A-Infos (en) Italy, FAI, Umanita Nova #19-25 - China: the capitalist dragon (ca, de, it, pt, tr)[machine translation]

China's historical development has followed a different path from that 
of the part of the world where we live, which saw first the slave 
society, then the feudal one and then the capitalist one. Within this 
historical scheme, China is difficult to classify. Its thousand-year 
history also has repercussions on the current situation; China's 
inconsistencies with the capitalist model typical of Anglo-American 
imperialism and its allies are often simplistically explained by 
attributing the Chinese model the label of "socialist". If there were 
any need, the latest measures adopted by the Chinese Communist Party and 
government demonstrate that China, far from socialism, is following its 
own model of capitalist development.

Last May, in fact, the central committee of the Communist Party and the 
Chinese government jointly developed new economic guidelines; these 
guidelines aim to "transform more state-owned and private companies into 
innovative, resilient and globally competitive companies with modern 
corporate governance structures", says the South China Morning Post. The 
2035 goal for a more refined corporate governance system also aligns 
with China's broader modernization goals for that year, which the 
Chinese government sees as essential to catching up with the United States.

China's governance structure, called modern in the document, will be 
established in about five years. The interim goal will help companies 
contribute to innovation and industrial upgrades and fulfill social 
responsibilities.

Special attention is given to scientific and market-oriented management, 
improving governance at listed companies, and engaging institutional 
investors as active shareholders.

The new guidelines complement other central guidance. In March, China's 
Ministry of Commerce and the National Development and Reform Commission, 
its top economic planner, released a document setting a goal of having 
100 Chinese companies lead digital and AI-related supply chains within 
five years to strengthen resilience and security in critical industries.

Beijing's push comes as China's biggest companies have lost ground to 
their US rivals. In 2024, mainland China and Hong Kong had 128 companies 
on the Fortune 500 list, while the US had 139 companies on the list, a 
reversal after Chinese companies dethroned their US counterparts in 2019.

Total profits of state-owned enterprises contracted 4.4% in the first 
four months of 2025, after falling 4.6% in 2024. Private firms, on the 
other hand, saw their profits rise 4.3% between January and April.

According to a widely accepted definition, state-owned enterprises in 
the People's Republic of China (PRC) are a key element of the economic 
system, which is based on the principle of "socialist public ownership 
of the means of production." This means that despite the opening up of a 
market economy, a significant part of China's economy is still 
controlled by the state, with state-owned enterprises playing an 
important role in various sectors; The government has given them a role 
that goes beyond simple profit and reflects the continued influence of 
the state in the economy. But these new guidelines now state that 
enterprises that are large but not strong and profitable will be 
rigorously reformed in line with modern corporate governance.

Private enterprises will be given greater autonomy in adopting flexible 
governance structures, and entrepreneurs will be able to run their 
businesses without excessive state interference, although there is a 
point in the document where it calls for strengthening the Party's 
leadership.

In April, China passed a law to promote the private economy and give 
enterprises hit by US tariffs greater legal protection against fines and 
interference that the Chinese government calls arbitrary.

Let's take a step back to understand how misplaced the attribute of 
socialist bestowed on China's economic reality is.

In 1953, four years had passed since the victory of the People's 
Liberation Army over Chiang Kai-shek and in that same year that same 
Army had intervened to defend Korea invaded by the USA and their allies. 
In that year, Mao Zedong, then President of the People's Republic of 
China, defined the Chinese economy as follows: "The capitalist economy 
in China today is a capitalist economy that is, for the most part, under 
the control of the people's government, is linked in various ways with 
the state-run socialist economy, and is under the supervision of the 
workers. It is no longer an ordinary capitalist economy, but a 
capitalist economy of a special kind, namely, a new type of state 
capitalist economy. It exists primarily not for the profit of the 
capitalists but to meet the needs of the people and the state. Of 
course, some of the profit earned by the workers still goes to the 
capitalists, but it represents only a small portion of the total profit, 
about one-fourth, while the remaining three-fourths go to the workers 
(as welfare funds), to the state (as taxes), and to expand production 
facilities (including a small portion that yields profit to the 
capitalists). It follows that this new type of state capitalist economy 
has a notable socialist character and is advantageous to the workers and 
the state." State."
This definition could also apply to today's China, except that more than 
seventy years have passed since Mao wrote these lines, China's 
productive forces have seen an unthinkable development, but this 
development of the productive forces, rather than leading to the 
destruction of capitalist production relations, has led to the extension 
of these relations to all production and distribution. Today 75% of 
production is ensured by capitalist enterprises, while state enterprises 
are limited to 25%. The search for maximum profit is also the guiding 
light that inspires the guidelines approved last May, while the role of 
the Communist Party within the production units is to ensure their 
profitability, that is, the ability to produce profits.
But more than in industry, the advance of capitalism is significant in 
agriculture and healthcare, where, the first attempts at socialization, 
were soon replaced by the logic of capital.
In the aftermath of the victory in the civil war, the government 
abolished private ownership of land, which became state property, and 
collectivized agriculture through farmers' cooperatives. From 1958 
onwards, the Chinese Communist Party, under the leadership of Mao 
Zedong, criticized the Soviet model of development based on heavy 
industry and focused on the rapid transformation of production relations 
in the countryside in a communist sense, accompanied by support for 
small rural industry. Thousands of people's communes were created: the 
over 740,000 agricultural production cooperatives merged into 26,000 
people's communes comprising 120 million families. This type of 
organization, in the intention of its creators, was not limited to being 
an economic unit, but was also a basic organization of state power. 
Furthermore, it was the response to the needs of the great leap forward 
which required a greater extension of land units. The commune was to 
achieve the collectivization of life, including the most basic forms of 
human existence, and thereby prepare the transition from the socialist 
to the communist system. Free markets and private fields previously 
assigned to families were abolished within them. In 1984, as part of the 
reforms promoted during Deng's presidency, the people's communes were 
definitively abolished and collective units were progressively reduced. 
In 1985, the transfer of crop quotas to the State was replaced by the 
system of negotiated purchase contracts, a system with which taxes 
replaced crop quotas. This evolution was legitimized by the 1993 
constitutional amendment that formally replaced the communes with a 
system of contractual responsibility. This system still requires the 
State to entrust the management of the land to individual heads of 
families by means of contracts.
Healthcare has also seen a similar evolution. The history of the health 
service in the PRC can be divided into four periods.
The first phase began with the seizure of power by the Chinese Communist 
Party in 1949. The state owned and provided all health services, and 
health professionals were its employees. One feature that was quite 
successful in this phase was the use of so-called barefoot doctors to 
provide essential public health services and primary care in rural 
villages. Between 1952 and 1982, infant mortality rates in China dropped 
from 200 to 34 per 1,000 live births, and diseases such as 
schistosomiasis, which had plagued the country for centuries, were 
almost completely eradicated. A new phase began in 1984. The health 
system was also involved in the reforms desired by the government to 
convert China into a market economy. Government funding of hospitals was 
dramatically reduced, and many health workers, including barefoot 
doctors, lost their government subsidies. The government still owned the 
hospitals, but had little control over the health organizations, which 
operated as for-profit entities in an unregulated market. Most people 
remained uninsured, as the government did not provide any coverage and 
there were no private insurance companies. In 1999, only 49 percent of 
the urban population had health insurance, mostly from state-run or 
government-run enterprises, and only 7 percent of the rural population 
had any form of coverage.

A new phase began in 2003, when the Chinese government introduced 
insurance to cover hospital costs for rural residents. Unsurprisingly, 
the 2003 reforms were not enough to address the deep-seated problems in 
China's health care system.

Since 2008, the health system has continued to be mainly market-based, 
but since 2012, a government-funded insurance system has started to 
provide 95% of the population with very modest coverage. The government 
has also made efforts to create a primary care system.

In addition to the data from industry, the data from agriculture and 
health care show that the Chinese government is oriented towards 
liquidating what remains of socialist structures in the country, 
avoiding critical steps such as those that led to the dissolution of the 
Soviet Union.

Tiziano Antonelli18

https://umanitanova.org/cina-il-drago-capitalista/
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