Changing China

Print edition : December 26, 2014

An overpass under construction in Wuhan in Hubei province. President Xi Jinping seems to prefer slower economic growth in order to address the challenges of widening inequality more effectively. Photo: DARLEY SHEN/REUTERS

An overwhelming focus on the state and the CPC is both the strength and the weakness of the book. The author explains clearly the ideology and rationale behind China’s economic transformation.

THE impact of China’s economic slowdown on the global economy is already visible. Softening demand from China is contributing to the slide in commodity prices, especially that of oil and minerals. In the quarter ended September 30, China’s gross domestic product (GDP) expanded at the rate of 7.3 per cent from the previous year, the slowest rate of growth in more than five years. According to the latest forecast from Moody’s Investors Service, China is expected to grow at the rate of between 6.5 and 7.5 per cent this year, down from 10.5 per cent in 2010, and will further slow down to 6 to 7 per cent in 2016. Capitalist economists have long argued that high economic growth is an imperative for China to keep social tensions at home under check. Going by their logic, the slowing growth rate is a threat not only to global recovery but also to the power monopoly of the Communist Party of China (CPC).

But Manoranjan Mohanty may not agree with this argument. In his book Ideology Matters: China from Mao Zedong to Xi Jinping, he says the slowdown is rather a “pointer” to the direction the Chinese leadership is taking rather than a matter of worry. Such changes in the direction of economic development are not new in China, which has come a long way from the days of Chairman Mao Zedong’s socialist experiments.

It is not easy to understand China’s state and society. It is a country ruled by the Communist Party for more than half a century. It has experienced conservative socialist experiments, class struggles as well as market reforms. Over three decades after Deng Xiaoping’s “open door” policy, the state still claims China is in a socialist transition stage. But international finance and industrial capital carry enormous weight in China’s economic system. These complexities may remain elusive for conventional analyses of a country, but Mohanty does not find them a problem. He argues that there is an underlying continuity in the transformation of the Chinese state and society.

Mao’s ideas were rooted in the new democratic revolution, which brought into being the People’s Republic of China in 1949; self-sufficiency; continuing class struggle in the socialist phase; and creation of a socialist human being. While Mao’s successors reaffirmed his legacy as a great revolutionary leader, his economic ideas and Cultural Revolution were criticised. Mohanty, who is the chairperson of the Institute of Chinese Studies in Delhi, calls it “discriminating evaluation”, a method Mao himself used to analyse Joseph Stalin (Mao said Stalin was 30 per cent wrong but 70 per cent right). Deng Xiaoping replaced the idea of class struggle with “economic construction”. His concept of socialism was different from Mao’s. For Deng, “the essence of socialism is to emancipate and develop productive forces, eliminate exploitation and polarisation, and finally realise common prosperity”. And to achieve this goal, Deng and his successors articulated what was called “socialist market economy”—the state would continue to exercise its role in maintaining macroeconomic coordination, while private investments and development of capitalist production forces would be allowed. One of the results of this economic experiment was the emergence of a capitalist class in society. Deng’s successor Jiang Zemin’s Three Represents theory—which urged the party to represent developing productive forces, advanced culture, and the interest of the masses—was interpreted as a move to accommodate this emergent class within the party.

To be sure, the focus on economic development has laid the foundation for China’s great leap forward in terms of economic growth. The average Chinese citizen experienced a “greatly enhanced standard of living” during these years. “But at the same time, social disparities grew enormously. Once one of the world’s least unequal society became one of world’s most unequal society,” writes Mohanty. President Hu Jintao’s “scientific outlook development” was aimed at tackling this problem. In his later years, he expanded the social security measures and slowed down economic growth, among other steps, to address inequality.

The complexities China represents, including its economic policies and ideological nuances, are analysed and presented in a simple way in Mohanty’s book. But the overwhelming focus on China’s state and party is both the strength and the weakness of the book. While on the strong side the book explains lucidly the ideology and rationale behind China’s economic transformation, on the other it sheds little light on the opposition in China.

Mohanty says mass discontent became more widespread recently, “with as many as 180,000 (protest) incidents in 2010” alone. But who are the major opposition forces in China and what are their ideological differences with the Communist Party? How much political clout do they wield in the system?

These unanswered questions do not discredit the book, which is otherwise a certain companion for a student of post-revolutionary China. After reading the chronological account of China’s transformation, one question may cross the reader’s mind: Is China a socialist country? The author says: “Today’s China is a fast developing capitalist society with many unique features, one of which is that it’s ruled by a Communist Party.” While the CPC has not given up its Marxist theoretical base, Deng’s pragmatism and focus on economic development is the dominant line in the party. But this has created new challenges as well. The Hu Jinato years show that tackling those challenges, especially the rising disparities, is not an easy task. “The structural logic of market economy that created the social base of capitalism in China was so strong that Hu Jintao’s effort could hardly alter that characteristic,” writes Mohanty.

It is this China that Xi Jinping, the incumbent President, has inherited. His initial policies indicate that he will continue the Hu Jintao line in addressing the structural problems of China’s economic development. And in taking that course, he seems to prefer slower economic growth in order to address the challenges of widening inequality more effectively. Recently, while addressing global business leaders at the Asia Pacific Economic Cooperation (APEC) CEO summit in Beijing, Xi reaffirmed this view: “Even at growth of around 7 per cent, regardless of speed or volume, [we] are among the best in the world.”

But tackling economic challenges is not the only goal on his horizon. Xi has launched an ambitious anti-corruption crusade and has given hints that China will become more assertive in its foreign policy. Chinese leaders since Deng had reiterated that China believed in a peaceful rise, and had been reluctant to take strong positions. However, the Xi administration is not only proactive in foreign policy, but also aggressive when it comes to China’s traditional rival, Japan.

In other words, though Xi might continue parts of the agenda of his predecessors, he seems to be keen on cultivating his own leadership style. It is expected by many in China and abroad that Xi will make “clear choices on how to fight corruption in a comprehensive way, promote democracy more confidently through institutional innovations, orient development towards equity and sustainability, and build China as a democratic force for global peace and equity. The future performance on those issues would clarify the meaning of the Chinese dream.”

Not an easy task at all. But the Chinese, after all, are known to accomplish difficult things.