The future for the New China - the writing on the wall

A Chinese-style socialist market economy is something of a mouthful and that betrays a problem. This is a concept bequeathed by Deng Xiaoping, describing how to combine state planning with today's market economics. Jiang Zemin passed this baton on to the new team leading China.

Public ownership of enterprises remains primary says Jiang but this rests among other forms of ownership - collective ownership, private ownership and foreign ownership. In theory this means quite a chunk of the ownership is "by the people" but because China has not reached its proposed New Democracy, in reality, the present state of affairs has the supposed people's ownership sectors in the hands of the Communist Party. That does not qualify!

China remains elitist; economically segregated between have and not-have areas. That is, the coastal regions and the deep south against the interior and western China, the rural and the urban areas, and there is also disparity within the cities. This is well understood by the government and is on the horizon as the next task to tackle.

Many collectives are in fact private companies, admits Jiang. The state firms are closing at a fair rate too, so the direction is leading away from the fundamentals of Communism. Also, admitting businessmen and women into the Party weakened the original for-the-common-good thrust.

Where is the 95-per-cent-representation of the people that heralds the arrival of the Communist Party as a real and functioning force, as stated by Mao Zedong? Elder Deng Liqun publicly remonstrates the government leaders, along with remnant leftists, expressing disquiet that reform under Jiang would lead to privatisation and loss of the basis of socialist rule. This minority view has the merit of being a valid and indeed meritorious stance. It should not be dismissed.

The "new doctrine" has led to the formation of the term min ben, meaning "people's capital" and this coinage has surface validity as the wealth generated under the developing schemes gets dished around. Many benefit - not all, but substantially more people - so there is a welcoming general acceptance.

In the longer term though, when the ills of unenlightened capitalism are seen to be a constant and the money is seen moving in the same restricted circles, the "masses" will again begin questioning where the ideals of Communism went!

It is understood by the intelligentsia that the Communist Party has to reinvent itself and indeed this is not against Mao's perpetual revolution proposal. The difficult part is how to keep the wheel turning so more people enjoy the benefits and the whole process does not get stuck in ever-diminishing circles, which is the weakness of dog-eat-dog capitalism.

The Communist Party in China has fulfilled its early promises better than many would have thought. It has improved the general living standards by a good margin. Western-style representative democracy was not needed for that, nor a multi-party system. Also, strengthening the rule of law and beating down corruption were goals even detractors of the new system could admire.

Televised interviews with businessmen and women about their attitude on gaining Party membership revealed that they would do this in order to gain security for their chosen direction in life and not for any Communist idealism, in fact far from it. This was no different from the pragmatism of many in the past who joined the Party in order to be accepted. Only later did they grasp the importance of the ideas behind Communism. Why not the same again today?

The backbone of the Party: workers, farmers, soldiers and officials, will have the addition of business owners, scientists, academics and artists, and that can only make the backbone stronger.

Political awareness has always had strong emphasis in Communist China and this is of paramount importance today under the pressures of these stressful changes. Without an awareness of the implications of their actions, the new blood would indeed negatively affect the body population, so what the new leaders do and how they do it is extremely important. How to liberalise without losing power, this is the question.

In village society, elections are held for the village representatives. Budgets are routinely posted for public scrutiny. The importance of job creation, and not just wealth creation, is to be given priority in the new push forward. Thumbs up for the SME. All very healthy signs.

This is where a free press comes in. The best way to spread ideas and to interchange and, importantly, learn what not to do, is to have open discussion and commentary in the media, on television and in newspapers and magazines - hence the tea houses.

Whereas in the earliest years of Chinese Communism the only legitimate form of income was that earned by physical labour, and this worked to give impetus for a reshuffle of everything. That has gone on long enough. The dough is mixed. To bake the bread active ingredients are needed.

These are seen in the new allowables of income from rent, share dividends, interest from bank deposits and profits from trading. All these are now acceptable. Land transfers are to be recognised under the law and property rights strengthened with home ownership. There are to be tax advantages and a general redirection of the financial system. With these types of economic freedoms many people will jump on the bandwagon and the projected GDP growth figures are very likely to be met.

In better-off regions, local governments are asked to provide welfare programmes such as old age pensions, medical systems, education and a minimum living allowance, as it is understood that distribution of the wealth is still a criteria to balance the new efforts that are going towards wealth creation.

It would be a mistake, though, to see industrialisation as a conversion of the rural into the urban. What is needed - as in many countries - is a reinvigoration of the rural by providing the kinds of amenities available in the cities, to offer the home town as an alternative to the young. Also, to stop the spread of cheap-labour ghetto townships in urban areas.

Industrialisation needs to be seen in the application of hi-tech (today often called IT) to industry (and to farming, and market-gardening) for efficiency and standardisation of products. This is important to get away from socially destructive cheap labour ethics which are bound to fail in the long term, as China reaches its economic goals.

The term "revolutionary" still holds good as long as transformations are taking place that bring nearer the goal of general social benefits and a lifting in the quality of life for an ever increasing majority. Communism only starts with poverty, it is not a mandatory and continuing state that proves it! Also, revolution has nothing essentially to do with bombs and wars, though in the past these were too-obvious fellow travellers.

Outsiders have not given thought to what Communism would be in an economically healthy country. Certainly, there are no existing examples, given capitalism's all-out efforts to quench the fires of people like Lenin, Mao, Castro and the lesser lights of workers’ champions.

Violence and coercion have always been associated with Communism because it has always had to start with nothing and has been opposed by violence. The automatic reaction is to fight fire with fire. Chinese Communism is taking another way, yet still it is fighting fire with fire. It is taking on capitalism.

China is playing the West's game and in the long term can be the big winner. When China calls the shots, its stalwarts who have grasped the nettle of political awareness can re-engage themselves in the task. Remember, they have no external debt, they are quite used to self-sufficiency. They don't run on petroleum. They have never colonised - Tibet and Mongolia are strategic plays, not economic. In other words, they do not have the heavy baggage of many other countries.

Whereas apologists for Western (including Japanese) imperialism mention enlightened capitalism, they are rather shy of speaking about enlightened Communism. Is "social market economy with Chinese characteristics" commensurate with a de-centralised economic and political structure where trade is within its boundaries and with ASEAN countries? No self-defeating struggle for the lucrative Western markets. Where the emphasis returns to the people thing, the true People's Republic, the Jet Min.

In the Jet Min as final form there will be no private enterprise or private sector, there will be no state-owned enterprises or banks, everything will belong to the people. This can only be done with de-centralisation, with co-operatives, mutual societies, credit unions and other small-scale institutions that are run by local people for local people.

Workers and white-collar unions will still have a role to intermediate between the floor and the management in decision making. Profits will be re-invested in the enterprises and not siphoned off elsewhere. In that way new opportunities will open up and employment will be continuously created.

In a total reverse of privatisation, foreign-owned companies will have to be nationalised and then immediately taken over by the people in the region they are situated or where they operate. They must NOT remain State-run enterprises. Likewise with private companies. Full compensation given. All control remaining within China, and within the locality. Only surplus goods exported, and then first within China to needy provinces.

All the different regions to fund their own education, health care, elderly care, and housing needs from resources generated locally. The unemployed to receive housing, foodstuffs, medical care and schooling for children or retraining. The wage differentials curbed to reasonable limits. All of this is on the horizon for a Communist country that manages to establish this elusive social-political-cultural form, and the colour or name of the cat hardly matters.