You Won’t See This on Wall Street

China Slashes Pay…of Managers

Last month, this noteworthy news item appeared in London’s Financial Times: “The corporate reporting season for China’s largest state-owned enterprises, which concluded last month, featured an unusual theme. Despite earning far less than their international counterparts, the men who steer the country’s largest companies welcomed recently announced plans to cut their pay” (“China’s State Sector Leaders Embrace Pay Cuts of Up to 60 Percent,” 12 October). According to Hong Kong’s South China Morning Post (30 August), the decision to slash management pay was decided at a Chinese Communist Party (CCP) Political Bureau meeting that also decreed an end to state-paid membership in private clubs and other perks. The pay-slashing appears to be tied to Chinese president Xi Jinping’s anti-corruption campaign, through which he seeks to remove some of his rivals in the CCP regime and to appease workers whose anger over inequality has fueled strikes and protests.

Even so, the move provides a clear, real-life refutation of the notion pushed by the bulk of the self-professed Marxist left that China is a capitalist society. For social democrats like the Committee for a Workers’ International (CWI), pushing that lie is a way to lure leftist-inclined youth and workers into embracing the imperialist-led drive to smash the Chinese workers state, which is bureaucratically ruled by the CCP. Thus, the CWI group in Hong Kong, Socialist Action, fulminates against “capitalist” China as it bangs the drums for the pro-imperialist “democracy” movement (see “Hong Kong Protests: Spearhead for Capitalist Counterrevolution,” WV No. 1054, 17 October). The aim of these protests is to weaken the CCP’s hold on Hong Kong—since 1997 a capitalist enclave of the People’s Republic of China—and thereby encourage counterrevolutionary forces on the mainland.

Right around the time that the Financial Times story appeared, the CWI posted an article on its website that tried to explain away protest leaders’ ties to U.S. and British government agencies (“Is the US Promoting a ‘Colour Revolution’ in Hong Kong?” socialistworld.net, 18 October). In this piece, the CWI declared that the American and Chinese governments “both represent the interest of billionaires.” This would be news to the heads of state-owned companies in China who are now watching a buzzsaw run through their pay packages.

Let us assume that the CWI’s adherents realize that Wall Street executives would respond rather differently than Chinese managers did if Washington so much as hinted at trimming the gargantuan pay, stock options and other wealth they accrue for jacking up profits (with a “golden parachute” waiting in the event the bottom falls out). For one thing, they could simply cut the financial lifeline feeding any of their political agents, Democratic or Republican, who showed such temerity. The inverse of this relationship operates in China, a bureaucratically deformed workers state that issued out of the 1949 Revolution. Decades of “market reforms” have created large capitalist firms, including some spawned directly by the bureaucracy. Nevertheless the state-owned enterprises (SOEs) and banks remain the core of China’s economy, and their managers answer to the government. As the head of China’s giant petroleum and petrochemical company Sinopec put it, perhaps ruefully, “If you want to earn big sums, you should not be an SOE executive.”

What the CWI obscures is the class difference between capitalist America and the People’s Republic of China. To be sure, a layer of capitalists has emerged on the mainland in recent years, but they remain atomized and lack their own political parties, unlike in Hong Kong. There are also plenty of fat cats in the nationalist CCP bureaucracy, a cancer that eats away at the foundations of the workers state. But the bureaucrats’ privileges lack the security provided by the property rights enshrined in law in the U.S., Britain, etc. (the only rights to which the “democratic” capitalist rulers are unequivocally committed). Witness the heads that are rolling in the current anti-corruption campaign.

It is the task of the Chinese proletariat to remove the parasitic CCP bureaucracy through political revolution and create a regime of workers democracy and proletarian internationalism. The basis for such a fight must be unconditional defense of the workers state against the class enemy, which requires as well the unmasking of phony “socialists” who seek to tie the combative Chinese working class to the forces of capitalist counterrevolution. The struggle of workers in the U.S. to overthrow the rule of the capitalist exploiters must proceed from defense of gains already won by the international proletariat, not least those of the Chinese Revolution.