Socialism as Disguised Neoliberalism: State Motivations Behind

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Socialism as Disguised Neoliberalism: State Motivations Behind

The reform and opening up is a revolution that the Chinese Communist Party has led the Chinese people under new historic conditions. In the past 30 years, from the countryside to the cities, from the east to the midwest, from the economy to politics and culture to all fields of society, an unprecedented major reform and opening up has taken place on the land of China. In the past 30 years, China dismantled a highly centralized planned economic system, and established a socialist market economic system. In the reform and opening up, the Chinese government has embraced neoliberalism ideas but did not conform to the capitalism ways entirely. In this essay, the various goals of the Chinese state during this extraordinary revolution in human history will be analyzed. The Chinese state worked to unleash the market and keep it unfettered, not because it believes in the primacy of the free market. Instead, it was the goals of survival, resources, politics, and ideology that prompted China to embrace the power of the market.

The primary goal of introducing an entirely new economic system was to save the country from sinking. The introduction of the free market was like a saving grace for China, as it was experiencing economic stagnation for years under the Mao administration. During the later years under the Mao administration, China entered a chaotic state due to the Cultural Revolution, the death of important members of the party, and the disturbances created by the Gang of Four. The economic system designed by the Mao administration was disastrous. With no intervention with the power of the market, China would be like a sinking ship. The collectivized agriculture had little motivation of production. To meet the demands of the quota allocation, false production numbers were submitted to the central administration. Industry and foreign trade were also like dead sectors, with the declining support from the USSR. Having shut down the doors of economic transitions with Western countries since 1949, the people were suffering from poverty, and reform and opening up was the only way out. Change for the sake of change had to be the primary goal for the Deng administration. This was more on the survival level than on the strategic level, since it is no exaggeration that Deng’s economic plans literally saved China from falling behind the rest of the world.

Reform and opening up was an important way for the Chinese state to regain political control both internally and internationally. The country was facing tremendous power struggles both internally and externally. Internally, the death of Mao created disturbances in the already chaotic China. There had been resistance within the party against the economic reform that Deng was trying to carry out. Thanks to the commitment of Deng and his supporters, his basic line reform plans prevailed and effectively served as an internal stabilizer. With the declining international and regional influence and status, China also wanted to place itself back onto the radar in the international political stage. While China was having all the political struggles during the 60s and early 70s, other developing countries in Asia was developing rapidly. Those smaller countries, which embraced capitalism, represented by the four Asian Tigers around China, became a major motivator for China to get on the path of political reform. If China was to stay on the planned economy regime advocated by Mao, it would only fall behind these countries more and more and finally lose its voice on the international stage. Meanwhile, economic development effectively diverted people’s attention, turning them from political enthusiastic to money driven. This has determined the social characteristics of China even till the present day.

Economic reform, neoliberalism, and a free market was the most effective means for the Chinese state to amass necessary resources and sustain power. The motivation behind reform and opening up is to establish a state-manipulated market economy, to accumulate wealth and technology in the process of economic development. Opening up and accepting foreign investment was an important means to procure the introduction of advanced technologies into the country. While China was still a poor country, it was growing increasingly eager for new machinery and technology as the means of industrialization. This was realized through joint ventures, as a win-win situation. The foreign companies get access to the large number of cheap labor, while the Chinese state obtained new technologies and investment, which are crucial for the next phases of development. Deng realized that wealth and technology are crucial in building and sustaining powerful state apparatus. With failed planned economy for the past decades, market economy was likely the most efficient way to obtain these two crucial resources. This does not mean that the ultimate purpose of socialism was abandoned for good: “While egalitarianism as a long-term goal for China was not abandoned, Deng argued that individual and local initiative had to be unleashed in order to increase productivity and spark economic growth.”

The last potential goal of the state behind a market economy, is to explore a unique path of development and promote an ideology that is unique from capitalism. This may not have been established from the very beginning, since things were only experimental and the surviving goals must be met before everything else. While the integration between central control and market economy may seem to be a compromise at first, its success makes it a much more strategic source of power for the CCP. Primacy of a strictly defined free market has never been established in China, as the country found its own path to privatization by avoiding the “shock therapy.” Whether it was due to wise planning or just a lucky dodge does not matter here. What matters is that China found a third way of development beyond capitalism and total planning. Socialism ‘with Chinese characteristics’ may be a compromise between state control and free market, but it also showed the state’s reluctance to conform to the western ways and ideologies. The “Chinese characteristics” resembles a propaganda, both domestically and internationally. Its success nowadays is giving China increasing soft power to “conquer” the world with its own ideology, by allowing and helping developing countries to follow the same path of development. In this way, it is much more effective for the Chinese state to exert cultural and ideological influence worldwide.

In the age of neoliberalism, economy is the new power. Deng was wise enough to realize that. The primary goal of the market economy in China was to save it from poverty and economic stagnation. Secondly, it also served the purpose to help China to be back on the map, and establish an international voice from a more economically powerful position. Thirdly, Deng realized the efficiency of the free market to gather resources, and most importantly, technology for industrialization. Luckily, China had all the qualities it needed to form a win-win situation with foreign investment. Finally, China developed its unique path of development, so that it can exert ideological influences more effectively. Overall, free market was never the ultimate goal of the Chinese state. It was only the most efficient means and tools for it to obtain economic, technological, political, and ideological power.

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