Mainland Media

Privatisation, WTO membership and State Assets – at what price and for whom?

The following is an edited version of a contribution posted on the official Xinhua News Agency - China's main state media organisation. It is a thinly veiled attack on the moral and economic injustices that the reforms have given rise to as well as the theory currently underpinning the present stage of the reform process.

Former President and CCP General Secretary Jiang Zemin's Theory of the Three Represents was developed in an attempt to justify the Party's policies and also to claim a role representative of the interests of the social classes that were emerging – as opposed to its former role as party of the working class and poor peasantry.   According to the theory, the Party can simultaneously represent and advocate on behalf of advanced social productive forces, the orientation of China's advanced culture, and the fundamental interests of the overwhelming majority of the people in China. A feat which the writer clearly finds both impossible and undesirable.

While taking a swipe at China's new parvenu class of entrepreneurs, the article indirectly attacks the three represents by pointing to the huge gap between rich and poor. In his view the former are increasingly making use of the resources they control to move China in the direction of a fully-fledged neo-liberal economy.

It is difficult to say if the hope expressed in the new leadership of Hu Jintao and Wen Jiabao is genuine or simply a case of political expediency. At the same time, we should not read too much into the fact that Xinhua posted the contribution in the first place. The article is quite restrained in comparison to many of the criticisms of government policies and individuals that frequently – and anonymously – make appear in the China's thousands of internet chat rooms. The original Chinese article is no longer on the Xinhua net but is on file at IHLO.

Economic Reform in China: Why and in whose interests?

The statistics are spectacular and the superlatives employed by economists and elite think-tanks to describe our success offer spectacular enticements for further reform. Yet if these reforms cannot be said to have benefited the majority of us, they will continue to have a negative impact on the moral climate.

The theory underpinning the reforms can hardly be described as constructive. Nor can they be called a success if we apply Deng Xiaoping's criteria. Deng pointed out that “socialism is not about the enrichment of the few and impoverishment of the many; if the reforms lead to a polarised social structure they have failed”. The gini-coefficient in China now stands at 0.5, way above the international average and indicative of a gross injustice in our nation's allocation of resources.

It is not my intention to deny that, in terms of economic growth, the reforms of the last 20 years have been an enormous success. But at no point during this period have we addressed the question of exactly why we started down the reform road or examined who has benefited from the process.  

Back in the early 1980s, we told the people that a price had to be paid for the reforms. But we said that this price was temporary, that it would lead to a better tomorrow and that there was no alternative if China was develop. And the big-hearted workers and honest peasants took these words at face value. Twenty years later many of the factories on which these same workers depended for a living have closed down – their status as “masters of the enterprise” gone forever. Land which farmers depended upon for a basic livelihood has been swallowed up by developers leaving only poor land for crops. Some farmers have given up and left the land to try and find work in the towns and cities as coolies, seasonal vegetable and fruit pickers, sex workers or beggars. We euphemistically refer to this great mass of people as “peasant workers”. But we rarely mention the fact that they can't afford to pay for their children's education or see a doctor.

The first generation have already paid the price with hardly a murmur, the second generation was laid off and preparations for the third wave of sacrifice are well under way. The twenty years of reform have also brought us large numbers of “entrepreneurs and CEOs” – a significant number of whom acquired their wealth through illegal and corrupt behaviour. Meanwhile those who have paid the price, the erstwhile masters of national capital, can only look on unwittingly as economists and corrupt reformers arrogantly transform our national assets into private companies and personal wealth.  

Where on earth did it all go? Some have calculated that as of 2001, following the [five] years of large scale privatisation, the proportion of national capital to private capital in the economy has fallen from 90 per cent to 30 per cent. Our elites along with those lovable old economists tell us not to worry, that the money from the great SOE sell-off has been used to create a social security fund. Yet if we look at the figures, we can see these are lies. The value of the national social security fund is worth less than 15 per cent of our national assets.

In essence then,   the reforms have done little more than transfer fifty years of accumulated national capital and assets into the hands of the tiny minority who have ‘got rich first'. This is what we have our so-called economists and elites to thanks for! At the core of their thinking is a desire to remove the ‘socialist' element of the socialist market economy. Once this has been achieved, they will no longer have to justify the yawning gap between rich and poor that the reforms have produced. The gap, they will say, is the rational consequence of a market economy. Period.

They tell us that to be rich is not a crime. That we should not see the situation in terms of the ‘haves' and the ‘have nots' even if some of the ‘haves' are guilty of gross corruption. The problem, they argue, is not wealth of itself but corruption which should be the true target of our anger.

This is not just an economic question of wealth disparity. It is the politics that is crucial. Our Constitution now affords legal protection to private property acquired through legal means (there surely must be a tiny number of people requiring such protection! Most of our rich are tainted by some manner of corruption or illegality). Our economists and elites are concerned to use the new class of entrepreneurs and international capital to proclaim – in the name of the Communist Party! – that China's privatisation is complete. The Party's economic base and class nature will be lost and they will be closer to their eventual aim:   to overthrow the leadership of the Communist Party.

Yet there is some hope remaining. The new national and Party leadership have begun to take steps to restore the reputation of the Party and to ensure that it truly serves the Chinese people. This is proof that apart from the elites, the so-called economists and the corrupt Party members, we still have genuine economists of our own and a new generation of leaders who capable of representing the interests of working people.  

Why are we reforming and for whom are we reforming? These are the most urgent questions facing China today. There is no use in allowing a tiny few to benefit at the expense of the many. I believe we have to continue the reforms and make them even deeper. This is absolutely necessary. We must concentrate on reforming the mistakes that have arisen and the theory behind these mistakes. If we don't there is no hope for the country. We can no longer naively rely on so-called economists or the elites to whom they have sold out. If we do there is no hope for the people. We must use the law to deal with the corrupt officials and business people who have acquired wealth through illegality. If we don't, the people will give up all hope.   Only then will the reforms find a genuine path.

Yong Quan (alias)

New China News Agency: Web Development Forum 27 February 2005.  

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IHLO Translation
December 2005