eg Chinese Voices
No. 31 | 30.01.2022
Happy Chinese New Year of the Tiger! [Xiang Wang]

Dear reader,

In the next two weeks, China will celebrate the advent of spring during the lunar new year, the Year of the Tiger 2022. We will not be publishing Chinese Voices next Sunday. After a short break, on February 13, we will restart, bringing you a continuously lively and deep analysis of China's issues. Happy Chinese New Year to all of you!

—Dongsheng editorial collective

China is reframing international aid with the rise of protectionism
Tang Lixia
Tang Lixia (唐丽霞) is a professor at the College of Humanities and Development Studies, China Agricultural University
Zhao Wenjie
Zhao Wenjie (赵文杰) is a PhD candidate at the College of Humanities and Development Studies, China Agricultural University
Li Xiaoyun
Li Xiaoyun (李小云) is a professor at the College of Humanities and Development Studies, China Agricultural University

Context

The rise of protectionism and unilateralism coupled with the pandemic have exacerbated poverty, hunger, and health problems globally. While traditional Western donors are scaling back their aid and efficiency, China is increasingly playing an important role and fulfilling its role as a major power. Tang Lixia, Zhao Wenjie, and Li Xiaoyun point out that since 2013, China has been transforming its approach from only giving aid to international development cooperation, with support that differs from the forms of Western aid.

Key Points

  • Poverty reduction has become an important aspect of China's international development cooperation through humanitarian aid provisions, infrastructure construction, and personnel training.
  • China is providing public goods to solve the global food security problem through emergency relief, technical cooperation in agricultural production, "teaching people how to fish" (授人以渔shòu rén yǐ yú), and promoting agricultural development by creating "end-to-end" industrial supply chains in recipient countries.
  • An example of this new approach to agricultural development is the China Africa Xai-Xai Agricultural Cooperation Project in Mozambique, which is managed by the China Railway 20th Bureau and funded by the China-Africa Development Fund. This project provided production and processing equipment, transportation, and sales support, for 10,000 mu (approximately 667 hectares) of land given to 1,500 local peasants to cultivate. It provided the peasants with the resources needed to increase the rice yield from 200 to 400kg/mu (approximately 13 to 27kg per hectare) .
  • China has continued to innovate international development cooperation models through tripartite cooperation with various international organisations and developed communities, promoting global poverty reduction, and jointly addressing climate change.
  • China has continued to strengthen the supply of global public goods in the field of health, and actively dispatched foreign aid medical teams to help developing countries improve their public health systems.

Summary

Rather than "give a fish"(授人以鱼shòu rén yǐ yú), China's international development prefers "teaching people how to fish", (授人以渔shòu rén yǐ yú). The Lancang-Mekong Cooperation is another good example. In 2018, China, Cambodia, and six other member countries of the Lancang-Mekong Cooperation released the Five-Year Action Plan (2018-2022). In 2020, the parties adopted the Three-Year Action Plan for Mekong Agricultural Cooperation (2020-2022), which aims to further develop the role of the Lancang-Mekong Agricultural Cooperation Center as a platform to strengthen the cooperation of countries along the Lancang-Mekong River in agricultural science, technology transfer, capacity building, knowledge sharing, joint research, investment, and trade. The goal is to promote sustainable agricultural development and support the enhancement of green agricultural production capacity in the Mekong region.

How digital platforms extract surplus value
He Zhe
He Zhe (何哲) is a professor at the Department of Public Management, Party School of the Central Committee of CPC (National Academy of Governance)

Context

On January 19, nine central ministries and commissions jointly issued guidelines for a standardized healthy and sustainable development of the platform economy. The Chinese government's recent regulations of digital monopolies and the disorderly expansion of capital have triggered extensive discussions domestically and internationally on the governance of digital platforms and data ownership, among other issues. From the perspective of Marxist political economy, He Zhe analyzes five ways of rapid capital appreciation in the internet age.

Key points

  • Powerful algorithms and assessments greatly increase the constraints on and labor intensity of workers; working hours are also extended through mobile network coverage and remote working.
  • The digital economy has largely eliminated inventors' intellectual property rights and interests in the distribution of surplus value in traditional industries. Internet platforms need only hire programmers, at going-rate salaries with a bonus, to design the core software and algorithms and adapt open source code.
  • These new digital platform companies develop in-house digital management tools to improve efficiency and reduce management costs.
  • They have optimized and leveraged the "first-mover" advantage and network effects to create a de facto monopoly, reduce market costs, and reap excess profits.
  • To avoid taxes and institutional costs, they have cleverly created the appearance of being a channel and technology provider.

Summary

The author argues that digital platforms are productive and innovative, but at the same time, the extraction and distribution of digital surplus value are exploitative and monopolistic, intensify the conflicts between labor and capital, between digital platform enterprises and traditional industrial enterprises, and between digital enterprises and traditional financial enterprises. This has created a confrontation between "ordinary workers and traditional industrial capitalists" on the one side and a few tech giants on the other side. Therefore, the digital economic governance system should encourage the digital transformation of the economy, while ensuring that the ordinary workers' wages, working conditions, and freedoms are protected, that the taxation regulation mechanism is optimized, and that the huge social wealth created in the digital era contributes to the welfare of the whole society.

How does China make state-owned enterprises stronger?
Wang Hongmiao
Wang Hongmiao ( 王宏淼)is a researcher and professor at the Institute of Economic Research, Chinese Academy of Social Sciences

Context

The corporate governance reform of China's state-owned enterprises (SOE) has been almost accomplished. As a result, the revenue of China's centrally administered SOEs (央企 yāngqǐ) grew 19.5 percent in 2021, reaching a record high. Beginning in 1993, China proposed a corporate system reform of its SOEs, the leading force of the socialist market economy. In Xi's era, China highlights the unification of the Party's leadership and the improvement of corporate governance in order to make SOEs stronger. Wang Hongmiao points out that China's current SOE corporate system embodies five distinctive characteristics.

Key points

  • China's SOEs differ in their property ownership structure, their core business categories, their profit targets, and their regulators.
  • Commercial SOEs are designed to preserve and increase the value of state-owned assets; the aims of the public welfare SOEs are to protect people's livelihood and serve society. Social factors are included in the KPI assessment of public welfare SOEs.
  • In adhering to the major principles of state-owned capital supervision, state-owned asset regulators tend to be less interventionist, thus stimulating, to the greatest extent possible, the vitality of SOEs' operations.
  • Rather than "shareholders first", China's SOEs follow a four-in-one model of co-governance in which the Party, the regulators, the governance body (shareholders, the board, and the supervisory board), and the external watchdog (auditors, the public, and the People's Congress) work together, while each has their own area of responsibility.
  • The Party committee plays a substantive role in SOE's governance. Yet it is also required to obey the rule of limited interference, and cannot interfere unnecessarily.

Summary

Since 2016, China's SOEs have developed a two-tier board structure. The Party Committee, as the proxy for state ownership, reviews major decisions and provides social supervision, which helps to address the problem of the "owner 's absence". The board of directors is essentially a company's governing body, functioning as decision-makers and implementors, but it must work under the supervision of the Party committee. This structure reflects the unity of the principles of the country's ownership control, professional management, and worker participation, and is a typical feature of China's SOEs' corporate governance within the framework of the socialist market economy.

What can we learn from Zhejiang’s practices in common prosperity?
Lilian Zhang
Lilian Zhang is a researcher at Maku Insights, a think tank specializing in showing real China to the world
Linna Hu
Linna Hu is a junior researcher at Maku Insights, a think tank specializing in showing real China to the world

Context

China has recently designated Zhejiang province as a pilot zone for a common prosperity push. Apart from Zhejiang's remarkable economic growth (ranking 4th in GDP nationally), the income disparity between urban and rural residents has remained the smallest (1.96:1 in 2020) in the country. Lilian Zhang and Linna Hu spell-out four key factors that lay the foundation for Zhejiang's achievements.

Key points

  • The geographic advantages contribute to a strong export-oriented economy, creating a huge number of job opportunities for ordinary people.
  • The private sector, including the e-commerce industry, makes up more than 97 percent of all businesses and creates 87.5 percent of all jobs.
  • Since the beginning of the 21st century, Zhejiang has initiated the integration of urban and rural development and has created a mechanism for rich villages and people to help the poor.
  • The characteristics of "small government and strong market forces" and the service-oriented government create a conducive environment for private business.

Summary

The article highlights that the integration of urban and rural development was proposed by President Xi Jinping when he became the Secretary of the Provincial Party Committee in 2002. One prominent project, beginning in 2003, was to beautify tens of thousands of villages and improve the rural environment. After 18 years of development, each village has access to roads, passenger buses, postal stations, telephone networks, and the Internet. Another "Mountain and Sea Collaboration" project, also begun in 2003, aimed at enabling rich villages and people to help the poor and promote collaboration between developed areas and mountainous areas. Both projects created green industries and enriched local people. In conclusion, Zhejiang has accomplished a unique balance between the visible and invisible hands – a strong market-based economy, but with government regulation and guidance that ensures common prosperity for all of the region’s population.

Qu Quibai’s Contribution to the Sinicization of Marxism
Liu Linyuan
Liu Linyuan (刘林元) is a professor in the Department of Philosophy, Nanjing University. His research area includes Mao Zedong, Deng Xiaoping, and contemporary Chinese Marxist philosophy

Context

Mao Zedong Thought is the result of the first historical leap in the Sinicization of Marxism, in which the "right revolutionary path of encircling cities from the countryside and seizing state power with military force" (农村包围城市武装夺取政权 nóngcūn bāowéi chéngshì wǔzhuāng duóqǔ zhèngquán), and is the product of combining the universal principles of Marxism with the practice of the Chinese Revolution. Mao Zedong Thought is not only his personal contribution, but also the distillation of the CPC's collective wisdom. Liu Linyuan analyzes the great contribution of Qu Quibai(1899-1935), an early leader of the Party, to Mao Zedong Thought and the first leap forward in the Sinicization of Marxism.

Key points

  • Qu Quibai was the first person in the Party to recognize the importance of combining Marxism with revolutionary practice, and in February 1927, he proposed that "the application of Marxism to the Chinese situation must not be delayed for a day".
  • Qu Quibai believed that the nature of China's revolutions, at that time, was that it had to be a bourgeois revolution led by the proletariat, and that it had to be transformed into a socialist revolution in two steps. The land revolution was the cornerstone of China's revolutions.
  • Between 1923 and 1927, Qu Quibai recognized that it was necessary to rely on the CPC to lead peasant revolts in order to solve the land question, so he enthusiastically supported the peasant movement led by Mao Zedong and Peng Pai.
  • Given the cooperation between the Kuomintang (KMT) and the CPC in the 1925-1927 phase of the Chinese Great Revolution (大革命 dà gé mìng), Chen Duxiu, a leader of the CPC, put forward the position that CPC did not need to build an army. The 1927 August 7th Conference, chaired by Qu Qiubai, rejected the Chen Duxiu strategy and this led to the creation of a revolutionary army, the development of worker-peasant armies, and the organization of peasant revolts to establish peasant power.
  • In summing up the peasant revolts in different regions, Qu Qiubai proposed to "carry out guerrilla warfare" (开展游击战 kāizhǎn yóujízhàn), "establish revolutionary territories"(建设革命根据地 Jiànshè gémìng gēnjùdì), and "create an independent regime in rural areas (创立农村割据 chuànglì nóngcūn gējù)", which were in line with Mao Zedong's later proposals of an "armed independent regime of workers and peasants" (工农武装割据 gōngnóng wǔzhuāng gējù)and "rural bases" (农村根据地 nóngcūn gēnjùdì).

Summary

Qu Quibai was the first person to introduce dialectical materialism to China, and his thorough understanding of Marxism, coupled with his role as the main leader of the Party, made it inevitable that his ideas would influence the entire Party through its documents and leadership. His grasp of the essence of China's democratic revolution was consistent with Mao's subsequent conclusion that "the new democratic revolution is essentially a peasant revolution". Moreover, it was through the lessons learned from the peasant revolt, Autumn Harvest Uprising (秋收起义Qiūshōu qǐyì), that Mao Zedong created the revolutionary base in the Jinggang Mountains, explored the correct revolutionary path of encircling the cities from the countryside, and achieved the first leap of the Sinicization of Marxism.

(Chinese Voices will continue to interpret the historical context and developmental logic of Marxism's Sinicization)

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