Re: [OPE] Class structure: China

From: Michael Webber <>
Date: Sun May 01 2011 - 19:51:18 EDT

thank you everyone for your helpful and constructive responses to my

bapuji: that's a wonderful history and i'm sure that i will come back to it
for the details that it contains!

paula: yes, i had forgotten latin america as containing states that owned
capitalist firms. a place like brasil must be a good place to think about
in this connection.

dave: your suggested set of readings is precisely the help i was looking
for. i'm no political theorist, and finding my way into that minefield is
something that needs a good guide. you have helped a lot.

jerry: you asked: Do you have some statistics and references on the growth
of state-owned 'for profit' enterprises? I'm curious especially about how
the surplus is used and what authorities within the state make the

one of the difficulties in working with chinese statistics is that
categories are imprecise and definitions changing. statistical categories
do include one called 'state owned enterprises', but there are other
categories that are, for example' shareholder corporations. such
shareholder corporations are listed companies, but often the major or
dominant shareholder is the state. some shareholder corporations are
private companies, in our sense, but many are not. and likewise with other
categories: foreign-invested companies may represent an alliance of a
foreign corporation and a state corporation or a foreign and a private
corporation. in my view, then, general statistics about the growth or
decline of the state investment in and control of corporations are

state corporations are ranked. just as ministries, bureaus and government
departments are ranked. so a first ranked bureau controls a second ranked
corporation; a fourth-ranked bureau manages a fifth rank corporation. so
big and important corporations are controlled from the centre, usually by a
ministry, but sometimes by a committee of state council. lesser
corporations are controlled by lower ranked bureaus, which may be
sub-departments within a central ministry or departments at the provincial,
prefectural or county level. so in principle, decisions about the surplus
are made within the controlling bureau/department/ministry. in practice,
the CEOs and senior managers of corporations are often former bureaucrats
(and bureaucrats are often former managers): the promotion path within a
given field of activity often involves moving between state and corporate
administration. this means that a bureau and its corporations are usually
working towards an agreed goal, established by informal communication over a
long time -- growing up together.

concerning the more general arguments below: i think that the chinese state
is by no means subordinate to capitalist interests. but we need to be
careful here:
1 this is generally true, provided that we mean 'private capitalist
interests'. since the state is itself a capitalist, it also carries
capitalist interests 'within itself', so to speak.
2 the state has all kinds of levels, from the centre on down to the
townships. at more local levels, it is to be expected that in some the
state is effectively subordinate.
3 incidentally, a nice example of the contradictions involved in the state
being a capitalist as well as a state is revealed by the fact that a few
years ago the government had to force the PLA to give up its commercial

finally, i want to emphasise the specificity of the term 'capitalist state'
for present day china. i mean by this that the commanding heights of the
economy are (i) capitalist corporations and (ii) owned / controlled by the
state. this is a little different from what we might call 'the state in
capitalist societies', whatever a capitalist society is.

thanks again, everyone: back to the library...


On 1 May 2011 09:37, GERALD LEVY <> wrote:

> Michael W:
> Do you have some statistics and references on the growth of state-owned
> 'for profit' enterprises? I'm curious especially about how the surplus is
> used and what authorities within the state make the decisions.
> Dave Z:
> Brief comments on your comments:
> > Second point:
> > Since the political force that won state power in the revolutionary
> > process was a CP, it imposed a particular constitutional form of rule
> > derived, in part, from Comintern.
> Yes, but it's crucial also to recognize how Chinese policy and law
> changed in the late 50's - especially after the rise of Khrushchev to
> power in the USSR. After that time the "particular constitutional form of
> rule" changed and the CCP moved in a decidedly different direction,
> including
> the Great Leap Forward in 1958.
> > Third point:
> > Since there can be little doubt that capitalist expansion is being
> > promoted in China, one should consider another aspect of the global
> > political economy; a system of surplus-appropriating states which
> > pre-dates the existence of capitalism. In the context of inter-state
> > rivalry or conflict with an advanced capitalist state, pre-capitalist
> > states are likely to to adopt a path of capitalist modernization for the
> > development of the productive forces and hence their abilities to act in
> > the inter-state system. Mooers wrote a nice comparative study of this
> > competitive process and its unintended outcomes:
> > Colin Mooers (1991), "The Making of Bourgeois Europe: Absolutism,
> > Revolution, and the Rise of Capitalism in England, France and
> > Germany", Verso.
> Sometimes 'pre-capitalist', 'capitalist', and 'post-capitalist' are
> inadequate descriptors for particular states, I think. It's hard for
> me to conceptualize the current Chinese state as 'pre-capitalist'.
> Was it also pre-capitalist under Mao?
> > Of course, the
> > central question is the phase transition itself; whether the Chinese
> > state has crossed 'the tipping point' towards being subordinate to these
> > structural mechanisms? You point to the emergence of a class coalition
> > of state officials/managers and capitalists, pushing for privatization.
> > On the other hand there appears to be factional struggle within the CP,
> > which remains the dominant political force.
> The factional struggle which led, imo, in a relatively straight-line
> path to the current policy began after 1976 and was championed by the
> late Deng Xiaoping. In retrospect, the name given to his faction within
> the CCP by their factional opponents (the so-called 'Gang of Four') seems
> to be correct: they were 'capitalist roaders'. The current
> policy which Michael is asking about was rationalized in the 2003 "Three
> Represents" change in the Party Constitution which had been proposed by
> Jiang Zemin. It's true that there is a so-called "New Leftism" faction
> within the CCP but they appear to be quite weak and unable to effect
> changes in party policy.
> What seems to be the case, imo, is that the party leadership has been
> trying through a series of measures to not only change the role of the
> state but also to rationalize this using some sort of
> popular and leftist rhetoric to both the masses and their own
> rank-and-file.
> This is not such an easy task - they want to have their cake and eat
> it too, so to speak. That is, they want to promote capitalist development
> while at the same time repeating the line that there is socialism in
> the PRC and that they as representatives of the CCP are dedicated
> communists. As the realities of Chinese society become more and more
> understood by the Chinese masses, this becomes an increasingly tortured
> and hard sell. I'm not even sure if the party leadership which espouses
> this rhetoric believes it. But what does seem clear to me is that the
> party leadership is intent on making sure that in this continued path
> of capitalist development the role of the state, and hence the role
> of the Party, isn't diminished. So maybe that's one way of getting around
> to thinking about Michael's question - it could be seen as an attempt
> by the party leadership to preserve the role of the state in the
> development process - and hence also reproduce their own individual
> and collective positions of power, (relative) wealth and prestige.
> Certainly it's unusual - one might call it (playing on another
> expression) "capitalism with Chinese characteristics".
> The logic of the current situation makes me think that at some point
> there is going to be a massive 'legitimation crisis' within the PRC
> and, with it, heightened class struggle.
> In solidarity, Jerry
> _______________________________________________
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Michael Webber
Professorial Fellow
Department of Resource Management and Geography
The University of Melbourne
Mail address: 221 Bouverie Street, Carlton, VIC 3010
Phone: 0402 421 283

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Received on Sun May 1 19:52:24 2011

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