The question of the class nature of China had been a key question for the Marxist movement and it is not possible to grasp the processes that took place in China from the point of view of formal logic and abstract definitions. There is no simple litmus test that can be applied here, complex historical processes do not admit such an elementary approach. Only a method, which takes the process as a whole and concretely analyses its contradictory tendencies as they unfolded, stage by stage, can shed a clear light on the situation.
The Stalinist bureaucratic counter-revolution in Russia in the period 1923-36 was by no means a preordained event determined in advance. Trotsky followed the process through all its stages, showing concretely the relation between the balance of class forces in Russia, the different tendencies in the Communist Party and their relationship to the classes, the evolution of the world situation, the economy, and the subjective factor. As the situation developed and the different factors changed their specific weights, Trotsky’s position developed accordingly, finally concluding a new regime existed in the Soviet Union, which he termed Soviet or Proletarian Bonapartism.[67] Such a development did not reflect vacillation on Trotsky’s part, but rather the way his analysis followed the process of bureaucratic degeneration as it unfolded.
In In Defence of Marxism, Trotsky outlined the way in which a Marxist should pose the question of the class nature of the Russian state:
(1) What is the historical origin of the USSR? (2) What changes has this state suffered during its existence? (3) Did these changes pass from the quantitative stage to the qualitative? That is, did they create a historically necessary domination by a new exploiting class?.[68]
The method of our analysis of recent and present events in China is in no way different from that of Trotsky. The demand for an immediate answer to the question “workers’ state or capitalism” reveals, not intellectual rigour, but a formalistic “either … or” approach. However, the situation in China has now developed to such a stage that we can give a definite answer.
The return of capitalism was an ongoing and complex process but it is possible to date the process by the Central Committee meetings at which key decisions were made. We can see that the transition lasted from 1982, when selected SOEs began to produce outside the state plan according to market forces, to October 1992 when the 14th CCP Congress finally buried state planning and the monopoly of foreign trade and agreed to begin wholesale privatisation of SMSOEs with the perspective of selling-off the larger companies as soon as suitable arrangements could be made.
The fear of chaos has always been a central theme in Chinese history. The PRC itself emerged following a long period of war and chaos and the events of that period were still alive in the memories of the CCP leadership during 1991/92 when the Soviet regimes in eastern Europe and the Soviet Union collapsed. The Chinese Party tops saw the resulting chaos, the break away of the different national republics, the collapse in production, the rise of the Russian mafia and they were appalled and terrified. But at the same time they came to an understanding and agreement between themselves, no doubt spurred on by the recent events in Tien An Men Square, that they had to remain in control of the situation even if that meant adopting capitalist measures.
The restoration of capitalism slowed and accelerated as the different groups within the CCP leadership argued out their differences. Added unevenness occurred in the process due to the specific conditions in the different regions of this enormous country and in the different sectors of the economy. China has a long history of dispersed power, with considerable provincial, county and even city autonomy. In fact, an integral part of the transition to capitalism was encouragement and greater decentralization of state powers.[69]
To accelerate the process it was determined, at an early stage, to delegate substantial responsibility for enacting the reforms to Party tops in the provinces and the four great cities of China (Beijing, Shanghai, Chongqing and Tianjin). To further accelerate the process, the revenues of local governments throughout China were made dependant on local business taxes and taxes on sales. The promotion of Party cadres came to depend on their ability to deliver economic growth, employment and foreign investment.[70] Many local Party members served as brokers and deal-makers between the public and private sectors, others greased the wheels through black-market deals, bribes and informal networking. It was only natural that these came to have stakes in private businesses or took posts as advisors on company boards or senior management positions in private companies.
However, for Marxists, this does not exhaust the problem. Have the new property relations established themselves unequivocally and irreversibly? Or, on the contrary, is it possible that the return to capitalism can be reversed? It is necessary to analyse the process as a whole and lay bare the relations between the different class forces involved. These factors are discussed in the next chapter.