This chapter will explain the process whereby, in order to protect its privileges, a hardened, Stalinist caste took the Chinese workers’ state back to capitalism. The defining point in the process was the bloody crushing of protests that took place on a national scale but centred in Beijing at Tien An Men Square. After this watershed, the dominant section of the CCP increasingly came to see capitalism as its salvation.
The alternate solution to the social and economic problems besetting China was Soviet democracy, but the bureaucracy knew this would mean the end of its privileges and preferred capitalism. This chapter concentrates on the bones of the process. How and when the CCP relinquished the three key pillars of a workers’ state: a national economic plan, monopoly of foreign trade, nationalisation of the key industries including wholesale food distribution and, especially, the banks. The process of the so-called reforms was piecemeal due, not least, to the very real powers of the provincial authorities each with its own interests, but also due to the CCP acting cautiously and testing each step as the process progressed.