‘China’s Belt and Road Initiative and African Industrialisation’ (激活非洲工业化：“一带一路”能带来什么) was originally published in Wenhua Zongheng (文化纵横), issue no. 4 (August 2022).

Governments across Africa have long reached a consensus: ‘industrialisation is the essence of development’.^[1] Over the past half-century, African nations continuously pursued industrialisation, embarking on various paths to develop their own industrial sectors. However, neither the industrial policies of the 1960s and 1970s that emphasised self-reliance and import substitution, nor the structural adjustment programmes adopted in subsequent decades, characterised by market liberalisation and pushed by Western countries, have been able to help Africa achieve sustainable industrial growth and transformation. In the twenty-first century, African countries have redesigned their paths to industrialisation and development. Across the continent, governments have become more unified in their thinking, formulating the ambitious New Partnership for Africa’s Development (2001) and the Action Plan for the Accelerated Industrial Development of Africa (2007). However, the aims of these initiatives have yet to be realised. Although the absolute output value of manufacturing across sub-Saharan Africa has generally grown each year for the past two decades, the rate of growth has been slow, and consequently, the share of manufacturing in gross domestic product (GDP) has decreased (Figure 1).

<Figure 1: The share of manufacturing value added as a percentage of sub-Saharan Africa’s GDP from 1971 to 2018. Source: World Bank.>

The biggest challenge to industrialisation in Africa lies in the difficulty of integrating various elements into a system. Early on in the industrial revolution of the eighteenth century, the economist Adam Smith observed that the high productivity of industrialisation was mainly derived from the division of labour and collaboration, and the use of machinery in multi-step production processes to perform extremely simple actions in a highly efficient manner.^[2] This basic pattern is still applicable to manufacturing today, except that the depth and breadth of the division of labour and collaboration far exceeds that of the past. Today, the manufacture of any product – whether it is pins, shoes, hats, computers, or cars – requires a range of businesses and factories to cooperate with each other. The industrial chain contains many links related to the raw materials, tools and machinery, design, parts and accessories, approval of finished products, packaging, and sales; an individual enterprise may only be responsible for one or a few of these links, specialising to win market competition in a narrow area. Within each enterprise, the production process is also highly segmented: a production line often has hundreds of component processes, in which hundreds or thousands of workers operate simultaneously and a large number of machines and equipment are used. The closely interconnected system of modern industry requires every related party to complete their respective tasks in a precise and timely manner. Any absence or delay caused by any entity, individual, or even machine part in the production chain may disrupt the smooth operation of the entire manufacturing system. On top of this, the massive exchange and flow of materials requires large amounts of infrastructure and integrated management capabilities. Therefore, the development of modern industry cannot rely solely on individual enterprises or sectors, but depends on a country’s comprehensive production and circulation capabilities.

Historically, African countries have long been marginalised in the global economy, serving as a source of raw materials for Europe and North America. Most countries on the continent do not have a complete industrial sector and existing factories often have to import a large amount of machinery and parts from abroad. Local power and water supplies and infrastructure are often limited and unable to meet the needs of large-scale production. Meanwhile, poor and dilapidated transportation facilities, administrative inefficiencies, and political and geographical complexities often result in poor material exchange and circulation both within Africa and between the continent and other regions. Finally, due to a lack of practical experience and systematic training, there are deficiencies in the professional and technical skills of workers as well as the coordination and organisational capabilities of managers. These factors have constrained the deepening of the interconnected division of labour on the continent at multiple levels, and over time, the gap between African industrial development and that of other regions of the world has grown increasingly large.

How Has the Belt and Road Initiative Promoted Industrialisation in Africa

Most African economies still primarily depend upon traditional small-scale agriculture, relying on subsistence production. Only by advancing highly specialised and professionalised industrial production, coupled with appropriate market reforms, can productivity be significantly and sustainably improved. For a long time, China’s economy was also largely agricultural and experienced many hardships on the path to national industrial development. Since the launch of reform and opening up in the late 1970s, China has achieved explosive industrial growth, becoming the ‘world’s factory’. China’s successful experience in industrialisation has aroused great interest around the world, including among African countries. For China, this continuous industrial growth has further boosted the country’s demand for resources, labour, and markets. In the context of saturated European and North American markets as well as intense domestic competition, it is urgent for China to find new partners for cooperation and new opportunities for growth. Given the common interests and aspirations of China and other developing countries in pursuing industrial development, the Belt and Road Initiative (BRI) identifies industrial capacity as an important area for mutually beneficial cooperation. In this vein, the Forum on China-Africa Cooperation (FOCAC) has always emphasised industrialisation and industrial cooperation in its action plans. China’s industrial capacity cooperation with African countries has focused on three main aspects.

1. The construction of industrial parks. Given the generally low industrial level of African countries, there is an overall shortage of factors of production. To ensure that large-scale industrial production operates in a rapid and smooth manner, in some countries Chinese companies have invested in the construction of local industrial parks, introducing firms both upstream and downstream in the industrial chain for vertical collaboration, constructing basic infrastructure, and providing basic services to promote the formation of regional industrial clusters of interconnected firms, suppliers, and institutions. For example, in 2007, China Nonferrous Metal Mining Group (CNMC), a state-owned enterprise (SOE), established the Zambia-China Economic and Trade Cooperation Zone (ZCCZ) in Chambishi, Zambia, for deep processing of natural resources mined locally. The companies operating in the economic zone are mostly CNMC subsidiaries, covering various steps along the industrial chain of copper and cobalt resources, including mining, smelting, and processing. There are also several Chinese private enterprises and local Zambian private enterprises that have provided supporting services such as machine repair and logistics.^[3] This industrial park project has contributed to Zambia’s efforts to progress from simple resource mining and gradually ascend to higher value-added processing activities. In 2009, the ZCCZ launched a sub-zone on the outskirts of Zambia’s capital, Lusaka, clustering light industrial enterprises in food processing, brewing, and plastic products, among other sectors, based on the character of the urban economy. While there is no direct commercial connection between the companies in the sub-zone, the services provided by the zone (such as water, electricity, transport, and security) have decreased the cost of building a factory and greatly shortened the investment cycle (for example, without the services provided by the sub-zone, the application process for the industrial use of electricity alone could take several years). Small and medium-sized enterprises lacking international experience and large amounts of capital can also exchange information, saving a great deal in costs they would have incurred due to their inexperience and benefiting from strength in numbers.

2. The synergy of infrastructure construction and industrial investment. China is a global leader in both manufacturing and construction industries, and Chinese enterprises accounted for 61.9 percent of the entire African construction market in 2019.^[4] Chinese infrastructure construction provides necessary facilities in various sectors in Africa, such as energy and transportation, aiding industrial development. To play a sustainable role on the continent, these infrastructure projects must be combined with industrialisation. The main challenges for infrastructure construction in Africa are the large-scale investments required and the long-term horizons for repayment. In developing countries, sometimes the revenues generated by infrastructure projects are insufficient to maintain the operation of the facilities. In view of this, China and African countries have jointly planned industrial projects interconnected with infrastructure projects to improve the utility and return on these endeavours. Taking the Addis Ababa-Djibouti Railway as an example, in 2016, the Chinese government guided its enterprises to ‘combine large-scale infrastructure construction with industrial park and special economic zone development, striving to build an industrial belt along the railway for a harmonious interaction between large-scale infrastructure and industrial development’.^[5] Chinese private enterprises had already built two industrial parks near the Ethiopian capital of Addis Ababa but in recent years SOEs have played an important role. China Civil Engineering Construction Corporation has signed agreements with Ethiopia to build a series of industrial parks along the Addis Ababa-Djibouti Railway in Hawassa, Dire Dawa, Kombolcha, and Adama to make full use of the railway’s capacity. In addition, the state-owned China Merchants Group has participated in the construction of the Port of Doraleh, aiming to significantly enhance the port’s throughput capacity to cope with the increased cargo volume of the new railway. Similarly, to support the long-term development along the Mombasa-Nairobi Railway, China and Kenya have signed an agreement to upgrade the Mombasa port and establish a special economic zone near the port.

3. China’s industrial investment in Africa focuses on production that is suitable for local markets, and thus better synergised with local development and generating sustained momentum for industrialisation. Some economists have predicted that Africa will follow Asian countries in attracting global labour-intensive manufacturing, due to its lower labour costs, and embark on an export-led path to industrial development.^[6] However, in practice, African industries rely on imports for many inputs, such as raw materials, components, and spare parts. Without a developed ecosystem of suppliers and service providers, African factories face chronic issues, including administrative delays, traffic congestion, poor logistics, and unstable currency exchange rates, making the quality and timeliness of orders difficult to guarantee.^[7] In contrast, in Asia, there is a comprehensive and mature industrial network centred on Japan and China. Other countries in the region can find their own comparative advantages in this system and leverage their low labour costs to undertake industrial transfers. Due to the geographical distance, it is difficult for African countries to become integrated into Asia’s industrial network. Merely reducing production costs cannot compensate for the lack of support in other aspects, and foreign firms aiming to transfer production to the continent have only been able to maintain smaller scale operations in Eastern and Southern Africa that are difficult to expand.^[8]

Rather than pursuing export-led models, the industrial enterprises that have established a foothold for long-term operations in Africa and that are driving local enterprises to grow together, are mainly focusing on the domestic markets of African countries. Their production, supply, marketing, and sales are all rooted in the African continent. For example, Sun Jian (孙坚), a businessman from Wenzhou, China, toured Nigeria in 2010 and found that a large number of ceramic products in the country were imported from abroad. Sun saw a commercial opportunity. Because ceramics are heavy and fragile, they are not conducive to transportation; if they could be produced locally, the manufacturer would have a great advantage in the market. Sun quickly set up the Wangkang Ceramic Factory in Nigeria with $40 million, and the tiles produced were immediately popular among local consumers and quickly became short in supply.^[9] Over the past decade, the company has set up five large tile factories in Nigeria, Ghana, Tanzania, and Uganda, accounting for 25 percent of Africa’s ceramic tile production capacity. This example shows how industrial development can take place by closely examining the African market and identifying niche areas. Multinational companies often overlook the African market and rarely pay attention to the specific needs and interests of local consumers, with products exported to Africa often overpriced and outdated. Through closer economic and trade relations with African countries, Chinese companies have developed a keener awareness of the African market and spotted new trends. Chinese firms have set up factories locally to manufacture everyday products such as building materials, furniture, plastics, food, medicine, clothing, and footwear. Local production not only significantly reduces transport costs but also ensures that products are targeted and responsive to changing consumer preferences and market trends. These locally manufactured products have not replaced existing imports but filled gaps in the market.

Chinese enterprises can better understand African markets and seize industrial opportunities for two reasons: first, the many years of economic cooperation between China and Africa and, second, China’s strong industrial system. The founder of Wangkang did not originally engage in the ceramics industry, but when he spotted the business opportunity he quickly contacted suppliers of ceramic production equipment in China and was able to assemble production lines in Africa within a few months. Wangkang was able to rely on Chinese firms for installation, debugging, training, and maintenance services. China is the only country in the world that is home to all of the categories listed in the United Nations’ International Standard Industrial Classification of All Economic Activities, covering both high-precision technologies and traditional low-end industries.^[10] Due to the unstable power supplies and maintenance difficulties on the African continent, many newer types of precision machinery from Europe and the United States are not the best suited for use in African manufacturing. In contrast, some basic equipment made in China functions well in this environment, as well as being economical and durable. Industrial investments in the African market can use China’s comprehensive industrial system to provide strong support services for production activities in Africa. These factories obtain the main raw materials locally and sell their products on the local market, gradually forming an initial system of industrial production and circulation. Although these industries start small, they can drive the comprehensive cyclical development and are a more sustainable pathway to industrialisation.

This is exemplified by the rise of the local plastic recycling industry in Ghana. Initially, a company from China’s Fujian province began collecting the packaging discarded by locals after drinking bagged water, which could be processed and sold as plastic shopping bags. Although the work was difficult and tiring, the company was quite profitable because there was almost no competition. This news soon attracted many followers. Initially, more than ten Chinese companies followed suit, followed by local companies. Through their Chinese partners, these firms found machine and equipment suppliers and also entered this field. In the first six or seven years, the new entrants did not engage in fierce competition, but instead, worked together to increase the size of the industry ‘cake’ (把行业蛋糕做大, bǎ hángyè dàngāo zuòdà). The geographic range for recycling gradually expanded from the capital of Accra to the whole country and divisions developed in the industrial chain. Local companies are more familiar with the social environment, can better locate the dumping sites of discarded packaging, and have focused more on upstream recycling and primary processing, employing hundreds of waste collectors. Chinese companies have a better understanding of the machinery and production, and have increasingly invested in high-tech, back-end processing. In addition, many Chinese and Ghanaian companies have set their sights on other types of plastic recycling and processing. By identifying market opportunities, Chinese and Ghanaian firms have driven the development of an entire plastic recycling and processing chain and industrial cluster in Ghana.^[11]

Challenges and Solutions in Sino-African Industrial Cooperation

Relying on a unique model of collaboration and complementary economic structures, Sino-African industrial cooperation has made important achievements in the first two decades of the twenty-first century. Across the African continent, thousands of Chinese enterprises have invested in or co-built dozens of industrial parks, employing large numbers of local workers and driving the growth of related suppliers, service providers, and downstream businesses.^[12] China has established six national-level economic and trade cooperation zones in countries such as Egypt, Zambia, Nigeria, Mauritius, and Ethiopia, attracting over 300 enterprises and employing more than 30,000 local workers.^[13] However, long-term challenges remain in Africa’s pursuit of industrialisation, which pose a serious challenge to the sustainable growth of Sino-African industrial cooperation.

As discussed earlier, the key challenge in African industrialisation relates to the lack of systematic cooperation. Sino-African cooperation has made progress in resolving some coordination problems through the construction of infrastructure and industrial parks, the setting up of supply chains, and the connecting of markets. However, further industrial development will require far more than the supply of equipment or building of factories. To industrialise, developing countries must undergo a sea change in social structures and ideology. In each country or region, this process will be different, depending on local histories, cultures, and customs. For its part, when partnering with African countries, China must proceed with an understanding of local conditions and complexities. Chinese enterprises must appropriately navigate contradictions and conflicts that arise with local workers, indigenous communities, business partners, and governmental bodies. This will be particularly important as international tensions rise and foreign political forces attempt to inflame disputes and weaponise them for their own agendas.

Swedish economist and Nobel laureate Gunnar Myrdal pointed out, as early as the 1970s, that socio-economic systems have self-reinforcing characteristics. Due to social inertia, non-industrialised countries face a much greater difficulty in transitioning to industrial societies than developed countries face in continuing industrial development. A number of political, economic, social, and cultural factors work to keep these countries in a low-level equilibrium state.^[14] Singaporean-American economist Yuen Yuen Ang has argued that there is a ‘fundamental problem’ in development, in that a country’s economic prosperity often requires strong institutional support, ‘yet attaining these preconditions also appears to depend on the level of economic wealth’.^[15] This creates a ‘chicken-or-egg’ dilemma: many developing countries lack the resources to improve their institutional environment and, consequently, are unable to realise long-term, sustainable industrial development; in turn, the economy further declines and the institutional environment further deteriorates.

Overcoming this cyclical dilemma is essential to African industrialisation as well as the long-term success of Sino-African cooperation. To reverse this vicious cycle, it is necessary to simultaneously improve both the ‘chicken’ and ‘egg’ – that is, economic growth and institutional development – and promote a mutually reinforcing cycle. Only when all parties in the process of industrialisation are striving towards the same goal of promoting the sustainable growth of productivity can synergies form. However, this type of cooperation is difficult to achieve in practice. In the pursuit of industrialisation, most members of society are not oriented towards the long-term growth in productivity, but can only see local activities and pursue short-term benefits, and thus deviate from the overall goal. Determining how to promote widespread recognition of and commitment to industrialisation by all parties in society is an important issue for African countries to resolve to break past limitations and achieve continuous progress.

One of the major challenges in Sino-African economic and trade cooperation concerns the differences in perspectives and goals of various parties.^[16] The Tanzania-China Friendship Textile Company jointly operated by China and Tanzania is an illustrative example. The primary goals of the Chinese managers, on the one hand, are to improve enterprise productivity and profits; the Tanzanian managers appointed by the local government, on the other hand, are not only concerned with operational efficiency, but also with generating employment and tax revenue, as well as increasing purchases of locally-produced cotton.^[17] Similarly, in the construction of infrastructure and industrial parks, there are often differences in the goals of all the parties involved: for instance, Chinese companies aim to increase their profits, Chinese government officials seek to improve bilateral political relations, African government officials are concerned with fiscal revenues and employment opportunities, while local populations hope that projects are beneficial to their livelihoods and communities. Although these various goals are interrelated and compatible in many ways, differing priorities can lead to disagreements and conflicts. To reach consensus and synergise efforts, all parties must make appropriate adjustments to prioritise the larger goal of industrialisation over their respective individual goals, to find common ground while respecting differences, and to achieve mutually beneficial, ‘win-win’ results for all.

A similar process of adaptation to and integration of different perspectives has also occurred during the course of China’s reforms. At various times over the past four decades, the state has had to manage different tendencies in society, including conservatism, protectionism, and liberalism, through theoretical guidance and administrative management, and ultimately unify various sectors to strive for industrial development. The challenge in Sino-African international cooperation is that it includes multiple states, each with their own system of governance, and matters cannot be resolved through centralised leadership. The only path for cooperation is through equal-footed exchanges. In this regard, Sino-African partners should adhere to the progressive spirit of ‘crossing the river by feeling the stones’ (摸着石头过河, mōzhe shítou guòhé), in which they emphasise robust communication, a willingness to adjust and compromise, mutual understanding, and consensus. In the aforementioned example of the Tanzania-China Friendship Textile Company, the Chinese side respects Tanzanian interests and traditions, retains a large number of long-tenured employees, and actively dialogues with union organisations, while highlighting the market nature of the enterprise, introducing the piece-rate bonus system, and identifying areas to improve productivity.^[18] Similarly, in industrial park and infrastructure projects, Sino-African cooperation learns from China’s own rapid economic development in the past forty years but is not confined to a fixed mold, and is guided by a ‘win-win’ principle in the pursuit of long-term, sustainable economic growth, considering the needs of broader numbers of parties and willing to sacrifice some short-term commercial profits for broader political and social interests.^[19]

Of course, the exchange of ideas will not always lead cooperating parties to reach a mutual understanding. But in the long run, such exchanges are essential and are the most effective method to ensure the continuous and in-depth development of Sino-African cooperation. Ultimately, African industrialisation will only be realised by internal driving forces. This is a point emphasised by China in its partnership with African countries, based on its own development experience, and is an approach that differs greatly from Western countries.

The Character and Significance of the Sino-African Relationship

The West tends to take a condescending posture towards African development and industrialisation. Whether in its role as colonial ruler, suzerain, or donor, Western developed countries have often judged African countries according to their own political and economic systems, criticised Africa as ‘backwards’, and imposed their own models on the continent. For instance, in the era of the Washington Consensus, the United States and European countries often used coercive methods such as withholding aid and enacting sanctions to force African countries to implement Western free-market economic policies. Consequently, the Western approach not only has failed to integrate organically into African societies but has also promoted division and unrest, setting back African efforts to achieve comprehensive and sustainable industrial transformation.

In its own history and development, China has experienced similar external pressures and setbacks as African countries. Through its own exploration, China has found an effective path to industrialisation. Therefore, China has a different perspective and understanding than the West when it comes to the contradictions, challenges, and complexities faced by developing countries in the pursuit of industrialisation. In its relations with African countries, China emphasises the importance of economic development and the continuous growth of productivity. While constantly pursuing its own industrial upgrading and growth, China also hopes to promote common development with Africa, to escape poverty and underdevelopment, and no longer be controlled and oppressed by the West. To this end, China cooperates with African countries around the goal of improving productivity. It holds an open-minded and pragmatic attitude towards how African countries pursue economic transformation in their various, unique national conditions. Instead of imposing any policy on the African continent, China encourages each country to follow its own path of development and to not blindly follow any model. The BRI, which promotes infrastructure connectivity, trade, financial integration, complementary policies, and people-to-people exchanges, is guided by the principles of collaborative development and national sovereignty.

The unique approach of Sino-African industrial cooperation is not only necessary for economic growth, it is also guided by profound political thinking. In its cooperation with African countries, China, while emphasising economic development and market efficiency, does not ignore the political domain. China’s emphasis on productivity comes from its own practical experience in struggling against the domination of Western powers: only with a market economy and industrial development has the country been able to resist foreign influence and interference. This orientation is also consistent with China’s longstanding policy of supporting the independence and sovereignty of African countries and opposing Western hegemonism. In the contemporary period, international political support is more effective and sustainable through economic means. At the same time, the emphasis on equal exchange in Sino-African cooperation is not purely a political posture, but is guided by the fact that long-term cooperation and communication is necessary for the establishment of a new global market and industrial system that breaks free of the historic ‘chicken-or-egg’ vicious cycle.

As African countries advance on their paths to industrialisation, different social strata will be affected in drastically different ways and will have starkly different feelings and views about economic reforms. This is both a severe challenge and historic opportunity for Sino-African industrial cooperation. As Chinese infrastructure, industrial facilities, and other projects continue to develop in Africa, both sides will deepen their mutual understanding and integration through practice. From both an economic and political perspective, China and Africa share the same overall goal of promoting industrialisation and, therefore, can overcome temporary barriers and setbacks through communication and adjustment. In this gradual process, rich and extensive cooperation at multiple levels can help China and Africa build a closer and deeper connection and consensus.

Bibliography

Author’s Notes

‘How Targeted Poverty Alleviation Has Changed the Structure of Rural Governance in China’ (精准扶贫如何改变乡村治理结构) was originally published in Wenhua Zongheng (文化纵横), issue no. 3 (June 2020).

Unlike the Chinese government’s conventional poverty alleviation efforts, the targeted poverty alleviation (精准扶贫, jīngzhǔn fúpín) program, launched in 2013, has exhibited the distinct characteristics of campaign-style governance. This program set the eradication of extreme poverty as the central objective around which socioeconomic policy was coordinated in poor, rural areas. At the end of 2020, after eight years of arduous work, this goal was achieved.

To fulfil the designated aims of targeted poverty alleviation within the established deadlines, local governments vigorously mobilised human and material resources and implemented exceptional measures.^[1] In many localities, governments employed quasi-military methods to advance targeted poverty alleviation efforts, disrupting many existing conventions. Although campaign-style governance often features extraordinary measures and can yield extraordinary results, some research suggests that this style of governance is difficult to sustain into regular periods of governance. Regardless, campaign-style governance can still have an important impact on conventional governance structures.

This article will examine the impact that targeted poverty alleviation’s campaign-style governance has had and will have on rural governance. First, the article provides an overview of the existing problems in rural governance. Second, the article analyses the extent to which the campaign has changed the existing structure of rural governance. Finally, the article assesses whether the mechanisms of governance adopted under targeted poverty alleviation will be able to adapt to normal conditions after the campaign ends and have a lasting impact on rural governance. This article argues that, due to the success of targeted poverty alleviation in addressing weaknesses in rural governance and achieving its objectives, the campaign has the potential to effect long-term changes through institutionalisation of its practices and methodologies.

The Dilemmas of Rural Governance

Before the implementation of the targeted poverty alleviation strategy, both rural governance and poverty alleviation policies faced serious dilemmas. The repeal of agricultural taxes in 2006 led to the disintegration of rural society, numerous difficulties in the traditional systems of rural governance, and the detachment between the power and resources of community-level governments and their social responsibility.^[2] The distribution of poverty alleviation resources targeted primarily at counties and villages that were designated as poverty-stricken or poor produced awkward dynamics where local governments and village organisations vied for such designations to gain access to resources as well as imbalances in resource allocation, where poor households in undesignated villages were overlooked. As a result, tensions have existed to varying degrees between rural villages and between rural villages and the state.

Rural villages are often thought of as living communities, where rural residents maintain the village through practices based on shared values and reciprocity as well as strong local institutions. In the Chinese sociologist and anthropologist Fei Xiaotong’s (费孝通) conception of rural China and US political scientist and anthropologist James C. Scott’s depiction of the moral economy of the peasant, rural life is represented as largely distanced from the state. However, in reality, China’s villages have not been so distant from the state. While villages have featured characteristics of living communities, they have also existed under the rule of the state. Moreover, as the state’s governance capabilities have improved, it has tended to increasingly govern villages directly. The strength of the state’s rural governance has largely been determined by its ability to administer its rules and authority on the villages.

Small and large communities are often thought of as being in a zero-sum relationship, where state intervention reduces the autonomy of small communities and the autonomy of small communities minimises the state’s influence on villages. However, thus far in the twenty-first century, the relationship has not been so clear in China, as both small and large communities have struggled in rural governance.

As living communities, China’s villages weakened and even disintegrated in the decades following the rural reform initiated in the 1980s. The rural reform had two key elements: the implementation of the household responsibility system (包产到户, bāochǎn dào hù) in agricultural production and the establishment of village committees (村民委员会, cūnmín wěiyuánhuì). The first measure replaced the collective farming system implemented during the land reform process of the 1950s and allowed individual households to contract land and have greater autonomy over their agricultural production, laying the foundation for the market economy in rural areas. Meanwhile, the second measure aimed to rebuild the village community through villagers’ self-governance. However, the success of these two measures diverged significantly. On the one hand, land contracting and household production advanced continuously, with farmers’ individualisation being driven by the market economy and the greater autonomy and social mobility of village members; on the other hand, numerous difficulties were encountered with the village committees. These bodies were created to protect villagers, but amid the disintegration of village communities, village leaders in most areas either stopped serving as village organisers or took advantage of their positions to secure private benefits. The number of village organisations capable of providing leadership decreased significantly and villagers were often unable to hold village officials accountable; meanwhile, village officials also struggled to serve villagers and to effectively implement government policies intended to benefit farmers at the community level.

At the same time that small communities grew weaker, the state’s effectiveness in rural governance also decreased during the three decades following the rural reform, reaching a low point in the early twenty-first century. The repeal of agricultural tax collection in 2006 marked the beginning of the policy of ‘industry nurturing agriculture, cities supporting rural areas’ (工业反哺农业、城市反哺农村, gōngyè fǎnbǔ nóngyè, chéngshì fǎnbǔ nóngcūn), intended to direct more resources from the urban centres into rural areas to both advance their development and infrastructure as well as improve social welfare, through the implementation of various protections, subsidies, and grants for rural communities and individuals. In practice, however, the state struggled to realise these aims. Although transfer payments from the central government to poverty-stricken areas greatly increased and the state improved its provision of social welfare, the state struggled to define clear policy goals and to develop effective mechanisms to allocate resources to target populations.^[3] For example, subsidies aimed at encouraging grain production had a limited impact on farmers’ enthusiasm as the central government struggled to define grain-producing farmers and only granted subsidies according to the size of farmers’ contracted land. Similarly, the rural subsistence allowance system, intended to meet the basic living needs of low-income households, encountered several obstacles, including difficulties in collecting data on household income and identifying eligible households, along with corruption, with rural officials providing preferential treatment towards family members and friends and even using the allowance as a bargaining tool against farmers. As a result, the rural subsistence allowance was not efficient in being directed to those most in need. To put it simply, it was difficult for the state to realise its rural development and welfare goals through the existing administrative system.

The allocation of poverty alleviation resources should have been guided by precision and fairness, however, in practice, the allocation was influenced by many other factors. The central government focused on providing support to poverty-stricken areas, issuing special poverty alleviation funding to adjacent poor areas and those counties, villages, and households designated as key poverty-stricken targets. Following the Seven-Year Priority Poverty Alleviation Program, which aimed to lift 80 million people out of absolute poverty from 1994 to 2000, poverty alleviation resources were mainly channelled to the designated key poverty-stricken counties. This produced an adverse consequence, where rural counties competed against each other to be designated as poverty-stricken, a phenomenon referred to in China as ‘fighting to wear the “poverty hat”’ (争戴贫困帽子, zhēng dài pínkùn màozi); a few county governments even celebrated their entry into the list of poverty-stricken counties. Unfortunately, it was often the case that the identification of poverty-stricken counties or villages was not only a matter of low income or lagging development, but was also influenced by pressures from various and, at times, rival interest groups. With various interest groups and parties vying for resources, it was difficult to effectively realise poverty alleviation goals.

After completing its first ten-year plan for poverty alleviation from 2001 to 2010, the approach of the central government shifted, as it raised the poverty line significantly, first in 2010 and then again in 2013, and set a clear timetable to eradicate absolute poverty and complete the building of a moderately prosperous society in all respects by 2020.^[4] Under the new standard, the scope of poverty alleviation expanded greatly as the population considered impoverished increased more than five-fold, from less than 30 million people to 160 million people; the incidence of rural poverty similarly increased from less than 3 percent to over 17 percent; and the number of poverty-stricken counties increased to 832. In addition, the qualitative standard for poverty alleviation was also raised, now aiming for ‘two assurances and three guarantees’ (两不愁三保障, liǎng bù chóu sān bǎozhàng), meaning that, by 2020, the rural poor would be assured adequate food and clothing, and guaranteed access to the public education system, basic medical services, and safe housing, including running water and electricity (some localities also developed specific guarantees based on local conditions, such as a guaranteed supply of safe drinking water in arid areas). To lift such a large number of poor people out of poverty in a short amount of time, the state had to greatly increase the amount of resources that it allocated to the task. From 2015 to 2020, poverty alleviation funding from the central government increased on average by 20 billion yuan (approximately $2.8 billion) per year. More importantly, the types of poverty alleviation funding were diversified, including integrated funds, social funds, and various financial instruments. The total amount of resources invested by the state in poverty alleviation was unprecedented, although it generated new challenges for rural governance. However, realising the poverty alleviation goals was more complex and difficult than simply increasing incomes, and required fundamental changes to the system of rural governance in poor areas.

Rural Governance under Targeted Poverty Alleviation

In 2013, Communist Party of China (CPC) General Secretary Xi Jinping proposed the concept of targeted poverty alleviation. Shortly thereafter, in 2015, he specified that this policy required precision in the following six areas: first, in the identification of the poor, ensuring that the recipients of support were, in fact, those in need; second, in the alignment of projects and aid to the needs of the poor; third, in the provision and use of funding; fourth, in the implementation of measures appropriate for each household; fifth, in the dispatching of party officials to carry out poverty alleviation measures in individual villages; and, sixth, in the evaluations of whether poverty alleviation had met expectations. To ensure that targeted poverty alleviation was successful, a number of fundamental changes had to be made to the existing system of rural governance, including the creation of new system for information collection and analysis that was more transparent for villages and farmers; the establishment of a mechanism for direct governance by the state in villages, with a large number of officials assigned to be directly involved in the daily governance of villages; and the institutionalisation of mechanisms for villagers’ participation in public affairs. These changes have improved the state’s governance and provision of social welfare in rural areas.

The strategy of targeted poverty alleviation depended upon high-quality data collection. Beginning in 2014, detailed investigations were conducted to identify each poor household, their specific causes of poverty, and the specific poverty alleviated measures to implement; the information gathered was used to generate an electronic database with files on each poor household, village, county, and region across the country. Poor households were individually registered in the database and provided with a poverty alleviation handbook, containing a summary of their basic conditions and causes of poverty, their poverty alleviation plan, and the contact information for the official responsible for their household. The central government had previously tried to develop a poverty alleviation registration system, including a trial program in eight provinces in 2005, however, due to limitations in human and material resources as well as the state’s investigative capacity, these efforts were not successful. The large-scale administrative mobilisation under targeted poverty alleviation allowed this task to finally be completed.

The electronic registration system improved China’s poverty alleviation efforts in two ways. First, the more accurate identification of poor households and villages allowed resources to be better directed to the appropriate recipients and measures to be specifically targeted to recipients’ needs. Second, the data collected provided the central government with a more up-to-date picture of conditions at the community-level and, consequently, a better understanding of rural areas, helping its decision-making, formulation of specific policies, and evaluation of poverty alleviation efforts.

Some critics have argued that the digitisation of poverty alleviation governance has detached the process from village life and community-level governance, while others have pointed out that digitisation and technological mechanisms cannot address issues of community-level governance.^[5] In addition, due to the central government’s strong reliance on data in their decision-making, community-level poverty alleviation workers spent a significant amount of time engaged in administrative tasks related to data collection, such as filling in forms, which took away from their actual anti-poverty work and, in some areas, resulted in excessive formalism; this eventually prompted the central government to issue directives to reduce unnecessary data collection.

As targeted poverty alleviation progressed, however, the process of data collection, quality of the data obtained, and implementation of the data into governance all improved. First, by implementing procedural reviews to verify data after its initial collection, the data gradually became more accurate and objective. Second, the dynamic updating of data has also improved information quality. The goal of the registration system was to verify the general statistical estimates of the number of poor households, by conducting investigations on the ground. As targeted poverty alleviation advanced and the number of poor households decreased, the statistical estimates became less reliable, and the importance of precise household-to-household data increased. Since 2017, the poverty registration database has no longer been limited by the general statistical estimates and has been dynamically adjusted based on the findings of on-the-ground investigations. Third, the poverty alleviation registration system laid the foundation for information-based rural governance; going forward, as community-level governments gain further experience in data collection and are able to integrate data from different governmental departments and levels, information will play an increasingly important role in rural governance.

Information-based governance increased public transparency in rural areas, but was not able to improve the effectiveness of targeted poverty alleviation on its own; it was supported by a shift in the priorities of local governments and a greater distribution of resources to the community level. Following the rural reform of the 1980s that spurred China’s rapid economic development, local governments prioritised economic efficiency and focused their resources on rapidly developing sectors; meanwhile, the central government prioritised the development of urban areas and generally focused on the maximisation of Gross Domestic Product (GDP). The targeted poverty alleviation campaign sought to reorient governmental priorities, at both central and local levels, placing the eradication of poverty in poor areas at the top of the agenda. From the top down, local government and CPC leaders were directed to regard poverty alleviation as their principal task, which led to a shift in the aims, resource allocation, and work of local governments and party committees. With poverty alleviation being made the first priority in poor areas, economic development had to serve this end, rather than narrowly pursue growth.

Along with this reprioritisation, the central government increased its distribution of resources to lower levels of government. These resources have not only included funds and supplies, but more importantly, human resources. Greater numbers of personnel have been required to address the weak administrative organisation of poor villages and advance targeted poverty alleviation, as traditional local institutions lacked the capacity both to distribute large amounts of resources to households and villages and to implement the new methods of governance associated with the campaign. Village organisations in poor areas were severely understaffed, often with three officials at most, and thus, were incapable of managing large amounts of resources or administering complex procedures. Related to this, these organisations had a very deficient knowledge base, and were overwhelmed by the influx of new poverty alleviation concepts, methods, and technological processes, such as the large-scale data collection about poor households and the selection of industries and markets to invest in. In addition, most village officials were enmeshed in their community’s social relationships, resulting in biases which undermined objective decision-making; to fairly distribute the large amounts of poverty alleviation resources that poor villages received from the central government, external support was necessary.

To address the shortage of human resources in rural areas, increase the administrative capacity in lower levels, and strengthen rural governance, the CPC dispatched resident work teams (驻村工作队, zhù cūn gōngzuò duì) and first party secretaries (the lead party official in an area) to live in and assist poor villages. Since 2013, more than three million officials from higher levels of government, state-owned enterprises, and other public institutions, have been dispatched as part of 255,000 resident work teams to live in villages for at least two years and work on targeted poverty alleviation.^[6] Some researchers have questioned the impact of resident work teams, contending that they have lacked sufficient understanding of local situations and experience in agricultural production, and also faced resistance from local authorities; however, on the whole, the research indicates that resident work teams have brought more poverty alleviation resources into rural areas and gradually played a steering role in targeted poverty alleviation efforts.^[7]

The dispatching of resident work teams to poor villages under targeted poverty alleviation was a continuation of the existing policy of pairing assistance (对口帮扶, duìkǒu bang fú), under which lower levels of governments support each other. Rather than being tasked with merely providing assistance, the resident work teams were given the responsibility of realising poverty alleviation in their villages, including managing poverty alleviation resources, visiting poor households, carrying out registration and data collection, and implementing anti-poverty measures. Resident work teams were generally required to stay in their assigned village for more than twenty days each month, and therefore, participated in the entire process of poverty alleviation. To address initial difficulties that resident work teams faced in carrying out poverty alleviation governance, in 2015, the CPC began to assign first party secretaries in most poor villages to concurrently serve as the heads of their village’s resident work team. This measure ironed out the institutional difficulty of integrating resident work teams into village decision-making. Improving the social governance of villages became a critical responsibility of first party secretaries, perhaps even more important than their duty to promote the economic development of villages.^[8]

The large-scale movement of personnel to poverty-stricken villages exemplified the campaign-style governance of targeted poverty alleviation. While resident work teams differed in terms of their work, methods, and involvement in village affairs, from a broader, institutional perspective, through this mechanism the state was able to directly influence village-level governance. As such, targeted poverty alleviation did not merely consist of the central government channelling resources to rural areas, but rather was an extension of state power to the village level. From the identification of poor households to the setting of poverty alleviation standards, numerous measures formulated by the state were implemented at the village level.

Alongside greater state involvement in village administration, greater emphasis was also placed on villager participation. In theory, villagers’ self-governance was supposed to be the foundation of rural communities, from the establishment of village committees, elected and supervised by villagers, in the 1980s, to the central government’s promotion of community participation in poverty alleviation in the 1990s. In practice, however, many obstacles impeded the realisation of self-governance. For example, although village governance is based on a system of one person, one vote, political decisions were often intertwined with and influenced by the interests of families, factions, and other powers. Furthermore, due to the deterioration of rural communities as well as the lack of resources and supportive social environment, it was difficult to promote and safeguard democracy within villages. As a result, public participation in poverty alleviation was little more than a formality.

Targeted poverty alleviation strengthened the voices to villagers, especially those from poor households. First, enhanced public transparency and openness improved villagers’ participation, mainly through the identification of poverty-stricken households and the evaluation of poverty alleviation efforts. Designated poor households were given more poverty alleviation resources; although this has provoked disputes among villagers, especially when income differences were not evident, public transparency proved to be an effective remedy to these conflicts. Under targeted poverty alleviation, the confirmation of poor households required a public announcement and was subject to villagers’ approval. Villagers’ satisfaction was also an important factor in the evaluation of poverty alleviation efforts; here, villager participation was not abstract, but had a precise scope and form, encouraging high levels of participation. Second, and more importantly, the strict top-down inspections of poverty alleviation efforts created a channel for villagers’ opinions to reach upper levels of government, promoting accountability through the application of pressure from upper-level officials on lower-level officials (a mechanism of villager participation that differed from traditional models and conceptions). In the period of targeted poverty alleviation, villager participation and centralised authority were mutually reinforcing; the centralised authority strengthened the voice and participation of villagers through the application of pressure on local officials, while villager participation allowed the central government to evaluate local officials and ensure their aims were pursued at the community level.

Ultimately, targeted poverty alleviation established a new mechanism of rural governance in poverty-stricken rural areas, bridging the gap between official policy makers and the subjects of poverty alleviation policies. This mechanism led to the central government being better informed on conditions at the community level and, through top-down pressure, to greater participation for villagers, resulting in governmental policies being more thoroughly translated into grassroots actions and results.

The Potential for Lasting Changes in Rural Governance

The new mechanism of rural governance developed in the process of targeted poverty alleviation, played a crucial role in achieving the eradication of extreme poverty at the end of 2020 and effectively addressed long-standing rural political issues. However, whether these changes can be carried over from the targeted poverty alleviation campaign to conventional periods of governance and have a lasting impact on rural areas, depends on whether this mechanism can adapt to changing circumstances. There are three important factors that indicate that the structural changes in rural governance will endure.

First, the distribution of national administrative resources to lower levels of government is a major trend that will continue after the end of the targeted poverty alleviation. Prior to the campaign, the local talent pool and institutional structure in most villages were insufficient to support long-term development, and poor villages lacked the capacity to manage the influx of resources for poverty alleviation. In recent years, the state’s provision of administrative resources to rural areas has strengthened community-level institutions, supported the return of rural talents to their communities from urban areas, encouraged prominent villagers to participate in rural governance, and developed rural collective economies to help villages retain their developing talent and attract talent to return from cities. However, China is still in the process of rapid urbanisation; the rural population will continue to flow outwards, and the return of talents to rural areas has just begun. In this context, the distribution of administrative resources to lower levels is indispensable for maintaining rural social order and realising effective rural governance.

Second, the state will play an increasingly important role in rural areas, in terms of infrastructure construction and the provision of public goods. During the period of targeted poverty alleviation, the state has mainly focused its support on poverty-stricken rural areas, however, as part of the broader rural revitalisation strategy, more rural areas will benefit from the state’s resources. In this process, public transparency regarding recipient households and villages will remain important to avoid disputes and to prevent the distribution of resources from becoming influenced by local power struggles. As a result, it will be necessary for the state to build upon the poverty alleviation registration database and develop an general rural information system; for example, to identify the population living in relative poverty, information on both poor and non-poor households is needed because relative poverty can only be defined through a wide-ranging comparison across the rural population. In summary, as the state invests more resources in rural areas, it will increasingly need and rely upon information systems.

Third, rural development gravitates towards the areas where there are high levels of villagers’ participation in public affairs. In the context of a large outflow of young talent and an aging population, rural communities have been hollowed out; as such, strong institutional guarantees are required to secure villagers’ participation. The mechanism for villagers’ participation under targeted poverty alleviation was based on greater public transparency in rural affairs, the creation of an effective channel for feedback from the grassroots to top-level officials, and strict evaluation of and accountability for rural administrators. In this way, bottom-up participation was guaranteed by top-down support, although the process differed from traditional modes of villagers’ self-governance. Today, the objective is not to recreate traditional systems of village governance, but to develop mechanisms for participation that facilitate the effective distribution of state resources to rural areas. Therefore, participation must not be limited to the granting of superficial rights to villagers; more importantly, there must be concrete institutional guarantees that ensure villagers can and do participate.

The mechanisms of governance under targeted poverty alleviation have promoted important changes in rural governance, but they cannot simply be replicated going forward, in ordinary periods of governance. After successfully completing the tasks of targeted poverty, some formerly poverty-stricken counties have attempted to adapt the governance mechanisms of the campaign – in particular, the program of resident work teams – into their conventional system of governance. However, these efforts have encountered two main difficulties.

The first difficulty is the high cost of campaign-style governance measures. For instance, to complete the poverty alleviation registration system and ensure its high quality, more than two million staff were mobilised to work for eight months to just review the data. Meanwhile, the program of resident work teams required the redeployment of more than three million public servants to work full-time in villages, which not only incurred high costs in terms of subsidies, training, supervision, and the construction of accommodations, but also in terms of causing significant disruptions to the other governmental institutions, which had to undertake additional poverty alleviation responsibilities. In addition, the rotation of resident work teams between different villages made it difficult to ensure continuity in work and for officials to accumulate localised experience and knowledge. From both a financial and human resources perspective, the governance mechanisms of targeted poverty alleviation incurred a high cost and cannot easily be carried over in conventional periods of rural governance.

The second difficulty lies in the low level of institutionalisation of targeted poverty alleviation governance mechanisms and the challenges of balancing different governmental responsibilities. Campaign-style governance focuses on a single goal, adopting various and, at times, extraordinary methods to achieve this goal, some of which can be unsustainable and can even result in imbalances or unfairness. During the period of targeted poverty alleviation, the central task in poor areas was poverty alleviation, with a significant amount of human and material resources invested into meeting targets and shoring up weaknesses. This inevitably resulted in those tasks that fell outside of this objective, being overlooked. For example, following poverty alleviation registration, resources were often concentrated on registered poor households and, at times, the needs of other farmers were neglected. In some cases, poor households were relocated to situations where they would have a stable income and were not only provided with housing, but also with real estate to set up small businesses, giving them far more assets than the average farmer. The temporary and short-term measures employed in campaign-style governance are difficult to replicate in ordinary periods due to their lack of institutionalisation.

The governance mechanisms and extraordinary measures of targeted poverty alleviation need to be appropriately adapted to conventional governance, to continue promoting living standards and balanced development as part of rural revitalisation. In this process of adaptation, it is necessary to institutionalise the rural information system, the distribution of administrative resources to rural areas, and the participation of villagers, in a manner that reduces operational costs, while maintaining their advantageous features.

First, it is necessary to regularise and institutionalise data collection and analysis in rural areas. In the 1950s, the central government established an agricultural economic management system that collected and aggregated rural data for a number of decades, however, this data lacked objectivity and was eventually replaced by statistical sampling surveys. However, while statistical sampling can assist macro-governmental decision-making, it is not suited to micro-governance. Within the new framework of poverty alleviation registration, information systems from various governmental departments, such as civil affairs, public security, and finance, can and should be integrated to establish a unified rural information network, thereby systematising information-based rural governance.

Second, it is necessary to institutionalise the distribution of administrative resources to lower levels. The state must continue to provide financial and human resources to support rural governance, including incorporating rural service into the responsibilities of national civil servants. Currently, the central government distributes administrative resources to lower levels in various ways, the most common of which are the baocun (包村, bāo cūn) system of designating township officials as responsible for assisting the economic and social development of specific villages, as well as the dispatching of first party secretaries and resident work teams to poor villages under targeted poverty alleviation. The combination of these two measures, the baocun and resident work teams, could establish a sustainable village-level administrative system and promote long-term changes in the structure of rural governance. The village-level administrative system should not merely be considered to consist of the existing village officials and village organisations, but more broadly envisioned as the extension of the national administrative system to rural villages. Therefore, rotations in village governance should be systematically incorporated into the responsibilities of higher-level officials and civil servants, but in a manner that is sustainable and does not overburden institutions.

Third, it is necessary to institutionalise villager participation. Village committees should be strengthened as institutions for self-governance and as vehicles for villagers to participate in public affairs and democratic decision-making. On the one hand, the bureaucratisation of village committees must be reversed so that they can be more closely connected with the people and not simply function as extensions of the central government; on the other hand, the supervisory role of village committees and their coordination with village-level administrative authorities must be strengthened, so that they can become people’s organisations.

As a significant social mobilisation, campaign, and experiment, targeted poverty alleviation has innovated China’s rural governance model. The lasting impact of targeted poverty alleviation will depend not only on the changes that have already taken place but also on how these changes can be adapted and institutionalised into rural governance going forward.

Bibliography

Author’s Notes

Longway Foundation‘Socialism 3.0: The Practice and Prospect of Socialism in China’ (社会主义3.0——中国社会主义的现实与未来) was written collectively by a group of researchers at the Longway Foundation (修远基金), and originally published in Wenhua Zongheng (文化纵横), issue no. 2 (April 2015).

We Need to Talk About Socialism

Today, the concept of socialism is at the centre of fierce ideological battles, with supporters and opponents arguing vehemently with each other. These debates often remain at the level of ideas, with participants tending to put forward their conceptions of socialism based upon selective historical narratives and theoretical doctrines, while ignoring the reality that socialism is a historical process that has advanced alongside industrialisation. Over the course of several centuries, socialism has emerged as an alternative path of development to overcome the crisis of capitalist industrialisation, a path characterised by a pursuit of greater political and economic equality, and an exploration of the ideal of a community in ethics and culture. Socialism not only gave rise to states such as the Soviet Union and China, but also had a significant impact on the social democratic policies in Western Europe. However, with the collapse of the Soviet Union in the late twentieth century, the world socialist movement suffered a major setback, and the forms of the socialist state and the socialist mode of production required systematic reflection and revitalisation. Today, as the traditional capitalist welfare states have been dismantled or are facing multiple crises and the forms of material production undergo complex transformations, it is necessary to revisit and reassess the fundamental ideas and practice of socialism to activate its political dynamism.

As the global socialist movement waned, China’s socialist system underwent a self-transformation through reform and opening up. However, despite its achievements, it cannot be denied that socialism with Chinese characteristics faces serious challenges today.^[1] In China, there are doubts about the meaning of socialism and whether it is still necessary or even possible. This presents a dilemma for China – on the one hand, as a socialist country, we cannot avoid discussing socialism; on the other hand, we cannot get bogged down in conceptual disputes. Instead of becoming consumed by ideological battles, we should view socialism as an ongoing process and continuous effort to create a fairer and more just society in the face of the opportunities and challenges brought about by changes in production since the beginning of industrialisation.

Today’s discussions on socialism and the future forms that it may take, must place socialism in the context of existing historical processes, in the context of industrialised mass production, as illuminated by Karl Marx, and analyse the complex interaction between the ideal of equality and the material realities of production. In the case of China, the country’s socialist path must be examined in the context of its historical trajectory since the twentieth century – analysing the complex process through which socialism, as a foreign political concept, has been integrated with China’s political traditions as well as evaluating the lessons learned from China’s experiments in socialist construction – to grasp the reality and necessity of socialism. Furthermore, amid the increasingly complex changes in the forms of material production and the international political-economic structure, it is necessary to explore the changes in patterns of social organisation, factors of production, and the division of labour, that have been brought about by globalisation and the new industrial landscape, to determine the future direction of socialism.

Only on this basis can we effectively face the political and economic conditions in this time of great change, understand the political resources offered by socialism, and contemplate the path for China’s future development.

This article will trace the historical evolution and future direction of Chinese socialism. The authors describe the socialist practice during the Mao Zedong (毛泽东) era of 1949 to 1976 as China’s ‘Socialism 1.0’ and the subsequent exploration of the socialist market economy since the beginning of reform and opening up in 1978 as ‘Socialism 2.0’. Finally, amid the current period of global political and economic upheaval, the authors argue that China needs to develop a ‘Socialism 3.0’ to guide its future course that learns from and builds upon Socialism 1.0 and 2.0.

Socialism 1.0

1. The historical encounter between socialism and China’s rising consciousness of national salvation.^[2] China’s choice of the socialist path was not accidental. At the end of the nineteenth century, all major non-Western civilisations faced comprehensive challenges from the West. Through the advances of industrialisation, Western modern military forces were able to thoroughly defeat the fragile military backbone that was required to maintain order in these traditional agricultural empires. For the elites in these civilisations, this prompted anxiety and frustration, as they felt that their cultures had been superseded or destroyed; civilisational states such as China lost their sense of cultural superiority over the ‘barbarians’, or the neighbouring states and minority ethnicities. The West’s ‘hard ships and sharp canons’ (坚船利炮, jiānchuán lìpào) imposed on the world ‘major changes unseen in three thousand years’ (三千年未见之大变局, sānqiānnián wèijiàn zhī dàbiànjú ), forcing Chinese politicians and intellectuals to respond.^[3] Driven by the powerful material force of their industrialisation, the ‘advanced’ countries, led by the United Kingdom, continued to expand outward, shaping a new international order and new ‘rules of the game’. The transformation of the world order rendered all preceding conventions unviable.

Confronted by the Western powers that were armed by industrialisation, China had to determine how it could quickly industrialise to catch up with the West and protect itself. As Chinese politicians and intellectuals painstakingly explored a path for the country’s industrialisation during the late nineteenth and early twentieth centuries, the Western-led expansion of capitalism gradually moved from the phase of free trade to that of imperialism. The harsh logic of capitalism, wherein the weak are preyed upon by the strong, grew increasingly prominent. Within European countries, class conflict between labour and capital intensified, and social resistance movements surged, a dynamic which had a profound impact on China’s intellectual class at the time. The outbreak of the First World War prompted many Chinese scholars to reflect deeply on the inner dilemmas of Western civilisation. For the revolutionaries and thinkers of modern China, there were two aspects to this engagement: on the one hand, they sought to learn from the West to achieve their goals of modernisation and national prosperity; on the other hand, they remained vigilant to the poverty and inequality brought about by capitalist industrialisation. Figures such as the intellectual Yan Fu (严复) and leader of the 1911 revolution Dr. Sun Yat-sen (孙中山, Sūn Zhōngshān),^[4] were able to gain a broader vision for China’s development because they had ‘opened their eyes to see the world’ (开眼看世界, kāiyǎn kàn shìjiè) and they recognised the historical trends of progress and change; however, their intellectual and ideological foundations, laid in their youth, were deeply influenced by traditional Chinese culture, including the ancient Confucian ideal of ‘Great Unity’ (大同, dàtóng).^[5]

Thus, while learning from the West, Chinese thinkers also identified flaws in Western industrial civilisation and the possibility of constructing a social system that surpassed it. In particular, the rapid growth achieved by the Soviet Union’s socialist industrialisation in a short period of time was viewed as a realistic pathway for China to follow to catch up with the West. After the concept of socialism was introduced into China in the early twentieth century, many Chinese intellectuals found its foundational ideal of equality to be more in line with traditional Chinese ideals than Western liberalism. During this period, socialism had a strong appeal in China because it was not merely a set of lofty communal values, but a concrete example of a system that was capable of achieving industrialisation; both Western European social democracy and the Soviet Union’s state socialism had shown that they could develop a modern mode of production and achieve industrialisation.

In the 1920s and 1930s, after the disillusioning failure of the Great Revolution (1924–1927), Chinese intellectuals fervently discussed and debated socialist theory.^[6] Importantly, the evolutionary view of history imported from the Soviet Union – that human society proceeded from ‘primitive’ society, to slave society, to feudal society, to capitalist society, and finally to socialist and communist society – began to be consciously applied to the historical development of Chinese civilisation. This revolution in the conception of history became the premise of the eventual political revolution.

The task of catching up with the West eventually fell into the hands of the Chinese communists, who were strongly influenced by the October Revolution of 1917; this influence was not limited to Vladimir Lenin’s advanced organisational model of the vanguard party, but also in the practical example and specific methods that a backward country could utilise to pursue industrialisation. Thus, a profound integration took place in China, between the desire for industrialisation (driven by the growing consciousness of national salvation) and the plan to build a socialist state.

2. Mao Zedong’s socialist ideas and practice: the first attempt to adapt socialism to the Chinese context. During the late 1930s, Mao Zedong began to explore how to integrate China’s revolutionary and industrial aims with the historical trend of socialism in the world. In his works, The Chinese Revolution and the Chinese Communist Party (中国革命与中国共产党, Zhōngguó gémìng yǔ Zhōngguó Gòngchǎndǎng, 1939) and On New Democracy (新民主主义论, Xīn mínzhǔ zhǔyì lùn, 1940), Mao argued that China at that time was a semi-colonial and semi-feudal society and that the Communist Party of China (CPC) was the party to lead the socialist revolution.^[7] In Mao’s conception, the plan for China’s future development could be divided into two stages: first, the New Democratic stage, followed by the socialist stage, which would be reached only after the full development of New Democracy.^[8] Starting with the theory of historical stages of development developed by Joseph Stalin and others, Mao incorporated Lenin’s writings on imperialism and colonialism and ultimately constructed a historical view of the development of modern China: after passing through ‘primitive’, slave, and feudal societies, the country had entered a semi-feudal and semi-colonial stage, that it needed to transcend through a stage of democratic revolution, which was divided into the Old and New Democratic phases. This view of history served as the benchmark for the CPC to formulate and evaluate its policies: those policies which were deemed ahead of the historical schedule, so to speak, were considered left-leaning, while those lagging behind were deemed right-leaning.

Guided by this view of history, the generation of Chinese communists led by Mao pursued socialist industrialisation and socialist equality, two goals with a complex and even contradictory relationship.

The CPC now took up the responsibility for the country’s industrial development, following the failed efforts during the late nineteenth and early twentieth centuries such as the Self-Strengthening Movement (1861–1895).^[9] The party’s historical and socialist perspective on the question of industrialisation carried a stronger sense of equality, which generally transcended the consciousness of national salvation. After the founding of the People’s Republic of China (PRC) in 1949, the CPC’s model of industrialisation prioritised the development of heavy industry, which was considered necessary in latecomer countries that sought to catch up the development ladder and had been advocated since the Self-Strengthening Movement. This view was expounded upon in The Party’s General Line for the Transition Period (过渡时期总路线, Guòdù shíqí zǒnglùxiàn), a directive issued in 1953, in which Mao emphasised the need to concentrate efforts on developing heavy industry to establish the foundation for the nation’s industrial and defence modernisation.^[10]

The developmental strategy of prioritising heavy industry and ‘becoming stronger before getting richer’ (先强后富, xiānqiáng hòufù), is, in a way, inevitable for latecomer countries to adopt. However, industrialisation entails an extremely high cost, requiring the accumulation of a huge amount of capital; if sources of investment cannot be obtained and resources cannot be plundered externally, investments in heavy industry often need to be extracted from domestic rural areas. In the early years of the PRC, the only way to advance industrialisation was to re-concentrate the distributed land and increase the centralised management and distribution of agricultural surplus through the people’s commune movement. In addition to agricultural taxes, an instrument called the ‘state monopoly for purchasing and marketing’ (统购统销, tǒnggòu tǒngxiāo) redirected agricultural surplus to industry and cities. Industrialisation also required a large number of highly skilled workers, making it necessary to pour massive amounts of resources into building a modern education system – popularising primary and secondary education, developing institutions of higher education, and increasing the educated population from tens or hundreds of thousands to tens of millions. Therefore, facing the urgent need for industrialisation, China quickly ended its New Democratic phase and entered the initial stage of socialism. In 1953, the CPC adopted the general line of ‘one transformation and three reforms’ (一化三改, yīhuà sāngǎi), through which Socialism 1.0 was gradually established in the country, guided by the following political-economic principles: public ownership of means of production, the planned economy, and distribution according to work.^[11] Similar to the Soviet model, this was an efficient system of accumulation in the early stages of China’s industrialisation.

As the process of socialist industrialisation advanced, however, a contradiction between industrialisation and the goal of socialist equality became increasingly evident. The state-led industrialisation model that prioritised heavy industry inevitably required a large number of government officials, corporate executives, and professionals, with the numbers required expanding alongside industrialisation. As a result, the means of production became concentrated in the hands of the managers rather than the workers, leading to a tendency toward bureaucratisation. By the late 1950s, Mao realised that, as long as production continued to develop in this manner, it would continuously generate a managerial class within the system, managers with their own self-interests who would amass control of government and enterprise affairs and use their power to undermine public ownership. In other words, this bureaucratic class would use its position to manage the economy, offloading the costs of industrialisation onto ordinary people, especially the peasantry, while enjoying the benefits of industrialisation themselves.

Faced with this dilemma, Mao explored a new model of industrialisation that ‘allowed the people to manage the production processes directly’ through the campaign called ‘grasp revolution, promote production’ (抓革命促生产, zhuā gémìng cù shēngchǎn), which sought to make the otherwise contradicting goals of industrialisation and equality complementary to each other. In his comments on Stalin’s Economic Problems of Socialism in the USSR (1951), Mao pointed out that the socialist transformation of ownership of the means of production would not inevitably result in labour occupying a leading position within production.^[12] For Mao, public ownership of the means of production would not guarantee that China developed in a socialist direction, in which the working people ran their country, and so adjustments and experiments were needed at the level of cultural and political leadership – namely, it was necessary to break with the bourgeois legal regime. To this end, Mao pushed for a series of initiatives during subsequent decades, strengthening the guidance and supervision over cadres at the political level and conducting various experimental measures aimed at addressing this problem, including criticising the rank-based wage system, sending large numbers of cadres to engage in manual labour in the countryside and factories, commending policies which reorganised the division of labour, launching socialist education campaigns, and so on. Mao also proposed that the economy should ‘walk on two legs’ (两条腿走路, liǎngtiáotuǐ zǒulù), meaning that economic development could not rely solely on a state-led model and it was also necessary to conduct mass mobilisations to counteract the drawbacks that arose from this model’s reliance on technocrats to implement the directives of the centrally planned economy. This was exemplified by the emergence of policies that reorganised and disrupted the division of labour, such as the Angang Constitution (鞍钢宪法, Āngāng xiànfǎ) in 1960 and its practice of ‘two participations and one reform’ (两参一改, liǎngcān yīgǎi), commended by Mao.^[13] These efforts reflect Mao’s ongoing concern with ensuring that the country’s industrialisation proceeded in a socialist direction, his efforts to correct the imbalances brought about by industrialisation, and commitment to the idea of equality.

Overall, between the founding of the PRC in 1949 and the start of reform and opening up in the late 1970s, China gradually transformed into an industrialised country. During this time, China’s social structure remained relatively equal and social divisions were not so pronounced. However, although the development model of ‘becoming stronger before getting richer’ helped the country to achieve industrialisation, the population generally remained in poverty; the contradictions between the state-led model of industrialisation and the objective of equality became increasingly prominent in Mao’s era. On top of this, driven by the country’s century-long wave of radical thinking, Mao attempted to resolve these problems with the Great Leap Forward (1958–1962) and the Cultural Revolution (1966–1976), but both ultimately failed. Subsequent generations have continued to grapple with these twin pursuits of Chinese socialism, industrialisation and equality.

3. The internal dilemmas of Socialism 1.0. Since Marx, socialist theory has had the following core aims: to overcome capitalist private ownership and disorderly competition through public ownership and the planned economy, to eliminate exploitation, and to implement distribution according to work. However, for both the state-led socialist path initiated by Lenin and the social democratic path pursued in Western Europe, substantial adjustments to socialist theory were required. The socialism envisioned by Marx was supposed to be achieved in the developed capitalist countries, where the accumulation of social capital had reached a considerable degree, thus providing the conditions for a planned economy and distribution according to work. However, neither the Soviet Union nor China were developed capitalist countries, and so the first step in these countries was to determine how to quickly accumulate capital to lay the foundation for public ownership. By the beginning of the twentieth century, the centre-periphery structure of world capitalism had taken shape, which meant that socialist countries would not be able to rely on the world market to quickly accumulate capital. As a result, socialist countries often had to experiment with and, at times, rapidly overhaul their economic policies; a dynamic that was on display in the Soviet Union. During the civil war, Lenin’s ‘war communism’ – characterised by near total nationalisation of the economy and compulsory requisitioning of food products from the peasantry – was implemented from 1918 to 1921 in response to the state of emergency and the need to maintain political power. After the civil war ended, faced with the urgent need to increase productivity, Lenin had to make a number of radical changes (and, to some extent, compromises), implementing the New Economic Policy (1921–1928) and permitting the development of capitalism and a market economy, under state control. Meanwhile, Stalin took another, more costly approach, replacing the market with an organised bureaucratic system to undertake the heavy responsibility of planning and distribution.

In China, the initial stage of industrialisation was based, to a large degree, on the deprivation of the rural areas; one of the functions of the rural commune movement was to direct agricultural surplus towards industrialisation. Compared with the Soviet Union, however, China did not completely transfer the cost of industrial capital accumulation onto the rural areas. Mao, along with other leaders, called for the whole country to ‘tighten their belts’, that is, for the whole population to share in the cost of capital accumulation. Objectively speaking, in both the Soviet Union and China, the planned economy played a positive role precisely in the initial stage of industrialisation. During this stage, the economic and social structures were relatively simple, and thus it was possible for the state to formulate planned arrangements for production, exchange, distribution, and consumption. However, once industrialisation began to move beyond the initial stage, the industrial division of labour became increasingly complex and the production chain extended, leading to a rapid decline in the efficiency of planning, a ‘clogging of the pipes’ throughout the economic system, and an information crisis where there was insufficient feedback to make appropriate policy adjustments.

Although Mao had hoped that the prioritisation of people’s participation in the management of production would further the realisation of Marx’s conception of workers’ control of the means of production, these efforts met profound difficulties in reality. As industrialisation proceeds, the division of labour intensifies, not only in terms of industrial labour, but also the positions and functions of managers and scientific researchers. In addition, as industrialisation creates increasingly complex production, consumption, and distribution processes, the amount of information generated rapidly increases in comparison to agricultural society, requiring an organised bureaucratic system for information management. This bureaucratic system, as articulated by Max Weber and others, is necessary not only within production units but for the society as a whole. In this sense, in times of peaceful development, one of the collateral consequences of industrialisation is that a vanguard political party can rapidly divide into increasingly sophisticated bureaucratic components and into different political groupings. Mao hoped that this problem could be addressed by replacing the bureaucratic system with the people’s self-organisation. His confidence may have come from the CPC’s experience of the people’s war; through the practice of the mass line, the party was able to realise powerful social mobilisations and dynamic political processes that integrated the vanguard party with the people. Mao wanted to revive the organisational model of the people’s war during industrialisation to drive national development forward; however, this organisational model had been successfully implemented during a specific historical context, in which there was a strong popular sense of urgency due to the Chinese civil war (1927–1937; 1945–1949) and the War of Resistance Against Japanese Aggression (1937–1945). Following the victory of the revolution and the initiation of national construction, this sense of urgency gradually faded away. Furthermore, the conditions during the era of Socialism 1.0 were not conducive to help the people deal with the complexities of the country’s development, while the party’s and government’s bureaucratic systems distorted and disintegrated the self-organisation of the masses, whether deliberately or inadvertently. Therefore, Mao’s aims were in practice very difficult to realise.

Another problem that could not be solved at the time was to adjust the system of high accumulation during the early days of the PRC. After completing the initial stage of industrial accumulation, the next challenge facing a socialist state is to promote a stable cycle for expanded reproduction. This involves two tasks; first, it is necessary to adjust the proportion of accumulation and consumption reasonably, conduct fiscal and financial policy reforms, and generate sustainable power for economic growth. However, during Socialism 1.0, China’s fiscal and financial policies were relatively conservative, leading to insufficient money supply, which suppressed the expansion of consumption and thus resulted in a lack of motivation for industrial upgrading. Second, it is necessary to solve the problem of integrating the national economy into the international economic system. The modern system of mass industrial production depends upon inputs of resources and products that span borders and regions. It is difficult to sustain economic growth when relying solely on domestic investment and consumption; an effective economic cycle must be established through international trade to maintain vitality. As early as the 1930s, the Soviet Union attempted to attract capital and technology from the United States, which was in the midst of an economic crisis at the time and had an objective demand for capital output and industrial output. These conditions were favourable to promoting cooperation and the high-speed development of the Soviet economy. Subsequently, the Soviet Union committed to building the socialist camp, not only for political and security reasons but also to establish an economic cycle between the socialist countries. After the revolution in 1949, China joined the socialist camp and received a significant amount of Soviet capital and technical support, especially after the Korean War (1950–1953) (known in China as the War to Resist US Aggression and Aid Korea [抗美援朝战争, Kànɡměi yuáncháo zhànzhēnɡ]). This support enabled China’s basic industrialisation to proceed smoothly, however, the Soviet-led economic system also produced its own imbalances between countries. Eventually, Mao and the party’s leadership chose to break away from the Soviet system, as it broke away from the capitalist world economic system in 1949, which resulted in China’s economy being relatively closed for a long time.

In general, the vision of Socialism 1.0 can be summarised as follows: under public ownership, workers collectively managed the means of production, producing for their own material and spiritual well-being rather than for profit. In fact, the planned economy and system of public ownership created a system of accumulation in which the costs were shared by the people as a whole and completed basic industrialisation in a relatively short period of time. However, this economic structure also had some inherent limitations, related to the sustainability of internal development and difficulties in connecting with the external economic cycle. In the end, the mode of production and organisational capacity of China during Socialism 1.0 were not sufficient to truly realise the socialist ideals of equality and cooperation. This was the challenge facing Deng Xiaoping (邓小平) and other leaders, who would lead China into its next phase of socialism.

Socialism 2.0

1. The political economy of Socialism 2.0. Having experienced and participated in the construction of Socialism 1.0, Deng Xiaoping had a clear understanding of its problems. In contrast to Mao’s emphasis on the idealistic goals of ‘fighting selfishness and criticising revisionism’ (斗私批修, dòusī pīxiū), ‘being just and selfless’ (大公无私, dàgōng wúsī) and ‘serving the people’ (为人民服务, wèi rénmín fúwù), Deng Xiaoping was more inclined to a realistic stance, due to his lengthy involvement in frontline economic work. This orientation was on display during a 1979 meeting with foreign guests, when Deng stated that it was wrong to think that a market economy could only exist under capitalism, contending that socialism could also adopt a market economy and learn things from capitalist countries, such as business management methods.^[14] Deng’s strategy was to gradually transform the planned economy into a tool for macroeconomic regulation, to install the mechanism of a market economy, and to try to make the market economy compatible with public ownership and distribution according to work. This approach differed significantly from Socialism 1.0, in which the planned economy was an institutional foundation that was interrelated with public ownership and distribution according to work. In 1984, the Decision of the Central Committee of the Communist Party of China on Reform of the Economic Structure was passed at the Third Plenary Session of the Twelfth CPC Central Committee, the first breakthrough in the impasse between the planned economy and the commodity economy.^[15] Deng spoke highly of this decision, saying that it was a political economic framework that combined the basic principles of Marxism with China’s socialist practice.

Changes to the country’s basic economic system inevitably raised questions regarding the meaning and interpretation of socialism, namely what were its key elements and features? Although it was necessary on a theoretical level to clarify how these reforms were consistent with socialism, Deng proposed that the party should set aside theoretical debates, and instead focus on setting specific goals and mapping out the trajectory for the country’s new developmental direction. Therefore, in promoting economic reform, Deng made adjustments to the theory of historical stages of development that was adopted during the period of Socialism 1.0. In 1987, the thirteenth CPC National Congress proposed the idea that China, due to its historical underdevelopment, was in the ‘primary stage of socialism’ (社会主义初级阶段, shèhuì zhǔyì chūjí jiēduàn) in which the principle task was to develop the productive forces and set out a three-step economic development strategy to achieve a relatively good standard of life for the people and realise socialist modernisation by the centenary of the revolution.^[16] Subsequently, in 1992, the fourteenth CPC National Congress declared that China’s reform aimed to establish a socialist market economic system, which was indeed a change from the classical conception of socialism, by no longer insisting that a fully planned economy was necessary to ensure public ownership and distribution according to work. Corresponding adjustments were made to the theory of historical stages of development, gradually clarifying that it was necessary to build a socialist market economy during the primary stage of socialism. Together, these theoretical developments formed the basis of socialism with Chinese characteristics.

2. The challenges of Socialism 2.0. During the reform and opening up period, China’s industry has grown rapidly, due to the activation of domestic demand and access to foreign investment by joining the global market. With the support of domestic and international economic circulation, industrialisation has embarked on a sustained process of sovereign development and high-speed growth, moving past the phase of industrial accumulation and entering the stage of industrial upgrading.

According to Deng, in the socialist market economy, the market was only a means to realise the socialist vision of building a ‘moderately prosperous society’ (小康社会, xiǎokāng shèhuì) and attaining the ‘common prosperity’ (共同富裕, gòngtóng fùyù). However, with the rapid development of the market economy, this vision faced increasing problems.

First, Deng’s theoretical framework lacked the support of a compelling historical narrative, namely, it did not identify a clear path by which China’s socialist development would proceed, creating a weakness in the party’s new ideological paradigm. The socialist theory of Deng’s era added a new segment to the historical narrative outlined by Mao in On New Democracy, inserting the primary stage of socialism into the proposed transition of socialism to communism. However, this formulation of the primary stage of socialism failed to answer two critical questions: is there an advanced stage of socialism that follows the primary stage? And how will this path ultimately lead to communism? At that time, the party neither had the ability nor the resources to answer these questions and could only postpone the issue by not arguing over it.

Second, Socialism 2.0 also faced severe difficulties in terms of the basic economic system. The central concern with the theory of the socialist market economy was whether the market economy and socialism could be compatible with each other. Socialism, as a form of ownership, is characterised by collective and public ownership, whereas the market, theoretically, allocates resources, with the types of products and scales of production for different enterprises being based on the price signals determined by the forces of supply and demand. Therefore, in theory, various forms of ownership should be compatible with the market. Proponents of the socialist market economy contended that socialism could develop a market economy in place of the planned economy, while retaining the two basic elements of socialism: public ownership and distribution according to work. However, in practice, the market economy began to dissolve these two socialist principles. During the late 1980s, China’s commercial sector gradually privatised and, after 1992, a large amount of foreign investment poured into the country, and private ownership of production began to expand. In 1997, the CPC adopted the policy of ‘grasping the large and letting the small go’ (抓大放小, zhuādà fàngxiǎo), focusing on maintaining state control over the largest and most strategically important state-owned enterprises (SOEs), such as energy and banking, while relaxing control over smaller, non-strategic SOEs, such as light industry; reforms under this policy resulted in the basic privatisation of county-level state-owned enterprises (SOEs), a large loss of state-owned assets, the exposure of the working class to market forces, and the detachment of the party from its class base. At the same time, there was a shift from the principle of distribution according to work to distribution according to other factors, such as capital, land, and technology, that, due to their scarcity, often occupied a more advantageous position in market transactions than labour. The extreme prioritisation of economic efficiency magnified and abused the advantages of these other factors over labour. This would inevitably compress the proportion of surplus distributed among labour, leading to an increasing separation between workers and the means of production as well as a continuous deterioration of living conditions for workers (the latter trend being exacerbated by inadequate public services). If the cost of the first thirty years of industrialisation was evenly distributed among the whole population through the powerful will of the state, then the cost of the market-oriented reform of the following thirty years was borne more by ordinary people.

Socialism 3.0: Towards the Future

For China, both the practice of Socialism 1.0 in the first three decades following the revolution and that of Socialism 2.0 in the subsequent three decades demonstrate how socialist ideals and beliefs have been integrated with the country’s realities. This integration makes it irrational for China to pursue any radical departure from its socialist path. However, the challenge that China faces lies in the fact that there is no external model to draw upon to adjust Socialism 2.0. As the international political-economic landscape has evolved and the forms of production have undergone transformations, both the Western European path of social democracy and the US path of completely disavowing socialism have descended into crises due to their inherent contradictions. Therefore, the reform of China’s socialist path needs to be based on its own practice.

Focusing on China’s own practice does not mean separating the country from the external world. On the contrary, the fundamental reality of contemporary China is its profound integration with the external world. As such, discussions of socialism in China must take into account the background of global political and economic changes. Just as Marx made great efforts to analyse and understand the internal logic and operation of modern industrial capitalism in the mid-to-late nineteenth century, today it is necessary to deeply analyse and understand the internal logic and operation of the contemporary form of production and its transformation. Rational action can only be taken in accordance with the direction of this transformation, and at critical moments and junctures, relatively reasonable choices should be made based on the given historical conditions. For China, socialism cannot simply be limited to the governing manifesto of the ruling party, it should also be a concept and practical resource to rethink public participation and reshape a political community. Amidst the new world landscape and the rise of new forms of production, the new direction of socialism should be seriously considered.

The core tenets of Socialism 1.0 – the planned economy, public ownership, and distribution according to work – were built through reflection on and improvement of the mass production model. The basis of mass production is collective labour: workers gather in a common workplace and work with each other to operate the means of production to assemble and manufacture goods. The principles of Socialism 1.0 aimed to enable workers to control the means of production on the basis of collective labour in order to cast off the exploitation of the bourgeoisie, and improve the structure of work and the living conditions of the workers. Socialism 3.0 should explore new approaches to correct the abuses caused by capitalism’s dominant position in the global economy, with a focus on improving the living conditions of workers and increasing their control of the means of production, while acknowledging the necessity of a market economy. In China, it is necessary to limit the abuses of capital and to improve the status of labour in the production process, in line with the dynamics of industrialisation, and, ultimately, to build a more inclusive and fairer model of industrialisation. This goal obviously cannot be achieved by the spontaneous adjustment of the market and requires the state to ensure and maintain its leadership in the economic domain.

Since the beginning of the revolution, the Chinese state has exhibited a certain uniqueness, possessing multiple executive forces that penetrate the country’s economy, politics, and society. Even after the administrative reforms during Socialism 2.0, the state has continued to possess a certain economic initiative, not only in terms of its public policies but, importantly, the SOEs and the state-owned land system.

While undertaking such a daunting task, the country must also be vigilant of the further bureaucratisation that may arise from efforts to regulate production. To continue to lead the Chinese people, the CPC must effectively use its power and resources to restructure the relations of production and advance the interests of the working class, thereby winning the support of the people. In the era of Socialism 1.0, the CPC distributed the critical means of production – land – to the peasantry and generated the working class through industrialisation. As a result, the overall interests of the CPC and the people were aligned, and the party’s social foundation was solid. However, in the era of Socialism 2.0, the CPC introduced and developed the market economy and made efficiency the core principle to guide resource allocation, encouraging individuals to become rich. This approach catered to the ‘ever-growing material and cultural needs of the people’ (人民群众日益增长的物质文化需求, rénmín qúnzhòng rìyì zēngzhǎng de wùzhì wénhuà xūqiú) but also laid the groundwork for a serious crisis. Today, if the CPC seeks to rebuild its social foundation, it cannot merely make adjustments to its social welfare policies, it must also regenerate its class foundation by broadly improving the living conditions of the working class, achieving a more balanced distribution of income across the country, and raising the position of labour in the industrial system as well as limiting the abuses of capital.

In addition to the economic and social fields, it must also be recognised that the values and ideals inherent in socialism are an important resource for China as a political and cultural community. The reason why socialist ideas were rapidly accepted and spread in modern China is not only because they are closely related to the traditional Chinese ideal of ‘Great Unity’ (even today, many Chinese people derive their understanding of socialism from this cultural concept), but also due to the successful adaptation of the socialist narrative of historical stages of development to the Chinese context by Mao and others. It is precisely in this narrative that people’s acceptance of socialism achieved the unity of cognition and belief.

In a socialist country, the historical materialist narrative of development is both informative and enlightening. It can be said that this historical narrative plays a role in maintaining public faith in the political system and the trajectory of national development in non-religious countries like China, just as the Christian tradition plays a strong political role in the liberal democracies of the United States, Europe, and other Western countries. For a large country such as China, it is necessary to develop a common set of values and ideals that are reflected in real political and economic processes, rather than mere ideological propaganda. Under ever-changing historical conditions, China must mobilise its own cultural traditions and ideals to reshape and revitalise its common values to ensure the survival of the country and guide it in the correct direction.

Bibliography

Author’s Notes