Chinese Perspectives on Twenty-First Century Socialism

A contemporary Chinese saying goes, ‘In 1949, socialism saved China. In the twenty-first century, China will save socialism’. In a 2018 speech to incoming members of the Central Committee, Chinese President Xi Jinping (习近平) recalled that, after the collapse of the Soviet Union, ‘had socialism failed in China […] then global socialism would [have] lapsed into a long dark age. And communism, like Karl Marx once said, would be a haunting spectre lingering in limbo’.

But what are the main characteristics of socialism with Chinese characteristics? How are the market and planning jointly integrated into a socialist strategy, without antagonising each other? What sets Chinese socialism apart from the Soviet model? What are the greatest challenges that China faces as it confronts the contradictions imposed by the market on socialism? Can the Chinese experience inspire other countries on the path to socialism? The fourth issue of the international edition of Wenhua Zongheng (文化纵横) examines these central questions in two essays by Yang Ping (杨平), editor-in-chief of the Chinese edition of Wenhua Zongheng, and Pan Shiwei (潘世伟), honorary president of the Institute of Chinese Marxism, Shanghai Academy of Social Sciences.

In ‘The Third Wave of Socialism’, Yang Ping argues that during the past one and a half centuries, there have been three waves of scientific socialism: the emergence of Marxism and revolutionary movements in Europe in the nineteenth century (first wave), the emergence of a large number of socialist states and national liberation movements during the twentieth century (second wave), and, with the collapse of the Soviet Union and the exhaustion of socialism during the Mao Zedong era, the emergence of a socialist market economy, beginning with China’s reform and opening up in the 1970s (third wave). Similarly, in ‘The New Forms of Socialism in the Twenty-First Century’, Pan Shiwei contends that three main forms of socialism have emerged: classical socialism in the centres of European capitalism, transformative forms of socialism in the colonies and semi-colonies, and a new form of socialism that is developing in China and aims to surpass capitalism. Both authors believe that the new wave or form of socialism is in its early stages and discuss how it can further strengthen socialism in China and serve as an inspiration to other nations around the world.

Today, the imperialist powers are in the midst of an economic decline and embroiled in a frenzy of warfare in Ukraine and Palestine – which risks spreading to East and Southeast Asia and plunging humanity into a third world war. In this context, what opportunities does the rise of socialist China offer to the Global South? This editorial engages with the perspectives of the authors to examine this question.

Achievements and Challenges for Chinese Socialism

After 45 years of reform and opening up, socialist China has become a major industrial, technological, financial, commercial, and military power. Based on gross domestic product (GDP) in terms of purchasing power parity (PPP), a more realistic measure to compare economies, China has comfortably surpassed the United States. In 2022, China’s GDP (PPP) was $30.32 trillion compared to $25.46 trillion for the US. In other words, China’s GDP (PPP) is 119 percent, or roughly 1.2 times greater, that of the US. To contextualise this achievement within the history of socialist development, at the peak of the Soviet Union’s economic strength in 1975, its GDP (PPP) only reached 58 percent, or just over half, that of the US.

Since the late 2000s, China has been the world’s largest industrial power. Last year, China produced 26.7 percent of global manufacturing output, followed by the United States (15.4 percent), Japan (5.3 percent), and Germany (4 percent). This means that China’s industrial production exceeds the combined output of the three largest industrial nations in the Global North. China has also made remarkable technological advancements in recent decades, becoming the global leader in sectors such as telecommunications (5G), high-speed rail, renewable energy, mineral refining, and electric vehicles, and reaching highly advanced stages in many other areas, including artificial intelligence, quantum computing, biotechnology, and construction.

In addition, China is the world’s largest trading power, serving as the primary trade partner for over 120 countries. In 2022, China’s exports totalled $6.28 trillion, with a surplus of $860 billion, ending the year with international reserves of $3.13 trillion. Meanwhile, in the realm of finance, the Chinese state controls the world’s four largest banks based on total assets – Industrial and Commercial Bank of China (ICBC), China Construction Bank (CCB), Agricultural Bank of China (ABC), and Bank of China (BOC) – which together hold roughly $20 trillion in assets. Globally, the country has become the largest source of development financing, surpassing all other countries and multilateral institutions, including the World Bank.

Finally, China has achieved one of the greatest feats in history by lifting 850 million people out of extreme poverty between 1978 and 2021. According to the World Bank, China accounted for 76 percent of all poverty reduction during that period.

At the same time, despite its achievements, China remains a developing country and faces significant economic, social, and political challenges as it seeks to advance beyond its ‘primary stage’ of socialism. These challenges include the need to reduce inequality, both between urban and rural areas and between regions of the country (the east being much more developed than the west); raise the income and social wellbeing of over 300 million (internal) migrant workers; reduce high levels of youth unemployment; reduce the high degree of economic dependency on a financialised real estate sector; address the environmental consequences resulting from hyper-accelerated industrialisation; adapt to an aging population and declining birth rate; revive Marxist political education within the Communist Party of China (CPC) and among the masses (a priority for Xi Jinping); and navigate the hybrid warfare tactics employed by Western powers to try to contain China’s progress.

A Socialist or Developmental Wave in the Global South?

China has managed to break free from the vicious ‘development of underdevelopment’ cycle that has ensnared the Third World. Decades after gaining their independence from Western colonialism, this cycle continues to define the experience of peripheral countries within the capitalist system. Owing to its tremendous economic success, an increasing number of countries in the Global South view China as both a successful example to follow (taking into account their local specificities) and a potential partner in their pursuit of development-oriented strategies. In turn, China is increasingly developing such partnerships.

In October 2022, the report of the twentieth National Congress of the CPC included a resounding Marxist critique of the Western model of modernisation, as being based on colonisation, plunder, slavery, and predatory exploitation of the natural resources and peoples in the Global South. This model not only served as the foundation for the industrialisation processes in Europe and the United States, but also their economic, political, and military domination over the rest of the world, producing a system of imperialism. In response, China formulated its own distinct path of modernisation, characterised by principles of shared prosperity among a massive population, material and ethical-cultural progress, harmony between humans and nature, and peaceful development.

This historical awareness shapes China’s state policy, particularly the Belt and Road Initiative (BRI), launched in 2013 with the aim of boosting the development of western China through its connection with Central Asia. In Deng Xiaoping’s (邓小平) style of ‘crossing the river by touching the stones’, the Chinese government realised that this could be the cornerstone of its relationship with the Global South, which had been plagued by neoliberalism for over three decades. Ten years and hundreds of billions of dollars later, this direction was reaffirmed at the twentieth National Congress of the CPC, which declared that China is committed to helping narrow the gap between the Global North and the Global South and supporting the acceleration of development in nations of the Global South.

Recent developments indicate a higher level of cooperation between China and developing countries. For instance, at the China-Africa Leaders’ Dialogue in August (held shortly after the fifteenth BRICS summit), African leaders expressed their appreciation for China’s efforts over the past two decades to promote infrastructure on the continent but also called on China to shift its investment focus from infrastructure to industrialisation.^[1] Xi Jinping agreed with the proposal. A similar debate took place at the Russia-Africa summit in July, confirming the current African strategy.

Across the Global South, the need for industrialisation is once again at the forefront of public debate, from countries like Brazil and South Africa, which once had robust and diversified industrial sectors but have experienced deindustrialisation in recent decades, to countries like Bolivia and Zimbabwe, which, despite their abundant natural resources, have never been able to accumulate sufficient capital to initiate a consistent industrialisation process due to Western exploitation.

Numerous partnerships between Chinese state-owned and private companies with Global South countries have been established in the recent period, many of them related to the local processing of high-demand minerals or the production of electric vehicles. For example, China is investing billions of dollars in lithium processing plants in Bolivia, another lithium plant and mega steel plant in Zimbabwe, nickel processing plants in Indonesia, and a hub of electric vehicle factories in Morocco. There are high expectations that regional initiatives like the BRI, the expanded BRICS-11, and the Shanghai Cooperation Organisation, can serve as levers to strengthen this process, even though they face opposition from Western powers.

Without industrial development, the peoples in the Global South will not be able to overcome their profound problems, such as hunger, unemployment, and insufficient access to quality education, housing, and healthcare. However, this will not be attainable merely through relations with China (or Russia). It is necessary to strengthen national popular projects with broad participation from progressive social sectors, especially the working classes, otherwise, the fruits of any development are unlikely to be reaped by those who need them the most. Given that few countries in the Global South are currently experiencing an upsurge in mass movements, the prospects for a global ‘third socialist wave’ remain very challenging; rather, a new wave of development with the potential to take on a progressive character, seems more feasible. The principal contradiction of our time is imperialism and all efforts to confront it are strategically advantageous.

There is no doubt that China and Russia have been targeted by the imperialist powers precisely because they have built strong sovereign nations in recent decades. Beyond this, however, China and, to a lesser degree, Russia offer a greater range of industrial, technological, financial, communication, and military capabilities to countries of the Global South, expanding their choices and potentially weakening the hegemony of Western powers more broadly. Was this not precisely what was missing for the success of the ‘Third World Project’, the great wave for national liberation and development between the 1950s and 1970s, whose dreams were ultimately thwarted by neoliberalism and the Empire’s war machine?