by Thanasis Spanidis, commissioned by the Central Committee of the Communist Party

The question of the current character of Chinese society and the direction in which it is developing is the subject of controversial debate within the communist movement. Within our party, we have taken a clear and unified position on this question from the very beginning: Monopoly capitalist conditions prevail in China and China is embedded in a global imperialist system. This position is questioned and disputed by parts of the communist movement in Germany, but the discussions on this were often not well-founded. In order to close this gap and make our position clear, a comrade of the CP, Thanasis Spanidis, has explained the position in detail on behalf of the organization. We published the text at the end of 2023 and are now pleased to make it available in English translation. We have made every effort to correct problems with the machine translation. If we have made any errors, please let us know by email (info@kommunistischepartei.de)
Communist Party, April 2025

Content

1) Introduction: The Discussion About the Class Character of China

2) Clarification of Terms: Capitalism, Imperialism, Socialism

3) From Socialism to Capitalism: China in the Second Half of the 20th Century
a. Problems and Mistakes During the Revolutionary Period of the People’s Republic
b. The Break: 1978 and After
c. On the Classification and Assessment of the Counterrevolution in China

4) China’s Social System
a. State and Private Capital in Chinese Capitalism
b. Labor Becomes a Commodity: The Chinese Working Class
c. State, Party, and Bourgeoisie in China
d. Using Marx Quotes Against Marxism: The Ideology of the CCP
e. Interim Conclusion

5) China in the Imperialist World System: Crises, Capital Export, Risk of War
a. Crisis Developments in Chinese Capitalism
b. Chinese Capital Export
c. Consequences of Chinese Capital Exports for the Working People in the Recipient Countries
e. Is there a Chinese Imperialism?

6) Conclusion: The Correct Position of Communists on China

1) Introduction: The Discussion About the Class Character of China

Is China a socialist state or, at the very least, a state that continues to work toward creating a socialist or communist society? Or is it already a capitalist society, where the bourgeoisie holds power?

This question divides the communist world movement like few others. And this division is not about being right or sectarianism. On the contrary—such a division on this question is inevitable and correct. For it concerns far more than just assessing the social conditions in a distant country—it concerns the principles of Marxism: the question of what is meant by capitalism, and, above all, what socialism actually is. It is about whether imperialism can still be grasped through the terms of Lenin’s theory of imperialism and thus understood as a developmental stage of capitalism and a global system encompassing all countries—or perhaps instead as an exclusive club of a handful of Western states that are classified as imperialist primarily due to their foreign policies. Finally, it is about whether, in the intensifying global political conflicts between China and the USA, an internationalist position is taken that defends the interests of the working class against both poles of the imperialist system, or whether, instead, the workers’ movement aligns itself with the pole of this world system led by China. The evaluation of China is, therefore, closely intertwined with the strategic questions confronting the communist world movement. The different and indeed opposing answers to this question from communist parties worldwide greatly influence the direction these parties take at the crossroads where the communist world movement finds itself today.

A significant part of the communist world movement believes that the People’s Republic of China remains a socialist country or a country taking steps toward socialist development. In Germany, this position is particularly vehemently represented by the German Communist Party (Deutsche Kommunistische Partei, DKP), which solidified this stance in a far-reaching resolution during its 25th party congress in 2023: „The DKP welcomes the successes of economic reforms and the increased global economic importance of the People’s Republic of China. This opens an alternative to the imperialist economic order. The Communist Party of China aims to develop the People’s Republic into a modern socialist state. There are capitalists in the country, but they do not hold political power. The state controls central sectors of the economy. This is the prerequisite for China’s development from an initial stage of socialism into a modern socialist country.“ Furthermore, „The DKP sees the improvements brought about for many countries through cooperation with socialist China and how these improve the conditions for the workers’ struggles.“ China’s foreign policy is fundamentally different from that of imperialist countries, which the DKP does not classify China as part of: „In this situation, the People’s Republic of China pursues a foreign policy aimed at maintaining peace and economic development. This policy of peaceful coexistence is a form of international class struggle that includes cooperation between countries with different social systems, without, however, abandoning ideological confrontation and the fight against imperialism.“¹

A critique of this resolution by the DKP has already been provided in another text.² Here, it will be demonstrated in more detail that the DKP and similar parties are fundamentally mistaken in these assessments.

One problem in debating this position is that claims about „socialism“ in China are often loudly proclaimed but rarely seriously argued or substantiated. On the contrary, their representatives often rely on platitudes and phrases. A scientific analysis of the class relations in China, the driving laws of the Chinese economy, and the class character of the Chinese state and the ruling „Communist“ Party is seldom carried out. One gets the impression that the supporters of the „socialism-in-China“ thesis prefer to express a declaration of faith rather than conduct a scientific analysis, especially as the debate is often highly emotionalized, and any dissenting position (especially any Marxist analysis that calls out capitalism in China by name) is sharply attacked.

When attempts are made to substantiate this position, the following arguments are typically presented:

1. A centralized planned economy is not yet possible or practical in China due to the insufficient development of productive forces.
2. Nevertheless, the pillars of a socialist economy in China remain intact, referencing the significant role of state enterprises in the Chinese economy and the continued state ownership of land.
3. State power remains in the hands of the working class because the Communist Party of China governs the country.
4. Therefore, China’s „reform and opening-up policy“ is not a policy aimed at establishing capitalist conditions but a necessary compromise on the path toward a developed socialist society, comparable to the New Economic Policy in Soviet Russia or the early Soviet Union.
5. The socialist character of China is also evident in its international policy, which, unlike that of the USA, is not directed at war and subjugation of other countries but at peaceful coexistence, equality, and development.

These arguments rely on the official pronouncements of the Chinese party leadership. Historically, they can be traced back to Deng Xiaoping, under whose leadership and justifications the process of „reform and opening-up“, as it is called in China, began. Therefore, this stance is often referred to as „Dengism.“

Interestingly, some capitalists arrive at completely different conclusions. For example, Shan Weijian, a former World Bank and JP Morgan employee and CEO of a private equity firm in Hong Kong valued at $40 billion, said about Americans: „They don’t know how capitalist China is. China’s rapid economic growth is the result of its embrace of a market economy and private enterprise. China is one of the most open markets in the world: it is the largest trading nation and also the largest recipient of foreign direct investment, surpassing the United States in 2020.“ ³How is it possible that an internationally connected capitalist is as satisfied with the economic order of today’s China as certain groups in Western countries that regard themselves as communists? Unless, by some miracle, capitalists and the working class in China have learned to reconcile their opposing interests, we must assume that one of the two sides holds a significantly flawed view of the nature of China’s economic system.

The communist movement, based on Marxism-Leninism, is currently weak in addressing the China question, even though there are various analyses of China that provide important insights.⁴ However, critiques of Chinese capitalism often come from Maoist and Trotskyist perspectives, which tend not to delve into detail and instead rely on their respective terminologies and concepts (e.g., „bureaucracy“, „Stalinism“ for Trotskyists, and „social imperialism“ for Maoists). These terms often hinder a proper understanding of Chinese capitalism.

This text aims to provide a detailed analysis of the current Chinese economic and social order. It will show that characterizing China as socialist is incorrect and that all arguments supporting this view are individually wrong. It will demonstrate that capitalist laws dominate in China, making it a capitalist country where monopoly and finance capital prevail. It will also show that the Chinese state and the „Communist“ Party of China have a bourgeois class character and that China’s international relations are determined by the capitalist nature of its economy. We will see that these relations are essentially based on the exploitation of human labor power and that China seeks to promote a redivision of the world in favor of its monopolies. China is acting not only as a player within the imperialist world system but increasingly as one of the leading powers of global capitalism.

One must harbor no illusions: For some, the conclusions of this article will be unacceptable, leading them to simply ignore the facts and arguments presented here. The correct argument does not prevail merely because it is written somewhere. However, one can hope that the analysis provided here will help consistent Marxist forces combat Dengism and that there may still be enough openness among some influenced by Dengism to seriously examine the arguments presented.

The analysis will first clarify what is understood under the terms capitalism, imperialism, and socialism from a Marxist perspective. The next chapter will address the historical development of the People’s Republic of China from socialism to capitalism. Following that, the focus will shift to China’s societal system: in subchapters, the respective roles and weights of private and state capital in the Chinese economy will be examined; the situation of the working class, their struggles, and the transformation of labor power into a commodity will be briefly discussed; the subchapter on state, party, and bourgeoisie will demonstrate that the bourgeoisie is the ruling class in China and – contrary to the unsubstantiated claims of the DKP – also holds political power; and finally, the programmatic and ideological framework of the Communist Party of China will be presented, along with the question of what strategic goals the party pursues. The final chapter will address China’s position within the imperialist world system, the international role of Chinese capital and capital exports, the effects on the working population in the target countries of this capital export, and the inter-imperialist conflicts arising from China’s rise. A conclusion will be drawn about what constitutes a correct communist position on today’s China.

2) Clarification of Terms: Capitalism, Imperialism, Socialism

The question of the class character of the Chinese state and the Communist Party of China, as well as the characterization of China’s economy, presupposes certain terms whose meanings must first be clarified. It involves the question of how to recognize whether a country has a capitalist or socialist character. And what does it mean when we speak of imperialism?

Capitalism

Karl Marx, in the three volumes of Das Kapital, uncovered the economic laws that determine the development of the capitalist mode of production. He shows how, from the form of the commodity, which possesses both a use value and an exchange value, all capitalist relations necessarily develop. The value of commodities, whose quantitative amount is determined by the socially necessary labor time required for their production, ultimately determines the exchange relations between commodities. Marx calls this the „law of value.“ The law of value governs, in the capitalist mode of production, not only price movements but also the distribution of social labor across different goods and economic sectors and the incomes of the various social classes.

The capitalist relations of production are based on the private ownership of the means of production, which are concentrated in the hands of a social minority that Marx describes as the bourgeoisie or capitalist class. Opposing them is the working class, which increasingly becomes the social majority as the intermediary strata (particularly small farmers and the urban petite bourgeoisie) shrink. The working class has no significant private ownership of means of production and is forced to sell its labor power to the capitalists. Through the exploitation of labor power, not only is the invested capital reproduced, but surplus value is also created. Because capitalists are in constant competition with one another, they cannot fully consume the surplus value themselves; they must reinvest a significant portion in improved production methods and techniques to gain an advantage over their competitors. This leads to the accumulation of capital – and any capitalist enterprise that fails to accumulate capital is doomed to quick extinction. The appropriation and accumulation of surplus value is the sole and overarching goal of capitalists, which determines their success or failure in capitalist competition. The accumulation of capital knows no limits, whether in terms of the amount of accumulated capital, time, or space.

Capitalist relations of production can thus be summarized as follows: First, they consist of two opposing classes, one of which owns the means of production while the other lacks ownership and is compelled to sell its labor power to the capitalist class. Second, they involve competition among workers and capitalists alike because all commodities (including labor power) are traded in a market. Third, capitalists necessarily orient all their actions toward the unlimited accumulation of capital.

Commodity production and the capitalist mode of production are not immediately identical; that is, capitalist production entails more than just the production of commodities and their distribution according to the law of value. However, there is a close logical and historical connection between the two, as Marx makes clear. For Marx, the division of society into the working class and the bourgeoisie becomes „inevitable as soon as labor power is freely sold as a commodity by the worker himself. But only from then on does commodity production generalize and become the typical form of production; only then is every product produced from the outset for sale, and all produced wealth passes through circulation. Only where wage labor is its basis does commodity production impose itself on the entire society; but only there does it develop all its hidden potentials. To say that the intervention of wage labor falsifies commodity production means to say that commodity production, to remain uncorrupted, must not develop. To the extent that it progresses according to its own inherent laws to capitalist production, to that extent do the property laws of commodity production turn into the laws of capitalist appropriation.“⁵ Thus, for Marx, capitalist production necessarily arises from all commodity production and the workings of the law of value; capitalism is nothing other than the full unfolding of commodity production or the law of value. A „market socialism“, in which commodity production and distribution according to the law of value endure permanently – let alone private ownership of the means of production and exploitation – is inconceivable for Marx.

The capitalist social formation also includes the political rule of the bourgeoisie. Safeguarding capitalist property relations against any disregard for private property, organizing capital accumulation and favorable conditions for it, asserting dominance against revolutionary efforts, and constantly working to disorganize and politically weaken the exploited class all require the bourgeois state, which politically enforces the dominance of capitalists. Economic and political dominance are inseparably connected: On the one hand, the state, as the „ideal collective capitalist“, organizes the accumulation of capital, i.e., the enrichment of the capitalist class through the exploitation of the working class. On the other hand, the bourgeois state is also the site and instrument of direct dominance by the capitalists, who are interconnected with the state apparatuses through countless links and overlaps, enabling them to organize as the ruling class.

Socialism

What, then, is socialism? In Marxism, a socialist society is typically understood as a society in the initial, still immature stage of the development of communist production relations. Marx emphasizes that in such a society, various remnants and influences of the preceding capitalist mode of production persist: „What we are dealing with here is a communist society, not as it has developed on its own foundations, but rather, as it has just emerged from capitalist society and is thus in every respect – economically, morally, and intellectually – still stamped with the birthmarks of the old society from whose womb it emerges.“⁶ However, the decisive point is that the capitalist property and production relations have been overcome, existing at most on a small scale, while the new (socialist-communist) production relations already predominantly govern economic development.

Socialist-communist production relations are based on the social ownership of the means of production. This implies that production of use values can no longer be regulated (as in capitalism) through a market, i.e., supply and demand, nor is it driven by profit; instead, individual production units are subjected to an overarching societal plan. A central authority must determine the needs of society in advance and develop a plan that allocates raw materials, intermediate products, and labor across various economic sectors and enterprises to achieve the desired production result as efficiently as possible. The fundamental law of the socialist-communist mode of production is, accordingly, the planned development of productive forces to increasingly meet the needs of the population. Marx expresses it this way: „Economy of time, along with the planned distribution of labor time across the various branches of production, remains the first economic law on the basis of communal production.“⁷ Marx emphasizes the planned distribution of labor time under socialism – while labor time remains the measure in which products are related to one another, this is no longer done unconsciously and retrospectively through the market but rather in advance by central planning authorities. The notion of a „market socialism“, in which socialism is permanently compatible with the continued existence of commodity exchange and the law of value, fundamentally contradicts Marx’s understanding of socialism.

In a socialist society, remnants of capitalist production relations may exist in an early stage of development; however, these can no longer play a determining role (otherwise, the society as a whole would be capitalist, not socialist). It must also be the goal of the ruling working class to increasingly push back these elements: „This socialism is the declaration of the permanence of the revolution, the class dictatorship of the proletariat as a necessary passage to the abolition of class distinctions altogether, to the abolition of all the production relations on which they rest, to the abolition of all the social relations corresponding to these production relations, and to the revolutionizing of all the ideas arising from these social relations.“⁸

Just as capitalism implies the political dominance of the bourgeoisie, socialism represents the dominance of the working class, or, in the words of Marx and Engels, the dictatorship of the proletariat. This means that in a socialist state, the working class, through its own organs of power, enforces and defends social ownership of the means of production, and the communist party is tasked with advancing the planned development of communist production relations.

Imperialism

Unlike bourgeois understandings of imperialism, which view politics and economics as separate realms, Marxism-Leninism defines imperialism as encompassing both politics and economics, recognizing economic laws as the fundamental driving force of social development. Lenin writes about the economic basis of imperialism: „If a concise definition of imperialism is required, one must say that imperialism is the monopolistic stage of capitalism.“⁹ In Lenin’s understanding, imperialism signifies the dominance of monopoly capital. It corresponds to a stage of capitalist development that emerged at the end of the 19th century—initially in a few highly developed capitalist countries and subsequently spreading to almost the entire world.¹⁰ Today, imperialist conditions exist globally. While during Lenin’s time, only a relatively small number of imperialist states competed for the redivision of the world, monopoly capital as the economic basis of imperialism now exists in most countries, including many former colonies and semi-colonies. The colonial system that dominated much of the world’s surface at the time has largely disappeared.

From a Marxist perspective, imperialism today is not a characteristic of only a few countries but rather a highly hierarchical global system under the dominance of monopolistic capital. Some readers may not share this understanding. However, even if imperialism is regarded as a characteristic of only very few states, the question arises as to whether China belongs to these countries—whether monopoly capital predominates in China and to what extent China is involved in international capital export.

What Does This Mean for the Analysis?

It means we must examine the extent to which the law of value and capital accumulation govern China’s economy, whether property relations are primarily shaped by private or social ownership, and what role central planning plays. Furthermore, we must analyze which class dominates the Chinese state—whether it reflects the interests of the proletariat or the bourgeoisie. For assessing China’s international role, it is necessary to investigate whether monopoly capital has emerged in China, whether Chinese capital is exported on a significant scale, and how China is integrated into the imperialist world system.

First, however, it makes sense to historically examine the transition to capitalism in China.

3) From Socialism to Capitalism: China in the Second Half of the 20th Century

The Chinese Revolution and the founding of the People’s Republic of China in 1949 was without a doubt one of the most significant events of the 20th century – if before 1949 there were hardly any people living under more miserable conditions than the Chinese, the country now embarked on the path towards socialism. By the mid-1950s, industry was nationalized, and in the 1950s, the small-scale peasant economies were merged into communes; with the help of central planning, a large-scale program was initiated to industrialize the country, increase agricultural production, expand infrastructure, and build a healthcare system and education system for the entire population. In the following decades of socialist construction, life expectancy increased enormously, and hundreds of millions of Chinese experienced a noticeable improvement in their living conditions. While China had been one of the poorest and least developed countries in the world in 1949, by 1978, at the end of the revolutionary period of the People’s Republic of China, poverty and underdevelopment had not yet been overcome, but the lives of the masses had vastly improved, and they had become the subject of their country’s history. And this country had experienced a tremendous developmental leap over the past nearly three decades – in a society where the wealth created collectively benefited all, where there was no exploiting class and no exploited class, and no significant social differences.

a. Problems and Mistakes During the Revolutionary Period of the People’s Republic

While the great achievements of the Chinese Revolution are evident and must always be defended against distorting anti-communist propaganda, it should not be overlooked that many problematic developments, which contributed to the reintroduction of capitalism after 1978, had their origins in earlier decades. Even though a profound rupture in the relations of production and ownership took place after 1978 – the dissolution of the socialist planned economy and the transition to capitalist social relations – there are certain continuities in the policies of the CCP both before and after 1978, without which the transition to capitalism is difficult to explain. The leading figures of the counterrevolution, such as Deng Xiaoping, Hu Yaobang, and Zhao Ziyang, had, unlike the Soviet counterrevolutionary leaders Gorbachev, Yeltsin, Yakovlev, or Gaidar, fought in the revolution. Now they were pioneers of the dismantling of socialism. How was such a thing possible? This immediately raises the question: Did the CCP already previously adopt positions that later facilitated a departure from the socialist path?

The problematic, revisionist tendencies of the CCP before 1978 can only be briefly examined here and will be dealt with in more detail in another text. A brief look into the history of the revolution is necessary: The CCP had to fight its way to socialism both against the domestic counterrevolution in the form of the Kuomintang under Chiang Kai-Shek and against Japanese occupation. China was territorially divided among various warlords, and so it first had to be unified and liberated from foreign invaders. At the same time, capitalist relations had only just begun to emerge in the cities, while in the countryside, the peasants lived in dependence on large landowners. The tasks facing the CCP were therefore manifold: national and anti-colonial liberation, overcoming pre-capitalist relations of oppression and large landownership, and, of course, building a socialist society. In the theory of the CCP, and especially in the thinking of Mao Tse-tung, the national rebirth of China and socialism were interconnected and mutually reinforcing. This was not wrong in itself – of course, it was correct that the CCP led the struggle for China’s liberation from its semi-colonial status. However, what was problematic from the beginning was the idea that a part of the bourgeoisie could participate in the revolution – because, according to Mao, the contradiction between the working class and the national bourgeoisie in China, if handled correctly, was not an antagonistic contradiction, but rather a “contradiction among the people.”¹¹ Contained within this was an understanding of socialism as a joint struggle of the entire Chinese people (from which only the “compradors”, who were linked to foreign imperialism, were excluded) against foreign powers.

Mao analyzed social and political conflicts using the terminology of “primary and secondary contradictions”, which he developed himself. According to this, in a specific phase of development, one particular contradiction is always the principal contradiction, by which Mao simply meant the predominant, most important conflict, while the others were secondary contradictions. The principal contradiction was thus determined relatively arbitrarily by whichever political struggle happened to be dominant in the country at the time. As a category for analyzing the societal foundation, this concept was not as suitable as the term fundamental contradiction used by Engels, which refers to the basic contradiction of society from which all other contradictions develop. However, Mao went even further and emphasized that principal and secondary contradictions frequently switched places, so that a particular conflict that had just been the principal contradiction could suddenly become a secondary contradiction, and vice versa.¹² Thus, it was possible that during the fight against Japanese occupation, the CCP defined the struggle of the Chinese nation against Japan as the “principal contradiction”¹³, in 1952 the contradiction between the working class and the bourgeoisie¹⁴, and from 1956 the contradiction “between the needs of the people for rapid economic and cultural development and the inability of our economy and culture to meet these needs.”¹⁵ Ultimately, by seeing the most important task of socialism as the development of the productive forces rather than the development of new production relations, an idea was already laid out that Deng Xiaoping would later adopt and make the centerpiece of his worldview: for Deng, as we will see later, socialism was equated with economic growth.

The “Great Proletarian Cultural Revolution”, whose mastermind and leading figure was Mao, can be seen as an attempt to correct this one-sided prioritization of the development of productive forces. However, the method chosen for this – the mobilization of the masses against the party apparatus, the development of an absurd personality cult, the largely indiscriminate rejection of the entire previous culture, and the paralysis of the education system – weakened socialism instead of strengthening it. It did not lead to a correction of the opportunistic tendencies in the party but rather enabled them, after the end of the Cultural Revolution and Mao’s death, to achieve a breakthrough. However, this must be discussed in more detail elsewhere.

Another factor that facilitated both the rise of pro-capitalist forces and the growth of the capitalist economy was the extremely problematic foreign policy of the PRC during the Mao era. After the rupture in relations with the Soviet Union in the early 1960s, the Soviet Union was, first of all, discredited as a model of socialist development within the CCP. While Mao and the party leadership argued that the Soviet Union had supposedly reintroduced capitalism after Stalin’s death – a completely anti-Marxist claim, which was never seriously substantiated by the Chinese Communist Party – it paradoxically made it easier for the right-wing group around Deng Xiaoping later on to suppress Soviet experiences and the debates on socialist economic planning from the discourse and thus to present the use of the market as the only solution to economic problems.

At the same time, beginning around 1971, China moved significantly closer to the United States. The fact that the United States, as the leading power of capitalism, was now effectively China’s ally, while the Soviet Union, as the leading power of the socialist camp, was seen as the enemy, weakened the forces within the CCP that sought to maintain socialist relations of production. Moreover, this alignment opened the possibility of using the inflow of foreign capital to catch up technologically in key areas and to develop the fledgling Chinese capitalism relatively unbothered by the United States – which was initially preoccupied for another decade with the Soviet Union as its main adversary – and to benefit from growing trade with them.¹⁶

b. The Break: 1978 and After

After Mao’s death, the so-called “Gang of Four”, a group of leading figures of the Cultural Revolution, attempted for a short time to continue the Cultural Revolution’s program. However, within just a few weeks, they were overthrown, arrested, and sentenced to long prison terms. Even the new chairman of the Chinese Communist Party, Hua Guofeng, only led the party for a short period. An assessment and evaluation of his tenure cannot be provided here, but in any case, he was ultimately ousted by the further right-leaning group around Deng Xiaoping in the party leadership, who criticized his policy of the “Two Whatevers”: according to this slogan, which had been propagated in several official media under Hua, it was declared that everything Mao had decided and everything he had instructed would be resolutely upheld and followed.

Under Deng’s new leadership, a definitive break occurred in the policies of the CCP, initiating the gradual dismantling and abolition of socialist relations and the transition to capitalism.

This process took place in several steps: At the 3rd Plenary Session of the 11th Central Committee of the CCP in December 1978, the process of the “reform and opening-up policy” began, and Deng Xiaoping established himself as the leading figure of the party, prevailing against Hua Guofeng. The first step was a rupture in social relations in the countryside: the people’s communes, in which the peasantry had previously been organized – large units the size of small towns, where detailed production planning took place, but where social services were also extensively collectivized – were dissolved into private households in 1978. By 1983, 98% of peasant households had been transitioned to the new system, and apart from a few isolated “islands”, the commune system was abolished.¹⁷ On paper, the land remained state property, but in practice, it was treated as private property. By the late 1980s, tenants already had full rights to lease, sell, or pass on land through inheritance.¹⁸

In the following year, 1979, local “experiments” with capitalism were conducted as a second step. In selected cities, private enterprises and cooperatives were allowed to operate relatively outside the central plan.¹⁹ These local experiments were generalized and expanded in the following years – a pattern the Chinese government would frequently apply from then on.

At the same time as private capital and cooperatives were expanded, and thus the scope and binding nature of the central plans were further weakened, the workforce was gradually turned into a commodity as a third step, and a labor market was created. Starting in 1983, state enterprises began employing contract workers for limited periods without social protection, which represented a departure from the previous form of employment. By 1987, approximately 8% of industrial workers were such massively disadvantaged contract workers. After private wage labor had existed in China only to a very limited extent, its scope began to increase again.²⁰ For the living standards of the urban working class, this initially meant significant setbacks: according to official data, in 1987, 20% of urban families experienced a decline in real income, while the Chinese trade union federation reported that, on average, real income in the cities fell by 21% in that year alone.²¹

A key role in the transition to capitalism was played by so-called township and village enterprises (TVEs) – formally collective enterprises that, in fact, were often disguised private companies. These enterprises expanded massively in villages and small towns in the 1980s and, through their “collective” legal status, circumvented restrictions that still applied to private companies. Their profitability often relied on offering workers significantly lower wages and social protections compared to state-owned enterprises.²²However, the boom of the TVEs did not last long. By the 1990s, the managers of these enterprises, who were already acting as their de facto owners, tended to systematically plunder the firms by siphoning off capital for their own enrichment. Since they rightly assumed that they would soon be able to purchase these enterprises anyway, they deliberately reduced their value through such asset transfers to ensure they would later pay a lower price for them. Starting in 1996, the TVEs were formally privatized on a large scale by local authorities in villages and small towns, generally transferring ownership to their former managers.²³

Through the privatization of TVEs, as well as other enterprises, a new capitalist class emerged in China, after the bourgeoisie had ceased to exist as a class between 1956 and the late 1970s. Party officials and directors of state-owned enterprises also exploited their positions of power to appropriate parts of the enterprises‘ capital or to divert state subsidies for their firms for private purposes (such as travel expenses or private educational fees for their children). State property was sold – either illegally with the tacit approval or active encouragement of authorities or legally at undervalued prices.²⁴ The transfer of state-owned property to the new bourgeoisie, i.e., the expropriation of the Chinese working class, took on enormous proportions: according to one estimate, approximately 5 trillion (!) US dollars worth of state and collective property was transferred to individuals with good connections to the government during the privatization process. By 2006, as a result of this massive expropriation program, there were 3,200 individuals with assets worth over 15 million US dollars each – and approximately 90% of these were high-ranking party and state officials or their family members, whose combined wealth in 2006 was equivalent to the country’s entire economic output at the time (about 3 trillion US dollars).²⁵ Thus, the process of “reform and opening up” represented an unprecedented joint plundering by leading economic, state, and party officials, through which they transformed themselves into a new ruling class, a new Chinese bourgeoisie. This new bourgeoisie was already closely intertwined with the state apparatus through its formation process and occupied key positions within it.

1992 marked another milestone: the year began in January and February with Deng Xiaoping’s famous tour of the southern Chinese provinces. During his trip, Deng held discussions with many officials, urging them to accelerate the capitalist “reforms” and to remove individuals from leadership positions if they were not sufficiently committed to these reforms. In October, at the 14th Party Congress of the CCP, the goal of a “socialist market economy with Chinese characteristics” was formulated. Concretely, this meant abandoning the role of the state sector as the central anchor of the economy, which was already heavily infiltrated by capitalist elements. Many state-owned enterprises were now privatized and converted into joint-stock companies. By 1997, 107 of the 500 largest industrial enterprises had become joint-stock companies, meaning they were at least partially under private ownership. The government’s strategy was now summarized as “Grasp the big, let go of the small”, meaning that the largest 1,000 enterprises would remain under state ownership while the rest would be sold to private capitalists.²⁶

After Deng’s southern tour, the significance of foreign investment in Chinese capitalism grew rapidly. Up until then, investments had mainly come from overseas Chinese capitalists in Taiwan, Hong Kong, Macao, and other East Asian countries. These networks of overseas Chinese capitalists with mainland China facilitated the inflow of capital and essentially paved the way for other capitalists, who also began to invest in China in the 1990s. The Chinese government actively promoted this influx of capital, officially designating Taiwanese capitalists as “patriotic ethnic Chinese” and “special domestic capital” as early as the late 1980s. This classification gave them far better access to the Chinese market than other foreign investors enjoyed.²⁷

As a result of all these interconnected transformations, the transition of Chinese society and economy from socialism to monopolistic capitalism was carried out and completed in the 1980s and 1990s. This process must equally be characterized as a counterrevolution, similar to the dismantling of the Soviet Union and the Soviet socialist planned economy at the end of the 1980s to 1991.

c. On the Classification and Assessment of the Counterrevolution in China

The transition to capitalism within the CCP was by no means uncontested; rather, the pro-capitalist elements in the party had to assert themselves through significant struggles. Criticism of the, at times, highly voluntaristic and counterproductive economic policies of the Mao era (particularly during the “Great Leap Forward”, but to a lesser extent also during the “Cultural Revolution”) served as justification for the gradual departure from the planned economy. It was as if the “Great Leap Forward” were an inherent feature of socialism rather than a specific historical decision.

In the influential textbook by the economist Xue Muqiao from the 1980s, for example, it states: “To better implement these (the state-determined development priorities, editor’s note), we previously relied on bureaucratic measures instead of making use of the law of value. In particular, agriculture was regulated in a command-economy manner.”²⁸ And: “We should therefore, under normal economic conditions, that is, when social purchasing power essentially corresponds to the supply of goods, make more use of the law of value than before. Instead of rationing goods, the balance between supply and demand should be achieved through price movements. (…) Only the prices of a few vital goods should be uniformly set by the state.”²⁹

With “bureaucratic measures”, economists like Xue obviously simply meant that the economy was socialist, that is, centrally planned. The planning and control of the economy appeared to them as “unnatural”, while market regulation, or the law of value, was seen as the “natural” and appropriate form for any economy. Increasingly dominant in China were such intellectuals who still invoked Marxism in superficial phrases but no longer had anything substantive to do with it.

Today, the main political justification of the CCP, or its supporters abroad, for China’s gradual departure from the planned economy starting in 1978 is the argument that this transition extraordinarily accelerated China’s economic growth. Even nearly three decades after the revolution, China was allegedly so backward that the CCP simply had no choice but to act “pragmatically” and introduce elements of capitalism – supposedly temporarily – in order to catch up with the leading capitalist states. This argument is based on a very far-reaching and highly questionable assumption: namely, the belief that a capitalist system is fundamentally superior to a socialist, that is, a planned economic system, and that it produces higher growth rates. This assumption is not only theoretically dubious³⁰; it also completely ignores the fact that economic growth is a class-neutral concept, which says little about whether this growth actually increases the well-being of the broad masses or whether it is perhaps paid for by the working class through low wages, lack of workplace protections, and long working hours.

But let us set all of this aside for now and consider on its own the claim that the introduction of the „market economy“, that is, capitalism, led to significantly higher growth rates in China’s economy. The British economist Angus Maddison provides data on China’s GDP from 1952 to 2003, from which the annual economic growth can be calculated. According to this data, economic growth in China between 1953 and 1978, that is, up until the start of the „reform and opening-up“ policies, averaged 4.6% annually. Between 1979 and 2003, however, it was 7.9%. At first glance, this confirms the verdict that while economic growth under Mao was indeed high, it was still significantly lower than after the beginning of the „reforms.“ Was it really capitalism, then, that freed China from the „socialist administration of poverty“, as anti-communist authors claim?

The problem with this is that such a superficial comparison overlooks something crucial: during its socialist period, China was struck by two severe economic downturns – during the „Great Leap Forward“ from 1958 to 1962 and during the „Great Proletarian Cultural Revolution“ from 1966 to 1976. These downturns were obviously not the result of central planning but rather of political decisions which, in both cases (but significantly more during the Great Leap Forward), created economic chaos. What picture emerges when the years of the Great Leap Forward and the Cultural Revolution are removed from the calculation? Then, the average annual growth rate in the period from 1952 to 1978 was actually 8.2%, and thus even slightly higher than in the period from 1979 to 2003. Conversely, this high growth could also be partially attributed to the recovery after the severe downturns of the Great Leap and the Cultural Revolution, which again would relativize the better performance of the planned economy – all of this highlights how limited the explanatory power of such comparisons is.

Therefore, a more concrete analysis of the drivers of growth is required. A particularly significant fact, which also contradicts the bourgeois narrative of a more efficient capitalism, is that during the final years of the socialist developmental phase, numerous large projects in industry and infrastructure were initiated, whose positive impact on economic growth only became evident in later years, that is, in the late 1970s and 1980s.³¹ For example, during the Cultural Revolution, many roads and railway lines were built, large steel plants were opened, and especially in rural areas, infrastructure was greatly expanded: “One of the reasons for the good results in grain production in the post-Mao era is that the enormous amount of labor invested in irrigation projects, particularly during the Cultural Revolution, paid off in the years immediately after Mao’s death. From 1966 to 1977, 56,000 medium and small power stations were built, connecting 80% of the communes and 50% of the production brigades to the power grid. Irrigation powered by electric pumps reached a capacity of 65 million horsepower. More than 20,000 electrically driven wells were built, which could irrigate more than 700 million mu of land (one mu corresponds to approximately 0.0667 hectares).³² Compared to 1965, the irrigated area in China increased by 51%, electricity consumption in agriculture by 470%, electrically driven wells by 935.89%, the electrically irrigated area by 355.58%, the available tractors by 5.7 times, and the hand tractors by 65 times.”³³ Additionally, there were large-scale irrigation projects such as the Haihe and Liaohe projects, which involved thousands of kilometers of dikes, thousands of bridges and sluices, and tens of thousands of water reservoirs. All of these projects were not included in the GDP during their construction phase, which is why the GDP in the statistics appears lower than it actually was. At the same time, however, these investments contributed enormously to economic growth in the following years, so they distort the direct comparison of growth statistics in two ways.³⁴

This is not to say that there were no economic problems at the end of the Mao era. Wages had stagnated for a long time, the growth of food production was moderate (though still higher than in most countries at a comparable level of development), and product quality often left much to be desired. On the other hand, industrial growth was very high, and unlike almost all other countries of the so-called “Third World”, China was free of foreign debt. The economic situation was by no means disastrous. Most importantly, it is completely implausible to claim that the existing problems could not have been solved within a socialist economy. Rather, a look at the facts demonstrates the impressive achievements of the socialist planned economy in China. The decision to dismantle socialism was not the inevitable consequence of an overwhelming crisis but rather the result of the political enforcement of a specific right-opportunistic and pro-capitalist line within the leadership of the CCP.

As a result of the counterrevolutionary processes, a qualitatively different economic and social system emerged in China, which increasingly had little in common with the socialist system of the Mao era. This system will now be analyzed in the following section.

4) China’s Social System

The following section is divided into four subchapters, each dealing with the following aspects of the Chinese social system: a) the economic system and the role of private and state capital as well as economic planning; b) the transformation of labor power into a commodity, that is, the creation of an exploited working class through capitalism, the condition of this class, and its struggles; c) the bourgeoisie in China and the instruments of its rule, especially its connection to the state and the “communist” party; and d) finally, the ideology and program of the CCP, the proclaimed goals of the “socialism with Chinese characteristics” and the society aimed for with this concept. This will also involve refuting a widespread myth, namely that the CCP introduced capitalism only temporarily.

a. State and Private Capital in Chinese Capitalism

The dismantling of the socialist planned economy starting in 1979 naturally signified a profound upheaval in the functioning of the Chinese economy. The state-owned enterprises, which represented the most important units of the economy during the socialist phase of Chinese history, were largely privatized in the 1990s and early 2000s. At the same time, the widespread assumption that, over time, all state-owned enterprises would gradually be sold off and China would become an economy modeled after the West has not been fulfilled. State influence on the economy remains high, leading both some liberals and certain leftists to the mistaken conclusion that China is still not a “real” capitalism.

We will therefore now examine the forms of ownership in Chinese capitalism and the economic role of the state in the Chinese economy as well as the role of the private and state sectors. We will see that the distinction between state and private sectors is by no means synonymous with the opposition between socialist and capitalist economies, and that both China’s private and state enterprises have a capitalist character.

To begin with, it is helpful to get a rough idea of the size of the state sector in the Chinese economy. However, this question is not so easy to answer, as there are no official statistics available. Generally speaking, the state is heavily concentrated at the top of the rankings of enterprises: while there are millions of small, medium, and large privately-owned firms and relatively few state-owned enterprises, most of the largest corporations remain state-owned.

Today, the largest monopolies in China, which simultaneously rank among the largest in the world, can be divided into three broad groups in terms of their ownership structure: first, there are state-owned enterprises, especially in strategic industries such as the oil corporations Sinopec and CNPC, the energy conglomerate SGCC, and the construction company CSCECL. The second group consists of effectively mixed publicly listed companies that are still classified as state enterprises because the state exercises controlling influence over them. These companies can be found, for example, in the financial sector, including the major banks ICBC, Agricultural Bank of China, and Bank of China, as well as the insurance giant Ping An Insurance. Finally, the third group includes a number of private companies among the largest monopolies, some of which have a state minority share. These predominantly private-capitalist companies are found in areas such as electronics and the Internet, including companies like Huawei, Lenovo, Tencent, and Alibaba.

However, focusing on the largest of the massive Chinese monopolies can be misleading because it fosters the illusion that state ownership remains dominant in China. This is by no means the case when one considers capital as a whole and not just the thin layer of the very largest monopolies.

Estimates from around the mid-2010s mostly agreed that state-owned enterprises in China accounted for approximately 40% of value creation and 20% of workforce employment.³⁵ The most recent study on this question, which could be found, dates to 2019. According to this, two different estimation methods yielded a share of Chinese state-owned enterprises in China’s GDP of between 23% and 27.5% and a share of employment between 5% and 16%.³⁶

These shares still sound relatively high and are indeed so compared to most other contemporary capitalist economies. However, as we will see, they can easily be misinterpreted: the fact that state-owned enterprises today presumably account for about 25% of value creation does not mean that 25% of value creation is state-owned – because in state-owned enterprises, the state is not the only shareholder and usually owns less than half of the shares. Conversely, this figure above all means that in supposedly “socialist” China, approximately 75% of total production and probably around 90% of employment takes place in non-state, that is, primarily private companies.³⁷

How did such a development come about in a formerly socialist planned economy, where private capital ultimately managed to assume a clearly dominant role?

Privatization and Capitalist Restructuring of the State Economic Sector
The transition from an economy where social ownership of the means of production dominated to one where the means of production are predominantly in the hands of private capitalists occurred in China – unlike in the Soviet Union and most other formerly socialist countries – gradually, over a period of many years. The key stages of this process were as follows:

In the first phase of the so-called “reform and opening-up policy” from approximately 1978 to 1984, the focus of policy was on granting managers of state-owned enterprises greater autonomy in business decisions and partially separating enterprise budgets from the state budget. Enterprises were thus allowed to produce outside the binding state plan, and exporting enterprises were permitted to retain part of the foreign exchange they earned and spend it at their discretion. In this way, even in the early stages of capitalist restoration, the central planning of investments and the distribution of goods was severely undermined.³⁸

In 1984, another decisive step was taken with the introduction of a system whereby managers of state-owned enterprises were given complete control over the management of their firms through their employment contracts. They were thereby obligated to pay a fixed amount of profits to the government and could keep the remainder. By 1988, 93% of all firms had already switched to this system. This had two main consequences:

First, managers were now only interested in short-term profits. Since they typically managed a firm for only three to five years, there was no longer any incentive to make long-term investments or even to maintain the stock of fixed investments. It was far more profitable to plunder state-owned enterprises as thoroughly as possible and enrich themselves. By the early 1990s, as a result, 40% of state-owned enterprises had been so depleted that they were recording losses.³⁹ Second, this automatically created a class in China that had been abolished by the revolution: a capitalist class that gained significant control over still state-owned means of production and privately appropriated a large portion of surplus product in the form of profit. By the second half of the 1980s, the Chinese social order had thus entered a transitional phase – these were the years of the shift from socialism to capitalism.

The qualitative leap into capitalism was completed in the early 1990s. Following a series of influential speeches by Deng Xiaoping emphasizing the importance of the market for economic development and after the 14th Party Congress of the CCP enshrined the goal of the “socialist market economy”, the focus of the “reform and opening-up policy” shifted. Whereas previously the emphasis had been on changes to enterprise management, state ownership of the means of production now came directly under attack. The opening of the Shanghai and Shenzhen stock exchanges enabled state-owned enterprises to go public and thus sell shares to private investors.⁴⁰ Listing on the stock market meant that these enterprises were, from that point forward, subject to the imperative of distributing returns and were thus primarily oriented toward profitability criteria.

In 1978, when Deng Xiaoping assumed leadership of the CCP, 77% of industrial production was accounted for by state-owned enterprises, while the remaining 23% was attributed to collective enterprises, which, according to the law, belonged to the workers on site. This changed drastically in the 1980s and 1990s. By 1996, the share of state-owned enterprises had already fallen sharply to 33%, with the remainder divided among collective enterprises (36%), which by then mostly represented a disguised form of private enterprise, official private companies (19%), and foreign enterprises (12%).⁴¹ Between 1996 and 2006, the privatization of state-owned enterprises was further accelerated: their number was halved, and approximately 30-40 million workers were laid off. However, privatization also affected those enterprises that continued to be listed in statistics as state-owned. This is because these companies were now granted the right to sell shares of the enterprise to investors.⁴²

In the 2000s, the focus shifted to the reform of the remaining large state-owned enterprises. The smaller and strategically less important of these enterprises were transferred to local and regional governments. Large enterprises deemed strategically important remained in the hands of the central state, which in 2003 created the SASAC (State-owned Assets Supervision and Administration Commission) for this purpose. The SASAC reports to the State Council, that is, the government, and acts as the central state shareholder in state-owned enterprises. At the same time, it is responsible for overseeing a selected group of large state-owned enterprises. When the SASAC was founded, this included 189 „central state-owned enterprises.“⁴³

The privatization processes in the large state-owned enterprises no longer occur today at the same rapid pace as around 20 years ago, which indicates a policy shift by the Chinese leadership: unlike in the 1990s and early 2000s, the motto is no longer to sell off all state property to private investors as quickly as possible. Instead, both state and private ownership of the means of production are now recognized by the government and party leadership as legitimate components of the system.

In 2013, the CCP Central Committee decided to redefine or elevate the role of the market in the conception of the Chinese economic system. Until then, official statements had mentioned that the market should play a “basic”role in the allocation of resources to branches of the national economy. Since then, it has been stated that the market plays the “decisive” role in the Chinese economy.⁴⁴

In the same year, the National People’s Congress, that is, China’s parliament, approved a new wave of state-owned enterprise reforms: “For competitive sectors, the instruction was to ‘steadily promote the mixed ownership of state-owned enterprises and ensure that both state and non-state capital participate in the operations of the respective state-owned enterprises,’ while for strategic sectors, ‘state-owned enterprises in the respective sectors should remain in state hands, while encouraging participation by non-state parties.’”⁴⁵

In the following years, further major privatizations took place: for example, in 2017, the second-largest telecommunications company, China Unicom, sold 35% of its shares on the Shanghai Stock Exchange to a group of private and state investors. As a result, the state holding company, which until then held 63% of the shares in the company, fell to 37%. This is particularly significant because the telecommunications sector had previously been considered a strategic sector under strict state control.⁴⁶ A bourgeois study accordingly expressed its satisfaction: “It is a promising trend that more private capital is being allowed into strategic and pillar industries, as this introduces more competition and leverages the technical, management, and strategy know-how of private enterprises.”⁴⁷

At this point, it should also be mentioned that countertrends existed: the state simultaneously bought into private companies or even took them over completely, primarily in the form of state bailout packages for bankrupt firms.⁴⁸ Such examples are often cited to argue that the Chinese state is strengthening its control over the economy – either by economic liberals, who paint the “specter” of a return to China’s planned economy, or by Dengists, who use this to demonstrate a socialist orientation and therefore evaluate these measures positively. As has already been shown, however, the overall trend clearly continues in the direction of strengthening the private sector relative to the state sector, and not in the opposite direction.

With the new directive of 2013, the CCP Central Committee and the State Council also implemented a division of state-owned enterprises into “public” and “commercial” categories. The “public” enterprises are those responsible for the provision of essential goods and in which the state intends to retain decisive influence. These enterprises are therefore to remain subject to political decisions, although they are also simultaneously directed toward cost reduction and profit maximization. The “commercial” category, on the other hand, is to be comprehensively exposed to market competition and focus primarily on generating profits.⁴⁹

Another reform of the management of state-owned enterprises was adopted in 2014. This reform, in various forms, aimed to transform the state from a direct administrator of companies into a manager of securities for these companies, to give state-owned enterprises more freedom in appointing their leadership, and to advance the privatization or partial privatization of some state-owned enterprises by having the state sell part of its shares to private investors.⁵⁰

In 2019, a new law on foreign direct investments made it easier for foreign capital to flow into the Chinese economy. Until then, foreign investors in many industries had been required to establish joint ventures with Chinese companies. This law exempted a range of additional industries from the regulation and thus opened them up for foreign investments.⁵¹

In July 2023, the CCP Central Committee, together with the government, published a key document on the expansion of the private sector. It stated: “To resolutely resist and immediately refute false statements and actions that undermine or weaken the fundamental socialist economic system, that negate or downplay the private economy;” “to support private economic actors in playing a greater role in international economic activities and organizations;” “to encourage various levels of government departments to consult outstanding entrepreneurs and utilize their role in the formulation and evaluation of policies, plans, and standards related to enterprises;” and “to prudently recommend outstanding private economic professionals as candidates for representatives of the People’s Congress at all levels and as members of the CPPCC⁵², with the All-China Federation of Industry and Commerce playing a leading role as the main channel for the orderly political participation of private economic professionals.”⁵³

In summary, the document includes:

1. A clear commitment to expanding the role of the private sector in Chinese capitalism and a fight against still-existing viewpoints that seek to diminish this role.
2. The strengthening of international economic diplomacy by Chinese capitalists with the aim of better global representation of the interests of Chinese monopolies.
3. The increased direct involvement of capitalists in the drafting of laws and political measures.
4. A guaranteed presence of capitalists in leading state organs.

We will examine some of these points more closely in the following chapters, but this statement already provides a preview of what to expect there.

The continued and deepened capitalist reforms since Xi Jinping assumed the presidency in 2013 also refute the myth, popular in some parts of the communist movement and propagated by certain bourgeois media, that China under Xi Jinping is once again turning towards a socialist orientation. But more on that later.

What Function Do State-Owned Enterprises Serve?
The continued importance of state-owned enterprises in a predominantly private economy indicates that state-owned enterprises in the Chinese economy perform three main functions:

First, they are meant to provide infrastructure and essential services that increase social and political stability, but most importantly, that can also be made available for the accumulation of private capital. Thus, private capitalism in China can rely, for example, on a well-developed transport and communications network as well as cheap energy, which represents a decisive advantage in international location competition.⁵⁴

Second, state-owned enterprises are also tasked with accumulating capital themselves and being developed into internationally competitive monopoly corporations.

Third, and connected to the first two functions, state-owned enterprises are also supposed to expand markets internationally and ensure the supply of raw materials for the growing capitalist economy. For example, under the Belt and Road Initiative, loans from state banks, infrastructure projects (often carried out by Chinese state-owned enterprises), and resource extraction in other countries are closely interconnected.

All three functions are not unusual for capitalist countries. There are examples in almost all economies of states retaining certain enterprises because privatizing them can have harmful macroeconomic consequences. This particularly applies to infrastructure and communications companies (telecommunications, railways, water, and power supply), but also, for example, to the extraction of certain raw materials.

As for the second function, it is true that in most developed capitalist countries, privately owned monopolies hold a dominant position in the economy and in capital export. Nevertheless, the targeted development of “national champions”, that is, internationally competitive top corporations in (majority) state ownership or with massive state support, was for decades central to the economic strategies of other East Asian countries such as South Korea and Japan, but also France.

An example of how internationally leading monopoly corporations emerge under state guidance is the field of artificial intelligence. In the multi-stage “Plan for the Development of a New Generation of Artificial Intelligence” from 2017, the Chinese government stated: “By 2030, China’s AI theories, technologies, and applications should have reached a globally leading level, making China the world’s primary AI innovation center, achieving visible results regarding applications in the fields of intelligent economy and intelligent society, and laying an important foundation for a leading innovation-driven nation and economic power.” This is to be achieved through a systematic policy of technological development, the establishment of large internet corporations, and the acceleration of “the creation of globally leading AI enterprises and brands in advantageous areas such as unmanned aviation, speech recognition, pattern recognition (…) smart robots, smart cars, wearable equipment, virtual reality, etc.”⁵⁵

To clarify the comparison with France: in the post-war period, the model of “planification”, that is, a planned capitalism, was created there, in which the central state guided economic development by providing targeted incentives for companies to strengthen the position of French capital in competition as part of a national economic development strategy. This included, in particular, the nationalization of many key industries and banks and the targeted development of so-called “national champions”, i.e., predominantly state-owned enterprises that were meant to achieve global competitiveness under the protective hand of the state.⁵⁶ The economic system and policies in France at that time shared significant similarities with contemporary Chinese capitalism: indicative planning through incentives, state ownership of the financial system and the largest industrial corporations, and a targeted industrialization policy supported by central bank monetary policies aimed at promoting growth. However, no one would have thought to attribute a “socialist” character to this policy in France. On the contrary, it was primarily pursued under the conservative presidents Charles de Gaulle and Georges Pompidou, and France was unquestionably regarded as a capitalist country and part of the anti-communist Western alliance system.

What are the reasons why state-owned enterprises can play an important role even in capitalist countries? In the monopolistic stage of capitalism, in most economic sectors – and in all medium- and high-technology industries – ultimately only monopolies are competitive, since only monopoly enterprises can raise sufficient financial resources to make the necessary investments. Moreover, transnational investment, that is, capital export, can generally only be carried out by monopoly corporations. Therefore, China’s rise to world power, particularly in the economic sphere, is only possible on the basis of a massive concentration and centralization of capital.

And this strategy is successful: while in 2000, only nine Chinese state-owned enterprises were among the 500 largest companies on the Fortune Global 500 list, by 2017 there were already 75.⁵⁷ By 2023, the number of Chinese companies among the 500 largest had risen to 135.

The “Belt and Road Initiative” (BRI), the ambitious project to promote Chinese goods and capital exports, also primarily serves the monopolies or is implemented by them (see Chapter 5). It is therefore not surprising that the state is actively driving the centralization of capital: “To support the BRI and the ‘Going-out’ initiatives of state-owned enterprises, mergers to create large ‘national champions’ will help provide sufficient economic resources for mergers and acquisitions abroad as well as for research and development (R&D). The mergers will also help avoid the loss of financial resources due to price competition between state-owned enterprises in the international market.”⁵⁸

In the 2010s, the SASAC implemented a targeted policy of creating large corporations through mergers among the largest state-owned enterprises under its supervision, and in the six years between 2012 and 2018 alone, it oversaw mergers involving 20 major state corporations.⁵⁹

On the Character of State-Owned Enterprises in Contemporary China
Do the state-owned enterprises, which still account for a large share of China’s economic output, today represent a “socialist sector” within the Chinese economy? This is often claimed by propagandists of Chinese “socialism.” However, this is a fundamentally incorrect understanding of the role of these state-owned enterprises.

Fundamentally, it is crucial to note that socialism is not the same as state ownership of the means of production. Rather, socialism as a mode of production entails the elimination of capitalist laws and the organization of production according to the binding directives of central planning aimed at meeting societal needs. Naturally, this requires the nationalization of the means of production, but above all, it means that investment and production decisions of state enterprises are made in accordance with planning directives.

The character of an individual enterprise cannot be determined independently of the character of the economy as a whole and the economic laws prevailing within it: a state-owned enterprise in an economy functioning under capitalist laws and regulated by a bourgeois state cannot have a socialist character, because the state that owns the enterprises is a state of the bourgeoisie and accordingly uses state enterprises to secure the capitalist overall order and provide services for the accumulation of private capital. State ownership of the means of production is thus entirely compatible with a capitalist economy and, as has already been shown, is not unusual. For example, in Germany, Deutsche Bahn and the Kreditanstalt für Wiederaufbau remain state-owned enterprises to this day.

Friedrich Engels already pointed this out: “The more productive forces it (i.e., the state) takes into its ownership, the more it becomes the real aggregate capitalist, the more it exploits its citizens.”⁶⁰ And Lenin also stated: “In the era of finance capital, private and state monopolies intertwine, and both, in reality, are merely links in the chain of imperialist struggle between the largest monopolists for the division of the world.”⁶¹ The fact that an enterprise is state-owned, therefore, does not in itself allow any conclusions to be drawn about its social character.

The state-owned enterprises in China, in any case, have the typical form of capitalist state enterprises within a capitalist economy: as has already been shown, they serve the accumulation of capital in private hands. Moreover, they themselves are structured according to the same fundamental principles as private enterprises. It should be emphasized that in China, “political decision-makers as well as owners of state or collective enterprises can be understood in their economic behavior as analogous to private owners. What is decisive is not their legal status but their (economic) function.”⁶²

The budgets of state-owned enterprises are formally and actually separated from the state budget under today’s Chinese corporate law. This has turned them into independent economic entities, whose activities are no longer directly controlled by the state and which no longer pay fixed contributions to the state but instead operate on their own account and are taxed by the state like any other enterprise.⁶³ The “soft budget constraints” frequently criticized by liberal economists⁶⁴ in socialist planned economies – meaning that a socialist enterprise would not simply go bankrupt in the event of financial losses but would be bailed out by the state – no longer exist in today’s China. The enterprises operate based on profitability criteria, and the state is often willing to let them fail in the event of losses.⁶⁵ If a state-owned enterprise becomes insolvent, the question arises as to who bears the burden of the bankruptcy. In China, the practice has become established to prioritize the interests of the company’s creditors over those of the workers – debts to banks must be paid first, and only then are compensations for lost jobs considered.⁶⁶

The industrial enterprises that were once fully controlled by the state were either fully privatized or partially privatized in the 1990s and 2000s. Even companies that are still officially classified as state-owned enterprises have sold a significant portion of their capital to private capitalists. By 2003, the share of stocks held by the state in state-owned enterprises averaged only 46.6%. By 2017, this had fallen to 38.3%.⁶⁷ However, a state share below 50% does not necessarily mean that the state gives up its controlling influence over the enterprise: first, because the share of a company’s stock does not always correspond to the share of voting rights; second, because it is possible to maintain control through pyramid structures with less than 50% of the capital.⁶⁸ Since the Chinese state explicitly aims to retain control over the state-owned economic sector, it can be assumed that these mechanisms are frequently employed. Moreover, the state appears to want to counteract the tendency for state revenues to erode gradually due to the ongoing partial privatization of state corporations. In 2015, it was decided to increase the share of profits that state-owned enterprises must pay to the state from 15% to 30%.⁶⁹ Specifically, this means that state-owned enterprises must now transfer to the state a portion of their profits, which formally always belonged to the state but had previously been available to them for financing investments. Nevertheless, the trend described above clearly shows a continuous transfer of ownership of the means of production – and therefore also the claims to profit – from state to private hands.

Only a few large enterprises, primarily in the infrastructure sector, are still directly financed by the state in China. Most state-owned enterprises are listed on the stock exchange, like private companies, and are therefore directly subject to the pressure to distribute returns to shareholders.⁷⁰ These state-owned enterprises, which represent the vast majority of Chinese state-owned enterprises, thus operate based on the criterion of profit and the unrestricted accumulation of capital. In 2017, Xi Jinping declared that 90% of state-owned corporations had already been restructured into joint-stock companies and that the remaining 10% would follow.⁷¹ As a result, the entire state-owned economic sector in China takes on the typical form of monopolistic finance capital, where an industrial corporation functions as a financial group and corporate financing is conducted through the equity participation system.

As a result of these reforms, the large state corporations have become largely autonomous enterprises. While their management remains accountable to state authorities, it faces almost no restrictions in its business decision-making. Financially, too, state corporations are independent capitalist enterprises. By the end of 2017, only 6% of the financial resources used by state-owned enterprises to finance investments came from the state.⁷²

Moreover, the state deliberately puts state enterprises in competition with one another. From the state’s perspective, a situation in which a single state enterprise dominates the market in a particular industry is to be avoided. Therefore, even in industries where the state is absolutely dominant (such as sensitive industries like defense), there are always two or more companies in China that compete against each other.⁷³ In most industries, however, state enterprises are already directly exposed to competition from Chinese and foreign private companies. Similarly, provinces are deliberately placed in competition with one another: provincial governments compete for investments and accordingly try to outdo each other by offering favorable investment conditions.

Economic Planning in Chinese Capitalism
Why does the Chinese state continue to concentrate a significant portion of industry, infrastructure, and services in state hands?

This has little to do with the state still pursuing socialist development. Rather, the substantial share of state enterprises is a cornerstone of the Chinese government’s capitalist development strategy. Various studies have shown that, contrary to the beliefs of liberal economists, state enterprises in China contribute positively to capital accumulation by being able, with state assistance, to raise the necessary capital for strategic investments more quickly and by providing private capital with various intermediate products and services.⁷⁴ They also enable the state to guide the development of the capitalist economy more systematically according to a long-term plan.

This macroeconomic management of economic development is also fundamentally pursued in other capitalist countries, albeit in a much more restrained form in Western European and North American countries today. The similarities between French “planification” in the 1960s and 1970s and the Chinese planning system have already been noted. In China, macroeconomic management has been particularly emphasized since the mid-2000s under the government of Hu Jintao and Wen Jiabao, whereas in the 10-15 years prior, under the leadership of Jiang Zemin, the focus of economic policy was clearly on privatization and the liberalization of ever more sectors of the economy.

However, the economic management practiced by the Chinese state has a fundamentally different character from socialist economic planning. In a socialist economy, planning goals, oriented toward societal needs, are imposed on collectivized enterprises. Historically, there have been varying degrees of autonomy for enterprises, depending on how many planning targets were set as binding. In some cases, enterprises had leeway in deciding how and to what extent these planning goals should be fulfilled. Fundamentally, however, planning goals in a socialist planned economy have a binding character, as the enterprise is not an independently acting unit, as under capitalist conditions, but rather an executive organ of society, that is, of the collective of producers.

In China, by contrast, binding planning goals are generally no longer issued for enterprises. Such imperative planning with mandatory objectives primarily occurs in large state infrastructure projects, where the state aims for a very specific project outcome. Outside of these few selected sectors, the state only plays a coordinating role, even with state-owned enterprises, and does not issue binding directives. This coordination takes two forms: either through contractual agreements between the central government and the responsible provincial governments or with enterprises, meaning agreements that require mutual consent. Alternatively, it takes the form of indicative (rather than imperative) guidance, in which instead of directives, incentives (e.g., tax benefits for certain investments) are provided.

To this end, state-owned enterprises are overseen by the SASAC. This is, of course, not a central planning authority like the GOSPLAN in the Soviet Union but rather an instrument intended to ensure a rough steering of the economic development of the state sector in the interest of maximizing economic growth. Another instrument aimed at ensuring political loyalty of enterprise management to the state and its strategic goals is the establishment of party groups within enterprises, which also include management.

The SASAC is by no means an all-powerful authority capable of precise economic planning and control, if only because the managerial and political autonomy of state-owned corporations is far too great for that. “Many of the companies it oversees are massive conglomerates that control large amounts of resources and therefore represent power centers in their own right, which are not easy to control. While it often appoints leadership personnel for the enterprises formally under its supervision, in conjunction with the CCP Central Committee’s Organization Department, it cannot override their business orientations. For example, starting in 2010, efforts were made to partially extract the high profits in the state enterprise sector through increased taxes. However, this has proven difficult for the SASAC, as large state conglomerates have successfully sought to circumvent the new regulations. This situation also calls into question the sometimes-mystified assumptions of comprehensive party control. The fact that the CCP can appoint and dismiss leadership personnel does not negate the particularistic business interests and practices of enterprises. Allegedly, there are now so-called party groups in 420,000 companies. However, it is doubtful that these constitute effective instruments for coherent macroeconomic control.”⁷⁵ If the increased presence of the “communist” party in the economy is seen as evidence of a gradual return to socialist central planning, this misinterprets the purpose and character of these party groups.

The question of market or planning – that is, whether capitalist or socialist production relations dominate in the Chinese economy – has also already been (accurately) answered by the CCP itself. As previously explained, since 2013, it has been the official policy of the CCP that in “socialism with Chinese characteristics,” market laws dominate, meaning the blind operation of the law of value plays the determining role.

The Financial System
A developed capitalism, and especially a monopolistic capitalism, is not possible without a developed financial system, that is, without a capital market. Or put differently: the development of capitalism has always and everywhere led to the development of a capital market and must do so. Without a mechanism to facilitate the centralization of financial resources required for all major investments, as well as to allow the smooth flow of capital from one sector to another, private property would be too narrow a constraint to permit the development of capitalism beyond its embryonic stage. This ever-closer intertwining of the cycles of industrial, commercial, and banking capital, which Lenin referred to as the emergence of finance capital, is a fundamental characteristic of any developed capitalism. Therefore, the process of establishing capitalist relations in China required the establishment of a market for business loans at an early stage, as the township and village enterprises (TVEs) and increasingly autonomous enterprises in urban areas (which were no longer financed by the state) became increasingly reliant on credit to finance their operations.⁷⁶

According to its strategy of state-guided capitalism, the Chinese government has imposed clear restrictions on the development of the financial market. The financial system is relatively insulated from the global financial system through various regulations and entry barriers and primarily serves to promote and steer economic development and industrialization through targeted lending.⁷⁷

Despite these restrictions, there is a stock market via exchanges, a bond market, and a market for bank loans, with the financing of investments primarily taking place through the latter.⁷⁸ The Chinese financial system can be divided into three segments:

First, the banking system, which remains heavily dominated by the state, consists of central state-owned commercial banks, local banks and credit cooperatives, and, of course, the People’s Bank of China, the Chinese central bank. The four largest banks in China are also the four largest banks in the world, known in the West by their English names. These include the world’s largest commercial bank, the Industrial and Commercial Bank of China (ICBC), the China Construction Bank (CCB), the Agricultural Bank of China (AgBank), and the Bank of China, which operated as the central bank until 1980 and is now also a commercial bank.

The ten largest Chinese banks collectively hold assets of $28.2 trillion in their balance sheets, which is more than the gross domestic product of the United States. Of course, it should be noted that this capital is offset by liabilities (i.e., obligations they must meet). Nevertheless, this statistic provides an idea of the scale at which Chinese state banks manage capital.

Table 1: The Ten Largest Banks in China

ranking of the world’s largest banks	name of the bank	Assets in billion US$
1	Industrial & Commercial Bank of China	5.537
2	China Construction Bank	4.762
3	Agricultural Bank of China	4.576
4	Bank of China	4.207
14	Postal Savings Bank of China	1.982
18	Bank of Communications	1.836
25	China Merchants Bank	1.456
27	Industrial Bank	1.345
28	China CITIC Bank	1.266
29	Shanghai Pudong Development Bank	1.251

Source: Yuzo Yamaguchi et al. 2022: The world’s 100 largest banks, 2022, Standard & Poor’s, online: https://www.spglobal.com/marketintelligence/en/news-insights/latest-news-headlines/the-world-s-100-largest-banks-2022-69651785, last access 23.5.2023.

The second segment of the financial system is the capital market, which includes the trading of securities and stocks. However, most companies in China are still not listed on the stock exchange, as they predominantly finance themselves through loans. Primarily large enterprises operate on the stock market, including many state-owned enterprises. The stock exchanges are thus primarily an instrument of the government to advance the gradual privatization of state-owned enterprises.

The third segment is an informal credit system, through which smaller and medium-sized enterprises, which often struggle to obtain loans from major banks, can secure credit. This primarily requires good relationships and an appropriate business reputation.⁷⁹

In the medium and long term, the Chinese government faces a dilemma regarding the financial market and particularly its currency policy: to continue China’s rise within the capitalist world system and to become the dominant economic power on the planet, Chinese capital must undermine and replace the dominance of U.S. capital in financial markets and the U.S. dollar as the international reserve and reference currency. However, this inevitably requires a much deeper integration of Chinese capitalism into the international financial market and the opening of the full spectrum of financial operations to Chinese financial capital. This is precisely what the Chinese government has so far sought to avoid, as it would also mean making the Chinese economy more vulnerable to international capitalist crises and relinquishing the state’s economic management, which has so far been a key foundation of successful capital accumulation.

The Chinese currency, the Renminbi (RMB), is still relatively underutilized in international payment transactions, given China’s economic weight. The strict regulation of the Chinese financial system partly hinders the internationalization of the Renminbi, as it reduces a currency’s attractiveness to investors when its free use as capital is restricted. A strengthening of the Renminbi and a serious attempt to position it as a global challenger to the U.S. dollar would require deliberately increasing the external value of the Chinese currency. However, this contradicts both the interests of Chinese export capital, which benefits significantly from the Renminbi’s persistently low exchange rate, and the government’s plans to strengthen domestic demand (and potentially inflation) through wage increases.⁸⁰ These conflicting interests explain why the Chinese government has, on the one hand, repeatedly taken steps in recent years to expand the international use of the Chinese currency and open it further to international financial markets, while, on the other hand, it avoids full integration into the capitalist world system in these areas.

Initial efforts to internationalize the Renminbi by easing capital controls in the 1990s were halted following the so-called “Asian crisis” of the late 1990s, as the Chinese government feared becoming vulnerable to crises in other countries due to deeper integration into the international financial market.⁸¹ Since then, the internationalization of the Renminbi has been advanced in other ways, for example, by establishing RMB-based trading platforms, opening foreign exchange trading between Chinese banks, incorporating the use of the RMB into bilateral trade agreements and investment treaties, and including the RMB in the IMF’s basket of currencies. China is thus attempting a balancing act between, on the one hand, further integrating its capital and currency into international capital flows and, on the other hand, maintaining protective mechanisms for the Chinese financial system.⁸² The goal of the Chinese government is, therefore, to develop an efficient financial system to promote the accumulation of capital in China and its expansion beyond national borders while also preventing rival capitalist centers from gaining control over critical parts of the Chinese economy.

Ownership of Land
The property rights to land will also be briefly addressed here. Apologists for Chinese capitalism often point out that land in China still belongs to the state, which they see as evidence of the socialist nature of the economic system. Formally, this is indeed correct: according to the Chinese Constitution, land still belongs to the state. However, it is easy to see that in a capitalist economy, land must also effectively become a commodity – after all, companies need somewhere to build their factories and office buildings, and for firms to compete for the best plots of land, these must be tradable on a real estate market. In practice, it is therefore also the case in China that land has long been privatized. While a capitalist cannot acquire legal ownership of a plot of land, they can purchase a usage right for a fee, which they can also resell or pass on to others.⁸³ This arrangement ultimately reserves for the state a theoretical right of objection, which it could also maintain through other means. After all, even in Western capitalist countries, the use of land is subject to regulations, such as obtaining building permits. At the same time, the state has removed all barriers to the development of a fully-fledged capitalist real estate market: the Chinese real estate market was larger than that of the United States in 2016, making it the largest in the world.⁸⁴

b. Labor Becomes a Commodity: The Chinese Working Class

A society can only be called capitalist if labor power is a commodity. Alongside the privatization and abolition of the planned economy, the third major economic change brought about by the “reforms” since 1978/79 was precisely this: the transformation of labor power into a commodity, or the creation of a labor market.

Labor Power Becomes a Commodity
Under the socialist system in China, most laborers were either part of agricultural communes, within which commodity and monetary relationships were largely abolished, or permanently employed in state-owned enterprises. They were not forced to sell their labor power to entrepreneurs to earn their livelihood. Employment was lifelong and operated within an economic system where no surplus value was produced and appropriated, but rather a centrally planned economy determined production and distribution based on the needs of society or the working people. Employment in a state enterprise or agricultural commune came with extensive social benefits for the worker and their family. Employment in socialist enterprises and work in communes were therefore not forms of wage labor, at least not in the sense the term is used in capitalist economies, but rather the means by which individuals contributed to societal production and, in return, received their share of the total societal product.

This secure employment was abolished in 1984, and enterprises were instructed to select workers based on performance criteria and, if necessary, to dismiss them.⁸⁵ The transition to a capitalist economy was accompanied by a massive wave of layoffs. In the 1990s, an estimated 50 million workers were laid off from state-owned enterprises, and another 18 million were transferred to other firms where they lost the social benefits associated with state enterprises. Employment in enterprises controlled by the central state fell overall during the decade from 76 million to 28 million people.⁸⁶

The creation of a class of wage laborers was further fueled by a second source: the peasantry. Since the beginning of capitalist reforms, a form of primitive accumulation has taken place in rural China. Although the land formally remains state-owned, it is effectively used privately. In the 1990s and 2000s, land owned by peasants fell victim to a massive wave of expropriations, as land was acquired to meet the growing space demands of cities and industries, as well as for real estate speculation. According to one estimate, by 2006, a total of 70 million peasants had lost their land, which was purchased by local governments. The compensation they received was generally minimal, estimated to be between 1% and 10% of the value that buyers paid to local governments for the land. Thus, on one side of the expropriation of peasants stood the enrichment of capitalists, local government officials, and local state institutions.⁸⁷

The number of people employed in agriculture decreased from 389 million in 1990 to 219 million in 2014. These individuals migrated to villages and, above all, cities as part of the new working class. The number of rural workers rose during the same period from 73 million to 108 million. Employment in private enterprises in urban areas increased from 600,000 in 1990 to 76 million in 2014. Additionally, there are workers in so-called “urban units,” which include both state-owned and “collective” enterprises, the latter being, in practice, often private companies. The number of workers employed in these enterprises increased during this period from 118 million to 136 million. The informal sector, which largely functions as an industrial reserve army for capital and leaves those involved without any social security, exploded between 1990 and 2010 from 23 million to 111 million people.⁸⁸ The urban working class, which made up only 6% of all employed people in China in 1952, rose to 21% by 1978 and reached 33% in 2014. Self-employed entrepreneurs, who had been nearly nonexistent during the socialist phase after 1956, accounted for 14% of the working population in 2014. ⁸⁹

“Collective” enterprises, which were partially private in practice and played a key role during the transition to capitalism, particularly in rural areas, now play only a marginal role. For example, in 2019, 145.7 million workers in urban China were employed by private companies, 54.7 million by state-owned enterprises, and only 3 million by so-called “collective” enterprises. The trend here is also clear: in 2011, private companies and state-owned enterprises were still almost equal in employment numbers, and employment in collective enterprises, at about 6 million people, was double what it would be just eight years later.⁹⁰

The Chinese working class is deeply divided by the household registration system (“hukou”). So-called migrant workers, who migrate from rural areas to cities for wage labor but lack permanent residency permits in the city, have far worse or even no access to numerous social services such as public housing, education, healthcare, and pension benefits.⁹¹ Of the 459 million wage workers in urban areas (out of 733.5 million employed people in China overall), nearly 300 million were such internal migrants in 2022, making up about two-thirds of the total urban working class and about 40% of the working class overall.⁹² This fact alone significantly diminishes the often-praised improvements in the establishment of a social security system, as these achievements affect the working class very unequally, leaving a majority of urban workers excluded from many benefits.

As mentioned above, the transformation of labor power into a commodity, now traded on the market, also means that the working class is constantly subjected to the threat of unemployment. Particularly youth unemployment in urban areas is developing into an increasingly severe problem: in June 2023, over 21% of job-seeking urban residents aged 16 to 24 were unable to find a job. In response to this record, the government decided to stop publishing youth unemployment statistics in the future.⁹³ While the overall unemployment rate has been relatively moderate at around 4.5-5% in recent years, it is still not low given the country’s high economic growth.⁹⁴

Struggles of the Chinese Working Class
Where the contradiction between capital and labor exists or emerges, the struggle between the two classes also develops. Labor disputes and worker protests in China have been evolving dynamically for many years – accurately presenting this would require a separate, comprehensive investigation.

Until 2005, Chinese authorities published annual statistics on “mass incidents,” which, however, encompassed all kinds of occurrences and did not provide direct insights into their specific nature. Nevertheless, the trend indicates increasing contradictions within Chinese society. From 10,000 in 1996, they rose to 87,000 in 2005 and were estimated at 127,000 in 2008.⁹⁵

According to studies by the China Labour Bulletin, which tracks and analyzes labor disputes in China in detail, 1,706 strikes and worker protests were recorded across the country in 2018, and 1,385 in 2019. In 2020, the number dropped sharply to around 800 due to the Covid-19 pandemic but has since been on an upward trend again: in the first half of 2023, the number of strikes and worker protests was approximately back to the level of 2019. Numerous strikes occur in manufacturing, the construction sector, as well as in areas such as retail and taxi services. Among the most common causes are unpaid wages and dismissals, where companies use various tricks to avoid paying compensation to laid-off workers.⁹⁶

What Role Do Trade Unions Play in These Struggles?

The All-China Federation of Trade Unions (ACFTU) is the only legal trade union organization in China and has branches at all levels of the economic structure. Workers are typically organized in enterprise-level unions rather than by industry. In some ways, the ACFTU fulfills functions similar to those of trade unions in Western capitalist countries, such as supporting workers in labor disputes and negotiating collective agreements with capital. However, the unions do not organize militant actions against capital but instead participate in the management of enterprises and regulated conflict resolution.⁹⁷ “In specific labor disputes, the cooperative relationship with the enterprise takes precedence over a (conflictual) positioning on the side of the workers. Furthermore, not a few union officials use their position as a springboard for a corporate career or advancement to higher state positions.”⁹⁸

State-recognized unions are, in any case, not independent organizations of the working class but rather apparatuses of the state, which, as will be shown later, is by no means a workers’ state. In line with state policy, they primarily aim to promote economic growth and at most mediate between workers’ demands and the interests of capitalists, without challenging the capitalist order. In some cases, parts of the ACFTU have supported workers’ demands to a certain extent and halfheartedly. At the same time, there are numerous reports of employees articulating demands collectively, only for the responsible union to refuse to represent them.⁹⁹ For this reason, due to the lack of an organized representation of the proletariat’s interests in China, workers are forced to independently and without established organizational forms assert their interests against capital through militant actions.

Neither the “communist” party nor the “socialist” state act as allies of the struggling workers in class conflicts, let alone as the organizing and leading force of the working class, as would be the case with a genuinely communist party. Instead, they generally seek to resolve conflicts either by suppressing them or containing them through concessions.

State institutions “respond to social conflicts with a combination of concessions, mediation, promises, as well as threats and physical violence. Emerging protests are often addressed with compensations.”¹⁰⁰

As a result, protests and strikes, even when they violate laws, remain an effective method for workers to assert their demands and somewhat alleviate the pressure of exploitation. This has also contributed to significant wage growth in China.

“Hundreds of Millions Lifted Out of Poverty” – How Chinese Capitalism Is Glossed Over with Statistics

The growth in wages is often cited by defenders of Chinese capitalism as evidence of the “socialist” or at least worker-friendly character of China’s economic system. Indeed, it must be noted that nominal wages and salaries in China grew on average by about 10% annually between 2010 and 2022, reaching approximately 114,000 yuan in 2022, which equates to just under €14,500 per year.¹⁰¹ From this, inflation must be subtracted, which, however, was relatively low during the period studied at 2.34% per year.¹⁰² Real wages and salaries rose by a factor of approximately 2.4 between 2010 and 2022, meaning they more than doubled. However, these figures say nothing about how the increases were distributed across different social groups, particularly the working class – since the wage of a migrant worker in a factory is certainly far below 114,000 yuan per year, these figures also point to significant income inequality.

Closely related to this argument is the claim of poverty reduction in China. As the CCP and its defenders abroad proudly emphasize, China has “lifted nearly 800 million people out of poverty” over the past 40 years.¹⁰³ However, the validity of this figure is questionable: first and foremost, it does not refer, as is often claimed, to liberation “from poverty” but merely from “extreme poverty.” “Extreme poverty” is, however, a relatively arbitrary threshold used by the World Bank, defined since September 2022 as anyone who has less than $2.15 per day at their disposal. “Liberation from extreme poverty” thus means nothing more than earning more than $2.15 per day – it is obvious that even with $3 or $4 per day, one still lives in extreme misery. It is even possible for someone to be considered “lifted out of extreme poverty” according to the World Bank definition because their income has increased slightly, while in reality, they have become poorer due to rising local living costs. In China, this not only involves the increase in consumer prices but also the privatization of many essential services that were available to all Chinese during the socialist era. These services, such as higher education, healthcare, or public transportation, are now often only accessible for significant sums of money. The cost of living for a person who previously worked in the countryside and has now moved to a big city for work can have increased significantly – for example, due to the additional expenses for rent and public transportation to commute daily.

The comprehensive healthcare system built in rural areas before 1978, provided by people’s communes and enterprises, has been severely weakened by capitalist reforms, making it difficult in some remote villages to access medical care at all. Added to this is the dramatic collapse of social security: while workers were guaranteed lifetime employment in socialist enterprises, tens of millions of workers lost their jobs in the 1990s. These qualitative deteriorations in living standards are not captured by the statistical methods of the World Bank, which are more aimed at glossing over global poverty than truly measuring it. A study by development economists Andy Sumner and Eduardo Ortiz-Juarez instead uses a more realistic poverty threshold of $13 per day and classifies anyone earning less than this amount per day as extremely poor. According to this calculation, the number of extremely poor people in the world did not decrease between 1981 and 2019 but actually grew by 46%. In China, as of 2019, more than 800 million people (or 57% of the total population) still lived below the threshold of extreme poverty by this definition, making China the country with the second-largest number of extremely poor people in absolute terms (the first being India).¹⁰⁴

This is not to deny that, overall, consumption among the population in China has increased and that, if one measures living standards in this way, the living standards of relatively broad segments of the population and the working class have also risen. That is certainly the case. However, it would also be very surprising and difficult to explain if such massive economic growth over decades had not led to an increase in consumption among the working class as well. A realistic assessment, however, would need to contrast these changes with the numerous deteriorations resulting from the transition to capitalism: increasing work stress, social insecurity, loss of access to (free) healthcare and education, greater environmental pollution, and hierarchies and oppression in the workplace. In any case, the triumphalist rhetoric of liberal ideologues, who attribute the “Chinese poverty alleviation miracle” solely to the introduction of the “market economy,” is false and hypocritical. Even under the questionable assumption that economic growth would have been significantly lower under socialist conditions, the Chinese working class – meaning the vast majority of the Chinese people – would have benefited much more from socialist economic growth. Such growth would not have been marked by luxury yachts, expensive private cars, villas, or a real estate sector inflated by speculation. It would not have served the enrichment of a parasitic capitalist class, as is the case in today’s China. Instead, it would have been growth driven by the construction of hospitals, power lines, and roads to remote regions, as well as educational, cultural, and sports facilities for workers and peasants. It would have been economic growth not through the brutal exploitation of the working class but through the growth of shared societal wealth.

c. State, Party, and Bourgeoisie in China

A central argument of some proponents of Dengism is that while the Chinese economy may be predominantly capitalist, power at least remains firmly in the hands of the working class in the form of the proletarian state and the Communist Party. It is certainly true that Chinese capitalism exhibits some peculiarities due to its socialist past. However, the class character of a state can hardly be determined by simply adopting its self-description (“socialism,” “people’s republic”). Nor is it permissible for Marxists to accept a party as a communist party solely because it calls itself one. The next subchapter will deal with the worldview and programmatic goals of the CCP – which, of course, reflect the class character of the state. Here, the focus is on another aspect of this class character – let us examine which class in the Chinese state and through the ruling party in China organizes itself and its political rule. For if it were true that the state in China had a socialist character, then this state should also express the power of the working class.

In the previous chapter, we saw that the working class in China apparently cannot be in power – the Chinese working class is subjected to exploitation by capital, and its independent organization as a “class for itself” is suppressed by the state. It is evidently not a ruling class in China but a ruled one. In a capitalist country, this cannot be otherwise – the economic base and the political superstructure are necessarily interconnected, and the state must ensure the reproduction of capital. The state in capitalism is therefore a state of capital; it enforces the interests of the bourgeoisie against the working class, and the bourgeoisie organizes itself in and through the bourgeois state. The bourgeois state is the political form of the rule of the bourgeoisie. As we shall see, this is no different in China.

The Chinese Bourgeoisie
With the capitalist reforms initiated in 1978 after Mao’s death, a new capitalist class emerged in China. This class originally developed partly through high-ranking party officials or enterprise directors taking over enterprises during privatization. Another segment consisted of Chinese capitalists abroad (for example, from Hong Kong and Macao, then still British and Portuguese colonies, Taiwan, and other countries) who saw their chance to establish themselves in China as the socialist system was dissolving. Since then, another portion of the bourgeoisie has emerged through the founding of new enterprises, particularly in modern economic sectors such as microelectronics and online services.

Today, the Chinese capitalist class is among the largest and most powerful in the world. This is evident in the Forbes magazine ranking of the world’s richest people. According to the 2023 list, most billionaires are still from the United States, with a total of 735. However, China already ranks second with 495 billionaires, or 562 when including Hong Kong and Macao (particularly Hong Kong, as a hub of the Chinese bourgeoisie, should be included). India comes in third with 169 billionaires, followed by Germany and Russia in fourth and fifth place.¹⁰⁵ Another study even concludes that China already has 1,133 billionaires, significantly more than the United States, which, according to this study, has 716 billionaires.¹⁰⁶ The number of billionaires relative to the total population is, of course, lower in China due to its enormous population size. In 2018, China still ranked 20th in billionaire density, though Hong Kong was counted as a separate „country“ and ranked first.¹⁰⁷

A particular feature of the Chinese bourgeoisie is its entanglement with the state apparatus and the close interweaving of state and private capital, which is greater than in other capitalist countries. The largest private capitalists often have joint ventures with the state or are at least interconnected with other private capitalists who, in turn, are linked to the state. In 2019, approximately 65% of the 1,000 largest private capitalists had state participation in their enterprises, collectively accounting for over 100,000 members of the capitalist class, who together controlled an estimated 15% of total capital in China. The number of private capital owners with such economic ties to the state roughly tripled between 2000 and 2019.¹⁰⁸ This demonstrates that the Chinese state not only enabled the emergence of the newly formed bourgeoisie in the 1980s and 1990s but also continues to play an enormous and growing role in shaping the capitalist class today. Particularly, ascending to the uppermost echelons of the bourgeoisie in China is often only possible with the assistance of the state.

The Capitalists and the „Communist“ Party
How a powerful and extremely wealthy capitalist class can grow and thrive under the rule of a „communist“ party is only a mystery if one continues to consider the CCP a communist party. In reality, the party, though it already faced severe ideological problems and missteps in the decades following the revolution, fundamentally changed its character with the start of the capitalist „reform and opening-up“ policy. From a party that, despite its misorientations, still worked toward building a socialist society, it transformed into a party aligned with the capitalist path of development, becoming a useful instrument of rule for the capitalist-transformed Chinese state and, consequently, an apparatus of the bourgeoisie. The CCP is an apparatus of the bourgeoisie not only in its efforts to create favorable conditions for capital accumulation but also in providing individual capitalists with an effective means of establishing political connections and enhancing the success of their business ventures. The establishment of such a network of political connections and mutual favors to advance one’s career is a common practice in China to facilitate social mobility into or within the bourgeoisie. This practice is referred to by the Chinese term „guanxi.“ It is a historically evolved form of social behavior with roots predating the capitalist era, but it plays a crucial role in the self-organization of the bourgeoisie today.

A key condition for this was the 2001 decision by the CCP, under Jiang Zemin’s leadership, to lift the ban on capitalists becoming members of the party. This was justified by the distinction, previously emphasized by Mao, between „comprador capitalists“ serving foreign imperialism and „national“ or „patriotic“ capitalists who contributed to China’s rise and could therefore be allies of the CCP. In practice, capitalists had already joined the party before this reform, but the policy change led to an influx of entrepreneurs into the party. By 2006, 35% of private entrepreneurs were party members. This meant that the bourgeoisie, as a group, was significantly overrepresented in the CCP – at that time, only about 6% of the total population were party members.¹⁰⁹

Since then, many capitalists have taken advantage of this opportunity, as membership in the CCP signals loyalty to the state’s goals and, in return, offers numerous opportunities to better advance personal business interests within state apparatuses. Prominent leading members of the Chinese bourgeoisie, such as Jack Ma, founder of the online trading platform Alibaba; Ma Huateng („Pony Ma“), founder of the IT and video game conglomerate Tencent; Qin Yinglin, the „pig king“ and the world’s richest agricultural industrialist; and Liang Hua, chairman of Huawei, publicly present themselves as members of the CCP. A 2011 report found that over 90% of the 1,000 richest Chinese were members or officials of the CCP.¹¹⁰ According to the 2010 Hurun Rich List (the Chinese equivalent of Forbes Magazine), 12% of the 1,363 yuan billionaires at the time „held significant advisory government positions, providing them with a powerful platform in a business environment where official connections are important.“¹¹¹ A 2011 Forbes article lamented: „Almost all of China’s richest people have made their money in state-dominated sectors such as real estate and construction, natural resources, heavy industries, and telecommunications.“ It continued: „The problem with this state-driven approach is that entrepreneurs and other businesspeople need the support of the Party, or better yet, membership in the CCP, to advance.“¹¹²
Since then, extremely wealthy capitalists have also emerged in other industries where the state is less present, such as electronics, e-commerce, and software development. However, as the examples above show, many of them are also party members. These so-called „red capitalists,“ as they are sometimes called because of their supposedly „red“ party membership, are in reality not particularly „red“ in terms of their political orientation. In surveys, these capitalists cited economic advantages and connections to political decision-makers that party membership facilitates as the primary reasons for joining the party.¹¹³

Many of these capitalists with party membership are actively involved in shaping state policy. In 2023, 41 dollar billionaires were deputies in the National People’s Congress, China’s parliament, and another 40 billionaires were members of the Chinese People’s Political Consultative Conference (CPPCC). No other parliament in the world has so many billionaires. For example, Lei Jun, the founder of Xiaomi, one of the world’s leading smartphone manufacturers, is a deputy in the CPPCC. Liu Qingfeng, founder of iFlyTek, a leading company in speech recognition and artificial intelligence, is a deputy in the National People’s Congress. Ma Huateng, one of the richest people in the world, has since stepped down from parliament after ten years as a deputy.¹¹⁴

In the CCP leadership, there are also close family connections between party officials and monopoly capital. In 2012, The New York Times reported on how the close relatives of then Chinese Premier Wen Jiabao amassed enormous wealth during his tenure. According to the newspaper’s calculations, the family’s wealth, which included shares in banks, telecommunications companies, tourism firms, and infrastructure projects, amounted to an estimated $2.7 billion at the time.¹¹⁵ In 2017, Duan Weihong, a billionaire with close ties to Wen’s family, was arrested on corruption charges. Wen Jiabao himself sought to clear his name of corruption allegations and called for an investigation.¹¹⁶ However, the question raised was only whether Wen’s family had enriched itself illegally and whether Wen Jiabao himself was involved in a corruption scandal. The existence of the family’s billion-dollar fortune was not disputed. This reflects the CCP’s general stance on private wealth: it is not considered problematic that society is divided into classes, into rich and poor, into exploited and exploiters. It is only seen as a political issue if legal boundaries are no longer adhered to.

In 2012, another investigation found that Xi Jinping’s siblings also belonged to the upper echelons of the Chinese bourgeoisie. Their wealth at the time included investments of several hundred million dollars each in the mining company Jiangxi Rare Earth and the real estate company Yuanwei Group, totaling an estimated over $1 billion.¹¹⁷

Lobbying by the Bourgeoisie in China
In addition to the personal overlaps and informal connections between state and party officials on one side and capitalists on the other, legal lobbying is also an important tool in China, as it is throughout the capitalist world, by which capital ensures and steers the implementation of its interests through the state. The very fact that lobbying by capital in China essentially plays a similar role as in countries of the Western world once again highlights the capitalist class character of the so-called „socialism with Chinese characteristics.“

A political science article states: „Since the mid-1990s, national economic policy has been subjected to the influence of non-state interests, primarily in the business world. The industry interacts with the Chinese bureaucratic class on a daily basis at the local and national levels to shape policy to match its preferences.“¹¹⁸ Although the term „non-state interests“ is used here, it is more precise to generally refer to capital interests. Lobbying in China is conducted without significant distinction by state-owned enterprises, private Chinese enterprises, and foreign private capital groups.This demonstrates that state-owned firms fully act as capitalist enterprises with their own interests and compete both with one another and with private Chinese and foreign capital to assert their profit interests in state policy. Differences in behavior are less about ownership structure (state-owned, private Chinese, or private foreign) and more about size: as in other capitalist countries, monopoly corporations in China have far greater resources and closer ties to local and national governments than smaller companies.For instance, many large corporations have established their own lobbying departments, often staffed by former state and party officials who already possess personal contacts and understand the „rules of the game“ of the Chinese bourgeois state.¹¹⁹ As a result, the interests of monopolies disproportionately influence the Chinese state apparatus and its policies, as is the case in all bourgeois states under monopolistic capitalism, compared to those of non-monopolistic capital.

A study examining lobbying by state-owned, private Chinese, and foreign companies found the following results: Over 85% of the companies studied were present at legislative or administrative hearings. Ninety percent held press conferences, and even more disseminated their viewpoints through the media. Nearly all companies interacted at least once a year with central government agencies and local governments, while 82% interacted with the National People’s Congress. Almost 59% of Chinese private enterprises and 72% of foreign companies reported that the political influence of the industry had increased overall in the past three years. Nearly 70% agreed with the statement, „guanxi is the key to influencing public policy.“¹²⁰

Lobbying by capital in China is indeed successful. From the aforementioned study: „In certain sectors, such as energy, it seems that fundamental developments were determined less by a coherent government plan and more by companies that manipulated the government into implementing policies aligned with their interests.“¹²¹

A key institutionalized channel for private capital to advance its interests is the All-China Federation of Industry and Commerce (ACFIC). Another study examined all proposals submitted by the ACFIC to the Chinese People’s Political Consultative Conference (CPPCC) between 2009 and 2016. These included general demands to improve the business environment, such as the creation of new special economic zones, demands addressing the interests of the private sector in relation to state-owned capital, and demands concerning the interests of specific industries or individual companies.¹²² The annual CPPCC „attracts a great deal of attention from the media and the government. [Through ACFIC proposals] we have the opportunity to meet high-ranking government leaders, and the proposals can turn our demands into public affairs. Therefore, submitting proposals to the CPPCC is an effective platform to articulate our demands to the government.“ said a lobbyist for the internet monopoly Baidu.¹²³

Examples of Direct Influence on Public Policy by Business Associations
There are many examples of how business associations have directly influenced and shaped public policy. This was already evident in critical decisions such as the 2004 constitutional amendment guaranteeing private property and the drafting of the Property Law in 2007.¹²⁴ Here, two specific cases of policy influence are highlighted as examples (for more, see Huang/Chen 2020).

First, the case of the Chamber of Commerce for the Petroleum Industry (CCPI), which lobbied for years to dismantle the state monopoly in the oil sector. In 2011, the state energy administration’s response was still dismissive, but by 2012, after a renewed submission, it promised to take measures to resolve the conflict. In February 2013, the deputy director of the Oil and Gas Department of the National Energy Administration visited the CCPI to explore possibilities for an agreement. The CCPI’s secretary-general identified a trend: „In the past, we would have considered ourselves very lucky to receive any response. Nowadays, not only do ministries respond, but they also organize meetings with us if we find their responses unsatisfactory. At the meetings, they let us know what measures they will take, what they expect us to do, and why. Indeed, the ministry’s attitude has changed. Now they communicate with us about everything, including how proposals should be processed further.“¹²⁵ As a result of the CCPI’s renewed lobbying, restrictions on crude oil imports were first lifted, refining and sales operations within the three major state oil companies were separated, and finally, in 2015, direct crude oil imports by private companies were permitted – all measures that significantly weakened the state oil monopoly in favor of private capital.¹²⁶

A second significant example was the lobbying campaign by industry to influence the exchange rate policy of the Chinese central bank. Between 2003 and 2005, banks, some think tanks, and the central bank itself heavily advocated for an appreciation of the Renminbi’s exchange rate. In response to the „Asian crisis“ of 1997-1999, China had already significantly appreciated its currency. However, the manufacturing industry, which maintained strong connections, particularly with the local governments of the heavily export-oriented coastal provinces and with the influential then-Commerce Minister Bo Xilai, opposed the appreciation.¹²⁷ Behind this conflict were, of course, opposing interests of two groups of capital: while banks, whose financial capital is held in Yuan, benefit from an appreciation that increases the value of their capital on the global market, appreciation can be disadvantageous for industrial capital because it makes exports to other countries more expensive, thereby reducing their price competitiveness. In 2008, 41% of export companies surveyed in a study in China reported seeing the government’s exchange rate policy as the primary problem for their business model.¹²⁸ That same year, the export industry and the Commerce Ministry prevailed, and currency appreciations were halted.¹²⁹

In general, the above-cited study found that approximately 20% of collective proposals by the ACFIC were followed by the implementation of corresponding state policies.¹³⁰ At first glance, this percentage may seem to reflect a relatively low success rate for lobbying, but this is not the case. Often, capital lobbyists make relatively far-reaching demands on state agencies, which are initially rejected but serve to explore the boundaries of what is possible. A moderated or altered proposal can then be resubmitted with a higher likelihood of acceptance. In other cases, repeated submissions and patient public opinion shaping are necessary until the goal is eventually achieved.¹³¹ Finally, it is evident that not all demands by capital associations can be met, simply because they often (as in the case of exchange rate policy) conflict with the interests of other parts of capital, meaning the influence of one capitalist is limited by the power of their competitors.

Personal influence and connections between capital and high-ranking state officials are also crucial for advancing capital interests most directly. The ACFIC is therefore regularly led by the wealthiest and most influential Chinese capitalists. For instance, Li Shufu, vice-chairman of the ACFIC since 2017, was the tenth-richest person in China at the time and ranked 91st on Forbes’ global list. His predecessor, Li Yanhong, was the CEO of China’s largest search engine operator. Other high-ranking officials in the association, such as Xu Guanju, Chen Zhilie, and Wang Wenbiao, possess private wealth amounting to billions or hundreds of millions of US dollars. These major capitalists maintain close ties to the party leadership and government outside of the formal channels of the ACFIC. For example, Li Yanhong has often been seen accompanying Xi Jinping on state visits.¹³² The study concludes: „The close connections between powerful entrepreneurs and the party-state leadership enable them to successfully achieve what they want, even if the ACFIC declined to submit a collective proposal on their behalf.“¹³³ It further states: „The power of a wealthy entrepreneur does not only stem from their wealth but is also determined by their official position within the party-state system.“¹³⁴

Such influence through personal channels can also occur during institutionalized meetings between the CCP and non-party members, where proposals and perspectives from private capital are gathered. These meetings are very useful for directly asserting capital interests to the government and the party. As an ACFIC official explained in 2016: „At this year’s meeting between President Xi and non-party personnel, the ACFIC proposed cost reductions for businesses. Not long after, the government implemented cost-cutting policies, including eight measures to regulate the real estate market, five of which were designed and submitted by the ACFIC. Even some ministers may not have had such opportunities to meet with President Xi. However, the current chairman of the ACFIC had worked in Fujian for a long time and interacted with President Xi back then. President Xi is now willing to listen to his ideas.“¹³⁵

At this point, a few words should be said about a popular topic in Western bourgeois media: the „disappearing billionaires“ in China. It is regularly reported that some of the country’s wealthiest capitalists have „disappeared“ – a narrative seemingly intended, much like repeated reports of repression against separatists in Xinjiang and Tibet, to create the impression that rival China is a brutal, malicious, and „communist“ dictatorship against which the „democratic West“ must prepare militarily and otherwise. But what is really behind these reports? In most cases, these „disappeared“ billionaires reappear after some time. It is likely that some of them were detained for a limited period, possibly related to the government’s anti-corruption efforts.¹³⁶ This demonstrates that the state in China ensures that even individual members of the bourgeoisie adhere to legal frameworks – but it has nothing to do with action against the wealthy or the capitalist class as a whole, contrary to what Western media often suggest. Considering the hundreds of billionaires and even more multimillionaires in China who have amassed immense private wealth in a short time with the help of the state, the temporary detention of a handful of major capitalists for corruption certainly does not indicate a socialist agenda for the state and is significantly overstated in its importance.

These facts should overall sufficiently demonstrate the class character of the Chinese state. It is a state of the Chinese capitalist class. It does not represent the interests of individual capitalists but rather those of the bourgeoisie as a whole, with the monopoly bourgeoisie being structurally better positioned to assert its interests than the non-monopolistic bourgeoisie. The ruling party and state apparatus serve as hinges to connect the capitalist class with the state, incorporate its interests and perspectives directly into state policy, and unify the capitalist class behind a common overarching interest. The Chinese state actively fulfills its role as the representative of overall capital by organizing capital accumulation according to a comprehensive economic and societal development strategy, limiting the free movement of capital in the interest of this strategy, and retaining control over strategic sectors of the economy. Its nature as a bourgeois class state is ultimately expressed, as the following subchapter will show, in the dominant ideological guidelines that elevate successful development of productive forces under capitalist conditions to the nation’s highest goal.

d. Using Marx Quotes Against Marxism: The Ideology of the CCP

The Communist Party of China (CCP) continues to claim in its charter that its „highest ideal“ and „ultimate goal“ is to achieve communism.¹³⁷ However, the document does not explain what the party understands by this. Given the glaring contradiction between a thoroughly capitalist economy and the official commitment to communism, it is evident that the critical question is what the CCP means by socialism and communism.The understanding of socialism and communism represented by the CCP must be pieced together from various statements in official documents and speeches by its leaders, as it is (notably) nowhere explicitly outlined.

It is not surprising, nor particularly meaningful, that the CCP’s charter continues to uphold communism as its goal. After all, the party still carries the adjective „communist“ in its name and claims to follow in the tradition of the Chinese Revolution of 1949. Despite the capitalist restoration, the CCP’s historical narrative has always avoided a complete disavowal of Mao and the socialist past. Mao Zedong’s portrait still adorns the Gate of Heavenly Peace in Beijing and all Chinese banknotes. According to the charter, the so-called „Mao Zedong Thought“ remains part of the party’s ideological foundation. However, the party’s reference to this phase of Chinese history primarily ties to national liberation and China’s resurgence, initiated by the revolution, rather than the specific policies of the early CCP aimed at overcoming class society and building socialist relations.

The critical question, therefore, is not which symbols and historical traditions the CCP still adorns itself with today, but rather the actual character of its policies and programs. The party’s charter already provides an initial clue about its understanding of communism, repeatedly referring to communism as the party’s „highest ideal.“ This formulation, however, does not align with the understanding of scientific socialism but rather that of utopian socialism, which was criticized and overcome by Marx, Engels, and Lenin. According to scientific socialism – that is, Marxism-Leninism – communism is not an „ideal“ imagined by a few brilliant minds that society would do well to aspire to. Communism is a precisely defined mode of production, a way of organizing societal production based on specific property relations, namely, social ownership of the means of production. Without central planning of production and the direct societal allocation of products to consumers – a type of distribution where products never take on the character of commodities – there can be no talk of communist relations of production and distribution. The understanding of communism as a „highest ideal“ is fundamentally opposed to a revolutionary program for achieving communism, as it degrades communism into a moral value system that the party and its members are somehow (i.e., in an undefined way) expected to follow. Communism, however, can only be built consciously under the leadership of a revolutionary party that incorporates, generalizes, and continually updates the most advanced insights of Marxist science, not through adherence to values and ideals. The false designation of communism as an ideal means that the CCP does not need to justify its policies, which have nothing whatsoever to do with the conscious construction of communist social relations – after all, it is merely an ideal that one should somehow orient oneself towards and that might one day be realized, or perhaps not.

In its charter, the CCP outlines its ideological foundation as follows: „The Communist Party of China takes Marxism-Leninism, Mao Zedong Thought, Deng Xiaoping Theory, the Theory of the Three Represents, the Scientific Outlook on Development, and Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era as guidelines for its actions.“¹³⁸
It is immediately apparent that Marxism-Leninism does not stand alone as the party’s worldview, as would be the case for a genuinely communist party, but instead represents just one of many equally listed reference points. Moreover, according to the CCP’s interpretation, Marxism-Leninism merely reveals „the laws that govern the history of human society.“¹³⁹ What is missing in this definition is the fact that Marxism-Leninism is not merely a tool for analysis but primarily a means for the conscious transformation of the world toward overcoming classes and creating a society free from exploitation and class distinctions. That this is omitted is no accident, as the CCP does not overcome class contradictions in its policies but, on the contrary, exacerbates them.

In addition to Marxism-Leninism, „Mao Zedong Thought“ is mentioned and defined (also controversially, as discussed in Chapter 3a) as „the application of Marxism-Leninism in China.“ However, the actual programmatic line of the CCP draws on Mao Zedong’s ideas only very selectively, particularly those that can be used to ideologically justify the capitalist development program, such as his theory of „non-antagonistic contradictions“ and the „national bourgeoisie.“ The CCP’s programmatic direction is primarily shaped by the concepts listed afterward: the ideological positions of Deng Xiaoping, the so-called „Theory of the Three Represents,“ the „Scientific Outlook on Development,“ and „Xi Jinping Thought.“ The content of „Deng Xiaoping Theory“ and „Xi Jinping Thought“ will be examined in greater detail below.

The „Three Represents,“ introduced by former Party General Secretary Jiang Zemin and then exaggeratedly elevated by the CCP into a „theory,“ state nothing more than that the party should pursue the development of advanced productive forces, promote an advanced culture, and serve the interests of the majority of the Chinese people. Translated, this means nothing other than continuing the rapid capitalist economic growth, which the party considers to align with the interests of the majority of the people, while also fostering the development of a national culture. Jiang’s successor, Hu Jintao, made his own „contribution“ to the party’s ideology with the „Scientific Outlook on Development.“ This „scientific“ perspective is described as follows: „The Scientific Outlook on Development is a scientific theory consistent with Marxism-Leninism, Mao Zedong Thought, Deng Xiaoping Theory, and the Theory of the Three Represents, while also keeping pace with the times. It fully embodies the Marxist worldview and development methodology and represents a major achievement in adapting Marxism to the Chinese context. It is a crystallization of the collective wisdom of the Communist Party of China and a guiding ideology that must be upheld for the long term in developing socialism with Chinese characteristics.“¹⁴⁰
The only noteworthy aspect of these statements, whose substantive value is nearly zero, is the emphasis on „socialism with Chinese characteristics.“ This term, mentioned 28 times in the party’s charter, is not defined or explained at any point. Let us now examine what this term actually means.

The Goal of the CCP: „Socialism with Chinese Characteristics“
„Socialism with Chinese characteristics“ is the official designation for the societal system that the CCP aims to achieve. The ideology of today’s CCP is strongly influenced by Deng Xiaoping. Deng is rightly regarded as the „architect“ of the „reform and opening-up policy.“ He created the ideological foundations and justifications for this policy, primarily by dismantling the Marxist concept of socialism while carefully giving his position a Marxist veneer. As early as 1979, at the beginning of the „reform and opening-up“ period, he stated: „It is wrong to claim that a market economy exists only in capitalist societies and that there is only a ‚capitalist‘ market economy. Why can’t we develop a market economy under socialism? Developing a market economy does not mean practicing capitalism… We cannot say that the market economy exists only in capitalism. The market economy already existed in its early stages in feudal society. We can certainly develop it under socialism.“¹⁴¹

In 1985, he declared: „There is no fundamental contradiction between socialism and a market economy.“¹⁴² And in 1992, even more explicitly: „A planned economy is not the same as socialism; there is also planning under capitalism. And a market economy is not the same as capitalism; there is also a market under socialism. Planning and markets are both economic tools.“¹⁴³

Even in the early stages of the capitalist „reforms,“ Deng implicitly made it very clear that his aim was nothing less than the complete abandonment of the Marxist understanding of socialism and, thus, the end of building socialism. His argument that the „market economy“ is not inherently capitalist because markets already existed in feudalism is, of course, entirely incorrect. As Marx and Engels demonstrated, the expansion of commodity production and exchange in feudal society was precisely the starting point for the emergence of capitalist relations, which at that time still developed in the niches of society and had not yet become dominant. While a commodity-producing society is not inherently capitalist, it already contains capitalism as a seed (see Chapter 2). Apparently, Deng Xiaoping had either never read or understood Marx’s „Das Kapital“, or he consciously opposed Marx’s analysis. After all, Marx explained in his work how the commodity, as a sort of germ cell, logically and historically develops into the entirety of the capitalist mode of production. Deng completely ignores this essential insight. For him, the production of commodities, their exchange on the market, and, naturally, private ownership of the means of production are neutral „economic tools“ without any inherent societal character. Markets and planning, therefore, can be used as needed to achieve the ultimate goal: the development of the productive forces.

Deng defined socialism fundamentally as the development of productive forces, which he articulated clearly in 1980: „If the economy stagnates over a long period, one cannot speak of socialism. If people’s living standards remain at a very low level over a long period, it cannot be called socialism.“¹⁴⁴

Socialism, according to Deng, was therefore not, as in Marxism, a society based on social ownership of the means of production, central planning, and the political power of the working class; for him, the decisive criterion was whether „the economy“ and the population’s consumption were growing. Deng defined this even more clearly during his tour of southern China in 1992: Socialism is determined by three points: first, the development of productive forces, second, the increase in the national strength of the country, and third, the improvement of the standard of living.¹⁴⁵ „Some people shy away from reform and opening up because they fear taking the capitalist path (…). The main criterion for assessing whether a path is capitalist or socialist lies in the answer to the question: Does it promote the growth of productive forces in a socialist society, does it increase the national strength of the socialist state, and does it improve the people’s standard of living?“¹⁴⁶

The reduction of the concept of socialism to an improved standard of living is, of course, entirely incorrect. Even the capitalist development of a country can increase the consumption opportunities of broad sections of the population. Obviously, this has repeatedly happened in the course of capitalist development: Not only in the developed capitalist countries does the working class today live in better housing, consume more food, and have a higher level of education than during the Industrial Revolution. This is also the case in so-called „emerging markets“—even in Brazil or Turkey, many people today own, for example, a mobile phone or a PC, though this does not mean they have escaped from fundamental poverty, i.e., the subjugation of their lives to capital.

With the understanding of „socialism“ advocated by Deng, every phase of development with an improving standard of living and every upswing phase of the capitalist economic cycle, in which the working class always tends to have better conditions to fight for higher wages, would already be „socialism.“ Since the Chinese Communist Party adopted this „theory“ as a guideline as early as the 1980s, we must conclude that Marxism essentially no longer formed the basis of its actions from this point onwards, and we can therefore no longer speak of a communist party.

This development has continued and deepened without interruption since then. The Chinese Communist Party’s (CCP) understanding of „socialism“ has consistently followed Deng Xiaoping’s above-mentioned interpretation. According to this view, „socialism“ essentially means the development of productive forces, possibly combined with a certain degree of social redistribution and a guiding role for the state. However, it by no means entails, as in Marxism, a new mode of production in which the means of production are under the control of the working class and are used, according to central planning, to meet the needs of the entire society.

As the CCP Central Committee states: „Both the public and the non-public sectors are important components of the socialist market economy and an important foundation for China’s economic and social development. Regarding the protection of property rights, the resolution points out that the property rights of both the public and the non-public sectors are inviolable.“¹⁴⁷ Similarly, elsewhere: „The property rights of the public sector are inviolable, as are those of the private sector. The state protects the property rights and legitimate interests of all economic sectors.“¹⁴⁸

And further: „Our emphasis on the need to consolidate and develop the public sector and our policy of promoting, supporting, and guiding the development of the private sector are not contradictory but are inherently coherent (…) The public and private sectors of the economy should strengthen and benefit each other; there is no reason for conflict or dispute.“¹⁴⁹ According to the understanding of „Sinicized Marxism,“ „socialism“ is a synergy between the private sector and state-owned enterprises (which, as we have seen, are also capitalist enterprises). Crucially, the CCP explicitly rejects any notion of class struggle aimed at curbing or at least restraining the capitalist sector. After all, there is „no reason“ for such conflicts. Instead of socialism, the CCP’s goal today is the „harmonious society,“ where state and private capital, the working class, and the bourgeoisie coexist without conflict. This „harmony“ is to be achieved by making limited material concessions to the working class, which in turn is expected to accept its exploitation—namely, that the vast wealth of the country, created daily by their labor, does not remain in their possession but is appropriated by the parasitic capitalist class. This class uses that wealth to build ever-new representative office towers, luxurious yachts, and private jets.

In a speech to the Politburo of the Party on the „invisible hand“ and the „visible hand“ in economic development, Xi Jinping stated: „The proposal to let the market play a decisive role in the allocation of resources is a breakthrough in our Party’s understanding of the laws governing the development of socialism with Chinese characteristics, as well as a new achievement in the Sinicization of Marxism. It symbolizes that the socialist market economy has entered a new phase.“¹⁵⁰ For Xi, this „new phase“ of the „socialist market economy“ does not mean that the social character of ownership is strengthened with the advancing development of „socialism.“ On the contrary, as the CCP openly admits, the market—and not state political decisions—is the decisive mechanism primarily governing the allocation of resources across economic sectors and thus overall economic development. Xi’s reliance on Adam Smith’s famous concept of the „invisible hand,“ which supposedly ensures that the capitalist market always balances itself and guarantees the best possible outcome for all, also highlights how fundamentally opposed his worldview is to Marxism. Xi clearly regards the capitalist market as a neutral instrument that guarantees efficiency, overlooking the fact that capitalism inherently undermines itself and must therefore stumble from one crisis to the next.For example, at the World Economic Forum (an annual international gathering of monopoly capital held in Davos, Switzerland, bringing together representatives of the bourgeois elite, politicians, journalists, and NGOs acting in their interests), Xi attributed the global economic crisis that began in 2008 not to the intrinsic dynamics of capitalism but to „an excessive drive for profit by financial capital and a severe failure of financial regulation.“ ¹⁵¹This statement makes it evident that the CCP lacks a Marxist analysis of crises. Despite the existence of a broad body of research, the Party demonstrates no understanding that the so-called „financial crisis“ was a manifestation of deeper structural overaccumulation, which caused a collapse in industrial capital accumulation.Xi speaks as though the crisis affected only a specific sector of the economy—the financial system—due to the misbehavior of capitalists and a lack of regulation, rather than acknowledging that the capitalist system as a whole had entered a state of crisis. This bourgeois perspective is no coincidence; it allows the CCP to justify its policy of steering capital into the „right“ channels to supposedly serve the benefit of society.

Xi’s lack of a Marxist understanding of crises—and his inability to develop such an understanding as a bourgeois politician—becomes even clearer from his statements during a 2016 speech to the Central Committee. In this address, Xi elaborated in detail on why, in the debate between „Keynesian“ (demand-oriented) and supply-side („neoliberal“) economic policies, the latter should be favored: „International experience shows that a country’s development is essentially determined by the supply side.“¹⁵² He continued, „Supply and demand are the two fundamental relationships in a market economy. They are opposites and yet unified, interdependent and mutually conditioning. New demand generates new supply, and new supply generates new demand.“¹⁵³ Xi’s belief that every supply creates its own demand is entirely inconsistent with Marxist thought. On the contrary, this is the so-called „Say’s Law,“ one of the central assumptions of liberal „neoclassical“ economics, which Marx sharply criticized. Unlike Marxism (and even other bourgeois theories), this law assumes that a capitalist economy is self-regulating and always in equilibrium. Since every supply supposedly creates its own demand, overproduction is deemed impossible. According to this—obviously flawed—liberal theory, crises should not occur at all. It is for this reason that ideologues of capitalism, like Xi Jinping, must resort to alternative „explanations“ for crises, such as insufficient regulation, „external shocks,“ or individual misconduct.

The „Sinicized Marxism“: Marx and Engels Distorted into Bourgeois Ideologues

For the Chinese Communist Party (CCP), Marxism still occasionally serves as a reference, though almost always in a completely empty and superficial manner. In speeches by Xi Jinping, Marx and Engels are sometimes quoted, but their statements are stripped of context and meaning, and their actual implications are ignored.

One example illustrates this clearly: In a section where Xi discusses the necessity of further capitalist reforms, he quotes—seemingly at random—the famous statement by Marx: „In the social production of their life, men enter into definite, necessary relations that are independent of their will, relations of production which correspond to a definite stage in the development of their material productive forces. The totality of these relations of production constitutes the economic structure of society, the real foundation, on which arises a legal and political superstructure and to which correspond definite forms of social consciousness.“¹⁵⁴ Xi seamlessly continues with his own remarks: „In continuing our comprehensive reforms, we should remain focused on economic reforms and strive for breakthroughs in key areas of reform so that these breakthroughs can drive and stimulate reforms in other areas and ensure that these reforms can work together and move forward collectively. We should avoid fragmented and uncoordinated efforts in this regard.“¹⁵⁵

Marx speaks in his text about the relationship between the ideological and political superstructure and the economic base of society, and particularly about the relations of production. Not least, he implies that on a capitalist economic foundation, only a capitalist state power can develop, and the prevailing ideology must also be capitalist—therefore, it is not possible to develop capitalism over decades under the leadership of a communist party and a proletarian state without the state and the party changing their class character accordingly. Xi Jinping does not, however, think about drawing any conclusions from the Marx quote he uses. On the contrary, he uses the passage from Marx as a reference to advocate for a consistent program of capitalist reforms. Marx’s reference to the dialectical relationship between base and superstructure is violently distorted so that it can serve as a guide for managing capitalism—after all, Marx also supposedly said that everything is somehow connected to everything else, which is why one must consider the connection between different „reforms.“

In this and similar ways, Marxism is repeatedly misused by the CCP as a tool for managing capitalist development. „We all need to better equip ourselves to use Marxism to analyze and solve practical problems,“ says Xi.¹⁵⁶ However, Marxism is precisely not a „problem-solving theory“ as known in bourgeois political science and developed for the more efficient regulation of capitalist contradictions. Quite the opposite: it is a theory that demonstrates the necessity of the revolutionary overthrow of this system and shows how this is made possible precisely because of the self-contradiction of capitalist society.

An insight into what the „Marxism“ advocated by the CCP actually entails is given by David Kotz, who participated in an „International Conference on Property and Property Rights“ in Beijing in 2006.¹⁵⁷ The conference took place in the context of a political debate over a new law on property rights and was supported by the Rosa Luxemburg Foundation in Germany. According to Kotz, the following statements were made at the conference: A functionary of the Central Party School of the CCP argued that the stock market flotation of a state-owned enterprise (i.e., its privatization) represented a „socialization of property“ as Marx and Engels had envisioned, since ownership now shifted from a single owner to a multitude of owners. Furthermore, Marx had allegedly advocated for private ownership of shares. Marx had overlooked that there is „risk labor“ performed by capitalists when they take risks with their investments—this evidently implied that capitalists are a kind of worker, which is why the CCP was right to grant them party membership.

Various speeches claimed that companies in the „socialist market economy“ could only be efficient if they were privately owned. Ownership of enterprises, it was argued in line with Deng Xiaoping, had nothing to do with whether a country was capitalist or socialist. A country would be socialist if the government taxed surplus value and used the revenues for pensions and social programs. „Modern capitalism,“ it was argued, gradually creates a new form of capitalism that increasingly approaches socialism. Regarding China’s history, it was argued that the CCP had pursued a correct approach in the early years of the People’s Republic with the New Democracy (a period in which private capital still existed), and that the decision to build socialism in the 1950s had been a mistake.

Some congress participants also argued against the pro-capitalist reinterpretation of Marxism, as Kotz reports. This shows that in 2006—certainly to a greater extent than today—the capitalist development path was still contested within the CCP. However, even then, it was beyond doubt that the pro-capitalist stance was dominant.

Thus, as early as 2004, the Central Committee of the CCP launched a campaign to „further develop Marxist theory,“ which involved rewriting Marxism textbooks to suit the changed needs of the party. All core contents of Marxism that could be interpreted as a critique of Chinese capitalism were removed. Original texts by the Marxist classics are not normally used in schools and universities anyway, so access to Marxism that is not distorted by CCP ideologues is not intended. A professor from Sun Yat-sen University in Guangzhou evaluates the outcome as follows: „These textbooks met the political requirements of the party; they had no intellectual value whatsoever.“¹⁵⁸

Will China return to socialism in 2049? – Refuting a widespread legend

Regarding the programmatic objectives of the CCP in the present time, the myth persists that the party views the current capitalist development as temporary and will eventually return to the socialist path at some point in the future – often the year 2049 is mentioned, which is the 100th anniversary of the founding of the People’s Republic of China. Aside from the fact that it can be strongly doubted whether such a reversal would even be possible without another revolution (more on this below), it is simply a legend that the CCP would pursue such a goal. Not only are there no indications or corresponding statements to support this – on the contrary, there is no shortage of statements from high-ranking leaders of the CCP and the Chinese state that proclaim the exact opposite. Although „socialism with Chinese characteristics“ is nowhere exhaustively defined in content, the numerous speeches and statements by high-ranking politicians of the party nonetheless provide a comprehensive and clearly outlined picture of what is meant by it.

First, here are some quotes that clearly demonstrate that, from the perspective of the „Communist“ Party of China, the capitalist development path is intended to be permanent. Xi Jinping, 2012: „The policy of reform and opening is a constant task and will never end. Without reforms and opening, China would not be what it is today and would not have the prospect of a better future. The problems that arise during reform and opening can only be solved through reform and opening.“¹⁵⁹ In the following year: „We will encounter a dead end if we get stuck on our path or shift into reverse; reform and opening are always ongoing and will never end.“¹⁶⁰ „The answer has always been: reform and opening. Looking to the future, there is no alternative to continuing reform and opening if we want to solve all kinds of difficult problems that hinder our development, defuse risks, overcome challenges in all areas, better highlight the advantages of socialism with Chinese characteristics, and promote the steady and healthy development of the economy and society.“¹⁶¹ In another speech in 2013: „Our policy of utilizing foreign investment and protecting the legitimate rights and interests of foreign companies in accordance with the law will not change. China will never close its door to the outside world. Over the past ten years, it has fulfilled its promises to the WTO by creating a more open and standardized business environment. We will explore new areas and provide deeper access. Our economy will remain open to foreign investors, and we hope that other countries will provide Chinese investors with the same access.“¹⁶²

In a speech at the BRICS meeting in 2013, Xi Jinping explained what is meant by the often-cited slogan of becoming a „prosperous, strong, democratic, culturally advanced, harmonious, and modern socialist country“ by 2049. The fact that this cannot mean a return to socialism is already evident from the fact that the Communist Party of China (CPC), since the beginning of the capitalist „reforms“ under Deng Xiaoping, has primarily understood „socialism“ as a model of accelerated development of productive forces and has also referred to the current development path as „socialist.“ Regarding this, Xi stated: „We will build China into a modern socialist country that is prosperous, strong, democratic, culturally advanced, and harmonious by the year 2049, when we celebrate the centenary of the founding of the People’s Republic of China. To achieve these (…) goals, we will continue to prioritize development as our top priority and economic growth as our central task, and we will promote economic and social development. Our development effort is an open one, as we will remain committed to the fundamental state policy of opening up to the outside world and the mutually beneficial strategy of opening up and further liberalizing our economy.“¹⁶³ For Xi and the CPC, „socialism“ is thus in no way contradictory to further opening up the national economy to foreign capital and increasingly expanding the leeway for capital through further liberalization.

Xi Jinping further stated in 2022 in his report to the 20th Party Congress of the CPC: „The next five years will be critical for getting our efforts to build a modern socialist country in all respects off to a good start. Our main goals and tasks for this period are as follows: (…) Further progress in reform and opening up; (…) Continued commitment to deepening reforms and opening up. We must intensify our efforts to advance reforms and explore new paths, and we must resolutely advance opening up.“¹⁶⁴ There is no mention of rolling back the private capitalist economic sector, strengthening state ownership, or changing the character of economic planning toward binding targets.

Were all these commitments to capitalism not clear enough? Then perhaps the following two statements: Liu He, Vice Premier of the People’s Republic of China, in 2023 at the World Economic Forum: „First, we must always regard economic development as the primary and central task. (…)
Second, we must always make the construction of a socialist market economy the guiding principle of our reforms. We must give the market a decisive role in the allocation of resources and give the government a better role. Some people say that China will return to a planned economy. This is absolutely impossible. We will deepen the reform of state-owned enterprises, support the private sector, and promote fair competition, the breaking of monopolies, and entrepreneurship.
Third, we must always promote comprehensive opening up. Opening up as a fundamental state policy is a catalyst for reform and development and an important driver of economic progress in China. China’s door to the outside world will only continue to open.“¹⁶⁵

And very similarly again Xi Jinping: „The practice of reform has shown us that we must absolutely not deviate from responding to the blindness of the market and that we must not return to the old path of the planned economy.“¹⁶⁶

All of these statements leave no room for interpretation: The Communist Party of China explicitly commits to continuing the country’s capitalist development path (which the CPC, as we have seen, refers to as “socialism”) forever. A return to a planned economy, just like any substantial limitation on the freedom of capitalists, is explicitly ruled out.

Our examination of the programmatic goals of the Communist Party of China rules out any conclusion other than this: The Communist Party of China is only communist in name. In its essence, it is the direct opposite – it is a party of the capitalist modernization of the national economy, whose central goal is the continuous strengthening of China’s position within the imperialist world system.

The Relationship of the Communist Party of China to Global Capitalism

If the Communist Party of China aims for an improved position within global capitalism, this inevitably means that it must work towards granting Chinese monopoly capital an increasingly dominant position in the global capitalist market. Therefore, the CPC can no longer fight global capitalism – rather, it accepts it as the framework in which the capitalist development of the country can take place. Within this framework, it advocates for the most favorable conditions for capital (which necessarily means: at the expense of the working class and other working strata).

Like all other leading imperialist countries, China, despite differences on other issues, advocates for an „open world economy“: „We must maintain and develop an open world economy. ‚A single flower does not make the spring, while a hundred flowers in full bloom bring spring to the garden.‘ Countries will grow when their economies are open, and conversely, they will shrink when their economies are closed,“ said Xi Jinping at a G20 meeting in 2013.¹⁶⁷ For capital export to another country, it is of course advantageous if capital faces minimal obstacles in the target country. State measures such as tariffs, non-tariff trade barriers (e.g., consumer protection, environmental protection, prescribed product standards), or subsidies for domestic companies are to the disadvantage of foreign investors, as these strengthen the companies of the target country in competition. Therefore, international capitalist mechanisms like the World Trade Organization (which China is also a part of) call for a „more open“ world economy. In the same wording as the leading ideologists of Western capitalism, Xi Jinping also advises the countries of the world to keep the scope of state interventions to a minimum, naturally to clear the way for Chinese monopoly corporations on the world stage: „Growth driven by stimulating policies and large-scale, direct state interventions in the economy can only address the symptoms, not the disease (…) Countries should (…) invigorate the markets and improve economic competitiveness through active structural reforms.“¹⁶⁸ At the 2017 World Economic Forum, Xi further explained: „We must continue to promote the development of global free trade and investment, promote the liberalization and facilitation of trade and investment through opening up, and reject protectionism.“¹⁶⁹

In view of the prominent and rapidly growing role of Chinese monopolies in international capital flows, as global investors and creditors (see Chapter 5), it should not be surprising that the Chinese government advocates for a „more open“ world economic order that benefits this capital – while, just like the developed capitalist states of Europe and North America, it does not refrain from protecting its domestic market through numerous measures and keeping a significant portion of companies under state control, thereby blocking foreign takeovers.

e. Interim Conclusion

The analysis of the Chinese societal system has yielded the following results:

In China, capitalist relations of production dominate. Private capital predominates, alongside a significant role for state capital. However, state-owned enterprises also have a capitalist, not a socialist, character. Economic planning is indicative in nature, working with incentives rather than binding targets, and it does not contradict the capitalist economy.

With the transition to capitalism, labor power has become a commodity, the working class has become an exploited class, and many achievements of socialism have been lost. The workers are not represented by the legal unions, which is why they usually fight for their rights outside of these organizations. In doing so, they face the state as an opponent, which attempts to pacify class struggle through a mixture of repression and concessions.

The bourgeoisie in China is among the most powerful in the world and is closely intertwined with the Chinese state and the Communist Party of China. Through personal connections and legal lobbying, it is ensured that politics reliably implements the interests of capital.

The official ideology of the Communist Party of China refers to Marxism-Leninism, but it represents a complete break with it. In fact, the Communist Party of China does not pursue a socialist program, but a program of capitalist development of the country and strengthening its capitalists in international competition.

So far, the analysis has been limited to the national framework of China. In the next chapter, we will address the role of China in the imperialist world system.

5) China in the Imperialist World System: Crises, Capital Export, Risk of War

Capital in every country follows the drive for limitless accumulation. The profits it realizes must be reinvested so that capital can compete against its rivals. Since the emergence of monopolies through the concentration and centralization of capital, capital operates increasingly beyond national borders, on the international stage. Capital export, whose main initiator is monopoly capital, is a key factor in determining the position of strength or weakness that a particular country occupies within the imperialist world system.¹⁷⁰

These laws of capitalist production apply everywhere where the capitalist mode of production prevails, regardless of the will of the governments. Since, as shown, the capitalist mode of production is dominant in China, these laws also apply there—capital must constantly search for new profitable investments, and it expands beyond China’s borders to achieve this. This is deliberately encouraged by the government and the Communist Party of China. For example, former President Hu Jintao stated in his report to the 18th National Congress of the Communist Party of China: “Chinese companies should expand overseas at a faster pace, expand their operations in the international environment, and develop a number of multinational corporations at the world-class level. We should develop comprehensive plans for bilateral, multilateral, regional, and sub-regional opening (of the respective national economies, editor’s note) and cooperation.”¹⁷¹ A study by German bourgeois economists writes about the driving forces behind Chinese capital export: „The most significant motive is probably weak returns within China itself, so that Chinese investors are increasingly looking for interesting investment opportunities in other countries.“¹⁷² As in all capitalist countries, it is ultimately the tendency of the profit rate to fall and the stagnation phenomena of imperialist capitalism that drive capital in China to expand beyond its borders.

a. Crisis Developments in Chinese Capitalism

For a long time, it seemed paradoxical to speak of crises in the context of Chinese capitalism and the record growth of its economy. However, in recent years, it has become increasingly evident that the fundamental laws of capitalist production apply in China just as they do everywhere else, and a crisis-free capitalism is not possible.

Graph 1 shows the development of economic growth rates over the last four decades:

Source: World Bank, online: https://data.worldbank.org/indicator/NY.GDP.MKTP.KD.ZG?end=2022&locations=CN&start=1982, accessed: 09.12.2023.

Although there were also greater cyclical fluctuations in growth in earlier decades, which already indicates the capitalist nature of this growth, in recent times, the general long-term trend towards a slowdown in capital accumulation in China has become clearly visible. The growth rate has fallen from around 8-14% in the period 1992-2007 to a range between roughly 2% and 8% in the period 2012-2022. Marx demonstrated that in all capitalist societies, the increase in the organic composition of capital (i.e., the share of investments flowing into means of production compared to the mass of wages paid) leads to a long-term decline in investment profitability.¹⁷³ This long-term decline in the rate of profit causes crises to occur at shorter intervals and with greater severity.

Overcapacity in many of the key industries has been a recurring issue in China for some time. This means that the industrial production capacity is chronically underutilized because (global and national) demand is too low. In 2018, for example, the average capacity utilization of industry in China was only 64%, meaning that more than a third of production capacity was idle because there was no demand capable of paying for it. In heavy industry, the utilization rate was even lower at 50-60%, and in some regions, it was below 40%.¹⁷⁴ Sectors particularly affected by chronic overproduction include steel, cement, sheet glass, and maritime trade.¹⁷⁵ The problem of chronic overproduction was also accelerated in the early phases of the capitalist “reforms” under Deng Xiaoping, as it was decided to make the individual regions compete against each other, so that each regional government was eager to build the strongest possible production capacity. This artificially inflated the growth figures for China overall and simultaneously accelerated the crisis development.

A particularly crisis-prone sector of the Chinese economy is the real estate sector, which makes up over a quarter of China’s GDP. For a long time, China’s economic boom was accompanied by an endless construction boom, which transformed the appearance of Chinese cities in recent decades to the point where they are unrecognizable. However, in recent years, crisis tendencies have also been increasing here: There is significant overproduction in the industry, and many of the large real estate corporations, such as Evergrande or Country Garden, are facing significant difficulties in servicing their debts and have already missed repayment deadlines (Country Garden in October 2023). In July 2023, the sale of new apartments was already 33% lower than the level from July 2022.¹⁷⁶ The signs of an overproduction crisis are unmistakable.

This development again demonstrates the dominance of capitalist relations in the Chinese economy. During the socialist development period in China, as in other socialist countries, there were no crises caused by overproduction, but only growth slowdowns due to external influences (such as natural disasters) and political mistakes that (for example, during the „Great Leap Forward“) interfered with economic planning. Cyclical overproduction crises do not occur in a socialist system because production is not aimed at selling goods as profitably as possible, but rather to meet the needs of the people.¹⁷⁷

Through the ever-increasing integration of the Chinese economy into the capitalist global market, it is also becoming increasingly affected by global crisis developments. The internationalization of Chinese capital through capital export and the formation of internationally operating monopolies will be examined next.

b. Chinese Capital Export

The Chinese state deliberately contributes to the import and export of capital, thus integrating China into the global capital flows. In the 2000s, investments abroad increased, particularly in sectors such as logistics, energy, and construction. The main goals were securing access to resources on the one hand and utilizing over-accumulated capital on the other hand.¹⁷⁸

Although China’s capital export is essentially comparable to the capital export from other countries, it has specific characteristics. In particular, the role of the state stands out here as well. Capital export can be divided into direct investments, portfolio investments, and loans: Direct investments are capital expenditures abroad aimed at exerting influence over a company. Portfolio investments, on the other hand, primarily seek to gain a share of the company’s profits. In direct investments, private Chinese capital plays an important role alongside state capital, while loans and portfolio investments mostly come from state-owned capitalist enterprises.¹⁷⁹ This is mainly because portfolio investments are predominantly made by the People’s Bank of China (the Chinese central bank) in the form of foreign government bond purchases, and China’s financial system is dominated by state-owned banks, meaning that lending within the banks both inside and outside China is also largely controlled by state banks.¹⁸⁰ From 2000 to 2017, China’s international lending was dominated by two banks, the Export-Import Bank of China and the China Development Bank, which together controlled over 75% of the credit business.¹⁸¹

For empirical analysis, there is a problem because the Chinese government does not release data on lending, and international institutions do not have a complete set of such data. Available statistics on lending are therefore incomplete or underestimate their volume. ¹⁸²

A study that attempts to estimate the actual volume of China’s international loans, based on extensive materials, concludes that in 2016 alone, loans worth more than $200 billion fell outside the statistics, and the actual lending volume of China was about twice as high as reported in the statistics (around $400 billion).¹⁸³

For the year 2018, China’s loans and trade credits were estimated at $1.6 trillion, which represented 2% of the world’s total economic output. To achieve this enormous scale, lending has exploded in parallel with China’s economic rise—by 2000, it was nearly nonexistent.¹⁸⁴ The Chinese state is thus the largest „official“ (i.e., non-private) creditor overall, ahead of the United States. Only when combining both private and state lending do the United States still surpass China in total lending.¹⁸⁵ China’s outstanding loans to low- and middle-income countries are far higher than those of the entire Paris Club (the association of creditor countries from Western Europe, North America, plus Brazil and Australia) and are even slightly higher than those of the IMF and the World Bank combined (as of 2020).¹⁸⁶

If we now consider not just loans but add up all forms of capital export, China’s financial claims abroad (i.e., exported capital) amounted to over 8% of the world’s total GDP in 2017, which is roughly $6.5 trillion, almost equal to the combined GDP of France and Germany.¹⁸⁷

The Chinese state pursues a dual strategy in its capital export: It divides the world into developed countries on one hand and developing and emerging countries on the other. To the first group, it exports capital mainly by purchasing government bonds of these countries. In the second group, where government bonds offer much lower security, loans are mainly extended.¹⁸⁸ Foreign direct investments also flow into both groups, with a focus on countries in the Northern Hemisphere (as discussed below). The larger share of capital flows into the developed industrial countries: In 2017, the Chinese state held $3 trillion in government bonds (mainly from developed industrial countries). In comparison, loan claims (mainly to poorer countries) in the following year amounted to $710 billion.¹⁸⁹ Among the government bonds in the Chinese central bank’s portfolio were, for example, $370 billion in German government bonds (equivalent to 10% of Germany’s GDP and 17% of German government bonds) and $850 billion in government bonds from Eurozone countries in total. In contrast, government bonds from so-called „emerging markets“ amounted to only $30 billion.¹⁹⁰

The conditions for Chinese loans are generally neither worse nor better than the average level in the global credit market. For example, Ecuador took out a loan in 2010 at an interest rate of 7% over 15 years, while Angola took a loan of $20 billion over 10 years at 6%.¹⁹¹ These interest rates are similar to those offered by other lenders (e.g., European or North American banks) because the repayment security in the target countries is lower than in developed industrial countries. This shows that Chinese banks deploy their capital abroad based on the same considerations as other banks.

Foreign Direct Investment (FDI) has also grown explosively, from a relatively insignificant level of about $10 billion in 2005 to $177 billion per year by 2017.¹⁹²

Unlike international loans, which are mainly granted by state institutions, Chinese foreign direct investments are increasingly made by private capital. In the EU, for instance, there was a significant shift in Chinese direct investments: In 2011, 83% of these investments came from state-owned enterprises, but by 2019-2020, only between 11% and 18% did.¹⁹³ Due to the close intertwining of state and private capital in China, a strict separation between the two categories is not possible—private capital also expands with the help of the state, and „state-owned enterprises“ are often majority-owned by private investors. This connection is particularly strong in China but is by no means unique to it. Lenin also pointed out how, “in the era of financial capital, private and state monopolies intertwine, with both being, in reality, just individual links in the chain of the imperialist struggle between the largest monopolists for the division of the world.”¹⁹⁴

Foreign Direct Investment (FDI) is further distinguished between Greenfield investments¹⁹⁵ on one hand and mergers and acquisitions (M&A) on the other. Between 2005 and 2018, roughly a quarter of the FDI were Greenfield investments, while three-quarters were mergers and acquisitions.¹⁹⁶ Chinese direct investments are primarily focused on the energy sector and the transport sector. When direct investments and construction contracts (loans for construction projects, e.g., infrastructure under the Belt and Road Initiative) are combined, 36% of capital flows are directed towards the energy sector (especially oil, coal, and hydropower) and 19% towards the transport sector (mainly large Chinese investments in the automotive and railway industries).¹⁹⁷

In Europe and the USA, Chinese investors, especially since the 2007 crisis and in the following years, have bought into banks there (with $5 billion at Morgan Stanley, $3 billion at Barclays). Since then, there have been several spectacular deals, such as the acquisition of the German robotics producer Kuka by the Chinese Midea Group (2016/17, $4.7 billion), the purchase of the Californian IT company Ingram Micro by the Chinese HNA Group (2016, $6 billion), the acquisition of the tire manufacturer Pirelli by investors ChemChina and SAFE (2015, $7.8 billion), the British banking monopoly HSBC by the private Chinese insurance company Ping An (2017, $9.6 billion), and the participation of Geely in the automotive company Daimler (2018, $9 billion).¹⁹⁸ The initiators of these investments include sovereign wealth funds, state banks, state-owned enterprises, and private Chinese companies. All of them benefited from the low stock prices of Western companies since the beginning of the global economic crisis in 2008, which made it easier for them to acquire stakes.¹⁹⁹

This shows that Chinese monopolies were already able to compete on equal footing with their Western competitors in some cases by the 2000s, and capital interconnections increased. Despite this, the warnings from bourgeois politics and media in Europe and the USA about an alleged „sell-out,“ a „flood of Chinese investments,“ and similar concerns had little to do with reality. The interconnections of European capital with China, for example, are still much smaller than those with US capital. Rather, the anti-Chinese propaganda in the Western press reflects the fact that China is gaining influence as a rival power, one that acts as a direct competitor to the established powers (i.e., Western European, North American, and Japanese capital) in many economic sectors and geographical regions, and pursues independent interests outside of the USA, NATO, and the EU. This rising influence is thus identified as a threat by the ruling class in European countries and the USA. As a result, Western governments increasingly intervene to prevent Chinese acquisitions, particularly when it comes to technologies that could be used for military or intelligence purposes. For example, the takeover of the Aachen-based semiconductor equipment manufacturer Aixtron by the Chinese company Fujian Grand Chip Investment was stopped at the last minute by the German government.²⁰⁰

Geographically, the largest sums from direct investments and construction contracts flow to North America, Central Europe (mainly Germany, France, the United Kingdom, Switzerland, and Italy), Australia, Russia, and Brazil. Larger direct investments of over 100 million USD each also go annually to India, Pakistan, Kazakhstan, Indonesia, Nigeria, the Democratic Republic of the Congo, South Africa, Peru, or Argentina.²⁰¹ From 2005 to 2018, a total of 343 billion USD in Chinese direct investments flowed to Europe, with more than 95% of these capital flows directed towards mergers or the purchase of shares in European companies.²⁰²

Thus, direct investments are primarily concentrated in relatively developed economies of the so-called „First World,“ though there are many exceptions (India, Pakistan, Kazakhstan, Indonesia, Congo, Nigeria, South Africa, Brazil, Peru). On the other hand, construction contracts are predominantly carried out in less developed economies: Along the „Silk Road,“ including the Philippines, Indonesia, Vietnam, Malaysia, Bangladesh, India, Pakistan, Iran, Saudi Arabia, Iraq, Turkey (and along the land route, also Kazakhstan and Russia); and generally in coastal states, mainly in Africa (Algeria, Ethiopia, Nigeria, Egypt, Cameroon, Angola, Kenya), and to a lesser extent in Latin America (Argentina, Venezuela).²⁰³ In some countries, there is a strong concentration of Chinese investments, making them significantly dependent on Chinese capital: For example, around 40% of direct investments in Tajikistan, more than a third in Niger and Myanmar, and more than a quarter of investments in Kyrgyzstan and Mongolia come from China.²⁰⁴

The large volume of data presented here shows that China has become one of the centers of global capital flows and one of the main sources of capital exports. Chinese monopolies dominate not only the vast domestic market but also increasingly participate in the global competition among monopolies for the constant redistribution of the world. One instrument with which they are strengthened and supported in this competition by the Chinese state is the „New Silk Road“ initiative, or „Belt and Road Initiative.“

The „Belt and Road Initiative“

In September 2013, Xi Jinping announced a „Silk Road Economic Belt“ in Kazakhstan and, a month later, during a visit to Indonesia, added the goal of a „Maritime Silk Road.“ By referencing the historic Silk Road, the Chinese government symbolically connects China’s importance to global trade in earlier centuries. This is a massive investment project that was initially known in English as „One Belt One Road“ but is now referred to as the „Belt and Road Initiative“ (BRI). Despite the reference to the Silk Road, the BRI is not limited to countries along the historic route but is, in principle, open to all countries. However, the project mainly consists of a land route that runs from China through Central Asia and Iran, via Istanbul and Moscow, to Central Europe, and a sea route through Southeast Asian waters, the Indian Ocean, and the Red Sea into the Mediterranean (see graphic 2).

The goal of this enormous project, the largest infrastructure project in history, is to channel the massive amounts of accumulated capital in China, which often finds it difficult to be productively invested domestically, into uses that benefit the further economic rise of Chinese capital. China’s production capacity continues to grow, and, accordingly, so does China’s need for foreign markets for its goods. However, for this growing trade, inadequate transport infrastructure in the countries along the trade routes poses an obstacle. Therefore, the focus of the „New Silk Road“ is on developing this transport infrastructure both on the coasts and inland. This makes China one of the most important, and in some cases the most important (such as in Ethiopia), investors in infrastructure along the maritime „Silk Road“ from China through Southeast and South Asia, the Red Sea, and into the Mediterranean.²⁰⁵

In the first five years following the announcement of the BRI project in 2013, 207 billion USD in direct investments were directed to the participating countries, and an additional 406 billion USD in loans were granted as part of construction contracts. Due to the infrastructure focus of the BRI, about two-thirds of the officially registered Chinese capital exports to the BRI countries consist of loans for construction projects.²⁰⁶ The project also involved buying many of the world’s most important trade ports to ensure control over the key nodes of global trade.

Graphic 2: The „Belt and Road Initiative“

Source: ORF: Milliardenschwere Investitionen, online: https://newsv2.orf.at/stories/2445719/2445718/, accessed 19.10.2023.

The BRI is the largest project for strengthening the export of capital and goods that any state has initiated in the history of capitalism. Chinese investments under the project have now exceeded one trillion US dollars. It has played a crucial role in making China one of the main investors and creditors in many countries along the „road“ and „belt.“²⁰⁷ In recent years, fewer large infrastructure investments have been made, and instead, smaller projects in the so-called „green“ sector (e.g., renewable energy) have been started.²⁰⁸

Chinese propaganda praises the BRI and Chinese capital exports in general as a benevolent initiative, claiming that all parties involved benefit and that the recipient countries of Chinese investments would gain only advantages. The next subsection will deal with the consequences of Chinese capital exports for the working population of the recipient countries.

c. Consequences of Chinese Capital Exports for the Working People in the Recipient Countries

The rapidly growing credit provision by Chinese banks to foreign countries naturally results in an increasing level of debt for the recipients towards China. According to data from the World Bank (which, as mentioned above, is about 50% too low on average), China provided loans amounting to 152 billion US dollars to African countries alone between 2000 and 2018 and holds about 17% of the national debt of all African countries.²⁰⁹ The (officially reported) outstanding claims of China against the countries of the „Belt and Road Initiative“ amounted to 215 billion US dollars in 2017.²¹⁰ Some countries, both within and outside the „New Silk Road,“ are indebted to China to such an extent that it heavily burdens their national budgets: Djibouti, whose foreign debt is almost entirely held by China, owes China over 25% of its GDP. The Republic of the Congo and Laos owe China over a quarter of their annual economic output. Between 10% and 25% of GDP is the share for Togo, Zambia, Mozambique, and Cambodia.²¹¹ While 25% of GDP is still moderate for a developed country with a high rate of capital accumulation and economic stability, such a level can be directly destabilizing for poor countries like the ones mentioned, as they must pay much higher interest rates.

For many governments in less developed countries, China is a relatively popular address for taking on loans. This is primarily because Chinese state banks, unlike the IMF or the World Bank, do not impose political conditions. They do not demand privatization of state-owned enterprises, the dismissal of public employees, or reductions in salaries and pensions, etc., as the IMF or the „Troika“ did, or still do in the case of the Eurozone crisis. From this more restrained approach, the governing bodies hope to present China as an attractive alternative to the US and the imperialist bloc surrounding it, for more and more governments in Africa, Asia, Latin America, and even parts of Europe. As the growing political influence of China, especially in Africa, Southeast Asia, and Central Asia, demonstrates, this strategy has so far been very successful.

According to Western governments, particularly the US government, China pursues a deliberate plan to trap countries, especially through the BRI, into a „debt trap“—that is, to tempt them into taking out loans they cannot repay, thereby turning them into puppets of China. This claim has already been repeatedly disproven; it is an element of the anti-Chinese propaganda offensive by Western governments and media, serving as an ideological flank to the inter-imperialist conflict between the US and its allies on the one hand, and China on the other. In fact, no coherent strategy by the Chinese government in this direction can be substantiated. The infrastructure projects were not unilaterally imposed by China, but were also pursued by the bourgeoisie of the recipient countries out of their own interests; Chinese banks did not impose particularly harsh conditions on them, but were generally willing to discuss debt restructuring. Claims that China is seizing critical infrastructure, such as the ports and airports of its debtors, are also unsubstantiated.

A frequently highlighted example by the US for the alleged „Chinese debt trap diplomacy“ is Sri Lanka—the container port built in Hambantota with Chinese loans and the payment difficulties the country faced. However, this example also belongs in the realm of propaganda: The project originated with the Sri Lankan government, was based on recommendations and two Western reports, and was only (on usual terms) awarded to the Exim Bank of China after the US and India had refused such a deal.²¹²

It is therefore nonsense to portray China as a „modern colonial power“ or as a particularly evil example of an imperialist power. When such criticism comes from Europe or the US, countries with a long history of colonialism, which have themselves repeatedly driven poorer countries into such „debt traps,“ it is indeed especially hypocritical and deceitful.

But do Chinese capital exports provide a reason for joy for the working class in the recipient countries? Do they have a fundamentally more humane character than the capital exports of other countries? Let us look at the consequences of China’s expansion for the working class in the „partner countries“ through a few examples:

Greece

In 2016, the state-owned Chinese shipping giant COSCO, one of the largest companies in global maritime transport, took advantage of the fact that Greece was heavily affected by the capitalist crisis and purchased 51% of the Port of Piraeus, one of the largest container ports in Europe. However, for COSCO, as for the other capitalists in Piraeus, there was a problem: the dock workers at the Port of Piraeus have a long tradition of class struggle against shipping capital. Under the leadership of the class-struggle trade union front PAME, they repeatedly use their strike power to shut down the port, exerting significant pressure on the capitalists in negotiations. In response, capital promoted the Nazi party „Golden Dawn“ and used them as a strike force against the union movement, communists, and antifascist activists. The connections between shipping capital and Nazis are well-known in Greece and are also evident in the fact that „Golden Dawn“ consistently advocated for the interests of shipping companies in Parliament.²¹³

COSCO was also accused by unions of collaborating with the neo-Nazis.²¹⁴ It is also certain that the Chinese state maintains direct relations with the neo-Nazis in Greece: in 2017 and 2018, there were at least two meetings between the Chinese embassy in Greece and a delegation from „Golden Dawn“ to discuss the „further development of relations between the two countries.“²¹⁵ While the Communist Party of Greece waged an organized fight against fascists in the country, holding them responsible for murderous attacks on union members, migrants, and communists—at a time when all bourgeois parties in Greece had already severed their ties with the Nazi party, and the party itself was no longer invited to public events by the president of the state—the Nazis could still rely on the backing of „socialist“ China and the „Communist“ Party of China.

Pakistan

In recent years, Pakistan has shifted from being a historically close ally of US imperialism (for example, since the 1970s in the US strategies in Afghanistan) to becoming a close cooperation partner of China. This reorientation follows a shift in international capital flows: China is now Pakistan’s largest creditor, with Chinese banks holding about 30% of Pakistan’s total foreign debt, which has been largely accumulated through Chinese infrastructure projects in Pakistan as part of the „Belt and Road Initiative.“²¹⁶

The living conditions for large parts of the Pakistani population are, as is well known, still marked by great hardship. Especially poor is the large province of Balochistan in the southwest, where there is a movement for national independence from Pakistan, which is being fought by the Pakistani government with state-terrorist means. China has not only secured significant exploitation rights for gold and copper in the region but is also investing in the port city of Gwadar, which has been expanded into an important hub of the China-Pakistan Economic Corridor as part of the BRI. Chinese construction projects are destroying the livelihoods of the local population, most of whom depend on fishing. By purchasing land within a 70 km radius of Gwadar and assigning new jobs largely to brought-in personnel from China (since the local population did not have the necessary qualifications), the local ecosystem has been severely damaged, and several fish species have been wiped out, further worsening the already miserable situation of the local people. The Pakistani government, meanwhile, benefits along with the Chinese corporations from these dealings and enforces them with violence against the resistance of the people. Given China’s interests in the region’s natural resources and trade routes, it is not surprising that China clearly sides with the Pakistani state in the Balochistan conflict and commits to cooperation in joint „anti-terror operations“ against the separatist movement.²¹⁷

However, Chinese capital exports also threaten the livelihoods of the working class and small farmers in the rest of Pakistan. The Communist Party of Pakistan complains in a statement about how Chinese capital is contributing to the worsening of the living conditions of the country’s working population: „In the microfinance system introduced in the country, the interest rates were kept so high that they were comparable to those of private lenders. As a result, agriculture is currently in a situation where small farmers either have to sell their land or lease it to the high-ranking members of the government. (…) Industrial products could not compete with foreign products. As a result, industries are either being shut down or moved abroad. China is taking over the production and market for consumer goods. Unemployment is rising drastically. Inflation has skyrocketed in the past three years, putting working families in severe distress, while the middle class has been unable to meet the needs of households.“²¹⁸

Southeast Asia
In Southeast Asia, China is attempting to assert its economic and political interests through various levers. The military occupation of island groups in the South China Sea will be discussed further below. The geography also works in China’s favor, as the Southeast Asian countries Thailand, Laos, Myanmar, Vietnam, and Cambodia are all dependent on the water of the Mekong River, which China has been damming upstream, thereby reducing the water flow to the southern countries, potentially threatening their agriculture.²¹⁹ As the conflict over Crimea between Russia and Ukraine has shown, as well as specifically the water supply from the Dnieper, control over river courses and cutting off the water supply to downstream areas can be a significant geopolitical tool.

Especially the weaker Southeast Asian states like Laos and Cambodia are thus becoming significantly economically dependent on China. Laos is heavily indebted, with a large portion of this debt owed to China: According to a 2019 study, Laos‘ state debt to China was 45% of Laos‘ GDP. This debt burden largely arose from the construction of a high-speed railway from southern China to the capital Vientiane, as well as a series of dams financed through Chinese bank loans worth several billion US dollars. Additionally, the state-owned electricity company EDL is indebted to the tune of at least five billion US dollars (as of the end of 2020), with a national GDP of about 19 billion US dollars, which led to it being transferred to Chinese state control.²²⁰ While the Chinese government places great importance on keeping strategic sectors like energy supply and transport under Chinese control as a guarantee of its economic independence and thus partially restricts foreign capital from entering these sectors, it has no hesitation in taking control of these industries in other countries.

Africa
China’s activities on the African continent are diverse and include numerous projects aimed at expanding infrastructure and exploiting resources that China needs for its rapidly growing industry. Chinese propaganda – much like that of Western countries – portrays its economic expansion in Africa as „development cooperation“ that is in the „mutual interest.“ This rhetoric, which is nothing more than a rehash of the old lie that capitalism ultimately offers prosperity for all, deceives a surprisingly large number of leftists around the world. This is surprising, given the well-known fact that Chinese companies in Africa invest for profit motives and would not do so if they did not expect to get a hefty profit margin in return. At the very least, the question should arise as to why Chinese investments should inherently be considered „better.“ But let’s look at some data and examples.

On the African continent, China is now the largest creditor country, and according to estimates, it provided loans totaling 132 billion US dollars to African countries between 2006 and 2017. Approximately 20% of Africa’s total foreign debt is therefore owed to China (as of 2018).²²¹ However, these are estimates, as official data is not available – as mentioned earlier, some economists believe that actual Chinese lending is significantly higher. On the other hand, these figures also show that the majority of Africa’s foreign debt still comes from other parts of the world, primarily from Europe and the US, which together remain responsible for most imperialist activities on the continent – a fact that Western media, which warn of growing Chinese influence, often omit.

The Chinese activities are particularly focused in some countries. One example is Djibouti, the site of China’s first overseas naval base, whose foreign debt is held by Chinese creditors to more than three-quarters.

In Zambia, the Chinese share of its foreign debt stood at 73.5% in 2017.²²² Zambia is one of the African countries that have frequently been in the spotlight due to conflicts between local workers and Chinese capitalists: The unsafe working conditions in the country’s mines are notorious. According to a 2011 report by Human Rights Watch, work shifts of 12 to 18 hours are common, despite the country’s laws theoretically setting a limit of 8 hours. The working conditions and safety measures were even worse, and the wages were lower than those in mines operated by other foreign investors.²²³ As early as 2005, at least fifty Zambian workers were killed in an explosion at a Chinese copper mine.²²⁴ In 2010, two managers at the Chinese-owned Collum Coal Mine in southern Zambia opened fire on workers who were protesting against the poor working conditions.²²⁵ Twelve miners were injured, and two narrowly survived with gunshots to the head and chest. In 2012, there were protests by workers at the same coal mine, again complaining about the lack of safety measures considering the life-threatening working conditions and very low wages. The Chinese owners deployed strikebreakers, which led to violent clashes between protesting workers and the Chinese staff, resulting in the death of a Chinese national, apparently unintentionally.²²⁶

The events in Zambia are not an isolated case. China is also an active investor in many infrastructure projects in Zimbabwe, where, for example, it built a new parliament building. In 2020, a public scandal broke out when a Chinese entrepreneur shot two workers in the hips and lower jaw at his mining company. The conflict arose over wage disputes: “The wages are often very low and are often not paid on time. If someone insists on their rights as a worker and demands what they deserve, they are attacked or shot,” said a spokesperson from a local environmental organization.²²⁷

Further cases could be listed if the aim here were to provide a comprehensive overview of the actions of Chinese monopolies in Africa. However, these examples should be sufficient to demonstrate that the frequently circulating claims that Chinese capitalists in Africa play a fundamentally more humane role than those of other countries belong in the realm of legends. The same holds true for the other examples provided: The goal of Chinese capital exports is to generate profits, which are appropriated by the Chinese monopolies, that is, by the state and Chinese capitalists. Environmental regulations, workplace safety measures, and above all, an organized working class fighting for higher wages, restrict profits and are, therefore, fought against by the capitalists. In this regard, Chinese capitalists do not differ from their counterparts in other countries, whether they are from Germany, South Korea, or Brazil.

d. Military Activities and Interstate Conflicts

The global expansion of Chinese capital is also accompanied by a growing need for China to secure its investments, markets, resource deposits, and transport routes. In this regard, China fundamentally does not differ from other states that play a leading role in the imperialist world system—the only distinction being the scope of military activities in other countries, which is smaller in the case of China. This is partly because China has only recently reached a position at the top of the global imperialist hierarchy. Furthermore, open military interventions, similar to those of the USA or NATO in Iraq, Yugoslavia, or Afghanistan, would contradict China’s official self-presentation of a „peaceful rise.“ Such interventions would also be counterproductive for Chinese imperialism, which can improve its position through the strength of its capital accumulation—unlike the United States, which has, at least since the 1990s, sought to halt its relative decline in the world system through wars.

Military Activities Abroad

Nevertheless, China’s military presence outside its borders is increasing, particularly in Central Asia and Africa. The case of the „South China Sea,“ which is considered part of China by China itself but not by the other bordering countries, will be addressed further below. The growing importance of military protection for investments as capital exports increase is openly acknowledged by the Chinese state in its „Defense White Papers.“ Already in the 2015 paper, it was stated that the „security of interests overseas in terms of energy and resources, strategic maritime communication lines, as well as institutions, personnel, and assets abroad, has become an urgent issue.“ It further mentioned: „In response to the new requirements arising from the growing strategic interests of the country, the armed forces will actively participate in regional and international security cooperation and effectively protect China’s overseas interests.“²²⁸ The 2019 White Paper added: „To address deficiencies in overseas operations and support, the People’s Liberation Army (PLA) is building blue-water forces, developing overseas logistics facilities, and enhancing its capabilities to perform diverse military tasks.“²²⁹

The most visible example of China’s military presence and its connection to profit protection can be seen in the Chinese military base in Djibouti. This small East African country is located at the chokepoint that separates the Red Sea and the Gulf of Aden, one of the most crucial maritime trade routes. A significant portion of the trade between China and Europe passes through this area. The Chinese military presence at this location clearly serves one main purpose: controlling and securing the trade between China and Europe through the Chinese military. It is unlikely that the presence of Chinese soldiers is in the interest of the local population.

Whether China is currently building additional military bases in other countries is unclear, as claims about this are often made by Western media but have never been proven. In 2018, for example, rumors about a new Chinese naval base in Pakistan were circulated by various media outlets, but these have not been confirmed by China.²³⁰ Similarly, claims about Chinese military bases in the United Arab Emirates, Equatorial Guinea, and Cambodia have not been substantiated.

However, China is also concerned with the armed protection of its interests in other African countries. In South Sudan, China has been more involved in oil extraction than any other country in recent years. The confirmed oil reserves are the third-largest in Africa, with approximately 3.5 billion barrels of crude oil, and there is a high likelihood of discovering additional deposits. Despite political instability and armed conflict, the Chinese oil company CNPC has invested in the country, benefiting from the fact that these very factors have kept Western oil companies at bay. As part of a UN mission but with the clear goal of protecting Chinese investments in oil fields, the Chinese government has stationed troops in South Sudan since 2014. These troops were involved in combat with rebels in 2016 and 2018, with Chinese casualties. In 2018, 14 Chinese oil workers were killed by rebels.²³¹

According to the Chinese Academy of Social Sciences, 84% of the Chinese investments made under the Belt and Road Initiative (BRI) are situated in countries that are classified as medium or high-risk areas.²³² Between 2010 and 2015, there were 350 security-related incidents, such as kidnappings, terrorist attacks, and acts of violence against personnel working for Chinese companies, as reported by the Chinese Ministry of State Security. To ensure the safety of these investments, Chinese capitalists employ not only the Chinese military forces stationed abroad but also private security companies.²³³ An article highlights this development: „The growth of Chinese private security companies has increased in proportion to Beijing’s growing investments in major infrastructure projects across Africa. China is also investing in mining projects throughout the continent. However, in countries like the Democratic Republic of Congo, Sudan, and South Sudan, ongoing political unrest has left state security services wanting. […] In response to the increasing criminal and militant violence against Chinese nationals and infrastructure abroad, their role (that of private security companies) has expanded from protecting physical structures to providing high-tech surveillance.“²³⁴

In addition to this direct involvement, China, similar to European states and the USA, supports African governments in the expansion of their military and security apparatus. For example, China has provided funds to the G5 Sahel group to fight Islamic rebel groups.²³⁵ Chinese troops participate in various UN missions in African countries (UNMIL in Liberia, MONUC in the DR Congo, UNMISS in South Sudan, MINUSMA in Mali). In Liberia, Chinese instructors trained local police units in 2014. In Nigeria, the Chinese military shared intelligence data with government troops in their fight against rebels. The Ghanaian military was equipped by China with patrol boats for combating piracy, free of charge.²³⁶

In a similar manner as a military supplier to local government troops, China is also active in Central Asia. For instance, China supported the U.S.-installed regime in Afghanistan by helping to establish a mountain brigade to fight the Taliban, as announced by the Afghan embassy in Beijing in August 2018. Russian media also claimed that China was financing a military base in the Badakhshan province, although this was officially denied. According to the Chinese Ministry of Defense, China only supported the Afghan government in its fight against „terrorism.“ This support included military assistance to the Kabul government amounting to $70 million, as stated by an official from the Centre for Strategic and Regional Studies in Kabul.²³⁷ However, the Taliban’s takeover of Afghanistan has turned out to be beneficial for Chinese interests. China was the first country to send an ambassador to Kabul after the Taliban’s victory. Discussions are now ongoing with the new Afghan government about the country’s inclusion in the Belt and Road Initiative (BRI) and the China-Pakistan Economic Corridor, as well as the construction of a major copper mine with Chinese capital. The end of the decades-long civil war has thus opened up new investment opportunities in resource extraction and trade routes in Afghanistan.²³⁸

In Tajikistan, China is undoubtedly the dominant foreign power. Tajikistan has joined an „Anti-Terror Coalition,“ which includes China, Tajikistan, Pakistan, and Afghanistan (before the Taliban takeover), and is clearly dominated by China. Under this alliance, the participating states jointly train troops to fight forces defined as terrorist. According to an agreement between the Chinese Ministry of Public Security and the Tajik Ministry of the Interior, China has built a military base, four border posts, and several other military facilities in Tajikistan.²³⁹ Based on various reports and satellite images, there has been a presence of Chinese armed forces in Tajikistan since at least 2016.²⁴⁰ China’s interest in Tajikistan lies, on one hand, in stabilizing countries on its border and within its economic sphere of influence. On the other hand, the country is also focused on eliminating potential refuges for Uyghur separatists.

China’s interest in the poor Central Asian country is not only due to its geographical proximity and the unstable situation in Xinjiang, which prompts the Chinese government to seek close ties with the rulers of the western neighboring countries. There are also tangible profit interests at play: About 40% of the country’s external debt consists of Chinese claims, more than 80% of Tajikistan’s gold is extracted by Chinese companies, and 37% (as of 2018) of foreign direct investments come from China. Moreover, Chinese mining companies have secured mining rights for silver, lead, zinc, and uranium, and a pipeline between China and Turkmenistan also passes through Tajikistan.²⁴¹ As one political scientist from the region put it: „China wants to kill two birds with one stone – protect itself from potential military attacks by Uyghur separatists through the Wakhan Corridor and create conditions for the establishment of the most favorable transport routes for the export of ore from Afghanistan and Tajikistan, which contains valuable metals.“²⁴²

Thus, we can conclude: The capital export of a country is accompanied by increased military activities to protect and actively enforce its growing interests abroad. China, now one of the largest capital exporters in the world, is no exception in this regard. Like the armies of other capitalist countries, its military explicitly aims, among other things, to secure investments and trade routes. In addition to military involvement, the state also relies on the often „discreet“ strategy of using private security services and training armies and police in allied states to safeguard its profit interests.

China’s Rise and the Conflicts in the Imperialist System: Taiwan and the South China Sea

From the perspective of Western imperialist states, especially the U.S., China is seen as the greatest and most dangerous rival, threatening their dominance and claims to control as large a part of the world as possible. After China’s rapprochement with the U.S., particularly through meetings between Mao Zedong and U.S. Presidents Richard Nixon and Gerald Ford, there was closer cooperation between China and the U.S. against the Soviet Union, and throughout the 1990s, relations remained relatively good for a while. However, at a certain point, China’s continued economic rise had to challenge its relationship with the U.S. Chinese capitalists are not only conquering an increasing share of global markets, but the Chinese government is also restricting access for U.S. and Western capital to Chinese companies, making China a relatively independent rival, not integrated into any U.S.-dominated alliance system.

The U.S. responded to China’s rise with a strategy of encirclement. From South Korea and Japan, to Taiwan and Guam, and extending to the Philippines and Thailand, there is a continuous chain of U.S.-allied islands and states, complemented by U.S. allies Australia and New Zealand. The U.S. military has bases along the entire chain. It is not surprising that the Chinese government perceives this as a hostile act.

However, China is not a passive victim of U.S. imperialist aggression but is increasingly asserting its interests in an offensive manner. There are mainly two areas of conflict in China’s geographical vicinity: the first is the conflict over Taiwan, and the second is the one in the South China Sea.

The Taiwan conflict has its roots in 1949, when the anti-communist Kuomintang government, which had lost the civil war against the Communist Party of China, fled to the island of Taiwan and established its dictatorship there. The newly founded People’s Republic of China never recognized Taiwan or the „Republic of China“ as an independent state, but always considered the de facto state as a breakaway province, part of Chinese territory. To this day, only a few countries recognize Taiwan as a state, as this would automatically be seen as an affront by the People’s Republic of China. However, the essence of the conflict does not lie in the legal question of whether China’s claim to Taiwan is „legitimate“ or not. It lies in the capitalist interests of all the parties involved in the conflict: this is the interest of the United States in keeping Taiwan as part of its anti-Chinese alliance system, as an „unsinkable aircraft carrier“ off the coast of mainland China, while being able to conduct business with the important economy of the island state without hindrance. It is the interest of the Taiwanese capitalists in conducting their business independently of Beijing’s directives and developing their lucrative economic relationships with the United States, Japan, South Korea, and other countries. And it is the interest of mainland China in annexing Taiwan to break through the hostile encirclement by U.S. allies and to gain control over a central building block of the East Asian economic zone, where, among other things, more than 60% of global semiconductor production and over 90% of the most advanced semiconductor technology production is located.

A military conflict over Taiwan could quickly escalate into a large-scale war between China and the United States and their allies. In such a war, it would not matter who fired the first shot – it would be a war between the two leading imperialist poles for supremacy in the Pacific, a war that would be paid for with the blood of the working class of the involved countries, and in which they would have nothing to gain on either side. It is important to emphasize, in contrast to the prevailing Western propaganda, that it was the United States, in alliance with the Taiwanese bourgeoisie, who built Taiwan over decades into an anti-Chinese front-state, thus preparing the grounds for such a war.

To understand the conflict in the South China Sea, it is also necessary to grasp the economic and geopolitical importance of this maritime region: In 2016, 64% of all Chinese sea trade and 42% of Japanese sea trade, as well as 21% of total global trade, passed through the area.²⁴³ The conflict revolves around two groups of small islands in the South China Sea – the Spratly Islands and the Paracel Islands, which are partially militarily occupied by China, but are also claimed by a number of other countries, particularly the Philippines and Vietnam (see Graphic 3). By controlling the islands, China not only secures the economic exploitation of the surrounding waters but, more importantly, also the ability to project military power across the entire South China Sea, thereby gaining tremendous control over the flows of global trade.

Graphic 3: Territorial Claims in the South China Sea

Source: William Pesek: Making Sense of the South China Sea Dispute, Forbes, August 22, 2017, online: https://www.forbes.com/sites/outofasia/2017/08/22/making-sense-of-the-south-china-sea-dispute/?sh=152dbd41c3b9, accessed October 19, 2023.

With China’s growing strength in the global system, the intensification of conflicts inevitably follows. This is not to say that China alone is „to blame“ for these conflicts. The issue is not one of assigning blame, as these are objective processes arising from the shifting balance of power within the imperialist order. What is at stake is the understanding that these conflicts have the character of confrontations between states with a capitalist nature, sometimes even between the two main centers of today’s imperialism. Both pro-Chinese propaganda, which portrays China as merely a victim of Western aggression and justifies China’s rearmament and expansion, and the mirrored Western propaganda, which presents Taiwan as an innocent victim of Chinese aggression and thus justifies further arms supplies and military presence of the USA and European states, miss the point of the matter.

This brings us to the question that has implicitly played a role throughout the previous sections, namely, whether the term „imperialism“ is applicable in the case of China.

e. Is there a Chinese Imperialism?

Imperialism, when understood according to its Marxist definition, is not a characteristic that some countries possess and others do not, depending on how aggressive their foreign policy is or how many military bases they maintain outside their borders. Imperialism is a world system in which the hierarchy in mutual dependencies is based on the dominance of internationally expanding monopoly capital. The prerequisite for a state to adopt a non-imperialist or anti-imperialist character is that it lacks the economic basis of imperialism, namely monopoly capital: it can only be a socialist state or a country whose development towards capitalism is still at an early stage. To claim that China stands outside the global monopolistic capitalism would be such a detached statement from reality that only the most brazen apologists for Chinese capitalism would make it.

For, as the analysis of Chinese capitalism, including its global expansion, has shown, it is obvious that China is not only fully integrated into the imperialist world system but has even developed into one of the leading power poles of this system. What confuses some, even those who claim to adhere to Marxism, is that Chinese imperialism has thus far manifested itself differently. While US imperialism, as one could say drawing on Marx, oozes blood and filth from every pore, being responsible for countless wars, fascist coups, and millions of deaths across various countries of the world, in other words, appearing to the unblinded as naked barbarism on the world stage, Chinese imperialism presents itself much more „civilized“: It has so far not started wars or instigated genocides in other countries. It also does not yet have a worldwide network of military bases to enforce its influence around the globe and threaten its rivals through encirclement. It has no history of colonialism, that is, the ruthless, murderous, and systematic exploitation of other countries.

And yet, there is no doubt that it is imperialism: The Chinese state represents the interests of monopoly capital, most of which is privately owned, while the largest monopolies are predominantly state-owned. These monopolies export significant amounts of capital to all continents, they are among the world’s largest creditors, establish branches everywhere, and invest in or take over monopolies of other countries. To protect capital investments and trade routes, the Chinese state deploys its army and navy as well as private mercenary firms. Even in Chinese „police actions“ against rebels or pirates, as is the case when western financiers are behind such operations, it is mostly young men from the poorest backgrounds who are killed, often with no other perspective than piracy or joining an armed group.

China is not outside the imperialist system, as the socialist planned economy of the Soviet Union once was; rather, it is a part of it and contributes to its reproduction and maintenance. China is a member of the most important institutions for the global maintenance and regulation of imperialism, such as the International Monetary Fund (IMF) and the World Bank. China’s share in the World Bank is 4.8%, and in the IMF, it is 6.4%—efforts by China to increase its share were blocked by other countries, such as the USA. Both institutions have played an important role in recent decades in advancing the global offensive of monopoly capital against the working class and small peasantry, particularly in poorer countries. In exchange for loans, they have often demanded privatizations, dismissals of civil servants, actions against trade unions, pension cuts, elimination of subsidies, and similar measures at the expense of broad population segments, thus directly accelerating the impoverishment of these groups. China participates in both institutions not with the goal of fundamentally changing their character—something that is not possible—but in order to represent its own interests and exert influence on the regulation of the capitalist global economy.

The concentrated private property, for the protection of which China stands and whose interests it intends to enforce internationally, is no different from what the USA or the EU do. It means that the wealth of the world remains at the disposal of a small minority of capitalists, while the remaining billions are denied the fruits of their labor. For the miners in Zambia and the dock workers in Greece, it makes no difference whether the starvation wages they sacrifice their lives and health for are paid by a Chinese, US, or local company, or which exploiter appropriates the produced surplus value. While there is certainly a difference in that Chinese military and mercenaries are „only“ used to secure investments and trade routes in localized regions, whereas the USA in recent decades has repeatedly devastated entire regions with their wars, it remains and always will be a violent domination of monopoly capital over the working masses.

The actions in imperialist competition, the fight to increase the share of Chinese monopolies in the surplus value extracted from the working class—the course of the Chinese Communist Party (CCP)—is the direct opposite of proletarian internationalism. Instead of working for the liberation of workers worldwide and supporting their struggles against exploitation in every country, the CCP plays a central role in organizing and consolidating this very exploitation. The rise of China has also increased competitive pressure for the rest of the world, for instance, in other countries in Southeast and East Asia, as well as in Latin America, where production facilities were closed and relocated to China.²⁴⁴ This has worsened the conditions of the working classes in those countries, as bourgeois states have responded to intensified competition with intensified class struggle from above, aimed at lowering wages. At this point, the intention is not to criticize China morally for its role in capitalist competition, as all capitalist states play the same role. The point is that a development strategy based on being more successful in capitalist global market competition than other states inevitably renders proletarian internationalism absurd.

The fact that China currently pursues expansion less through direct military force than other imperialist centers likely has little to do with an internationalist stance by the Chinese leadership. It is far more likely due to the fact that such a course would disrupt the flourishing global business of Chinese monopolies and increase the risk of a military confrontation with the USA. Chinese capitalism is currently winning the competition with its rivals through „peaceful“ means and does not yet need war. This is why Chinese capitalism currently adopts a „human face,“ but this will inevitably change as global power dynamics shift.

The consequences of Chinese economic and, to some extent, military expansion for target countries have been outlined here, not to support the propaganda of Western media that claims China’s involvement in Africa or elsewhere represents a particularly ruthless form of imperialism. Such criticism, coming from those who for centuries ruthlessly exploited, slaughtered, and plundered the peoples of Asia, Africa, and Latin America down to the very last thread, is undoubtedly the height of hypocrisy and is often perceived as such in the countries concerned. However, criticism of Western double standards should not lead us, as Marxists, to become blind to objective realities and thereby apply double standards ourselves. Instead, the aim was to demonstrate that the fundamental laws and tendencies of development that have long secured Western imperialists their dominance in the capitalist world system are also operative in the case of China and underpin its rise to world power.

The often-repeated argument of modern China’s apologists—that Chinese capital exports, unlike those of, for instance, France, Germany, or the United States, do not bear imperialist characteristics because they contribute to infrastructure development in the target countries—is clearly absurd. That capital export, particularly when it involves investments in industry or infrastructure, also develops local productive forces is hardly surprising and is a general feature of capital export, as Lenin noted in his work on imperialism: “The export of capital influences the capitalist development in the countries to which it flows, accelerating it immensely.”²⁴⁵ Even the colonial powers of the 19th century, whose focus in the colonies was primarily on extracting maximum profits at minimal costs through the exploitation of natural resources, contributed to a certain extent to the development of productive forces by building railways and ports and training at least a small layer of collaborators. This does not, however, provide any justification for the barbarity of colonialism. Similarly, while it is nonsensical to label Chinese activities in Africa and elsewhere today as „recolonization,“ as is often done, they are unquestionably examples of capital export in the imperialist sense.

For a correct Marxist critique of imperialism, the point is not that imperialism would absolutely and universally prevent any economic development in the target countries. Rather, it lies in the fact that the working class, through its labor, creates immense wealth, which does not belong to them but to a tiny group of parasitic monopoly capitalists—regardless of whether these come from their own country or another. It also lies in the fact that imperialism generates colossal contradictions that manifest in inter-state conflicts and are often resolved only through wars—wars in which the working classes of various countries are sent to the battlefield to kill other workers in the interests of their capitalist masters.

Historically, this inhumane system did not originate from China. On the contrary, the Chinese people were for a long time one of its victims, enduring unimaginable suffering before they could liberate themselves through revolution. However, today, China is no longer a counterforce to imperialism but is instead part of this system and one of the poles driving the current dynamics that bring the threat of a new imperialist world war back to the horizon.

6) Conclusion: The Correct Position of Communists on China

The results of an analysis of China’s social development are unequivocal: capitalist relations of production are not only predominant in China but omnipresent. The fundamental classes of capitalist society—the bourgeoisie and the working class—have reemerged with the dismantling of socialist social relations (with the major difference that, unlike the 1950s, when there was still a massive peasant class alongside the bourgeoisie and working class, this class has now been drastically reduced). The Chinese bourgeoisie ranks among the most powerful in the world, while the Chinese working class has lost many achievements of the socialist era and now finds itself once again as an exploited class, facing the renewed task of defending its living conditions against the capitalists and fighting for its own power. The role of the state, which continues to intervene in economic development, does not contradict this reality—on the contrary, the role of the state is precisely to organize and advance capitalist development, i.e., the accumulation of capital. The Chinese state is a bourgeois state; it functions to advance the overall accumulation of capital and to create societal conditions favorable to it, for instance, by suppressing the class struggle of the working class through a combination of concessions and repression.

The Communist Party of China (CPC) labels its counterrevolutionary program of expanding capitalist relations as „socialist,“ even though it is, in reality, anti-socialist. The CPC’s understanding of socialism bears no resemblance to that of Marxism—it does not aim at the creation of new relations of production, social ownership, or central planning. Instead, the CPC merely speaks of achieving certain values such as „prosperity,“ „social harmony,“ societal stability, and national greatness. The party seeks to achieve these goals under capitalist conditions, not socialist ones, which is, of course, impossible—a capitalist society is based on class antagonisms and can never be „harmonious.“ A socialist economy, in the Marxist sense, is explicitly rejected by the party leadership. Thus, the „Communist“ Party has long been a party of capitalist development, providing not only the ideological framework and legitimacy for capitalist growth but also serving as an instrument of capital’s domination, concretely supporting the organization of the Chinese bourgeoisie as the ruling class. The fact that the bourgeoisie continues to use a party whose flag bears the hammer and sickle is a historical peculiarity, but it should not deter us from looking closely at what lies beneath the surface. Due to its meteoric economic rise, China now holds a leading position in the imperialist world order: it is one of the largest exporters of capital, one of the biggest creditors and international investors, and one of the foremost centers of capital accumulation, home to a significant portion of the „global players,“ i.e., the monopolies leading the redivision of the world.

Some propose a milder interpretation, arguing that while China may not currently be socialist, it is at least pursuing a „socialist development perspective,“ ultimately aiming for socialist relations. However, this thesis has no basis in reality. Not only have leading CPC officials repeatedly stated that the „reform and opening-up“ policy is designed to be permanent, explicitly ruling out a transition to socialist planning, but the very idea of inserting a period of capitalist development spanning seven decades (1978–2049)—as long as the Soviet Union existed—after an initial phase of socialist construction and then returning to socialism is deeply questionable. Capitalist development in China has created an exceedingly powerful bourgeoisie that exports capital worldwide and profits from the exploitation of the working classes in other countries and continents. This capital is closely tied to the Chinese state, or in some cases is state-owned capital itself, meaning that the state and the „Communist“ Party are directly involved in and have a vested interest in maintaining these exploitative relations. China has also exported substantial capital in the form of loans and will ensure that these investments are repaid with interest. Ultimately, the situation can be summarized as follows: a state that seeks to succeed in the capitalist world market must adhere to the „rules of the game“ of capitalism. Or, to express it in historical-materialist terms: it is subject to the objective laws of the capitalist mode of production and must act according to its imperatives under penalty of collapse. A state that does so inevitably and permanently chooses the capitalist path of development. On this path, a new ruling class emerges, one that will do everything in its power to defend its newly accumulated wealth—while simultaneously, the power of the working class erodes and is ultimately dismantled, as happened in China long ago, where the working class today has no independent organizations and must assert its immediate interests through spontaneous strikes and protests.

The hope for a return of China to the socialist path of development is, for these reasons, a pure illusion and, moreover, very dangerous. Siding with the Chinese state and the ruling party, which is derived from this illusion, inevitably results in a departure from communist positions in several ways:

Firstly, it means denying unconditional solidarity to the Chinese working class in its struggle against capitalist exploitation. Such solidarity would not only entail supporting their labor struggles but, above all, supporting the fight for a new socialist revolution in China, for the overthrow of the bourgeois government, as will be the task of a future communist international.

Secondly, siding with the Chinese state also represents a betrayal of proletarian internationalism, as it entails choosing the side of one of the imperialist poles in the increasingly intense rivalry between the USA and the EU on the one hand, and the bloc centered around China on the other, much like the Social Democracy did at the onset of World War I in 1914. This ultimately means disorienting the international working class amidst the bloodshed of the impending world war and preventing it from building its own organization against the war and for the revolution.

Thirdly, the “Dengist” position ultimately means abandoning the struggle for socialism in one’s own country. For if a capitalist country, where the state plays a more active role in the economy, is already accepted as “socialist,” and if, as in the case of Deng Xiaoping, socialism is essentially reduced to the growth of productive forces, then the Marxist concept of socialism-communism as a society free from exploitation, based on collective ownership, is evidently entirely lost. It then becomes unclear what the content or goal of the revolutionary movement should even be. A revolutionary strategy for overthrowing the capitalist system can no longer be formulated on this basis.

Thus, “Dengism” represents a dangerous form of revisionism and right-wing opportunism, which has already influenced numerous communist parties and produced false orientations. It is no longer possible to turn a blind eye to this opportunism, as it has become one of the greatest threats to the communist world movement. It must be fought and pushed back – and this is possible, as the facts are clearly not on its side.

The reason why the positions of „Dengism“ have some influence, despite their absurdity, is certainly not due to their convincing arguments. If the clearly obvious realization that today’s China is a capitalist country is continually denied, it is not because this issue is unresolved. It happens out of wishful thinking and a reluctance to acknowledge that, unfortunately, there is no socialist superpower on Earth today that could effectively resist imperialism. It is understandable that such a conclusion can be emotionally challenging – it means that, in the struggle for socialism, we essentially have no other ally than the international working class, that no state with a strong army will stand by us unless the working class itself creates that state. However, this is the reality, this is the magnitude of the task ahead, and it is deadly to harbor illusions in this regard.

An internationalist communist position in Western countries, on the other hand, certainly does not mean that communists could join in with the anti-Chinese propaganda of the Western bourgeois media. Similar to the case of other countries that face rivalries with NATO states, it is important here to uncover the role of war propaganda. When propagandists from the USA or Germany sensationally accuse China of repression, or when China’s actions in Africa or Southeast Asia are scandalized, this is not only meant to distract from their own crimes, but also to demonize China as the new „Empire of Evil“ (as US President Ronald Reagan once referred to the USSR), justifying rearmament, sanctions, and war preparations against this state. This propaganda is, of course, in direct opposition to the internationalist stance of the working class and must be exposed and fought as imperialist warmongering. This remains the main task of the peace and workers‘ movement in Germany when it comes to China. In order to address it, clarity about the class character of the Chinese state is an absolute prerequisite.

1 DKP 2023: Die VR China, ihr Kampf um den Aufbau eines modernen sozialistischen Landes und die Veränderung der internationalen Kräfteverhältnisse, online: https://www.unsere-zeit.de/die-vr-china-ihr-kampfum-den-aufbau-eines-modernen-sozialistischen-landes-und-die-veraenderung-der-internationalenkraefteverhaeltnisse-4779337/ , last access 2.10.2023.

2 Kommunistische Organisation 2023: Die DKP, der Sozialismus und die VR China, online: https://kommunistische.org/stellungnahmen/die-dkp-der-sozialismus-und-die-vr-china/#sdfootnote1sym, last access 8.12.2023.

3 “They don’t know how capitalist China is. China’s rapid economic growth is the result of its embrace of a market economy and private enterprise. China is among the most open markets in the world: It is the largest trading nation and also the largest recipient of foreign direct investment, surpassing the United States in 2020.”, “Americans Don’t Know How Capitalist China Is”, Interview with Weijian Shan, Harvard Business Review, 2021

4 cf., e.g. Elisseos Vagenas 2010: The international role of China, KOMEP 6/2010, online: https://inter.kke.gr/en/articles/The-International-role-of-China ; TKP 2017: Thesen zum Imperialismus entlang der Achse von Russland und China, online: https://kommunistische.org/diskussion/tkp-thesen-zum-imperialismus-entlang-der-achse-von-russland-und-china-2017/ ; Frank Flegel/ Jürgen Geppert 2020: Ökonomische Analyse Chinas, online: https://offen-siv.net/wp-content/uploads/2020/04/2002-03.pdf ; Anton Stengl 2021: Chinas neuer Imperialismus. Ein ehemals sozialistisches Land rettet das kapitalistische Weltsystem, Promedia Verlag: Wien; last access 2.10.2023.

5 Karl Marx: Das Kapital, Band I, MEW 23, p. 613

6 Karl Marx: Kritik des Gothaer Programms, MEW 19, p. 20

7 Karl Marx: Grundrisse der Kritik der Politischen Ökonomie, MEW 42, S. 105

8 Marx: Klassenkämpfe in Frankreich, MEW 7, S. 90

9 Wladimir I. Lenin: Der Imperialismus als höchstes Stadium des Kapitalismus, LW 22, S. 270.

10 Thanasis Spanidis 2022: Zur Politischen Ökonomie des heutigen Imperialismus, online: https://kommunistischepartei.de/diskussion-imperialismus/zur-verteidigung-der-programmatischen-thesen-der-ko, abgerufen 8.12.2023.

11 Mao Tse-Tung (1957): Über die Richtige Behandlung der Widersprüche im Volke, 1957, in: vier philosophische Monographien, Verlag für Fremdsprachige Literatur Peking 1968, p. 92

12 Mao Tse-tung (1937): Über den Widerspruch, Ausgewählte Werke Bd I, p. 365-408

13 Ibid. p. 389

14 Mao: Der Widerspruch zwischen der Arbeiterklasse und der Bourgeoisie ist der Hauptwiderspruch in China, Ausgewählte Werke Bd V, p. 353

15 ZK der KP Chinas 2021: Resolution des ZK der KP Chinas über die großen Erfolge und historischen Erfahrungen des hundertjährigen Kampfes der Partei, online: http://german.china.org.cn/txt/2021-11/17/content_77877415.htm , last access 15.3.2023.

16 Ten Brink 2013, p. 176.

17 ibid, p. 43

18 ibid, p. 44

19 Hart-Landsberg/Burkett 40f

20 Ibid, p. 41

21 ibid, p. 51.

22 ibid

23 Ibid, p. 58.

24 Ibid, p. 55

25 Minqi Li 2017, p. 71.

26 Hart-Landsberg/Burkett, p. 52f

27 Ten Brink 2013, p. 182.

28 Xie Muqiao 1982: Wertgesetz und neue Preispolitik in China, in: Felix Wemheuer (Hg.) 2021: Marktsozialismus. Eine kontroverse Debatte, ProMedia Verlag: Wien, p. 151.

29 ibid., p. 158.

30 Why this is the case cannot be elaborated on here; therefore, it should suffice to point out that such a position is neither supported by historical experience—especially since socialist economies often had equal or even higher growth rates than capitalist ones over long periods—nor theoretically plausible. The central counterargument of anti-communism, namely that a modern economy is too complex for central planning, originates from a time when computer technology was not yet available. At the latest since the 1980s, when electronic data processing has enabled continuously updated real-time economic planning, this argument has become obsolete.

31 Gao 2018, p. 145

32 Converted, this amounts to 467,000 square kilometers of cultivated land, which is roughly equivalent to the entire territory of Spain.

33 Translated from English: „One of the reasons for the good record of grain production in the post-Mao era is that the huge amount of work invested in irrigation projects, especially those carried out during the CR, happened to pay off during the years immediately after the death of Mao. From 1966 to 1977, 56,000 middle- and small-sized electric stations were built that connected 80 percent of communes and 50 percent of production brigades with electricity. Irrigation powered by electric pumps reached a capacity of 65 million horsepower. More than 20,000 electric-powered wells were made that could irrigate more than 700 million mu of land (on mu is about 0.0667 hectares). Compared with 1965, China’s irrigated land increased by 51 percent, electricity consumption in agriculture increased by 470 percent, electric-powered water wells by 935.89 percent, land areas irrigated by electric power by 355.58 percent, available tractors increased 5.7 times, and hand tractors increased 65 times”, ibid. p. 147

34 ibid

35 Economist Intelligence 2015: Grappling with leviathan: reforming the state sector, 12.1.2015, online: http://country.eiu.com/article.aspx?articleid=472649831&Country=China&topic=Economy_1 , last accessed 23.5.2023.

36 Chunlin Zhang 2019: How Much Do State-Owned Enterprises Contribute to China’s GDP and Employment?, World Bank Working Paper, Washington D.C.

37 Statista.de: Number of employees at state-owned, collective-owned, and private enterprises in urban China from 2011 to 2021.

38 Lin et al. 2020, p. 37

39 ibid, p. 38

40 Lin et al 2020, p. 38

41 Tobias ten Brink 2013: Chinas Kapitalismus. Entstehung, Verlauf, Paradoxien, Campus Verlag: Frankfurt am Main, p. 126

42 Ten Brink 2013, p. 127

43 Lin et al 2020, p. 39

44 Xi 2014, p. 135.

45 For competitive sectors, the direction was to ‘steadily promote the mixed ownership of SOEs and make sure both state capital and non-state capital engage in the operation of the relevant SOEs’, while for strategic sectors, ‘SOEs in the relevant sectors should remain state-controlled, but share-holdings of non-state parties are encouraged’.; Song 2018, p. 361

46 Song 2018, 361

47 Song 2018, 362

48 Marquis/Qiao 2022, p. 216ff.

49 Song 2018, 362

50 Economist Intelligence 2015.

51 Jörg Kronauer: Stark genug für die Öffnung, junge Welt, 9.3.2019.

52 CPPCC: Chinese People’s Political Consultative Conference, a central state institution for the inclusion of various interest groups in politics

53 online: https://www.pekingnology.com/p/new-top-document-promoting-chinas , last accessed 18.10.2023

54 David M. Kotz & Hao Qi 2019: The Impact of State-Owned Enterprises on China’s Economic Growth, Review of Radical Political Economics 52(1), 1-19.

55 Chinese State Council 2017: New Generation Artificial Intelligence Development Plan, online: https://digichina.stanford.edu/work/full-translation-chinas-new-generation-artificial-intelligence-development-plan-2017/, last accessed 8.12.2023.

56 Schild, Joachim/ Uterwedde, Henrik 2006: Frankreich: Politik, Wirtschaft, Gesellschaft, VS Verlag: Wiesbaden, p. 145-159.

57 Lin et al 2020, p. 31

58 Song 2018, 363

59  Lin et al 2020, p. 39

60 Friedrich Engels: Die Entwicklung des Sozialismus von der Utopie zur Wissenschaft, MEW 19, p. 222

61 Wladimir Lenin: Der Imperialismus als höchstes Stadium des Kapitalismus, LW 22, p. 255.

62 Ten Brink 2013, p. 170

63 Ten Brink 2013, p. 127.

64 Kornai

65 Ten Brink 2013, p. 170.

66 Ten Brink 2013, p. 258

67 Lin et al 2020, p. 43

68 These structures also exist in other countries. They function in such a way that the (private or state) majority shareholder does not directly control company B with its capital but instead owns, for example, 50% plus one share of a holding company A, which in turn holds 50% plus one share of company B. This means that (assuming A and B have the same market capitalization), only a quarter of company B’s share capital needs to be invested to reliably win all votes at the company’s shareholder meetings.

69 Economist Intelligence 2015

70 Ten Brink 2013, p. 197f

71 Die Presse: China will alle Staatsunternehmen in Kapitalgesellschaften umwandeln, 26.7.2017, online: https://www.diepresse.com/5258847/china-will-alle-staatsunternehmen-in-kapitalgesellschaften-umwandeln

72 Lin et al 2020, p. 40.

73 Ten Brink 2013, p. 198.

74 Cf., e.g., Kotz & Qi

75 Ten Brink 2013, p. 272f.

76  Ten Brink 2013, p. 152.

77 Simon 2022, p. 390

78 Ten Brink 2013, p. 151.

79 Ten Brink 2013, p. 159f.

80 Cf. Sit Tsui et al. 2018: Renminbi: A Century of Change, Monthly Review, November 2018.

81 Ibid. p. 392f.

82 ibid, p. 395ff.

83 Zhenhuan Yuan 2004: Land Use Rights in China, Cornell Real Estate Journal, Vol. 3.

84 Paul Tostevin: The 10 most valuable real estate markets in the world, The Savills Blog, online: https://www.savills.com/blog/article/219340/international-property/the-10-most-valuable-real-estate-markets-in-the-world.aspx#:~:text=Japan%2C%20the%20UK%2C%20India%2C%20Germany%2C%20France%2C%20Brazil%2C%20Italy,%2456.8tn%2C%20of%20the%20global%20real%20estate%20asset%20total., last access 23.9.2023.

85  Ten Brink 2013, p. 163f

86 Richard McGregor 2010: The Party: The Secret World of China’s Communist Rulers, HarperCollins e-books, p. 59.

87 Isabela Nogueira 2018: Estado e capital em una China com classes , Revista de Economia Contemporânea 22(1), p. 11.

88 Minqi Li 2017: China’s changing class structure and national income distribution, 1952-2015, Journal of Labour and Society, p. 70.

89  ibid, p. 72.

90 Statista.de: Number of employees at state-owned, collective-owned, and private enterprises in urban China from 2011 to 2021.

91 Ten Brink 2013, p. 284f

92 https://www.statista.com/statistics/1102407/china-number-of-employed-persons-in-urban-rural-areas/#:~:text=Published%20by%20C.%20Textor%2C%20Jun%2028%2C%202023%20In,around%20274%20million%20were%20employed%20in%20rural%20areas; https://www.statista.com/statistics/251380/number-of-employed-persons-in-china/#:~:text=The%20graph%20shows%20the%20number%20of%20employed%20people,in%20China%20amounted%20to%20around%20733.5%20million%20people.; https://www.statista.com/statistics/1127597/number-of-migrant-laborers-in-china-by-region-of-origin/

93 Statista: Monthly surveyed urban unemployment rate of people aged 16 to 24 in China from June 2021 to June 2023, online: https://www.statista.com/statistics/1244339/surveyed-monthly-youth-unemployment-rate-in-china/#:~:text=In%20June%202023%2C%20the%20surveyed%20unemployment%20rate%20of,up%20from%2020.8%20percent%20in%20the%20previous%20mont

94 China Unemployment Rate 1991-2023, online: https://www.macrotrends.net/countries/CHN/china/unemployment-rate, last access 9.12.2023.

95 Ten Brink 2013, p. 282

96 CLB 2023: After years of pandemic anomalies, worker strikes and protests are on the rise across industries in China, 28.7.2023, online: https://clb.org.hk/en/content/after-years-pandemic-anomalies-worker-strikes-and-protests-are-rise-across-industries-china ; CLB 2022: Increase in strikes in logistics and service sectors in 2021 not expected to let up, 15.2.2022, online: https://clb.org.hk/en/content/increase-strikes-logistics-and-service-sectors-2021-not-expected-let ; CLB 2021: Collective protests decline but worker grievances remain unresolved, 27.1.2021, online : https://clb.org.hk/en/content/collective-protests-decline-worker-grievances-remain-unresolved

97 Ten Brink 2013, p. 294f

98 Ibid.

99 CLB 2023

100 Ten Brink 2013, p. 301.

101 https://www.economy.com/china/wage-and-salaries

102 https://www.inflationtool.com/chinese-renminbi?amount=100&year1=2010&year2=2022&frequency=yearly

103 https://www.worldbank.org/en/news/press-release/2022/04/01/lifting-800-million-people-out-of-poverty-new-report-looks-at-lessons-from-china-s-experience

104 Andy Sumner/ Eduardo Ortiz-Juarez 2021: Fragile Progress? Global Monetary Poverty, 1981-2030, Paper prepared for the United Nations Virtual Inter-Agency Expert Group Meeting on the Implementation of the Third UN Decade for the Eradication of Poverty, p. 7, 13.

105 Chase Peterson-Withorn: Forbes’ 37^th Annual World’s Billionaires List: Facts and Figures 2023, Forbes, 4.4.2023, online: https://www.forbes.com/sites/chasewithorn/2023/04/04/forbes-37th-annual-worlds-billionaires-list-facts-and-figures-2023/?sh=8c479877d76a, last access 15.7.2023.

106 Hope King: China is making new billionaires much faster than the US, Axios 20.3.2022, online: https://www.axios.com/2022/03/20/china-new-billionaires-faster-us, last access 16.7.2023.

107 Jeff Desjardins: The 25 Countries with the most billionaires, VisualCapitalist 13.3.2018, online: https://www.visualcapitalist.com/25-countries-billionaires/#:~:text=In%20the%20U.S.%2C%20there%20is%20one%20billionaire%20for,%28233k%29%2C%20Singapore%20%28267k%29%2C%20Sweden%20%28319k%29%2C%20and%20Israel%20%28475k%29., last access 15.7.2023.

108 Bai, Chong-En et al. 2021: The Rise of state-connected private owners in China, NBER Working Paper 28170, Cambridge/Massachusetts, p. 2.

109 Ten Brink 2013, p. 209.

110 “Almost all of China’s richest people have made their money in state-dominated sectors, such as property and construction, resources, other heavy industries and telecommunications.”; “The problem with this state-led approach is that entrepreneurs and other businesspeople need the support of the Party, or better still, CCP membership to get ahead. “; John Lee 2011: China’s Rich Lists Riddled with Communist Party Members, Forbes 14.9.2011, online: https://www.forbes.com/2011/09/14/china-rich-lists-opinions-contributors-john-lee.html?sh=4fc6442b210b , last access 18.7.2023.

111 ten Brink 2013, p. 208.

112 ibid

113 Ten Brink 2013, p. 210.

114 Rhiannon Du Cann 2023: China’s Communist Party billionaires who own more than £400bn of wealth, Express, 15.3.2023, online: https://www.express.co.uk/news/world/1746362/china-latest-communist-party-billionaires-spt, last access 18.7.2023.

115 David Barboza 2012: Billions in Hidden Riches for Family of Chinese Leader, New York Times, 25.10.2012, online: https://www.nytimes.com/2012/10/26/business/global/family-of-wen-jiabao-holds-a-hidden-fortune-in-china.html , last access 18.7.2023.

116 David Barboza/ Michael Forsythe 2018: Corruption Inquiry Draws Nearer to Former Chinese Prime Minister, New York Times, 7.2.2018, online: https://www.nytimes.com/2018/02/07/world/asia/china-whitney-duan-weihong.html, last access 29.7.2023

117 John Garnaut 2012: Chinese leader’s family worth a billion, 30.6.2012, online: https://www.smh.com.au/world/chinese-leaders-family-worth-a-billion-20120629-218qi.html , last access 18.7.2023.

118 Scott Kennedy 2009: Comparing Formal and Informal Lobbying Practices in China, China Information XXIII (2), p. 196.

119 Kennedy 2009, p. 204

120 Guosheng Deng/ Scott Kennedy 2010: Big business and industry association lobbying in China, The China Journal 63, p. 110ff.

121 Deng/ Kennedy 2010, p. 102.

122  Dongya Huang/Minglu Chen 2020: Business Lobbying within the Party-State: Embedding Lobbying and Political Co-optation in China, The China Journal, no. 83, p. 110ff.

123 ibid, p. 116.

124 Ten Brink 2013, p. 205.

125  ibid, p. 117f.

126 ibid, p. 118.

127 David A. Steinberg/ Victor C. Shih 2012: Interest Group Influence in Authoritarian States. The Political Determinants of Chinese Exchange Rate Policy, Comparative Political Studies 45 (11), p. 1418.

128 ibid, p. 1420.

129 ibid, p. 1421.

130 Huang/Chen 2020, p. 115.

131 Huang/Chen 2020

132 ibid, p. 121f.

133 ibid, p. 121

134 ibid, p. 120.

135 Huang/Chen 2020, p. 122f

136 cf., e.g. Ben Chapman 2017: Chinese billionaires and CEOs keep disappearing in ‘state-sanctioned abductions’, Independent 6.2.2017, online: https://www.independent.co.uk/news/business/news/china-billionaires-ceo-disappearing-missing-station-sanctioned-abductions-beijing-security-agencies-xiao-jianhua-a7564896.html, last access 17.12.2023.

137 Communist Party of China 2022: Constitution of the Communist Party of China, Revised and adopted at the 20^th National Congress of the Communist Party of China on October 22, 2022.

138 Ibid.

139 Ibid.

140 Ibid.

141 Boer 2021, p. 116f.

142 „There is no fundamental contradiction between socialism and a market economy”, Boer 2021, p. 117

143 Kai Vogelsang 2014: Kleine Geschichte Chinas, Reclam: Ditzingen, p. 393f.

144 Boer 2021, p. 37

145 Boer 2021, p. 39

146 Konrad Seitz 2006: China. Eine Weltmacht kehr zurück, Goldmann: München, p. 300ff

147 Xi 2014, p. 100

148 Xi 2017, p. 282

149 Xi 2017, p. 283

150 Xi 2014, p. 134

151 Xi 2017, p. 520.

152 ibid, p. 278.

153 ibid, p. 275;

154 Karl Marx: Zur Kritik der Politischen Ökonomie. Vorwort, 1859, MEW 13, p. 8

155 Xi 2014, p. 115f.

156 Xi 2014, p. 70

157  David Kotz 2007: The State of Official Marxism in China Today, Monthly Review, September 2007.

158 Stengl 2021, p. 164f

159 Xi 2014, p. 89

160 Xi 2014, p. 91

161 Xi 2014, p. 108

162 Xi 2014, p. 133

163 Xi 2014, p. 361

164 Beriht

165 World Economic Forum 2023: Davos 2023: Special Address by Liu He, Vice-Premier of the People’s Republic of China, online: https://www.weforum.org/agenda/2023/01/davos-2023-special-address-by-liu-he-vice-premier-of-the-peoples-republic-of-china/, last access 5.6.2023.

166 Xinhua: Xi stresses decisive role of market in resource allocation, 23.5.2020, online: http://www.xinhuanet.com/english/2020-05/23/c_139082022.htm? , last access 5.6.2023.

167 Xi 2014, p. 373

168 ibid, p. 371

169 Xi 2017, p. 525.

170 cf. Spanidis 2022: Zur Politischen Ökonomie des heutigen Imperialismus, online: https://kommunistischepartei.de/diskussion-imperialismus/zur-verteidigung-der-programmatischen-thesen-der-ko/, last access 20.10.2023.

171 Report of Hu Jintao to the 18^th CPC National Congress, 8.11.2012

172 Felbermayr et al 2019, p. 28

173 Karl Marx: Das Kapital, Band III, p. 221-277.

174 Jiawen Guo et al. 2022: Uncovering the overcapacity feature of China’s industry and the environmental & health co-benefits from de-capacity, Journal of Environmental Management, Vol. 308.

175 Lydia Guo: China’s overcapacity problem: here’s the plan, Financial Times, 18.10.2013.

176 Daisuke Wakabayashi/ Alexandra Stevenson: China is on Edge as Fallout from its Real Estate Crisis Spreads, New York Times, 20.8.2023.; Zen Soo: Chinese developer Country Garden says it can’t meet debt payment deadlines after sales slump, 10.10.2023, online: https://apnews.com/article/china-country-garden-property-debt-8cee5b3d24762ef34e1bb056389d27d1, last access 9.12.2023.

177 The capitalist mode of production can only develop in a crisis-ridden manner; no other form of movement is possible for it. For a more detailed explanation of this dynamic, see Grundlagenschulung of the KP, Chapter 4.8 „Business Cycle and Crisis,“ online: https://kommunistischepartei.de/grundlagenschulung/kapitel-4-kritik-der-politischen-oekonomie/#4-8, accessed December 9, 2023.

178 Simon 2022, p. 394

179 Felbermayr et al 2019, p. 28

180 Horn et al. 2019, p. 2

181 ibid, p. 20.

182 ibid.

183 Horn et al 2019, p. 6f

184 ibid., p. 6

185 ibid, p. 6f

186 MERICS 2023: The party knows best. Aligning economic actors with China’s strategic goal, Merics Report October 2023, S. 81, online: https://merics.org/sites/default/files/2023-10/MERICS%20Report%20The%20party%20knows%20best-Aligning%20economic%20actors%20with%20Chinas%20strategic%20goals2_0.pdf, last access 9.12.2023.

187 Horn et al 2019, p. 9.

188 ibid, p. 37.

189 ibid, p. 33

190 ibid, p. 34.

191 Horn et al, p. 22.

192 Felbermayr et al. 2019, p. 30

193 Agatha Kratz et al. 2021: Chinese FDI in Europe: 2020 Update, p. 13, online: https://merics.org/sites/default/files/2021-06/MERICSRhodium%20GroupCOFDIUpdate2021.pdf, last access 23.9.2023.

194  Wladimir Lenin: Der Imperialismus als höchstes Stadium des Kapitalismus, LW 22, p. 255.

195 Greenfield investments are investments in which a new subsidiary is established abroad.

196 ibid, p. 31

197 Ibid.

198 ibid, p. 32.

199 Simon 2022, p. 397

200  Matthias Naß 2ß19: Aufkaufen und ausschlachten, Die Zeit, 8.5.2018.

201 ibid, p. 33.

202 ibid, p. 34.

203 ibid., p. 33f.

204 Isha Agarwal et al. 2020: The Determinants of China’s International Portfolio Equity Allocations, IMF Economic Review 68, p. 643-692.

205 Johnston 2018, 45f

206 Felbermayr et al 2019, p. 30

207  Martin Armstrong: The Global Reach of China’s Belt and Road, 17.10.2023, online: https://www.statista.com/chart/31053/chinese-belt-and-road-initiative-investment-and-construction-by-region/, last access 20.10.2023.

208  Christoph Nedopil: China’s BRI isn‘t going away, it’s getting smaller and greener, 13.10.2023, online: https://asia.nikkei.com/Opinion/China-s-BRI-isn-t-going-away-it-s-getting-smaller-and-greener, alast access 9.12.2023.

209 Diermeier et al 2020, p. 2

210 Ebd., p. 3.

211 Cerutti/ Zhou 2018

212 Lee Jones/ Shahar Hameiri 2020: Debunking the Myth of ‘Debt-trap Diplomacy’, Asia-Pacific Programme Research Paper, August 2020; Deborah Brautigam/ Meg Rithmire 2021: The Chinese ‘Debt Trap’ is a myth, The Atlantic, 6.2.2021, online: https://archive.ph/81ENz#selection-908.0-969.70, access 11.12.2023.

213 Atechnos 2019: Χρυσή Αυγή — εφοπλιστές: Οι φασίστες και τα αφεντικά τους…, online: https://atexnos.gr/%cf%87%cf%81%cf%85%cf%83%ce%ae-%ce%b1%cf%85%ce%b3%ce%ae-%ce%b5%cf%86%ce%bf%cf%80%ce%bb%ce%b9%cf%83%cf%84%ce%ad%cf%82-%ce%bf%ce%b9-%cf%86%ce%b1%cf%83%ce%af%cf%83%cf%84%ce%b5%cf%82-%ce%ba%ce%b1%ce%b9/. Last access 2.10.2023.

214 Iskra: Επίθεση χρυσαυγιτών σε δημοσιογράφο που κάλυπτε την απεργία στην Cosco, 9.9.2018, online: https://iskra.gr/%ce%b5%cf%80%ce%af%ce%b8%ce%b5%cf%83%ce%b7-%cf%87%cf%81%cf%85%cf%83%ce%b1%cf%85%ce%b3%ce%b9%cf%84%cf%8e%ce%bd-%cf%83%ce%b5-%ce%b4%ce%b7%ce%bc%ce%bf%cf%83%ce%b9%ce%bf%ce%b3%cf%81%ce%ac%cf%86%ce%bf/ , last access 2.10.2023.

215 International Communist Press 2018: KKE condemns relations of the PR of China with the Greek fascist organization „Golden Dawn“, online: https://icp.sol.org.tr/europe/kke-condemns-relations-pr-china-greek-fascist-organization-golden-dawn, last access 2.10.2023

216 Gibran Naiyyar Peshimam 2023: US concerned about debt Pakistan owes China, official says, online: https://www.reuters.com/world/asia-pacific/us-concerned-about-debt-pakistan-owes-china-official-says-2023-02-16/, last access 2.10.2023.

217 Stengl 2021, S. 51-59; S. Khan Islamabad 2020: Why China’s investment is stoking anger in Balochistan, DW 15.7.2020, online: https://www.dw.com/en/why-chinese-investment-is-stoking-anger-in-pakistans-balochistan-province/a-54188705, last access 18.10.2023; Ahmed Kulmeer 2017: CPEC: A game changer or a disaster, Balochistan Times 2.12.2017, online: https://balochistantimes.com/cpec-a-game-changer-or-a-disaster/, last access, 18.10.2023.

218 Communist Party of Pakistan: Statement of the central secretariat after central committee meeting, 26.7.2021, online: http://www.solidnet.org/article/CP-of-Pakistan-Statement-of-the-central-secretariat-after-central-committee-meeting/? , last access 2.10.2023.

219 Steffen Richter 2020: Der reiche Nachbar übernimmt, Die Zeit, 26.12.2020.

220 Ibid.

221 BBC 2018: Reality Check: Is China burdening Africa with debt?, online: https://www.bbc.com/news/world-africa-45916060. last access 2.10.2023.

222 Ibid.

223 BBC 2011: China mines in Zambia ‚unsafe‘ says Human Rights Watch, online: https://www.bbc.com/news/world-africa-15569310, last access 2.10.2023.

224 Alexis Okeowo 2013: China, Zambia, and a Clash in a Coal Mine, online: https://pulitzercenter.org/stories/china-zambia-and-clash-coal-mine, last access 2.10.2023.

225 Lusaka Times 2010: Two Chinese nationals arrested for shooting 12 Zambian miners, online: https://www.lusakatimes.com/2010/10/16/chinese-nationals-arrested-shooting-12-zambian-miners/, last access 2.10.2023.

226 Okeowo 2013.

227 Chinese mine companies in Zimbabwe accused of ‘rampant abuse’ after boss shot local workers, South China Morning Post, 1.7.2020.

228 Ministry of National Defense of the PRC 2015: China’s Military Strategy, Beijing.

229 Ministry of National Defense of the PCR 2019: China’s National Defense in the New Era, Beijing.

230 Sputiknews 2018: China to Build Second Foreign Naval Base, This Time in Pakistan, online: https://sputniknews.com/asia/201801051060541891-china-second-foreign-base-pakistan/ , last access 25.6.2023.

231 Austin Bodetti 2019: How China came to dominate South Sudan’s Oil, The Diplomat, 11.2.2019; Reuters: China deploys troops to UN force to protect South Sudan oilfields, 10.9.2014, online: https://www.reuters.com/article/china-sudan-idUSL3N0RB03Z20140910/ , last access 11.12.2023.

232 Chris Devonshire-Ellis 2020: 84% of China’s BRI Investments are in medium-high risk countries, online: https://www.silkroadbriefing.com/news/2020/07/02/84-chinas-bri-investments-medium-high-risk-countries/, last access 2.10.2023.

233 Brenda Goh et al. 2017: Local, global security firms in race along China’s ‚Silk Road‘, online: https://www.reuters.com/article/us-china-silkroad-security-analysis-idUSKBN17P10Y, last access 2.10.2023.

234 Alessandro Arduino 2022: Chinese private security firms spreading far and wide in Africa, Asia Times 10.8.2022, online: https://asiatimes.com/2022/08/chinese-private-security-firms-spreading-far-and-wide-in-africa/, last access 2.10.2023.

235 Consisting of Mauritania, Mali, Niger, Burkina Faso, and Chad.

236 Natalie Herbert 2021: China’s Belt and Road Initiative invests in African infrastructure – and African military and police forces, Washington Post, 30.4.2021.

237 South China Morning Post 2018: China is helping Afghanistan set up mountain brigade to fight terrorism, SCMP, 28.8.2018.

238 Asia Financial 2023: Taliban and China to Discuss Potential Belt and Road Links, 23.10.2023, online: https://www.asiafinancial.com/taliban-and-china-to-discuss-potential-belt-and-road-links, last access 11.12.2023.

239  Kanat Altynbayev 2021: China’s security expansion in Tajikistan sparks concerns in Russia, online: https://central.asia-news.com/en_GB/articles/cnmi_ca/features/2021/12/13/feature-01, last access 25.6.2023.

240 Catherine Putz 2021: China’s Security Infrastructure continues to grow in Tajikistan, The Diplomat, 27.10.2021.

241  Altynbayev 2021; Linda Lew 2021: Why China is funding a base in Tajikistan, South China Morning Post, 7.11.2021.

242 Altynbayev 2021.

243 ChinaPower (not dated): How Much Trade Transits the South China Sea, online: https://chinapower.csis.org/much-trade-transits-south-china-sea/, last access 2.10.2023.

244 Hart-Landsberg/Burkett 2006, p. 94-108

245 Wladimir Lenin: Der Imperialismus als höchstes Stadium des Kapitalismus, LW 22, p. 248.