist revolution, the majority leadership of the Communist Party of China put forward the thesis that between the two revolutions there should be an indefinite period of state-controlled capitalism. They envisaged before the bourgeois-democratic revolution had triumphed, and they put into practice after it had triumphed, the erection – to use Lenin’s startlingly apt phrase – of a “Chinese wall” between the bourgeois-democratic revolution and the socialist revolution – a “Chinese wall” of state-controlled capitalism.
As Mao expressed it in 1940:
Such a revolution in a colonial and semi-colonial country is still fundamentally bourgeois-democratic in its social character during its first stage or first step, and ... its objective mission is to clear the path for the development of capitalism. ...
If such a republic is to be established in China, it must be new-democratic – not only in its politics but also in its economy. It will own the big banks and the big industrial and commercial enterprises. ...
In the new-democratic republic under the leadership of the proletariat, the state enterprises will be of a socialist character and will constitute the leading force in the whole national economy, but the republic will neither confiscate capitalist private, property in general nor forbid the development of such capitalist production as does not ’dominate the livelihood of the people’, for China’s economy is still very backward. (Mao Tse-tung; “On New Democracy”, in: “Selected Works”, Vol. 2, Peking, 1965; p.344, 353).
On the establishment of the People’s Republic of China in 1949, the leadership of the Communist Party of China began to take steps to implement this economic programme.
The enterprises belonging to the comprador big capitalists were nationalised without compensation.
As the Central Committee reported to the last Congress of the Party, in September 1956:
After the establishment of the People’s Republic of China, the People’s Government confiscated all the enterprises operated by bureaucrat-capital which had had the economic arteries of our country in its grip. These enterprises ... .. were turned into socialist, state-owned enterprises; the state came into possession of the largest banks, practically all the railway lines, most of the iron and steel industries and other key sections of heavy industry and certain essential departments of light industry. This laid the foundations for the socialist sector to hold the heights in our economy.
Subsequently the People’s Government made a major effort to develop state-owned industries, state-owned transport trades and other state-owned enterprises...
The People’s Government has introduced a system of control over foreign trade and foreign exchange. It has also established a nation-wide, uniform and powerful network of state trade and trade through the supply and marketing co- operatives, gained control of the principal industrial raw materials and the supply of principal commodities, gradually brought about the nationalisation of wholesale trades, and consolidated the leading position of socialist trade in the country’s market. (Liu Shao-chi: Political Report of the Central Committee to the 8th National Congress of the Communist Party of China; Peking; p. 12-13).
In line with Mao’s revisionist concept of the national capitalists in China forming a social force supporting socialism, a different policy was adopted towards them. The programme envisaged the gradual, long-term peaceful transformation of the enterprises owned by the national capitalists into “socialist enterprises.”
We have in our country a relationship of alliance between the working class and the national bourgeoisie...
The socialist transformation of capitalist industry and commerce by the state will be gradually realised over a relatively long period of time, through various forms of state capitalism. ...
The aim can be achieved by peaceful struggle. (Liu Shao-chi: Report on the Draft Constitution of the People’s Republic of China; Peking, 1962, p.26,27).
Under the conditions existing in our country, the use of peaceful means, i.e., the method of persuasion and education, can change ... capitalist ownership into socialist ownership. (Mao Tse-tung: Speech at the Supreme State Conference, January 1956, cited in: Kuan Ta-tung; “The Socialist Transformation of Capitalist Industry and Commerce in China”; Peking; 1966; p.40-41).
The share of the national capitalists in China’s economy in 1949-50 was considerable.
The number of industrial enterprises run by national capital in 1949 was 123,165 employing over 1,640,000 workers and other employees and producing a total value of over 6,800 million yuan in that year. In 1950 the number of commercial establishments, including the vast number of private, individual small merchants, was about 4,020,000 ... and the sales totalled over 18,200 million yuan. ...
In 1949 capitalist industry accounted for 63.3% of the gross output value of the country’s industry. In 1950 the total volume of private trades occupied 76,1% and 85% of the country’s wholesale and retail traces respectively. China’s national capitalists numbered over a million.” (Kuan Ta-tung, ibid, p. 24, 28-29).
The principal form of state capitalism adopted in “transforming” the enterprises of the national capitalists was the formation of joint state-private enterprises.
The advanced form of state capitalism in China Is called a joint state-private enterprise. This is the principal way through which the transition of capitalist industry and commerce into socialist enterprises is being effected.
A joint state-private enterprise is one in which the state invests and to which it assigns personnel to share in management with the capitalists. At the end of 1956, 99% of the total number of capitalist industrial enterprises as of the beginning of the year came under joint operation. ... In commerce 400,000 private establishments were converted in the same period. ... A fixed rate of interest was paid by the state for the total investment of the capitalists in the joint state-private enterprises.
Irrespective of locality and trade, the interest was fixed at a rate of 5% per annum. ... Under the fixed interest system, the annual outlay from the state treasury was over 120 million yuan. There were 1,140,000 recipients in all. In early 1959 the People’s Government reaffirmed certain of its policies towards the capitalists. No changes would be made in the policy of paying them interest, at a rate of 5% per annum for seven years; in the high salaries received by certain capitalists in the positions assigned to the capitalists by the state. (Kuan Ta-tung: ibid., p.75,84, 86-87, 107).
The Chinese capitalists not only had no objections to this form, of “socialist transformation”, in which the state invested in their enterprises – they welcomed it.
Why were there increasing numbers of capitalists who petitioned: of their own free will to have their enterprises changed over to joint state-private operation? The answer lay in the fact that the superiority of many joint state-private enterprises became more and more obvious in their tremendous development. For example, the Shanghai Steel Works was changed over in 1950. Taking the value of its output in that year as 100, it was . ..871 in 1954.. ...The statistics of 64 factories, in various parts of China which had gone over to joint operation earlier than others revealed that their profits were increasing. Taking their profits in 1950 as 100, it was ... 306 in 1953. Still another example was the privately-owned Mingsheng Steamship Company, the largest of its kind in China. ... In the few years before 1952, ... the deficit incurred reached five million yuan per year. ... Profit was 1,680,000 yuan in the first four months of joint operation ... and more than 10,000,000 yuan in 1954. The capitalists paraded, with the beating, of cymbals and drums, while sending in their petitions for the change-over of their enterprises. (Kuan Ta-tung: ibid.; p.78-79, 84).
This policy was reaffirmed at the last National People’s Congress in 1964-5.
It is clear that the revisionist leaders of the Chinese Communist Party have erected a “Chinese wall” between the bourgeois-democratic and the socialist revolutions – a “Chinese wall” of state capitalism.
As Lenin correctly said:
To attempt to raise an artificial Chinese wall between the first and second revolutions ... is monstrously to distort Marxism, to vulgarise it, to put liberalism in its place. It means smuggling in a reactionary defence of the bourgeoisie against the socialist proletariat. (V.I. Lenin: “The Proletarian Revolution and the Renegade Kautsky” in: “Selected Works”, Vol. 7; London; 1946; p. 191).
This Chinese Wall ’theory’ is and can be only a means of concealing and camouflaging the counter-revolutionary aspirations of the bourgeoisie. (J.V. Stalin: “The Foundations of Leninism”, in: “Leninism”; London; 1943; p.22.)
The erection of a “Chinese Wall” between the bourgeois-democratic revolution and the socialist revolution by the revisionist leaders of the Communist Party of China has, like all revisionism, served the interests of the Chinese capitalist class. It has enabled them to continue for the last eighteen years to exploit the working class of the People’s Republic of China.
As Mao Tse-tung admitted:
In joint state-private industrial and commercial enterprises capitalists still receive a fixed rate of interest, that is to say, exploitation still exists. (Mao Tse-tung: “On the Correct Handling of Contradictions among the People”; Peking, 1964; p. 15).
In an effort to disguise their betrayal of Marxism-Leninism, of socialism and of the Chinese working class the revisionist leaders of the Communist Party of China have in recent years taken to presenting the formation in 1956 of joint state-private enterprises as “fundamentally the socialist revolution in the ownership of the means of production”.
Socialist relations of production have been established. (Mao Tse-tung: “On the Correct Handling of Contradictions among the People”, Peking, 1964; p. 16).
The socialist revolution in the ownership of the means of production was fundamentally completed in 1956. (Chou En-lai: Report on the Work of the Third National Congress of the People’s Republic of China”, Peking; 1965; p.26).
And they have taken to speaking of the new-democratic state, in which the working people still share power with the capitalist class, as “the dictatorship of the proletariat”, the “socialist state”.
The dictatorship of the proletariat in our country rests on firm foundations and our socialist state power is unshakable. (Chou En-lai: ibid.; p.28).
But behind this demagogy and the revisionist theories lies the reality: that within the People’s Republic of China the capitalist class continues to exploit the working class; that within the People’s Republic of China the capitalist class still shares power in the state of the working people.