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  February 19, 2012

Socialism vs Capitalism in China

Minqi Li: Vice President Xi is expected to become President at a time when a serious debate has emerged in the party
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Minqi Li is an associate professor of economics at the University of Utah. He is the author of The Rise of China and the Demise of the Capitalist World Economy (Pluto Press, 2009) and the editor of Red China Website (a leading Chinese leftist website).  Minqi Li has published many articles in the filed of political economy, the Chinese economy, global capitalist crisis, peak oil, and climate change.


PAUL JAY, SENIOR EDITOR, TRNN: Welcome to The Real News Network. I'm Paul Jay in Washington.

And in Washington on Tuesday, President Obama met with Vice President Xi of China, who's expected to be the next leader, leader of the Communist Party, and the next president of China. But most of the press has been commenting that not much is known about Vice President Xi.

Now joining us to talk about the vice president and what's happening inside Chinese Communist Party is Minqi Li. Minqi is an associate professor at the University of Utah specializing in political economy, world systems, and the Chinese economy. He was a political prisoner in China from 1990 to 1992. He's author of the book After Neoliberalism: Empire, Social Democracy, or Socialism? And he joins us from Salt Lake City. Thanks for joining us, Minqi.


JAY: So what do you know about the vice president? And what—do we expect any changes in terms of the course of the Chinese Communist Party? What's happening in the party and in terms of political circles outside of it, especially in a situation where we might be on the verge of another major global recession? European economy is—still seems to be ready to unravel. So talk to us about the debate that's happening in Beijing.

LI: Well, this—Vice President Xi's visit in the U.S. takes place at a critical moment in term of what is going on within China. And Xi, of course, is widely expected to replace Hu Jintao to become the next general secretary of the Chinese Communist Party, as well as the next president of People's Republic. And then this transition will determine not only China's next leadership; potentially could also determine China's future direction in term of economic and political development in the next decade—and, in fact, intense debate that is now taking place within the Chinese Communist Party, with the party right wing [incompr.] further movement in the direction of free market capitalism. And on the other hand, it appears that a left wing has emerged within the party that is trying to some extent to adjust China's current direction towards capitalism, and even to some extent make some reversal.

JAY: Reversal meaning increase, rebuild the public sector and some of the elements of socialism.

LI: In that way, yes.

JAY: And do we have any sense were Vice President Xi is in all of this?

LI: It's not clear at this point. Xi, of course, is the son of a veteran revolutionary, Xi Zhongxun, who participated in the Chinese revolution with Mao Zedung. And then the experience of Xi Zhongxun, and then his son Xi Jinping, has been complicated one. On the one hand, Xi Zhongxun is believed to be among those party leaders who were purged during the Cultural Revolution. So for that reason he might have resentments against Mao Zedung. And on the other hand, because he belonged to this first generation revolutionary—and so it might be the case that they, the Xi family, disagree with China's current direction of capitalist reform.

And as far as Xi Jinping himself is concerned, on the one hand, before he was promoted to the current position, he was the party's secretary of the Zhejiang province, where he led the economic development by promoting private enterprises. So in that way you might say he could be someone who was in favor of capitalist reform. But on the other hand, he had maintained close relationships with many children of the first generation revolutionary and has shown some support of the Chongqing experiment, the experiment in the southwestern city of Chongqing, which promoted more social spending, crackdown on organized crime, that is favored by the left but is opposed by the right.

JAY: Now, is there anyone that's particularly associated in the party as being of the left that's at a leadership level?

LI: Well, it is widely believed Bo Xilai, the party secretary in the city of Chongqing, is leading this left turn of the party. However, just before—a few days before Xi's visit to the U.S., the local police chief of the Chongqing city, for unknown reasons, entered into the U.S. consulate in Chengdu and stayed there for one day. And then the real reason behind that is still unclear, but there has been speculation that this incident could undermine the political prospect of Bo Xilai, the left leader in the party.

JAY: And there are suggestions that that's all tied up with some kind of local corruption scandal, is there not? And I guess it's not clear where this is all going to go.

LI: Yeah, that's part of the speculation. And then some others have speculated that it might be part of the conspiracy of the right wing in the party.

JAY: To actually go after this left-wing leader. Now, is this division between what you're describing as left and right a division of those who want to develop—or some form of kind of socialist framework? Or is it a little bit more like a division we see in the West, sort of, between austerity types and Keynesians?

LI: Well, it's the—of course this—you might want to compare this Chinese division between the left and right to—some way to what is going on in the West, although in the Western case we know that even the social democrats have basically become only moderate neoliberals. On the other hand, in the Chinese case, because China has got this socialist legacy—so even moderate change in the left direction could potentially lead to farther change more in the socialist or left development that could alarm the right wing.

JAY: Now, the recent sort of scandal, you could say, with the coming to international attention of what's happening at Foxconn, the enormous electronics manufacturer, which among other things works for Apple—but this is not just an Apple situation, and actually not just a Foxconn situation—but when you see the terrible working conditions and the violation of Chinese law—. You know, this is still supposed to be—I mean, they call themselves a workers party, the Chinese Communist Party. Is there any reflection of this in the struggle that—you know, how do you have such horrible working conditions and claim to be still a communist party?

LI: Well, that is, again, part of a debate that is going on within China now. The fact that Foxconn could enjoy this kind of brutal exploitation of the workers and then benefit from that suggest the capitalists like Foxconn have been enjoying the collaboration of many of the local and the provincial officials. In fact, related to the current debate within the party, the right wing is promoting this Guangdong model. So Guangdong is this southern province that has been pioneering this export-led capitalist growth where companies like Foxconn have prospered. And so a key question right now has to do with whether the Guangdong model or the Chongqing model is going to be favored by the next leadership of the Communist Party.

JAY: And again, do we have any idea where the vice president, Xi, is on this? He seems not to speak a lot publicly, in the sense that even you who follows this stuff so closely kind of have to speculate about where he stands on things.

LI: Well, I guess part of the implicit rule for the Chinese leadership is that if you speak too publicly about your position, that will dramatically reduce your own chance of being promoted. But on the other hand, now there is wide recognition that China's current social and economic model cannot be sustained much longer, both because China could no longer rely upon the export-led growth model—therefore China will have to find alternative ways to promote effective demand—and because rising social equality could potentially lead to huge political instability. And, therefore, in these kind of circumstances it's necessary for China to search for an alternative mode of development, and ideally that will lead to more redistribution that will favor the great majority of Chinese people. That will in turn make China's development more sustainable.

JAY: Now, is there any debate (I guess there must be some, but how intense is it?) to allow legitimate, independent unions? I mean, it doesn't seem that you're going to have any real possibility of enforcement of Chinese laws in places like Foxconn unless the workers have some more right to organize unions and defend themselves. What's—how is the debate on that issue going?

LI: To some extent there have been discussions about that. But in the Chinese context, on the one hand, it's not just a question about labor laws. As you said earlier, China has already got many labor laws. But the question is that they are not being enforced. So unless the central government is serious about that, then could have—really push the local governments to enforce existing labor laws, additional labor laws probably would not help.

JAY: And as I say, what's happening in terms of organizing independent unions? For example, if independent unions do get started in certain places—if I understand correctly, it used to be it was very possible that workers could wind up being arrested, or threatened, at any rate, lose their jobs. I mean, is that still happening?

LI: Well, [incompr.] I guess arrest is happening less these days, I mean, arrest by the police. But if serious workers protest taking place—and then, of course, the bosses would still call in the police as a way to repress workers. Then of course the strike leaders could still be threatened by losing their jobs. And so in many ways it depends on what is taking place on the ground, what is taking place in the term of actual organizing capacity of the workers against the ability for the capitalists to use their own social influence.

JAY: And how does this—is there a trend within the party—is it possible to speak up in the party about this kind of issue? Are there advocates for workers, you know, this kind of workers rights or independent unions? Can they speak publicly about this in the party? Is there any sense of it?

LI: Well, there's—the debate is probably taking place in implicit ways. So part of the right-wing strategy right now is that they also talk about the Chinese economy is suffering from imbalances. But they are arguing that the solution to that is to redistribute income from the government to the capitalists. They are calling for more tax cut for the capitalists. And, of course, if this strategy is indeed implemented, it will further undermine the public sector. While the left-wing is in favor of redistribution from the capitalists to the workers. So in the coming month or years, we will know which side will prevail in this intra-party debate.

JAY: And outside the party, is there signs of these workers protests taking on more political form?

LI: Not yet. What is going on is that the workers in the capitalist sector, the new capitalist sector, when they are organizing struggles for higher wage, better working conditions—so primarily it's still economic struggle. And on the other hand, you might argue that the state sector workers, or the old state sector workers, as they are organizing struggle against privatization—and over the past few years, that have got a growing political character, especially when that is in combination with more and more mass-based pro-Maoist movement.

JAY: And just finally, how significant is that mass-based pro-Maoist movement?

LI: It in fact has become quite significant. It has become something that is comparable to the Occupy Wall Street movement that is taking place in the U.S., except in the Chinese case, in fact, it's taking place on larger scales, involving possibly hundreds of thousands of people across the whole country, and more regularly every year, twice, on the birthday of Mao Zedung and on the day when Mao Zedung passed away.

JAY: And is—I keep saying finally, but this is too interesting not to ask another question. So is this kind of nostalgia for going back to the past? Or is this an idea that China needs to go into some new form, but of socialism and sort of the original ideals, if not the way it actually worked out?

LI: Well, it certainly has to do with nostalgia to some degree, but then I think it's more a protest of China's current economic social model and China's current direction of development, and then calling for the benefits of economic growth to be shared more evenly. So in that way it reflects people's desire for more direction in the socialist form.

JAY: Alright. Thanks very much for joining us, Minqi.

LI: Thank you very much.

JAY: And thank you for joining us on The Real News Network.


DISCLAIMER: Please note that transcripts for The Real News Network are typed from a recording of the program. TRNN cannot guarantee their complete accuracy.


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