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	Workers Hammer No. 197	Winter 2006-2007

"Market reforms" exacerbate contradictions in China

Defend, extend the gains of the 1949 Chinese Revolution!

For proletarian political revolution!

We reprint below in edited form the presentation given by comrade James Palmer at a Spartacist League public meeting in London on 4 November 2006.

The world is a very different place from 15 years ago. The Soviet Union, the first and only workers state created in a proletarian revolution and led by a revolutionary party, no longer exists. Under the leadership of Lenin and Trotsky’s Bolsheviks, the Soviet Union had been a great beacon of world revolution for the working class and oppressed. In Lenin’s time, for the first time, it had been shown that the working class could take control of a society and run the economy, administering it democratically through workers councils otherwise known as soviets. A bureaucratic degeneration began in 1923-24, accompanied by the anti-Marxist dogma of “socialism in one country”. Despite this, throughout its existence the Soviet Union still served as a massive military counterweight to the imperialist powers, especially the US. The Soviet nuclear umbrella had prevented the US from using nuclear weapons against Vietnam, North Korea and China itself. The USSR’s attainment of such military and economic might also proved the superiority of the planned economy over capitalist exploitation.

Since the destruction of the USSR, the imperialist powers have been fix-ated on the destruction of the remaining workers states: Cuba, Vietnam, North Korea and most importantly China. Although the bourgeois rulers have hailed the “death of communism” since the end of the Soviet Union, for them there is no such thing as the death of anti-communism. The recent furore over North Korea’s demonstration of an atomic bomb is ample illustration of the special hatred reserved for these countries where the capitalist class has had their wealth and power ripped away from them. We welcome the news that North Korea may now have a more effective deterrent against the very real threat shown by the “axis of evil” hit list. Nevertheless, China is the real prize for all the imperialists, and their economic and military manoeuvres are focused on re-conquering China to once again allow the unlimited exploitation of over a billion workers and peasants.

The Chinese Revolution of 1949 was a social revolution of world historic importance. Despite having deep bureaucratic deformations from the start, it overthrew the bourgeoisie. Hundreds of millions of brutally oppressed peasants rose up and took possession of the land. The victory of the peasant-based Red Army, led by Mao and the Chinese Communist Party (CCP) shattered and destroyed the Chinese capitalist state and its military apparatus. The Chinese capitalist rulers, together with Chiang Kai-shek and the remnants of his nationalist army, fled to Taiwan under the protection of American imperialism. The remainder mostly ended up in Hong Kong. In China the power of the warlords, land owners and bourgeoisie (often one and the same) had been finally destroyed. And a nation that had for a century been ravaged and divided by the Western powers was unified and liberated from the imperialist yoke.

The revolution created a workers state based on a centrally planned economy which was the basis for the huge leap forward in social progress. The new state redistributed land to the peasants, expropriated key industries and developed the state-owned industrial sector with aid from the USSR. After the Korean War of 1950-53 the remaining private industry in China was nationalised and a state monopoly on foreign trade was imposed. The social effect of these changes to the relations of production after the revolution can be seen most clearly by the gains in the conditions for terribly oppressed women, who were enabled to advance by orders of magnitude over their previous miserable status, historically symbolised by the barbaric practice of foot-binding.

Nevertheless the state that issued out of the 1949 revolution was a bureaucratically deformed workers state ruled by a privileged caste headed by the Chinese Communist Party leadership. A key factor in determining the outcome was the fact that the Chinese proletariat was not mobilised for the revolution, which brought to power a nationalist, anti-working-class bureaucracy who falsely proclaimed they would build socialism in a single, very backward country. The proletariat at the time was atomised, having suffered two decades of deadly repression under both the Guomindang and the brutal Japanese occupation (which began in Manchuria in 1931 and extended to the major cities in eastern and central China after the full invasion in 1937). Moreover, this working class had been repeatedly betrayed by Stalinism, most notably in the bloody defeat of the 1925-27 revolution.

China is not capitalist

Today, we do not minimise the danger posed to the Chinese deformed workers state by the capitalist economic penetration to which the Stalinist bureaucrats have opened the Chinese economy. However, we disagree with the majority of liberals and reformist organisations who have declared the “market reforms” mean China is capitalist. The core of China’s economy remains collectivised. Moreover, the claim that China is capitalist ignores the implacable hostility of the imperialist bourgeoisies to the People’s Republic of China. The British ruling class discussed the possibility of persuading the US to mount a nuclear attack on China in the 1960s and today imperialism targets China because it remains a workers state that issued out of the 1949 revolution.

In seeking to replicate what happened in the USSR in 1991-92, the imperialists are trying to promote a political opposition in China that will rely principally on the new class of capitalist entrepreneurs. At the same time, American imperialism is increasing the military pressure on China, trying for example to encircle China with military bases, including in Central Asia. The US rulers concluded an agreement with Japan, on the pretext of defending the offshore capitalist bastion of Taiwan, and have established a common military command with the Japanese military at Yokohama against China. The Pentagon is actively developing new weapons against China’s limited nuclear arsenal to allow the option of an American nuclear first strike, a strategy which has been openly proclaimed by the Bush gang in Washington.

After the creation of the joint military command at Yokohama, we published a statement titled “Down With U.S./Japan Counterrevolutionary Alliance!” and said “The U.S. and Japan will not hesitate to crush any challenge in their drive to exploit the working masses of the region”.

We Trotskyists stand for unconditional military defence of China and the other remaining deformed workers states against imperialist attack and all threats of capitalist counterrevolution. In particular, we support China’s possession and testing of nuclear arms as a necessary deterrent against imperialist nuclear blackmail.

China’s “market reforms” have intensified the contradictions that are inherent in a deformed workers state. The rapid economic and industrial growth has created the largest single industrial proletariat in the world. This is of strategic importance internationally. At the same time inequalities within the society are stark and growing. There have been ongoing workers protests and the countryside has seen massive protests by peasants, particularly against seizure of land by CCP officials. The ruling bureaucracy is an unstable caste, not a ruling class. Currently it is divided between elements who want the economic reforms to continue unabated, those who want more state intervention to curb the ravages of marketisation and to stifle discontent, and others who seek a return to a bureaucratically planned economy. At some point, the explosive social tensions of Chinese society will shatter the political structure of the bureaucratic ruling caste. As we have said, when that happens, the fate of the most populous country on earth will be posed: either proletarian political revolution that will open the road to socialism or a return to capitalist enslavement or imperialist subjugation.

We stand for a proletarian political revolution to sweep away the oppressive and parasitic Stalinist bureaucracy and replace it with a government based on democratically elected workers and peasants councils. Such a government, under the leadership of a Leninist-Trotskyist party, would re-establish a centrally planned economy, including reinstating the state monopoly of foreign trade, administered not by the “commandism” of a bureaucratic caste but by the widest workers democracy. It would expropriate the Chinese capitalist entrepreneurs and renegotiate the terms of foreign investment so that it served the interests of Chinese working people, insisting for example at least on conditions the same as in the state sector. A revolutionary workers government in China would encourage the voluntary collectivisation of agriculture on the basis of large scale mechanised and scientific farming, recognising that this requires substantial material aid from successful workers revolutions in the more economically advanced countries, particularly Japan.

There is a qualitative difference between the Russian October Revolution, which was carried out by the class-conscious proletariat and guided by the internationalism of the Bolsheviks, and the Chinese Revolution that came about from a peasant guerrilla war led by Stalinist-nationalist forces. The CCP used Stalin’s Russia as a model, meaning that they established a complete monopoly on power and political organisation. All working-class political activity was ruthlessly repressed, including economic struggles. Lenin and Trotsky’s Bolsheviks knew that the only way for the workers state to survive was through building socialism on a worldwide basis. They created the Third International as an instrument to extend the revolution internationally, especially to the advanced capitalist countries of Europe. However, the failure of international revolution, particularly the defeat of the 1923 German revolution, and the increasing isolation of the young Soviet workers state, combined with the devastation of World War I and the Civil War, laid the material basis for the growth of a bureaucratic caste. Beginning in 1923-24, the Soviet Union underwent a bureaucratic-nationalist degeneration under the rule of Joseph Stalin. This constituted a political counterrevolution, not a social one. The revolutionary proletarian internationalist programme of Bolshevism was repudiated for the profoundly anti-Marxist “theory” that socialism could be built in a single country, and that the Soviet workers state could “peacefully coexist” with world imperialism. The Chinese bureaucracy modelled itself on its Stalinist counterpart in the USSR.

The reactionary utopia of “socialism in one country”

The bureaucratic caste resting on top of the Chinese workers state is a mortal threat to its continued existence. Its anti-revolutionary nature can be seen historically in the Chinese bureaucracy’s alliance with US imperialism against the Soviet Union, which was the logical outcome of the policy of “peaceful coexistence” with imperialism. In 1972, while American bombs were raining down on Indochina, US war criminal Richard Nixon was hosted and toasted by Mao in Beijing. This policy continued under Deng Xiaoping. Four years after the US had been defeated in Vietnam — which amounted to an enormous victory for the toiling masses of the world — China criminally invaded the Vietnamese deformed workers state. Shortly after receiving a stinging defeat by Vietnam, China gave its support to the reactionary, woman-hating, imperialist backed mujahedin in Afghanistan who fought against the Soviet Red Army following its 1979 intervention. Mao and Deng and the Chinese Stalinists must share the blame for the USSR’s counterrevolutionary destruction, a historic defeat for the working people of the world. China’s alliance with US imperialism helped set the stage for Deng’s “open door” to imperialist exploitation in the next period.

This policy of “peaceful coexistence” continues today. Hu Jintao and Co support Bush’s “war on terror”, the political rationale for the US occupation of Iraq and Afghanistan and for their threats against Iran — one of China’s main energy suppliers. The Chinese Stalinist regime has criminally joined the imperialist-led uproar against North Korea. On 8 October, China joined imperialist Japan in a common declaration that a nuclear weapons test “cannot be tolerated”. This is despite the fact that any weakening of the North Korean workers state against imperialist militarism would also weaken China’s defence. Korea is a historic invasion route into China and is adjacent to important industrial regions. We regard nuclear weapons as necessary to deter imperialist attack and defend the workers states in the region. The ability of the workers states to develop these weapons is a historic gain of the international working class. In the face of US imperialism’s unchallenged global nuclear hegemony, the only meaningful guarantee of any nation’s sovereignty today is the possession of a credible nuclear deterrent.

Maoists and Stalinists reject in particular the possibility of proletarian socialist revolution in advanced capitalist countries. The Stalinist-Maoist dogma of “socialism in one country” is the antithesis of the Trotskyist perspective for permanent revolution which posits that the modernisation of China must be part of a globally integrated and planned socialist economy, following socialist revolution in the imperialist centres. This is the only road to the all-round liberation of China’s worker and peasant masses.

The class nature of the Chinese deformed workers state

China is a deformed workers state — a form of the dictatorship of the proletariat. For Marxists, any state is composed of bodies of armed men (the police, army, prison guards, courts) who are charged with defending and protecting the ruling class and its interests against the dominated classes. Karl Marx explained the concept of the dictatorship of the proletariat, emphasising that post-revolutionary society will need to retain a coercive state apparatus. In Critique of the Gotha Programme, Marx writes: “Between capitalist and communist society lies the period of the revolutionary transformation of the one into the other. Corresponding to this is also a political transition period in which the state can be nothing but the revolutionary dictatorship of the proletariat.”

When we say we stand for the unconditional military defence of China, we mean what Trotsky meant about the Soviet Union: “we do not lay any conditions upon the bureaucracy. It means that independently of the motive and causes of the war we defend the social basis of the USSR, if it is menaced by danger on the part of imperialism” (“Again and Once More Again on the Nature of the USSR”, In defense of Marxism). But we also give not an iota of political support to the programme of the Stalinist bureaucracy.

SWP’s rabid anti-communism

In Britain, the Socialist Workers Party of the late Tony Cliff does not claim that capitalism has recently been restored in China. For them, China has been “state capitalist” since the 1949 revolution, with the bureaucracy conveniently deemed a ruling class. The anti-Marxist theory of “state capitalism” is nothing but a fig leaf for the fact that these reformists have sided with the capitalist “democracies” against the workers states ever since the inception of this group. The Cliff tendency came into existence in a capitulation to anti-communist hysteria that accompanied the Korean War of 1950-53. In a cowardly capitulation to the Labour government which sent troops to Korea, Cliff rejected the Trotskyist position of unconditional military defence of the USSR, North Korea and China, thus breaking with Trotskyism. As an illustration of what an enormous defeat for US imperialism the Chinese Revolution had been, it was the intervention of China’s People’s Liberation Army in the Korean War that saved North Korea from being overrun by American imperialism and their South Korean puppet regime.

Throughout its existence, the Cliff tendency has supported every reactionary “anti-Stalinist” force, from Solidarność in Poland to the Afghan mujahedin in the 1980s to Yeltsin’s counterrevolution in Moscow in 1991, when they vilely proclaimed “Communism has collapsed…. It is a fact that should have every socialist rejoicing” (Socialist Worker, 31 August 1991).

In 1996 these reformists also sided with the political heirs of Chiang Kai-shek, who for decades ran the brutal capitalist state of Taiwan. As US warships plied the Taiwan straits in one of many provocations against Beijing, the Cliffites proclaimed that “China’s claim to Taiwan is a colonialist one. We would oppose any Chinese invasion of Taiwan as an act of imperialist aggression” (Socialist Review, April 1996).

Ever since the counterrevolutionary nationalist army and the Chinese bourgeoisie fled to Taiwan after the revolution, Taiwan has been an outpost for US imperialism’s counterrevolutionary schemes, military threats and interference in Chinese internal affairs. Taiwan has been since ancient times a part of China — it is both ethnically, linguistically and historically Chinese. We Trotskyists will stand with China in the event of any military conflict with imperialism over Taiwan. We are also opposed to the Chinese Stalinists’ proposals for reunification embodied in the slogan of “one country, two systems”. We call for the revolutionary reunification of China: that means a workers socialist revolution in Taiwan to overthrow and expropriate the bourgeoisie and a proletarian political revolution on the mainland, as well as the expropriation of the Hong Kong capitalists. Likewise with Hong Kong, we Trotskyists cheered as the decrepit British Empire lost its last major colonial holding with the lowering of the bloody Union Jack and the raising of the red banner of the People’s Republic in 1997. As we wrote at the time in an article “Britain out of Hong Kong” (Workers Hammer no 109, September 1989), we are for “One country, one system — under workers rule!”

China and permanent revolution

The Cliffites maintain that the 1949 Revolution disproves Trotsky’s theory of permanent revolution. This is the Marxist programme for the countries of belated capitalist development and in essence it was also the programme on which the Bolsheviks led the Russian October Revolution. In Trotsky’s words it says:

“With regard to countries with a belated bourgeois development, especially the colonial and semi-colonial countries, the theory of the permanent revolution signifies that the complete and genuine solution of their tasks of achieving democracy and national emancipation is conceivable only through the dictatorship of the proletariat as the leader of the subjugated nation, above all of its peasant masses.

“Not only the agrarian, but also the national question assigns to the peasantry — the overwhelming majority of the population in backward countries — an exceptional place in the democratic revolution. Without an alliance of the proletariat with the peasantry, the tasks of the democratic revolution cannot be solved, nor even seriously posed. But the alliance of these two classes can be realized in no other way than through an irreconcilable struggle against the influence of the national-liberal bourgeoisie.”

— The Permanent Revolution (1969)

According to the Cliffites, permanent revolution was “deflected” in the 1949 Revolution, as a result of which “bureaucratic state capitalism simply replaced private capitalism” (SWP pamphlet by Charlie Hore, China — Whose revolution? 1987). While maintaining that the class nature of the state that emerged from the revolution was capitalist, because one bourgeoisie was simply replaced by a more nationalistic capitalist ruling class — Hore admits that “1949 was a genuine revolution, in which a millions-strong peasant army overthrew the old ruling classes, broke the power of Western imperialism and laid the basis for a new social order.” The notion that the nationalist bourgeoisie in China, or any semi-colonial country, would institute a genuine social revolution and break the power of imperialism is totally contradicted by history. It shows that the reformist SWP would have stood with the Mensheviks in Russia in 1917 in supporting the “liberal” bourgeoisie. The Bolsheviks counterposed to this the need to break with the liberal bourgeoisie and to fight for the dictatorship of the proletariat! The colonial bourgeoisie’s true role was clearly demonstrated in the 1925-27 defeated Chinese revolution, which the Chinese bourgeoisie drowned in blood. They were aided by the treachery of Stalin under whose leadership the CCP was instructed to subordinate itself to the bourgeois Guomindang.

Permanent revolution confirmed in the negative

How could the Chinese Communist Party, based on a peasant army, ie a petty bourgeois force, establish a workers state? This presented a theoretical problem for the Trotskyists at the time and for some years afterwards, until a contribution by the founders of the Spartacist League regarding the Cuban Revolution retrospectively illuminated the course of the Chinese Revolution. In Cuba, under exceptional circumstances — the absence of the working class as a contender for social power; the flight of the Cuban bourgeoisie; hostile imperialist encirclement plus the lifeline that was thrown by the Soviet Union — a petty bourgeois movement did overthrow the old Batista dictatorship and eventually eliminated capitalist property relations. But Castroism or Maoism cannot bring the working class to political power.

As we have noted, even under the most favourable historic circumstances conceivable, petty-bourgeois forces were only capable of creating a bureaucratically deformed workers state, which means a state qualitatively the same as that resulting from the political counterrevolution in the Soviet Union under Stalin. In Cuba and China the results were anti-working-class regimes that blocked the possibilities of extending social revolution, into Latin America in the case of Cuba and into Japan and the rest of Asia in the case of China. To place the working class in political power and open the road to socialist development requires a further political revolution led by a Leninist-Trotskyist party. Since counterrevolution in the Soviet Union, with no readily available life-line against imperialist encirclement, the narrow historical opening in which petty-bourgeois forces were able to overturn local capitalist rule has been closed.

The experience of both of these revolutions has completely validated the Trotskyist theory of permanent revolution, in the negative: only under the dictatorship of the proletariat can the colonial and semi-colonial countries obtain genuine national emancipation. To open the road to socialism requires the extension of the revolution to the advanced capitalist countries.

In drawing out the lessons of the Russian October Revolution, which was led by the proletariat, Trotsky says that: “The peasantry can either support the dictatorship of the bourgeoisie, or serve as a prop to the dictatorship of the proletariat. Intermediate forms are only disguises for a dictatorship of the bourgeoisie….the peasantry can follow either the bourgeoisie or the proletariat” (The Permanent Revolution, 1969). Only one of the two fundamental classes in society can hold state power, ie the working class or the bourgeoisie. In destroying the army of the Chinese bourgeoisie and large landowners, the Maoist army had destroyed the dictatorship of the bourgeoisie and put in place the dictatorship of the proletariat.

Our 1966 Declaration of Principles of the Spartacist League characterised those revolutions led by petty-bourgeois guerrilla forces which came during a particular historical window of opportunity after the Second World War:

“Movements of this sort can under certain conditions, i.e., the extreme disorganization of the capitalist class in the colonial country and the absence of the working class contending in its own right for social power, smash capitalist property relations; however, they cannot bring the working class to political power. Rather, they create bureaucratic anti-working class regimes which suppress any further development of these revolutions towards socialism.”

— Spartacist no 8, November-December 1966

I would like to say one further thing about the role of the working class in the 1949 revolution. The SWP’s Charlie Hore claims that Trotsky assumed that the working class was at all times a consciously revolutionary force, and that their lack of action in 1949 also proved Trotsky, and permanent revolution, wrong. Trotsky did not make such a sweeping assertion. The proletariat is the only class in society that can, through the seizure of political power and destruction of capitalism as a world system, lay the basis for the elimination of exploitation, scarcity and war. However, its success or failure to achieve victory depends on its organisation and consciousness, ie on revolutionary leadership. The revolutionary party is the indispensable weapon in this struggle. By 1949 the working class in China had undergone 20 years of repression and disillusionment, and was politically atomised, largely thanks to the Stalinist CCP.

Contradictions of the “reform” era

Deng’s opening of the economy to foreign (and Chinese) capitalists has allowed rapid growth. It is easy to view the “market reforms” that Deng initiated at the beginning of the 1980s either as a total betrayal of the PRC or as the reason for its current growth level. Both of these would be false. The “market reforms” were initially an attempt to respond, within the framework of Stalinist bonapartism, to the inefficiency of bureaucratic “commandism” (poor productivity, mediocre quality, scarcity etc). As we wrote in the 1980s:

“Within the framework of Stalinism, there is thus an inherent tendency to replace centralized planning and management with market mechanisms. Since managers and workers cannot be subject to the discipline of soviet democracy (workers councils), increasingly the bureaucracy sees subjecting the economic actors to the discipline of market competition as the only answer to economic inefficiency.”

— “For Central Planning Through Soviet Democracy”, Workers Vanguard no 454, 3 June 1988, reprinted in “Market Socialism” in Eastern Europe (July 1988)

When Mao died, China, while having constructed a substantial, relatively modern heavy industrial sector, was still a predominantly rural, peasant country. Over three-quarters of the labour force was engaged in farming and over 80 per cent of the population lived in the countryside. Agricultural output had failed to keep pace with industrial growth and low agricultural productivity was a barrier to industrialisation. Foreign investment allowed certain areas of rapid growth that would not otherwise have been possible in an isolated and largely undeveloped workers state. Today, over 50 per cent of the labour force is employed in manufacturing, construction, transport and the service sector, while 40 per cent of the population is urbanised. From a Marxist standpoint, this is a progressive development. So too is the expansion of China’s industrial capacity.

But while this is true, the “market reforms” have massively widened the gap in living conditions within China, impoverishing millions of rural toilers and are also creating a wealthy new class of capitalists within China who have links to the CCP officialdom as well as to offshore Chinese capitalists.

Chinese “market reforms” v NEP under Lenin

In considering these “market reforms” it is useful to make a comparison with the New Economic Policy implemented in the USSR in 1921. This was done under the revolutionary leadership of the Bolshevik party as an emergency measure in an attempt to revive the economy after three years of bitter civil war against the White forces and imperialist armies. The economy had been crippled — starvation was rampant in the countryside and manufacturing had declined to the point where the proletariat had almost ceased to exist, a very bad situation for a state power that was based on proletarian rule. Lenin saw the NEP as a necessary compromise to buy the revolution time until it could be extended by proletarian revolutions in more developed countries, specifically Germany. The clear danger inherent in this plan was the creation of a new class of petty capitalists (the “NEP men”) and rich peasants who would act as a force against the dictatorship of the proletariat. As part of the NEP, the Bolsheviks also sought to bring in foreign investment and technique (the term used at the time was “concessions”) to certain areas of the economy, especially those centred on natural resources which they themselves were not well equipped to take advantage of. The foreign currency earned would have been important for buying what they could not yet make. In the end, the Bolsheviks failed to obtain any significant foreign investment from the hostile imperialist countries, but the programme and the reasons behind it were valid — to secure the resources needed to extend and defend the revolution.

In contrast to China today, the Bolsheviks maintained a strict application of the state monopoly on foreign trade. In China the market reforms are motivated by the appetite of the bureaucracy to enrich themselves. The bureaucracy has proved more than happy to act as gangmasters for the world’s bourgeoisies. Capitalist property owners are now allowed to join the CCP and it has been possible to inherit wealth, putting in place a key element for the return of the bourgeoisie as a class.

Pro-imperialist accomplices of counterrevolution

Leader of the reformist Socialist Party Peter Taaffe says:

“The present regime in China is increasingly capitalist with a peculiar amalgam of a growing capitalist economy ( par ticularly in the export sector) together with the remnants of the Maoist-Stalinist state machine, which is also seeking to move in the direction of capitalism.”

— The Socialist, 6-12 October 2005

Taaffe’s claims that the Chinese state is “gradually” becoming capitalist is an example of what Trotsky polemicised against in the 1930s when he said “He who asserts that the Soviet government has been gradually changed from proletarian to bourgeois is only, so to speak, running backwards the film of reformism” (“The class nature of the Soviet state”). Taaffe’s notion that a restoration can come about through incremental shifts from state ownership to private ownership, without a counterrevolution, goes hand in hand with the SP’s belief that “socialism” will come through nationalising the “commanding heights” of the capitalist economy through an “Enabling Act” in Parliament. These reformists utterly reject the idea that the proletariat must smash the bourgeois state and establish the dictatorship of the proletariat.

We insist that, like in the former Soviet Union, the decisive arena in which a capitalist counterrevolution would have to triumph is at the political level. A likely scenario will be when bourgeois elements move to eliminate CCP political power by supporting capitalist restorationist forces. In such an event the Taaffeites will be on the side of counterrevolution, just as they were in the former USSR when they supported Boris Yeltsin’s counterrevolution in 1991. The Taaffeites have never stood for defence of the workers states, including China. In August 2005, six months after the American and Japanese imperialists signed a military agreement against China, Taaffe clearly declared that the CWI will stand with the imperialist forces and “democratic” capitalist Taiwan in any military confrontation with the Chinese workers state. He said:

“Nevertheless, the Chinese regime is a dictatorship. Moreover, from the standpoint of the Taiwanese masses they would not wish to put themselves under its control, preferring the democratic rights, however limited, which they enjoy under a bourgeois-democratic regime, which is what Taiwan is.”

— Marxists, “Taiwan and the national question” Chinaworker.org 26 August 2005.

Taaffe’s CWI forces literally stood on Yeltsin’s barricades in Russia with the rest of the counterrevolutionary rabble in August 1991, playing a direct part in the devastation that followed capitalist restoration. We fought instead to mobilise the Soviet working class to sweep away Yeltsin’s barricades and fight for proletarian political revolution.

The Chinese economy today

The basic political power of the Stalinist bureaucracy in Beijing continues to be based on the collectivised sections of the economy, which still constitute the most vital parts. The private sector (including foreign companies) is principally made up of light industry. Heavy industry — the high tech sector, steel production, nonferrous metals, machine tools, telecommunications, electricity generation, petroleum and gas extraction, oil refining, modern armaments — are all concentrated in the state enterprises and are strategically much more important. The four largest banks in China are controlled by the state; the control exercised by the government over the financial system is crucial to state industry. This has up until now allowed the regime to effectively control the flow of finance capital entering and leaving continental China. The Chinese currency is not legally exchangeable on the international currency markets, although the imperialists want to force the Beijing regime to revalue the Yuan and to make it totally convertible in order to open China up further to financial penetration by the banks of Wall Street, Frankfurt and Tokyo. This represents a mortal danger.

When a conference of the National People’s Congress voted a constitutional amendment to “protect private property”, it simply reflected reality. In legally recognising private property and the right to inherit, the bureaucracy is trying to assure its privileges. However, it is not resolutions adopted by the bureaucracy that will determine the class character of China, but social struggle. Private property in China is as unstable as the bureaucracy itself, it exists to the extent that the bureaucracy authorises it to exist. This supposedly inviolable private property could be violated by the bureaucracy under the impact of open counterrevolutionary threats, or by the working class in a struggle for political power.

Of the companies quoted on the two main Chinese stock exchanges, the government either keeps a majority of the shares or a strong minority share. The shareholders of Chinese companies do not have property rights in the capitalist sense of the term. They have the right to income from their stocks, and they can sell their shares. But they can neither determine nor influence the management of the enterprises.

The bureaucracy in China preserves state property only to the extent that it fears the proletariat. The CCP’s economic policies are limited by fear of social unrest. The massacres perpetrated on 4 June 1989 in Tiananmen and elsewhere were unleashed by the bureaucracy when the Chinese working class began to mobilise. At the start, the protests were largely the result of student unrest, opposing corruption and seeking political liberalisation. The first units of the People’s Liberation Army failed to put down the protests because they solidarised with them. Soon however the movement was joined by millions of workers. Protesters began to hold mass meetings and create embryonic workers councils. Fear of the working class entering the scene terrified the bureaucracy and brought forth the fierce repression, and for this, army units considered more loyal had to be brought into the city. This also illustrates a key point about the army in a workers state — it can be split vertically during a political revolution, with sections of the officer corps coming over to the workers. This is impossible to imagine in a bourgeois army, where the officer caste is always loyal to the capitalist state in a mutiny, which means the army must be split horizontally, along class lines.

The Chinese powderkeg

Chinese society today is very explosive and unstable. The growth rate has been almost 10 per cent a year for more than 20 years, but not all workers have benefited. One of the results of the “market reforms” has been the creation of 20-30 million unemployed, largely women. Those that do find work, mainly in the private sector, have to accept lower wages and see none of the old benefits that state enterprises provided them with. However, salaries have grown and major industrial centres have begun to suffer a shortage of workers, which means employers are offering higher wages and better benefits to attract workers.

Restrictions on immigration from the country to the cities have been relaxed, but still exist. Migrants, many of whom are women, lack the rights of city residents, are often forced to live in segregated areas and are often looked down upon by urban workers. A revolutionary vanguard party in China today would struggle to unify all sectors of the working class and rural poor and would see the migrant workers as a potential bridge between the working class and the peasantry. Such a party would also oppose land seizures for industrial or commercial development, arguing instead that peasants should only have to give up their leases in exchange for significant compensation.

A proletarian political revolution in China would put an end to the ideological climate of the “death of communism”. It would radicalise the powerful Japanese working class; serve as the spark for a political revolution in encircled North Korea and have huge repercussions amongst the masses of South Asia. A revolutionary socialist government in China would actively favour proletarian revolutions internationally. And it is for the purpose of providing the necessary leadership to the proletariat in these struggles that the ICL seeks to reforge Trotsky’s Fourth International — world party of socialist revolution.