How the fear of imperial encirclement has driven the Chinese Communist Party

The Bolshevik Revolution had an electrifying effect on Asian countries suffering from the dehumanising impact of imperialism. Its project of world revolution addressed their needs for the first time, in a way that the European socialist movement had never done. Communist parties were formed all over Asia almost immediately after the Bolshevik Revolution: Indonesia (1920), China (1921), India (1921), and South Seas (1925) that split into the CPs of Malaya, Indo-China, and Siam in 1930. The 13 delegates meeting in Shanghai on July 1, 1921, to found the CCP, however, must have had a vision of the world a century hence that is vastly different from what the world is today. Their vision would have been of a world without capitalism, imperialism, unemployment, poverty, and exploitation, and of an egalitarian China with a sense of community, ensconced within a universe of socialism.

No doubt China has made enormous strides over these hundred years under the leadership of the CCP. A nation that British imperialism sought to convert into one of opium addicts, through the Opium Wars of the mid-19th century, and Japanese imperialism into a colonial appendage, is today the second-largest economic power in the world. The growth rate of its GDP has been phenomenal, indeed unprecedented for as long a period as the one over which it has been sustained. Its technological prowess, manifested most recently by its ambitious space programme, has been impressive. Indeed it is the only third world country of significance that appears to have climbed out of its state of underdevelopment: Japan, it must be remembered, had never belonged to the third world, and South Korea and the city-states much lauded by the Bretton Woods institutions are too small to signify.

And yet behind the glitter of these achievements, we enter an area of doubt. Income inequality in China is quite pronounced, not of course as great as in Latin America but comparable to other Asian countries. The official claim of zero poverty is untenable: It is arrived at by taking a very low “poverty line”, of 9 yuan per day in early 2020, which would just suffice to buy two one-litre bottles of water, but is quite insufficient for meeting all one’s needs including food, clothing and shelter. The persistence of poverty is not surprising, since, despite the emergence of labour shortages in particular regions, China still has large unutilised labour reserves with which poverty is usually correlated. China’s unemployment and poverty are proportionately much lower than in other Third World countries like India but they have not disappeared.

In this respect, China’s experience is very different from that of the Soviet Union and other former socialist countries of Eastern Europe, which had used up their labour reserves and achieved full employment, even labour scarcity, a feat unparalleled in the contemporary world. Indeed, much criticism was directed at these countries for being one-party states and for imposing restrictions on individual freedom (as is being done against China) but even their detractors had to admit that they had eliminated unemployment and absolute poverty. This achievement was considered the chief hallmark of “actually-existing socialism” and had prompted the Hungarian economist Janos Kornai to remark that “classical capitalism is demand-constrained” (hence its unemployment) “while classical socialism is resource-constrained” (where all resources are fully utilised).

China’s development trajectory since the 1980s has not been oriented towards building socialism in the sense of creating a community within which the individual can lead an unalienated life; it has not even been oriented towards achieving full employment and eliminating poverty. Its orientation has rather been towards making China into a big power. Its project has been essentially nationalist rather than socialist, which, in turn, has been caused by the ever-present threat of imperialism, of domination, that is, by metropolitan powers.

The context within which the CCP was formed a hundred years ago and the context within which it operates today have this element in common — the fear of imperialist encirclement and the CCP’s desire to lead China out of such a predicament. The threat of this encirclement has not lifted in a hundred years. True, there was actual imperialist presence on Chinese soil a hundred years ago (the CCP had met in 1921 within the “French concession” in Shanghai), while today there is no actual occupation. But the threat persists.

The debates on the economic trajectory to be followed in China have been not so much between those who want a restoration of capitalism and those who want to pursue socialism, but about whether China can become more powerful through a pure strategy of building socialism or through the pursuit of a strategy that also harnesses the resources of private capital, both Chinese and foreign. The CCP has on the whole chosen the latter course over the last four decades, though it has made several “course corrections” to ensure that popular anger against its economic policies does not reach a flashpoint.

This is why when peasant anger over land acquisition for industrial projects was giving rise to thousands of protests every year, the CCP had come up with the slogan of “Towards a socialist countryside”. This entailed a significant diversion of resources for the upliftment of the quality of life in rural China.

Likewise, at different stages along the “reform” path, the CCP has used different props to keep its high growth rate going — from reliance on Township and Village Enterprises, to inviting foreign capital to set up export-oriented units, to stimulating home consumption through administered wage increases and the provision of credit.

I believe it is a mistake to think that a socialist strategy, based on the development of the communes, would have been less effective in thwarting imperialist encirclement of China; at the same time, it would have eliminated unemployment and poverty and given the regime a firmer domestic support base. But the fact of encirclement is real, as numerous US initiatives, from the now-defunct Trans-Pacific Partnership to the Quad, testify.

The writer is a former professor of economics, JNU