Still waving the red flag

PUBLISHED : Saturday, 04 September, 2010, 12:00am
UPDATED : Saturday, 04 September, 2010, 12:00am

Is China still a communist country? This question is prompted by new figures showing that the state-controlled sector of the economy is expanding and this has encouraged the small army of China watchers to ponder whether past claims of Chinese capitalism's ascendancy remain valid.

Meanwhile, the totalitarian nature of China is underlined by controls on the political and social life of the nation which show every sign of expanding rather than retreating. Hardly a day passes without news of some government edict or action to curb the very limited freedoms which have sneaked their way into the public arena.

Recently, for example, there were reports of an 'anti-vulgarity campaign', aimed at suppressing one of the things that most alarm totalitarian regimes - humour. It's part of a media crackdown on poking fun at the regime.

In another case, former reporter Xie Zhaoping was arrested after publishing a book on the fate of those forced to leave their homes when the Sanmen Gorge dam and reservoir were built in the 1950s.

None of this is out of the ordinary. But there was some surprise at recent moves to recruit global executive talent for state enterprises, implying a desire to boost their operations.

And there was new data from the World Bank, which shows that industrial production by state corporations is increasing faster than output from private firms.

Marxism has always emphasised control over the means of production as the key to building a socialist society. This mantra held sway until the late 1980s, when the Deng Xiaoping -inspired economic reforms initiated the 'to get rich is glorious' era.

China effectively embarked on an experiment attempted by no other self-professed communist society, which involved freeing up the economy while maintaining a firm grip on all other forms of activity.

Here in Hong Kong, the part of China which has arguably flourished most as a result of these policies, there is a marked reluctance to ask whether it is possible to sustain relative economic freedom while imposing totalitarian controls over the rest of society.

It is, however, becoming clear that what was glibly described as the flourishing of the free market in China was never quite what it seemed.

The commanding heights of the economy remain under state control and, even where privatisation is said to have flourished, the state retains its iron grip on the large conglomerates that enjoy stock market listings and are foolishly said to have been transformed into shareholder-controlled entities.

So, back to the question of whether China can still be described as communist, which prefaces another question: does this categorisation have any useful meaning? The rather annoying answers to both questions are yes and no.

There is a quite reasonable case to be made that none of the self-proclaimed communist societies were what they said they were.

The old Soviet Union managed to spread a great deal of misery across the land and to its satellite states but always looked suspiciously like a Russian attempt to dominate Eastern Europe at the expense of other nationalities. It made a mockery of the communist idea of internationalism under the banner of proletarian rule. China is equally intolerant of minority nationalities within its borders and when Maoism was rampant it caused at least an equal amount of misery for its people.

Now - and this is the thing that excites revisionist thinkers - there is a lot less misery throughout China and we are presented with the spectacle of a society proclaiming itself to be communist yet there is far greater inequality here than in many capitalist societies.

This is the nub of the problem because history consistently shows that it is not absolute poverty which triggers revolt but relative inequality: the famous gap between the rich and the poor. In the words of the communist anthem, The Internationale, 'reason for revolt now thunders'.

So the People's Republic will find it hard to buck this trend by simply brandishing the red flag, declaring that its leaders are comrades and employing the increasingly tatty rhetoric of class struggle.

It is hard to define Beijing's strategy for confronting this dilemma other than a dogged belief that, as long as the economy expands, the Communist Party will be able to maintain control.

Now it seems that the party's leadership is wondering whether the leading role in driving economic growth should be taken by the public or the private sector and there are many signs of nervousness surrounding the development of civil society in ways the state cannot control.

Maybe, after all, it matters little whether or not China is really a communist nation or simply a totalitarian state because, like every other society that has embarked on a bold experiment of social engineering, it will either fail or have to accept radical and unpredictable compromises for it to succeed.

Stephen Vines is a Hong Kong-based journalist and entrepreneur