The Communist Party of China- a Leninist party on the basis of Lenin´s New Economic Policy or a state capitalist party?

The Communist Party of China- a Leninist party on the basis of Lenin´s New Economic Policy or a state capitalist party?

In the previous article Global Review aired the hypothesis that the CP China was a Leninist party on the basis of Lenin´s New Economic Policy. We want to deepen this idea, but also see some contradicting facts and ask if the term state capitalist party wouldn´t be better. The CP China is not a planned economy with fixed planning targets anymore, the state- owned industry is only 30% of the whole economy, the CP China has abonded class struggle, the promotion of workers´revolution and proletarian world revolution as the social divide and the Gini index was exploding in the last two decades.. Also the class structure has changed, especially after Jiang Zemin implemented the “three representatives”which means that also entrepreneurs and capitalists could become leading party members.

A new trend was emerging in recruiting China’s political leadership. Were the members of the generation of the political leadership under Mao and Deng more “educationally distant and less educated”, but also all the more loyal revolutionary veterans, party soldiers and military (e.g. the famous 10 generals), the generations under the presidents / prime ministers Jiang Zemin / Li Peng, Hu Jintao / Wenjaibao then were primarilly technocrats with a degree in natural sciences such as mechanical engineering, geology (Wen Jiabao), electrical engineering (Jiang Zemin), hydroelectrical engineering (Hu Jintao, Li Peng), so now Xi Jinping is trying to recruit  economists, humanities and social scientists and other natural scientists from the field of the new industries (IT, aerospace), including real university presidents. This may also be due to China’s current leader’s own academic background: Although President Xi Jinping himself studied chemical engineering at Qinghua University like his predecessors, he then went on to study law and also studied Marxist philosophy. Its Prime Minister Li Keqiang studied economics. This also affects the style: Hu Jintao quoted rather dry data, statistics and colons of numbers in his speeches, while Xi Jinping is more characterized by a flowery language with literary quotations and metaphors, whereby Xi also uses social media, comics and videos, to appeal to the younger generation.

It is also significant that the student of Marxist philosophy Xi Jinping pushed back neo-Confucian currents, again placing more emphasis on Marxism, above all on historical materialism, which is supposed to give the CPC a historical mission, in short: as a humanities scholar, he also has his own thoughts about the ideological orientation of the party, which he sees legitimized in his view through a historical mission of the “peaceful rise and “rejunavation” ” to the coming world power in domestic and foreign policy as the fulfillment of the “Chinese dream” based on the “American dream” that complement Hu Jintao’s semi-Confucian idea of the “harmonious society”, if not to replace it at all. Especially in view of Deng’s “getting rich” materialism, the pragmatic lack of Marxist ideology, the moral decay, corruption and the emergence of the Falungong, who at times had 100 million followers, i.e. more than the 65 million members of the CCP at that time and after their ban in the beginning still a strong underground network of tough cadres, presented themselves as representatives of Chinese culture, morals and as the real creator of Chinese civilization, the voices in the CCP became louder demanding an counter-offer that was more  communist and meaningful. In this context, Xi Jinping was chosen as a humanities student of Marxist philosophy who formulated the capitalist “Chinese dream” on the basis of communist historical materialism.

The Chinese interpretation of the book by the left-wing, socially critical US author Arthur Miller’s „Death of a Salesman“, which is also available in China, but is received and read in a completely different way than in the West, illustrates which intellectual achievements are required of the Chinese humanities scholars. While Miller’s novel was a criticism of capitalism and the American dream and its empty promises and illusions, this is reinterpreted by Chinese literary scholars in the diametrically opposite version: The protagonist Willy Lomann, who stumbled on the American dream in the novel, is recognized as a good and exemplary family father with Protestant and Confucian work ethics and  family values, which wants to raise his sons in the American, i.e. Confucian spirit and to become economic dragons and strong-willed, successful business people. Thus “The Death of a Salesman” is understood in China as an apology for capitalism, family values and the Chinese dream. A very pragmatic interpretation of literature that makes works critical of capitalism compatible with globalization and conform to capitalism. Furthermore, legions of Chinese economists, political scientists and philosophers are encouraged to adapt Marx’s “Capital” and labor theory of value to the needs of a “socialist market economy with Chinese characteristics”, which is officially known as “deepening Marxism”.

In terms of personnel, the further academization of the Chinese leadership can also be demonstrated using the following specific examples: In October 2015, Chen Yulu, President of Fudan University, was appointed Vice Governor of the Chinese People’s Bank. During the past 10 months another 5 university presidents have been appointed to important political positions in the ministries of the State Council. Wang Huning, now director of the Central Political Research Center of the Central Committee of the CPC, is even considered a future candidate for the highest decision-making body of the CPC, the 7-member Standing Committee of the Politburo.

The wave of recruiting began with the appointment of the former President of Qinghua University, Professor Chen Jining, as the new Minister of Environment. Then came Hou Jianguo, president of the University of Science and Technology, who was appointed vice minister of the Ministry of Technology. Huai Jinpeng, President of Beihang University, became Minister of Industry and Information Technology. Wang Enge, President of Peking University, became President of the Chinese Academy of Sciences. Significantly, Xi Jinping’s wife, the First Lady of China, Peng Liyuan, who actually only impressed with her academic degrees as a karaoke singer, has recently become official in the Chinese media referred to as „Professor Peng“ after she was apparently declared a visiting professor at four universities, including as the rector of the Art Academy of the People’s Liberation Army.

Culturalists and sinologists will see this again as confirmation of the great importance the Chinese place on the Confucian ideal of education and see China as an educational nation that wants to serve as a role model not only in Pisa studies. The official document „Action Plan for Building the National Party and Governance 2014-2018“ emphasizes the need to recruit executives from state-owned companies, universities, research institutes and other public institutions for the CCP. There are also plans to set up and promote think tanks / think tanks that provide innovative impetus for China’s reform policy, as well as gain international reputation, i.e. be part of a soft power initiative that will make China known worldwide as an academic and innovative intellectual nation target. So you also want to bring more unconventional, more free-thinking minds into politics, who bring more expertise and also think outside the box.

While this academization of the leadership continues, the CP China also is buidling party cells in the companies nationwide and also abroad. This lead to the first complaints from foreigen companies alredy in 2017 as exemplified by an article in the German magazine SPIEGEL:

“Party cells of the CP in companies „German companies could withdraw from China

China’s state apparatus is putting pressure on foreign corporations to set up party cells in their companies: the communists want to have a say in company decisions. 11/27/2017, 11:58 a.m.

German companies have expressed concern about growing Chinese pressure to give party cells greater control over their business in China. The delegations of the German economy warned that German companies „could withdraw from the Chinese market or rethink their investment decisions“, as announced by the German Chamber of Commerce Abroad (AHK) in China. In the opinion of the German economy, there is „no obligation or legal basis“ for an expansion of the powers of the party cells „according to the previous legal situation and business practice (…).“ The AHK is reacting to Chinese efforts to demand a say from representatives of the Communist Party in the management of companies with foreign investors. Among other things, it became known that the partners in a large joint venture had been asked to subsequently change their joint venture agreement accordingly. „Companies should not be actively encouraged to do so,“ the statement said. „Free business decisions are the basis for innovation and growth.“ According to current law, party cells could be set up in companies if three party members merged. In business practice, this means that companies provide rooms for their activities or exempt party members from work. The decision to participate in the development of party work must be left to the company alone.”

And also in 2018 the German magazine Handelsblatt complained:

“Chinese party cells This is how the Chinese state secures influence in international companies

By: Sha Hua, Dana Heide, Stefan Menzel, Stephan Scheuer The Chinese party organizations in foreign joint ventures are getting more and more involved in business – and are even demanding veto rights.”

After 2 decades of economic liberalization, the CP China under Xi Jinping due to fears of social instability and widening social gaps, tries to reregulate the economy. The Communist Party in China just celebrated its 100th anniversary and under Xi Jinping it focuses primarily on control over the private sector. Since Deng Xiaoping initiated the economic opening of the People’s Republic of China 40 years ago, more than 800 million people have escaped poverty. The communist government now commands the second largest economy in the world with 18 percent of global economic output – even the largest if you consider purchasing power parity. However, the advent of the market economy and accelerated growth have been accompanied by an exponential increase in inequality. The Gini coefficient, which measures the extent of inequality, increased by 15 percentage points between 1990 and 2015 (latest data available). Economic liberalization resulted in strong private sector growth, but the state retained direct control over a large part of the economy. The state sector accounts for about 30 percent: a textbook case of state capitalism.

In addition, the CP Ch has succeeded in co-opting the elites of the liberalized economy on a large scale. Even if the admission of new party members no longer follows communist ideology, the Leninist form of organization remains decisive for the relationship between state and capital. The party is getting bigger and bigger – it now has around 92 million members, after all 6.6 percent of the population – and is increasingly changing from a workers‘ to an employee party. In the early 2000s, President Jiang Zemin lifted the ban on private entrepreneurs who had previously been considered class enemies. As a result, the ¬KPCh should no longer only represent the “revolutionary classes”, i.e. workers, peasants and soldiers, but also the “advanced productive forces” of the country. The chosen business people became members of the political elite, which means at least some protection for their companies from corrupt cadres .A party loyal national bourgeosie should join the ranks of the CP China.

Their acceptance into the party accelerated from 2013 under President Xi Jinping. Its aim was to “form a group of individuals who belong to the business world and who are determined to march with the party”. As a result, the CCP quickly became more and more elitist. As early as 2010, “skilled workers” – so the official name – with higher education were numerically on a par with farmers and workers. Ten years later they made up 50 percent of the membership, while those classified as workers and peasants made up only 35 percent. While in the Maoist era (1949-1976) “commitment to communism” was one of the main reasons for joining the party, the current motivations are far more pragmatic.

The main thing is to ensure your own professional advancement. The party’s internal training courses show how the party presents itself as a neo-liberal-inspired management organization that aims to manage the population and the economy as efficiently as possible. However, although communist ideology is no longer as important, a high level of loyalty is still required of members. You have to demonstrate “party spirit”, a special entrepreneurial spirit that, aligned with the success of the organization itself, creates a sense of belonging and is permeated with nationalism. Members are regularly reminded of the decisive role the party plays in China’s development, be it in training courses or through “red tourism”: educational trips on the trail of China’s revolutionary history.

 There is also greater party discipline under the current President Xi Jinping. A massive anti-corruption campaign is intended to guarantee the morality and loyalty of both entrepreneurs and individual party members. In the course of this, not only were potential opponents of the president eliminated, but also cadres controlled more strictly – in the name of the fight against the „four bad working styles“: formalism, bureaucratism, hedonism and waste. This slogan of loyalty and professional ethics is consistent with the image the CCP wants to convey to the public, and it applies to all party members, including those in the private sector. The party demands of everyone that they faithfully follow the political line, “exercise control in their words and deeds”, “maintain a healthy lifestyle” and behave “modestly and discreetly”. If you step out of line, you have to reckon with consequences. The charismatic Jack Ma, founder of the Alibaba Group, is a prime example. After openly criticizing the control of the state apparatus over the banking sector, he became the target of an orchestrated attack by the authorities of the one-party state. The IPO of Alibaba’s financial subsidiary Ant Group was halted in late 2020, and the group was ordered to curtail its activities.

The case shows the determination with which the CCP pressures entrepreneurs, both to enforce their loyalty and to maintain some degree of control over the company’s financial and technological resources. The Ant Group, for example, has extremely valuable personal and financial data on hundreds of millions of users of their payment systems and customers of their online loans. Billions of US dollars flow through their online platforms every day. Increased control over the private sector is an element of the CCP’s hegemonic policy of the Xi Jinping era. In 2017 the party statute was specifically amended to emphasize that „in the party, government, military, society and education sector, east, west, south and north, the party is leading on all fronts“. In companies, this is reflected in the increasing number of party cells. As early as March 2012, the party’s organization department, which is responsible for the use of human resources, issued a guideline for “comprehensive coverage” of the private sector. And since 2018, all companies listed on the Chinese market have been obliged to form a party cell. 92 percent of the 500 largest companies in China now have their own cell. Although exact figures are not published on foreign companies with a branch in China, information does leak out from time to time that party members and cells are also very present here.

This strong presence gives the party state an influence that extends far beyond the already considerable state-owned parts of the economy. With the means of the “Central Commission for Disciplinary Inspection” (CCDI), the ¬CCP can sanction party members who do not adhere to their rules beyond the judiciary. The Commission’s powers have grown with the anti-corruption campaign. Criticism and self-criticism sessions, known as the „Assemblies for Democratic Life“, have been revived to get rid of „corrupt“ and „disloyal“ cadres. Traditional Maoist practices are thus being recycled – it is no longer about the “ideological flawlessness” of cadres and members, but rather about guaranteeing their loyalty to the organization and its boss.

So far, the party cells have only played a subordinate role in companies. Above all, they recruited new members and organized training courses as well as social and cultural activities. However, new guidelines have recently been issued with the aim of developing a “system of modern companies with a Chinese character”. Private companies must now “adhere to the principle that the party has the decision-making power in personnel matters”. It is too early to say what form this will take, but for Ye Qing, Vice President of the CCP-led China-wide Industry and Commerce Federation, the point is clearly to put human resources management under the Party’s oversight.

If he has his way, hiring and firing will in future be subject to the prior approval of the party cells in order to avoid “managers simply promoting whoever they want”. Ye Qing also recommends the creation of party supervisory bodies within the company to guarantee compliance with the law, but also to punish violations of discipline and „abnormal behavior“ by employees. This disciplinary apparatus would therefore apply to everyone, not just to party members. According to the new guidelines, the control function of the party cells is to be officially included in the company statutes and a separate budget for their activities is to be drawn up. It seems to come to the point that the requirements of the CCP gain the force of law and thus also become binding for companies that are not under its direct control.

The way the private sector works is thus increasingly approaching that of state-owned companies. The party always focuses on its own survival, showing great pragmatism and ideological indifference. So it takes more and more genuine capitalists into its ranks and at the same time it is becoming more and more present in companies. This asymmetrical alliance can even be found outside the country’s borders: The “New Silk Road” (Belt and Road Initiative, BRI) project is accelerating the internationalization of private and state-owned Chinese companies, which are now also setting up party cells abroad to monitor their employees. Although it has renounced Maoist internationalism, the ¬CPC exports its organizational structure and its instruments of discipline.

Asia expert Dr. Sachsenröder sees similarities to the development of social democratic parties:

“Workers‘ parties have probably been outdated for a long time, the SPD in my Bonn years with a peer group academic- intellectual and in the privileged suburbs were already very massively an employee party and an aid to entry into lucrative ministerial jobs. I can imagine that it should be similar in China.”

The SPD has officially been a people’s party since Bad Godesberg and no longer a workers party, and in the 1970s the DGB published a study on „employee consciousness“(“Angestelltenbewußtsein”) , which probably also showed the change of the class structure.

However China expert Professor van Ess thinks that the party cells already existed before:

“I wonder how new this is actually. There have always been party cells in companies. They just didn’t reveal themselves as strongly. You could see that at the universities too. In the past, the party secretaries were hidden, but they were there and of course determined politics. Today they are shown. The question is which is better. It is possible that the party structures will be built up more than before. My suspicion is that most western managers didn’t know what was really going on in their company in China. And of course the journalists knew even less. About Evergrande: You can do a lot behind such a Covid umbrella. I still think this is the beginning of an active policy against real estate speculation. Not an easy task, because everyone who has some money in China is involved. But of course that is extremely dangerous. Years ago, students in Hangzhou showed me empty new buildings that only housed money. As the population decreases, this becomes more dangerous. “

t is interesting, however, that the party cells appear so openly today and that many managers and capitalists are members. So not just employees, but something like a red national bourgeoisie.

Maybe the next step will be that the CPC uses the tools of Artifical Intelligence and big data to transform the present economic system into some sort of “cybernetic economy” with the party´s economic target algorithms- similiar to the already existing social credit system. However while formally and organizationally the CP China still might have a Leninist totalitarian structure, it is missing the credentials of the class structure of a worker´s party . Therefore the term state capitalist party and state capitalism might be more appropriate.

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