Neither Vietnam China nor Venezuela are socialist.
Socialism involves the socialisation of the means of
production, distribution, and exchange, and production
based on need not profit.
None of those countries have achieved this. Both
Vietnam and China have been moving away from such a
system through extensive privatisation and changing
toward a market system based on profit and integrating
into the global capitalist market. They also both have
increasing foreign investment. Venezuela at best is
moving towards a socialist system. What follows
is short description of China's change towards
capitalism. What is wrong with it?
http://www.encyclopedia.com/doc/1G1-146354456.html
The Irreversible Emergence of a Capitalist System
The last quarter century has seen the abolition of the
principal instruments governing the management of the
socialist economy in China. Since the beginning of the
1990s, economic planning structures have been
dismantled in a process characterized by the
deregulation of prices, supplies, and distribution.
The reforms enacted at the beginning of the 1980s,
which permitted businesses to sell freely on the
market an unrestricted amount of goods that exceeded
the quotas fixed by the State Planning Commission, led
gradually to the disappearance of the state economic
plan (Naughton, 1995). Today, more than 90 percent of
retail prices in industry and 80 percent of
agricultural prices are determined by the market. And,
despite endemic problems in the corporate governance
system and politicized decision making in the banking
system, the financial system has also been completely
revamped since 1978.
The last 25 years have also been marked by a
considerable diversification of the forms of ownership
and by a significant withdrawal of the state. But, for
political reasons, this process has been more
complicated than in other former socialist countries.
Since 1997, however, the discussion has been more open
and the directives clearer so far as the privatization
of public companies as well as the legal recognition
of the private sector are concerned. According to
recent estimates (Huchet, 2000: 3748), between 30,000
and 40,000 small and medium-sized state enterprises in
the industrial sector have gone over to the private
sector since 1997 (out of a total of 126,000 state
firms in the industrial sector in 1996). The national
private-sector accounts for almost a quarter of
industrial production; if foreign businesses are
included, the private sector represented almost 45
percent of the country's industrial production in
2002.
The main distortions found in socialist-type economies
have also largely disappeared. Although agriculture
still represents the main activity in terms of
employment, the service sector--traditionally
underdeveloped in socialist economies--grew from 12
percent of the total active population in 1978 to
almost 32 percent in 2003 (China Statistical Yearbook,
2004). As a result of the reforms, the economy has
rapidly become monetized. The rate of liquidity (that
is, the monetary mass as a proportion of GDP),
traditionally very low in socialist economies, rose
from 32 percent in 1980 to 82 percent in 1990 and to
165 percent in 2001 (Cai and Lin, 2003: 74). From the
early 1990s on, the Chinese economy ceased to be
dominated by the supply side, or, to use J. Kornai's
expression, to be "an economy of shortage." One
consequence of this is the development of ferocious
competition among domestic Chinese companies.
>From all these observations, is it possible to
conclude that China has now accomplished its
transition to capitalism? Considering the transitions
of other former socialist countries in Eastern Europe
or the former Soviet Union, the elements mentioned
earlier all suggest that China has largely solved the
worst problems of its transition. If we consider China
in the terms of reference used by the World Bank or
the European Bank for Reconstruction and Development
for measuring progress toward a capitalist economy, it
would seem that the country is well to the fore,
except where its political regime and the credibility
of its legal system are concerned. True, several vital
questions linked to its socialist heritage remain to
be dealt with, such as the withdrawal of the state
from large public companies, the politicization of the
decision-making system in the banking system, and the
reform of the welfare system. But similar problems are
to be found in almost all the former socialist
economies, including those that have made the most
progress in the transition process and which are
joining the European Union today. In light of the
state of the Chinese economy in 1978, this represents
a silent revolution comparable to the one that has
been witnessed in Europe since the fall of the Berlin
Wall.
But more relevant to our original question is the fact
that China has practically abandoned all the
instruments once used in the management of a planned
economy. Given the fate at the international level of
socialism as a system to organize economic life, the
possibility that the Chinese variant could block the
emergence of capitalism--which was still possible in
1989 after the Tiananmen political crisis when
conservatives brought back socialist orthodoxy for two
years--now seems unthinkable.
Building Critical Masses in Consumption, Human
Capital, and Infrastructure
The duration of the reforms and the economic growth
registered in China since 1978 have allowed the
country to attain a critical mass in many parts of the
economy. Although, when trying to measure economic
progress, it is always essential to relate statistics
to the immensity of the Chinese population as a whole,
certain absolute values cannot be ignored.
Despite the continued existence of important pockets
of regional protectionism, a national market has been
created. It is based on the consumption patterns of a
population that is now largely urban and which varies,
according to estimates, from 150 million to 200
million individuals. This population is now reckoned
to have adequate disposable income to meet needs for
food, clothing, household appliances, and education.
Moreover, it can now, with the help of bank loans,
envisage home ownership and the acquisition of other
material possessions of even greater value. The
figures are still a far cry from certain Western
dreams of a market of 1.3 billion consumers, but with
this middle-class population growing by 5 million to
10 million per year, it is a market that is undeniably
an important engine for future Chinese economic
growth.
With $60 billion invested in research and development
in 2001 (equivalent to 1.01 percent of GDP), China
ranks third in the world in this area, behind the
United States ($282 billion) and Japan ($104 billion),
but ahead of Germany ($54 billion) (Financial Times,
2003). In 2002, China trained nearly 459,000 new
engineers (four times as many as France) while 3.2
million new students entered Chinese universities in
the same year (twice the total number of students
enrolled in French universities). In 1978, the same
universities were barely functioning at all after a
decade of being practically closed down (Ministry of
Science and Technology Data Book, 2003).
In the past 25 years, close to 1.7 million kilometers
of new roads have been built, of which 19,000 are
freeways. China's rail network grew by 70 percent
during the same period and air transport now carries
close to 100 million passengers a year ("China Hand,"
2002). Despite the very rapid growth in GDP and
occasional shortage, the production of electricity, at
1.4 billion kWh, has grown dramatically when compared
with figures from 1978. Infrastructure in the
telecommunications sector has also exploded over the
last quarter century, with 300 million mobile phone
users (the leading market worldwide), almost as many
subscribers using fixed lines, and 110 million
Internet users.
China has attracted close to $470 billion in foreign
direct investment, or a quarter of the total foreign
investments going to developing countries over the
last 10 years. This direct foreign investment has
enabled China to restructure its foreign trade: firms
with foreign capital now represent more than half of
all Chinese exports and 30 percent of the country's
industrial production. China now ranks fifth among the
world's commercial powers in terms of volume of
foreign trade. Foreign direct investment and trade
balance surpluses have allowed China to amass $825
billion in currency reserves in record time. But
foreign direct investment has also contributed much
more, in terms of technology, management techniques,
and worker training.
--- Eric Sommer <[EMAIL PROTECTED]> wrote:
> "michael a. lebowitz" <[EMAIL PROTECTED]> wrote:
> Dear Eric,
> Good to hear of your existence. Actually, I do
> follow events in China and am familiar with Deng's
> innovations and the subsequent 'one represents'
> arguments. (In fact, I think most analysts outside
> the country know about this.) It would be
> interesting to know if you are aware of the work of
> list member Martin Hart-Landsberg on China and what
> you think of it.
> best wishes,
> michael
>
> Hi Michael,
> Thanks for your quick reply! How are you? I'm
> happy to hear from you. I hope you read my article
> carefully, because despite your statement of
> familiarity, there are elements here which I
> frequently miss in articles by western world
> observers.
>
> I'd like to begin our dialogue with the
> observation that my experience with western world
> observors of China, progressive and non-progressive
> alike, is much like what you reported from
> Venezuela:
>
> "To outside observers who get their facts from the
> bourgeois media it would seem that Chavez is going
> "too fast". But the ordinary working people of
> Venezuela are demanding immediate action. They live
> in such conditions that they can wait no longer.
> I get questions like this regularly from friends
> who don't know much about Venezuela but do know what
> they don't like (from reading the always unbiased
> and objective capitalist press). Of course, I'm not
> alone in this respect: others here get the same
> questions from outside: How can Chavez do this? How
> can you justify this?"
>
> I live permanetly in China, am married to a
> Chinese person, and am close to the Chinese people.
> In my experience it has been almost impossible to
> convey the reality of China and its programs to
> western world people who don't live here. In a
> separate post I'll send you a short article
> detailing the incredible filtering of Chinese
> reality by western world media.
>
> Here I want to mention a number of other ponts to
> illustrate what may not be clear to outsiders:
>
> 1. The communist party of China, which I will be a
> member of shortly, *is* a communsit party. It
> participates - as an important member - in the
> annual world conference of socialist and workers
> party's which was held this year in Belarush. We
> are in the first stage of socialist construction and
> are using a mixed economy to do so. Vietnam has
> also completely adopted Deng Xiao Ping Theory type
> approach to socialist development, and Venezuela is
> on the same general path. Both of these countries
> have close relationships with China and if China is
> not a socialist country then neither are they!
>
> 2. Someone in the list mentioned that he is
> 'skeptical' about the possibility that China can
> achieve a 'green socialism' or that it can use its
> economic development to 'lift 100's of millions (of
> peasents) out of poverty'. In fact this kind of
> success has been achieved here for some time. Much
> is made in China - and abroad - of the income
> disparity between urban and rural people in China,
> and about the difference between income levels of
> East coast Chinese and those living in the western
> provinces. This income disparity is a serious issue
> which is being strongly addressed in the new
> 'project to build a new socialist countryside' which
> for the past two years has been bringing medical
> insurance, modern medical systems, free public
> school education, the end of rural income taxes on
> farm income, and much more to 1 billion Chinese
> farmers. (note: This year our medical insurance
> program will be rolled out to all Chinese people in
> countryside and the cities, after
> experimentation in several rural areas.)
>
> What I want to stress here, however, is that while
> there is an income disparity, the *absolute* income
> level, and level of standard of living throughout
> almost all of China's countryside has risen
> astronomically in the past 25 years. While not
> rising as fast as the cities, it's currently rising
> at about 5% or 6% per year.
>
> Here I want to tell the story of a typical woman
> from the province of Inner Mongolia Her farther
> worked as a rural school teacher and her mother was
> a farmer and her grandmother provided childcare for
> the family. The family was so poor in this woman's
> early childhood that they could not afford rice but
> had to live on mashed up corn, and they were better
> off than their neighbours1 They had no electricity,
> no indoor toilet or modern plumbing, no TV, no
> modern heating system, little access to modern
> medical care. Eating out in a restaurant or other
> things North Americans take for granted was beyond
> imagination.
>
> Fast-forward to 2008: Now the family lives in a
> modern apartment. They have electricity, TV, radio,
> access to medical care, plenty of delicious food,
> can eat out in restaurants, and have managed to send
> both daughters through univerity.
>
> This story is the story of my wife Chen Chen, but
> it is also the story of `100's of millions of
> Chinese peasent families, who have been raised up by
> Deng Xiao Ping Theory.
>
> 4. For those interested in trade unions, new
> labour laws enacted this year have given our unions
> real muscle for the first time and a massive
> unionizaation drive is taking place throughout the
> country. The U.S.-China chamber of commerce, and
> the multinationals have resisted but unionizationis
> proceeding apace. One target is have all, or nearly
> all, of the foreign companies unonized, for which
> the unionization of wallmart here was a successful
> test case. Our 200 million Migrant workers are also
> being brought into unions as well as workers in
> ordinary Chinese government and private companies.
> A new contract law will require that all workers in
> the country be covered by written labour contracts
> with their employers to ensure transparency and
> honesty in worker-employer relations.
>
> 5. On wage levels, urban workers wages effecting
> 300 million city dwellers plus 200 million migrant
> workers have shot up this year. A factory or
> service sector worker who earned 3 RMB a year or two
> ago may be earning around 5 RMB or even 7 now. This
> increase results from new minimum wage laws in the
> various provinces and cities motivated by the new
> government emphasis on 'sharing the wealth' plus new
> policies designed to boost domestic consumption to
> balance out, and reduce reliance on, export trade.
>
> 6. On green china, hundreds of polluting and
> high-energy wasting factories across China have been
> closed last year and more are being closed down
> daily. New anti-pollution regulations are in
> place. Large-scale investment in clean energy
> technology and research is also taking place, and
> much else is being done, including very large
> projects involving construction - from the ground up
> - of the world's first four eco-cities, with full
> recycling and super energy efficiency planned in
> from the beginning.
>
>
> 7. Chinese people say: "Travelling thousands of
> miles is better than reading thousands of books."
> To understand contemporary China, the best way is to
> live here for as long as possible. In addition,
> studying 'the theory of scientific development'
> which I beleive to be the most advanced theory
> available for third world development will pay
> dividends.
>
> 8. All Chinese school children learn Deng Xiao
> Ping Theory and Marxism. My wife was therefore
> dumbfounded when I told her that many people living
> outside China in places like the U.S. think that
> capitalism is the final result of the world process
> and that communism is impossible. "You mean there
> are people who don't know about this," she said
> incredulously. She had thought that everyone knew
> that the end of the world process is communism.
>
> All the best from Beijng, Eric Sommer
>
>
>
>
>
> "True development puts first those that society
> puts last."
> -Mahatma Gandhi
>
> "Dare to be naive."
> - Buckminster Fuller
>
> "Work for the world."
> - Karl Marx
>
> "A loving heart: In all the world this state of mind
> is best."
> - ADM CEO
>
>
>
=== message truncated ===
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