Firmly on the socialist path

Print edition : October 09, 1999

China is making major strides of economic development while at the same time being conscious of the problems of growth of any tendencies alien to socialism. Some observations and impressions from a visit.

A FIVE-MEMBER Central Committee delegation of the Communist Party of India (Marxist) led by Polit Bureau member Sitaram Yechury visited China from March 31 to April 10, 1999, at the invitation of the International Department of the Central Committee of t he Communist Party of China (CPC). The other members of the delegation were Nirupam Sen, P.K. Gurudasan, N. Varadarajan and Ashok Dhawle.

The delegation, which was received warmly, held fruitful discussions with the CPC leadership reflecting the mutual desire to strengthen relations between the two countries, peoples and the parties. At the Great Hall of the People in Beijing the delegatio n was received by Wei Jianxing, one of seven members of the Standing Committee of the CPC Political Bureau who is in charge of party discipline. The delegation held discussions with Dai Bingguo, head of the International Department of the CPC Central Com mittee, Ma Wenpu, Vice-Minister of the International Department of the Central Committee, and many others. Three days of intensive discussions with the leadership of the CPC in Beijing covered a wide range of bilateral and international issues.

Thereafter, the delegation visited the provinces of Xian, the ancient capital of China, and Yunnan. In Yunnan, the delegation visited remote hilly areas and deep down south the tri-junction with Laos and Myanmar inhabited by China's minority nationalitie s. The week-long tour to interior China aimed to study the living conditions of the people and find out how the problems arising out of the speedy developmental process are being tackled at the grassroots level. The itinerary was worked out at our sugges tion that we visit interior China rather than the more developed, fashionable and prosperous east coast which has huge cities such as Shanghai and Guanzhou (Canton), which are easily comparable with Hong Kong.

What we saw and experienced in China's interior reflected a country and a people seized with a singular passion to bring about all-round development based on speedy economic growth. This singularity of purpose and determination was evident at all levels. Given that this is happening in a country with 1.3 billion people which has been experiencing a phenomenal annual economic growth during the last two decades, such a massive human and material effort is bound to produce results that will have global imp lications.

One highlight of the visit was the discussions the delegation had with Wei Jianxing. While detailing various aspects of the current situation in China, he highlighted China's desire to improve good-neighbourly relations with India. This, he said, was in China's interest as its main priority was to develop its own economy and thus strengthen socialism, which required peace and absence of tension with any country. Despite the recent setback to the decade-long process of improvement of relations that had b egun with Prime Minister Rajiv Gandhi's visit to China in December 1988, Wei Jianxing emphasised China's desire to overcome these problems and continue the process of improving relations. In response, we conveyed to the Chinese leadership that the Indian people, given their centuries-long association and interaction with the Chinese, are equally, if not more, desirous of improving these relations. In fact, mutual concern for good-neighbourly relations was a constant feature of all the discussions we had during the visit.

Considering that ours was the first political delegation visiting China after the BJP-led government assumed office in India and in the background of irresponsible acrimony unleashed by the BJP and its allies against China as a justification for Pokhran- II, the fact that there was such a universal desire among the Chinese leadership and the people to improve relations with India was heartening.

The Chinese leaders emphasised that while one arm of the present developmental process in China is that of economic reform and opening up to the outside world, the other arm is the firm adherence to the four cardinal principles (adherence to the socialis t road; Marxism-Leninism, Mao Zedong thought; people's democratic dictatorship; and the leadership of the Communist Party) and the strengthening of socialism with Chinese characteristics.

A series of public campaigns are being conducted by the CPC on these issues and a vast network of party schools continuously train and re-train party members on ideological matters. Our delegation visited the party school in Yunnan province. One importan t activity at this school is to carry on study and research in Marxism-Leninism and Deng Xiaoping theory. Apart from research scholars, party cadres sent by the lower-level committees come here for training. Over the last 20 years, the school has trained more than one lakh students. It conducts various courses in revolutionary theory and philosophy and also on party-building and party history. The faculty follows the method of criticism and self-criticism and studying theory by integrating the subjectiv e with the objective.

Explaining their assessment of the international situation, the CPC leaders told our delegation that peace and development will remain the main themes of the 21st century. They were optimistic that the 21st century will offer more opportunities than chal lenges for the struggle towards socialism. In their perception, the circumstances also will be more favourable than they are unfavourable, and hence the opportunities should be seized to counter the challenges.

CPI(M) Polit Bureau member Sitaram Yechury (left), who was part of a five-member Central Committee delegation from India that visited China earlier this year, with Wei Jianxing, member of the Standing Committee of the Political Bureau of the Communist Party of China.-BY SPECIAL ARRANGEMENT

CERTAIN important features of the present international situation figured in the discussions. The first is the global tendency that propels the world towards multi-polarity. While on the one hand, such a development, after the bipolar Cold War period has ended, is a positive one, on the other, there are forces with a vision of a "new world order" which seek to convert this natural tendency towards multipolarity into one of unipolarity. Such an effort will have to be resisted in the interests of a democr atic world order.

The second feature concerns the true nature of economic globalisation. Its potential to wreak havoc is becoming clearer with the severe economic damage it caused in South East Asia, virtually overnight. Globalisation poses serious threats to the sovereig nty and economic security of Third World countries. On the other hand, globalisation also offers possibilities for expanding economic activity and, hence, achieving development. China is preparing to face this dual nature of globalisation.

During the discussions with various leaders it became clear that over the past couple of years China has overcome enormous difficulties and achieved new advances while maintaining political and social stability alongwith a relatively high economic growth . China has achieved significant diplomatic victories as well and is bracing itself to re-unite Macau during the 50th anniversary year of its socialist revolution.

Domestically, China had to overcome two very serious problems: the impact of the South East Asian financial crisis and severe floods, unprecedented in this century.

The impact of the financial crisis, we were informed, is still felt. Over the past few years China's foreign trade was growing at an annual rate of 16 per cent. Last year this figure fell to 0.4 per cent. Anticipating such problems, China had targeted a modest 8 per cent growth. Of this, 2 per cent was to come from foreign trade. The sharp drop in the foreign trade was therefore a severe setback. The unprecedented floods caused damage of more than 200 billion yuan (the Chinese currency, approximately ei ght to a dollar). Despite this, China achieved a growth rate of 7.8 per cent during the year. And real per capita income grew by 4.3 per cent in the rural areas and 5.8 per cent in the urban areas. How was this achieved?

China faced these two formidable challenges mainly by effecting a massive increase in state spending that stimulated internal domestic demand. This year, more than yuan 100 billion was spent by the exchequer on building infrastructural facilities. It was this timely and effective state intervention that helped China avoid going the way of the South East Asian countries, which would have caused tremendous chaos in a country of China's size.

While China's decision not to make its currency freely convertible helped it insulate itself from the financial crisis elsewhere, it has refused to devalue its currency despite this being the obvious choice to bolster exports and, thereby, improve the gr owth of foreign trade. The country, instead, took a series of measures to encourage exports through a variety of subsidies. One of the main reasons for not opting for the devaluation of the currency was that it would have affected Hong Kong which was alr eady suffering the consequences of the financial crisis. Further, any devaluation would adversely affect the overall confidence in the economy and its international standing. More important, it would increase China's foreign debt burden.

Incidentally, the few hours we spent in Hong Kong during our return journey confirmed the fact that mainland China had greatly helped Hong Kong to avoid buckling under the regional financial crisis. Apart from not devaluing the yuan, mainland China had s tepped up investments in Hong Kong, boosting demand and employment. This has silenced even the worst critics of Hong Kong's unification with China. The bulk of Hong Kong's population appears more grateful to the mainland than even before.

Building a bund in the lower reaches of the Yellow River in order to check flood damage. The experience of the Chinese people in mobilising mass efforts to fight floods has been impressive.-XINHUA

It would be interesting to note that when we, in India, argue that in order to overcome the current industrial recession and at the same time generate employment it is necessary for the government to undertake large public expenditures, we are told by th e Indian "liberalisers" that this will push up the fiscal deficit and, hence, would be counter-productive. Then why is this not true for China? Because, it is not true for India either.

On the contrary, despite such huge public expenditure, both retail and consumer prices grew at a lower rate in China than in the previous year. The Chinese explained that the problem is not in building up domestic debt. The question is how such borrowed funds are utilised? If it is employed productively and not wastefully, then it need not give rise to inflation. They claimed that the ratio of deficit plus the total value of outstanding national bonds (domestic borrowing) to GDP is still below the inter nationally accepted alarm level and, hence, sustainable. This has been so because, unlike India, over the years China has pursued a prudent fiscal policy.

As regards foreign debt, a question with which we are often confronted in India, China has explained that in no single year has its outstanding foreign debt been more than its foreign exchange reserves. This, it was stated, is the key to ensuring that th e country does not get indebted excessively.

WE were most impressed to learn how China tackled the unprecedented floods. Apart from a direct economic loss of over yuan 200 billion, many mines and industrial enterprises had to be closed down. But, following a massive mobilisation programme under the leadership of the CPC and the People's Liberation Army, China succeeded in battling the floods and minimising losses. Despite such a major calamity, the harvest that followed was generally good. Amazingly, the grain output did not fall; it was estimated to have grown by around 4 per cent. In fact, very high priority has been accorded to agricultural development with an emphasis on urgent modernisation.

With regard to industry, a major problem China is facing is that of its public enterprises. Public enterprises continue to be the overwhelmingly predominant part of Chinese industry. And we were assured that this situation will be maintained. However, in the process of restructuring these enterprises, the problem faced is that of workers being laid off. Around five to six million workers are laid off every year. But at the same time, six to seven million new jobs are created every year. But due to popul ation growth and additions to the labour force every year, around five million workers remain to be re-employed. This situation is expected to be resolved in the next couple of years.

The laid-off worker is protected by the state; he or she receives a minimum amount of money required to sustain normal life. Further, in China, whenever a person is employed, the employer is obliged by law to take out an insurance policy against the empl oyees' future risk of unemployment. The employer pays the premium. If the employee loses the job, then he or she receives the insurance amount as compensation.

Another problem being faced by China is the regional economic imbalance between the prosperous east coast and the rest of the country. We were told that conscious efforts were being made to overcome this situation through greater financial allocations fo r major projects in these areas and to create a better climate for the introduction of private capital. The developed areas are to assist the backward areas through economic linkages, that is, by encouraging the establishment of auxiliary units in the ba ckward areas. Through this process, people deprived of developmental benefits should receive them at the earliest. What was in evidence, therefore, was an active policy of state planning to ensure balanced economic development, far from relying exclusive ly on "market forces".

Another problem that China is facing relates to the growing disparities in the income levels of its people. The Chinese dictum that in the process of getting rich some people will get rich faster is there for all to see. But through conscious state inter vention, China is seeking to provide benefits to those at the lower end.

Apart from such disparities, a major problem that continues to surface is the growth of illegal activities such as corruption. The CPC has adopted a vigorous policy of encouraging people to grow rich through honest means and simultaneously cracking down on illegal activities. A widespread campaign is on in this regard and some deterrent action has also been taken. The action taken against the former Mayor of Beijing, who was found to be corrupt, is one example.

In March 1999, the National People's Congress, the highest state authority, met to review the activities of the past year. The Chinese emphasise that Deng Xiaoping's theory means working from practical conditions. In the past, they had committed, accordi ng to them, the mistake of not acting on the basis of this theory. China is not yet a developed country; it is still backward. Hence their decision to develop productive forces through the socialist market economy and to demonstrate the superiority of so cialism through the growth of economic productivity. In the process of such a review, they realised the need to amend the Constitution in order to allow the development of other forms of property ownership such as private, collective or cooperative owner ship while retaining public ownership as the dominant one.

This, they said, was necessary to stimulate the initiative of private or other forms of ownership and to allow them to co-exist with public ownership. Responding to the obvious question whether this would permit the growth of a capitalist class, they ans wered that under the leadership of the CPC with its commitment to maintaining and strengthening socialism in China, they are confident that they can preserve China's socialist character and not allow such forms of property ownership to become dominant.

With differences in incomes and standards of living growing, the danger of such differentiation laying the basis for a possible process of class differentiation is a cause for worry. The Chinese leadership, however, is confident that while tackling the i ll-effects of the reform process, they will also preserve and strengthen the socialist character of the People's Republic of China.

In sum, our delegation's visit to China was an experience which helped us gather more information regarding how China is making stupendous strides of economic development while at the same time being conscious of the problems of growth of any tendencies alien to socialism. The CPC leadership repeatedly emphasised the fact that they are combating such trends and would preserve and strengthen the socialist character of China. The visit resulted in a better understanding of current developments in China an d the discussions reinforced the mutual desire to strengthen further the bonds of friendship between the two giant Asian neighbours.

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