From International Socialism (1st series), No.55, February 1973, pp.15-17.
Transcribed & marked up by Einde O’ Callaghan for the Encyclopaedia of Trotskyism On-Line (ETOL).
The face which the Chinese regime presents to the world is truly an astonishing one. At one moment we are told China is rotten with resurgent capitalism, the decay reaching as high as the top leadership of the Communist Party. A short time later, the capitalists turn out to be the tiniest group of people, easily excised to leave a kind of Methodist Sunday school (no wage pressure, no strikes, so appealing to Denis Healey of the Labour Party leadership on his recent visit there).
At one moment, continuous political discussion is the only way of saving China; all remains of private enterprise must be rooted out; Red rebels in the factories must revolt against all who want to impose ‘capitalist’ norms. At another, the People’s Daily calls for an end of time-wasting meetings and discussions (23 October, 1972), praises the peasants’ private plots (22 October), and demands punishment for those who resist managerial authority and discipline in the factories (30 May).
However, the casualties of this zigzag policy are numerous; not all are able to move in so short a time from ‘ultra-left’ to right. Prominent leaders have proved insufficiently ‘flexible’ – there are only two effective members surviving from the 1969 five-man standing committee of the Politbureau (Mao and Chou). A third of the Politbureau itself seems to have been purged in the past 18 months, and of the remaining 14 members only eight are active (that is, neither very aged nor ill).
Many millions of young Chinese who believed Mao’s promises have now been betrayed. They did not inherit power; they have been whipped back to school or exiled to remote rural areas. The rate of illegal immigration to Hong Kong is now higher than in any year since the famine exodus of 1962; half the swimmers are young people banished to rural areas, and a quarter regular young farm workers.
The key factor in the period since the end of the Cultural Revolution has been the behaviour of the Soviet Union. In 1968, Russia invaded Czechoslovakia. In 1969, it launched border attacks on China in the North , and for a time looked as though it might push matters to war. At that stage, the Chinese army was ensnared in administering China after the destruction of the Communist Party in the Cultural Revolution.  The first priority was to restore the army to its military functions and rapidly increase defence expenditure. To do these things, the party had to be restored, trade expanded (to import materials for stockpiling and defence production), and civil State expenditure radically reduced to make room for an enlarged defence budget.
The Government has radically cut its non-military financial obligations. The State bureaucracy has been heavily purged, and many sent to rural areas where the communes will have to support them (at much lower rates of pay and without the customary welfare provisions safeguarding urban workers). The Red Guards were similarly broken up and despatched to the countryside – some 10 to 20 million of them (Wuhan, a city of three million people, claims to have sent 220,000 of its young people to the countryside over the past three years).
Second, the State has drastically cut its expenditure on education, health and culture (a quarter of the central budget in the 1950s). Length of compulsory schooling has been cut from 10 to seven years; all pupils must simultaneously work in a factory or on the land, and their education is subordinate to the demands of their work. More important, education must now be financed by the production brigades in the villages, and the factories in the cities (formerly, it was financed by the central Ministry of Education). The same is true for health services, culture and administration. Inevitably, this will mean backward areas will have backward services, for the subsidies which formerly came from richer areas (through the central budget) will be at an end. In higher education, no-one can now go from school to university without a few year’s work.
Third, communes have been told to meet their own needs for simple light industrial and consumer goods out of their own resources. The Government claims that this ‘local industry’ is now a major component in the economy – producing 60 per cent of the national output of chemical fertilizer, 40 per cent of cement, a third of steel. This saves the State a lot of money, tapping commune savings that might otherwise not finance investment. On the other hand – as in the Great Leap Forward of 1958 – it is very wasteful of scarce raw materials, diverts investment into uneconomic and badly-run plants (badly-run because the skills of the peasants are not suitable), and produces goods which, helped by the commune’s regulations, compete with the output of national industry. Each commune becomes its own little country, producing everything even though it would be cheaper to produce some things elsewhere and specialise.
‘Excessive’ decentralisation has now been denounced in a drive to economize on raw materials. Yet the checks did not, occur before the policy had been rationalised into an ideology. Mao went so far as to say to Edgar Snow in his last interview:
‘China must learn from the way America developed, by decentralizing and spreading responsibility and wealth among 50 states’ (as a comment on US capitalism and imperialism, that must take the prize).
Peking has alleviated some of the financial strain on local bodies by leaving more of the tax revenue in the hands of rural communes and raising public revenue almost entirely from urban areas. This intensifies the policy, pursued since 1958, of exploiting factory labour rather than the peasantry. The Finance Ministry recently claimed that whereas in the early 1950s, the central Government took 13.2 per cent of farm incomes, now it takes around six per cent. Of course, that only gives the figure for the centre – not the provincial Government or the commune. And it concerns only taxes, not the drain out of the commune arising from compulsory State grain procurements, indirect taxes etc. The Government does claim to have increased the prices of farm produce while lowering industrial prices, which must have accured to the benefit of the communes. But it is also true that still a sizeable part of Government revenue comes from profits and taxes on the processing or sale of agricultural products. However, it seems – ironically enough – that the general burden of the central budget on the peasants in terms of direct taxation may even be as low as it is in India.
Leaving more in the hands of the communes, restoring material incentives for work, allowing the peasants to cultivate private plots and sell the produce for profit, all are by way of soothing the commune leadership after the ‘ultra-left’ excesses of the Cultural Revolution. Perhaps this is also the reason why – despite the continued calls for austerity, discipline and increased savings – there seems to be more colour in the cities, a modest revival in music and the opera, and the end of some of the sillier slogans (e.g. the Red Guard cry: ‘Making love is a mental disease which wastes time and energy’).
Strengthening the peasant market certainly forms part of the general Bukharinist economic strategy  said to be embodied; in the unpublished Fourth Five Year Plan that began on 1 January 1971. There has been a debate about economic strategy: whether defence should be the main element, and within this, what sort of defence – ordinary men and munitions, or technically sophisticated weapons, missiles etc; whether agricultural mechanisation or light industry serving agriculture should be the key priority. In July 1971 Red Flag was arguing, almost word for word, Bukharin’s case – that only agricultural prosperity could create the market for industrial goods and the supply of raw materials for industry. Light industry serving agriculture should be the key ling transmitting peasant demand into the growth of heavy industry. Unlike Bukharin, the paper did not point out that such a strategy held out no hope at all of development at any speed. (Bukharin argued: ‘We shall move at a snail’s pace, but we shall be building socialism’).
The central aim of the leadership in the Cultural Revolution – to restore tight central control so that resources could at the maximum rate, be drained into accumulation – has now clearly been abandoned. Accummulation – economic development – is to be sacrificed on the one hand to defence, on the other to standing still at a politically tolerable level. But even the latter depends upon the weather. The harvests in 1970 and 1971 were good, but the 1972 output was severely affected by droughts and floods. With the population increasing by nearly 15 million each year, a quirk of the weather can spell disaster. Even in good years, the increase in grain is hardly a hairsbreadth ahead of the increase in population. The room to manoeuvre is very small. The defence budget and the weather are the two central factors which determine the operation of the modern Chinese economy and its rate of economic development.
The 1969 attack made the Sovet Union China’s ‘Number One Enemy’ and revealed to Peking how far its diplomatic isolation had gone during the Cultural Revolution. The regime set out to find friends, anywhere and everywhere. This sudden flurry of activity coincided with US efforts to escape from the Vietnamese war. So the two could collaborate to mutual advantage. (Remember Foreign Minister Chen Yi’s 1965 declaration? ‘Peaceful coexistence with US imperialism, which is pushing ahead its policies of aggression and war, is out of the question’). As a result, all other Cold Wan, relationships changed – China entered the UN, the Foreign Ministers of Britain, West Germany and France dutifully followed Nixon to Peking, and agreement was reached with Japan.
In 1964-5, the Chinese leadership tried to build an alliance in the ‘intermediate zone’ – that is, all countries between itself and the United States. As Mao put it to a startled French parliamentary delegation in 1965: ‘France itself, Germany, Italy, Great Britain – provided the latter stops being courtier of the United States – Japan and we ourselves: there you have the Third World.’ By 1973, the US is no longer the main enemy, and the revived intermediate zone is now directed against Russia and Russian influence. To this end, Chou En-lai has offered public support to the European Common Market (and British entry) as a counterweight to Soviet influence, and opposes the security talks between the European powers and the Soviet Union lest they reach an agreement. He has even gone so far as to approve the five-power Commonwealth security arrangements for policing South-East Asia, and the US military presence in Asia (excluding Vietnam) as a means of keeping Russian influence out.
Despite massive efforts, the new provincial administrations are still dominated by the army. They are supported by ‘rehabilitated’ party leaders; the rebels of the Cultural Revolution have hardly any role in the effective administration.
At the centre, the situation is little short of disastrous. It is astonishing enough that the second-in-command of the regime, head of State and party leader for many decades Liu Shao-chi, should be found to be secretly scheming to introduce capitalism again. Yet hardly has a successor been appointed – Lin Piao a man notorious for his slavish devotion to Mao – than he too turns out to be a traitor. Lin Piao was the named in the 1969 constitution as only legitimate heir to Mao. Now, what is left of the politbureau dare not reconvene another party congress to ratify the destruction of Lin. Nor have replacements been appointed to those purged – Head of State, Secretary to the Party, Minister of Defence, Chief of the General Staff (General Huang Yung-sheng), Commander of the Air Force (Wu Fa-tsien), Political Commissar to the Navy (Li Tsa-pang) and many other senior officers. If it is true that these men, along with politbureau member, Mrs Lin, were in the plane which crashed in Mongolia in September 1971, it is a staggering comment on the stability and integrity of the Chinese regime that the top leadership of the armed forces and the party had fled to the Soviet Union. Chen Po-ta, for 35 years Mao’s private secretary and appointed by him chairman of the Cultural Revolution group that superseded the politbureau between 1966 and 1968 (and fourth in precedence in the leadership) has also apparently been purged.
In contrast to Stalin in the 1930s, Mao has been able to rid himself of his rivals, but not to appoint successors, nor ratify the changes legally. Apparently he cannot summon the Fourth National People’s Congress (scheduled for 1969). Even the gaps in the leadership line up on Tien-an-Min Gate are too embarrassing – so the leadership has ignored the traditional national parades (May Day, 1 July anniversary of the foundation of the party, 1 October National Day). All the leading bodies of the party are in disarray, and despite the border clash, only the army is the thin line between the ruling class and chaos. The Government is not much better – only a quarter of the Ministers and Vice Ministers of 1966 survived through to 1969.
Economically the country is standing still; politically it is in stalemate. This is in vivid contrast to the picture presented by some western journalists visiting China recently, as if they were Columbus just discovering America (and finding it, to their surprise, not populated by monsters). Indeed, the gap between domestic reality and the external image of the country has probably never been greater.
It is the domestic stalemate which will determine future reactions by the leadership. It will make necessary further campaigns against both ‘revisionists’ who are apparently, after all the events of the past eight years, still operating in the party, and the ‘ultra-left’ that resists the army-old party carve up. The current relaxation positively encourages people to seek private solutions – speculation, embezzling, profiteering, black marketeering, are current targets for press attacks. So many hopes of a new deal were raised in the Cultural Revolution, that it will now prove extremely difficult to hammer them out of people. Cynicism and bitterness are their likely responses.
The retreat forced on the leadership by the collapse of the party and the Russian attack leave unsettled all the outstanding issues. The more Peking restores the old party bosses and relies on them, the less flexibility there is, and the less possibility of a real mobilisation of resources for development. That is the reason why Mao or whoever it is who runs China will be forced to make the present pause temporary. Then the attack will have to begin again. Watch the Western liberals jump yet again on the new swing of the roundabout. The real target for their attention ought to be world imperialism, that subordinates the struggle of the Chinese to the needs of the Soviet Union and the United States. But that means opposing the ruling class here and now instead of basking in myths.
1. See China and the Russian Offensive, IS 41, Dec.-Jan. 1969-70.
2. For the development of this point in detail, see China: Let a Hundred Flowers Bloom, IS 35, Winter 1968-9.
3. For an explanation of ‘Bukharinism’ and its relationship to Chinese economic policy, see Tony Cliff, Crisis in China, IS 29, Summer 1967.
Last updated: 27.1.2008