The absence of a mass revolutionary Marxist party meant a petty-bourgeois, Stalinist party was carried to power in China on a mass upsurge so extensive that it swept away the bourgeois government and disintegrated its armed forces. The period immediately following 1949 was a transitional period during which the CCP attempted to form a viable state with the shades of the bourgeoisie, and with the declared aim of maintaining capitalism in China. The New Democracy encouraged capitalists to remain in charge of their factories, apparently secure in their positions. Overseas Chinese businessmen were encouraged to return to help build a capitalist China.
11.2.1 New Democracy and Bureaucratic Capital
In 1947 Mao estimated that the four families had accumulated assets worth US$ twenty thousand million and that under their rule, China had reached a condition of state-monopoly capitalism.[2] This turned out to be a gross under-estimation of the extent of bureaucratic capital.
When the new regime seized bureaucratic capital it found, to its surprise and consternation, that it had four-fifths of the country’s heavy industry (90% of the metallurgical industries, 90% of power generation and electrical equipment, 75% of chemicals and 70% of machine building), about one third of light industry, and control of the transport and communication systems. After seizing Japanese-owned industry it acquired 83% of all foreign capital in China. The New Democratic government found itself employing about half of all factory workers, far more than it had expected or wanted.[3] The CCP was dismayed to inherit such a great share of the economy because it demonstrated just how weak was the national bourgeoisie.
The four families had also been entrenched in the banking system. On capturing Shanghai, the Military Control Committee immediately seized the banks owned by “comprador-feudal state monopoly capitalism” which included the two most important, the Farmers’ Bank of China, and the Central Bank. The regime was again taken by surprise, now being in de facto control of the banking system with no perspective or plan. As a stop-gap measure and to strengthen the national bourgeoisie, the regime attempted to rationalise the banking system by forcing small and medium-sized banks to merge. These banks had to register with the government but were encouraged to continue operating privately.[4]
State ownership of the banks was absolutely essential if the intention was for China to break with capitalism. The banks are an essential instrument of economic policy because control of the allocation of resources must be in the hands of the state in a planned economy. This would be a decisive issue regarding the future of the Chinese revolution. The CCP did appoint cadres to sit on the decision-making bodies in the banks but the government was happy to see the joint state-private banks and the private banks that had existed under the KMT to continue to function for the benefit of the national bourgeoisie.
The banks belonging to the four families were amalgamated into a newly-formed People’s Bank of China with the mergers negotiated jointly with the former senior managers who mostly remained in post. By and large, personnel simply transferred to the People’s Bank. In some cases prominent bankers who had fled China were personally invited by Zhou Enlai to return and take leading positions in the People’s Bank.[5] To attract these people, and other Chinese business men abroad, the CCP hinted at privatising at least some of these banks to strengthen the national bourgeoisie. At first, the New Democracy worked hard to support the private banks, but the need to bring inflation under control required a degree of centralisation that knocked privatisation off the agenda.
Inflation was so bad that the economy was collapsing, many factories and shops were unable to sustain themselves, and those which did, did so by not paying the wages of their employees. Trade was reduced to barter and workers demanded to be paid in kind, usually rice. The corrective measures had to be on a grand scale, co-ordinated and draconian to be effective.
The need to bring inflation under control required the People’s Bank of China to tightly regulate credit and foreign currency exchange. During 1951-52, private banks were progressively rationalised, combined into a small number of joint state-private enterprises and then nationalised. By the third anniversary of the founding of the PRC, banking had become the first sector of the economy to be completely socialised. This extremely important development was not in the direction predicted by Mao, and at odds with the expectations of the New Democracy.
To minimise the effects of inflation and the resulting chaos, representatives of state industries began meeting to draft plans for future development. This was the first step to an integrated plan for the whole economy. For example, to avoid widespread hunger and profiteering, it was found necessary to set up state trading companies which monopolised both retail and wholesale trade in such basic essentials as food and farm produce. These functioned through fixed price state stores and co-operatives which, by August 1950, had 20 million members.[6]
The Party had promised to boost the growth of private capitalism and at first was as good as its word, but it had relatively few native capitalists to work with because businesses of any size had either been taken over by one or other of the four families or had fled with Chiang. Bourgeois property generally was left untouched, given protection, and its growth artificially bolstered. During this phase private businesses could depend on the state for raw materials, distribution channels, and a ready market. Representatives of the bourgeoisie were placed in prestigious and public positions, and even though they may have had no real power they were able to influence the regime because the state wanted their opinions and listened to them. The strength and importance of the national bourgeoisie was artificially and deliberately exaggerated.[7]
Because the national bourgeoisie were so weak on the ground, the New Democracy made a feature of encouraging over seven million small retailers and self-employed artisans to continue their operations. The forcible confiscation of the property of the self-employed taken by the Stalinist regime in Russia was a bureaucratic and short-sighted course of action. Forcing such people into state-controlled co-operatives was not an indication of a workers’ state but the action of a bureaucratic regime. Both Lenin and Trotsky had been against compulsory confiscation of the property of artisans and shopkeepers.
11.2.2 New Democracy and Workers’ Democracy
For the proletariat, political rights such as freedom of assembly, association, speech, and to strike, were strictly limited. Free, democratic workers’ Soviets, or factory councils, are the mechanism by which the masses assess and impose their will on the parties that claim to represent them, and so were completely forbidden. To justify this approach Lo Fu developed the novel argument that the Bolsheviks came to power against the Soviets – any other interpretation was deemed ‘Trotskyist’.[8]
A handful of workers held governmental posts (very few in senior positions) but these were appointed – the working masses had no right to freely elect their own representatives. Workers were hailed as the masters by this regime, but in reality they were as disenfranchised as workers in the Soviet Union under Stalin. Workers’ democracy is a key issue for revolutionary Marxists because without genuine workers’ democracy it is impossible to create a healthy workers’ state “under the leadership of the proletariat.”[9]
Nevertheless, the New Democracy did give workers significant protection from the worst excesses of exploitation. This was of real substance in the treaty ports where the imperialists had carried out their business with little concern for the laws of China or their Chinese employees. The PLA took control in quick succession of Nanjing, Hangchow, Wuhan, and then Shanghai. Foreign companies now had to abide by Chinese employment law and regulations; firms had to hire as permanent, their casual and temporary staff, and pay their workers in rice to beat inflation. However, while foreign companies now faced the same financial burden as Chinese companies, “there was little that was specifically socialist in the policies pursued by the CCP in the early years of the PRC.”[10]
As late as August 1950, the Liberation Daily was promising foreign companies that they could continue operations in China and would be protected. However, without their privileges the foreign firms found it hard to compete and gradually they reduced their levels of activity. The UN embargo imposed during the Korean War reduced foreign trade to barter and meant it was closely controlled by the state. With the Three-Antis and Five-Antis Campaigns (see below), foreign firms effectively withdrew from China.
Far from smashing the old KMT state machine, the New Democracy absorbed important sections of it. Later, in 1952 – three years after the assumption of power, the PRC ruefully reported: “the People’s government adopted a policy of taking over all the personnel in the former Kuomintang government offices and educational institutions when the reactionary rule of the Kuomintang collapsed.”[11] This degree of presence in the state structure meant that the measures taken by the New Democracy to support capitalist initiatives struck a natural resonance and became amplified.
During the three years of recovery the number of private industrial enterprises increased from 123,000 to 150,000; most of these were small businesses employing fewer than 10 persons but a number of larger factories producing consumer goods did thrive. The size of the private industrial labour force grew from 1.6 to 2.2 million workers. The number of businessmen in major cities had increased by a quarter by the end of 1951 and in that year the average rate of profit was a remarkable 29%.[12] One Hong Kong business journal concluded: “The new regime has so far brought prosperous living conditions to all and sundry; the bankers and traders have no reason to complain, and, in fact, no substantial complaints are ever heard. Private trade is doing well and profits are high.”[13] These developments had little independent substance and depended on the goodwill of the CCP, but with hindsight, it is clear that with continuing support from the CCP leadership, these small forces could have quickly grown into a real power within the state.
11.2.3 The New Democracy and Agrarian Reform
The Land Reform Law, published in June 1950, soon after the CCP became the new government, was historic in eradicating feudal remnants such, as mentioned above, that women were entitled to own land. But all activities were carried out under tight Party control, were constrained by the CCP’s bureaucratic methods, and did not violate capitalist property relations and the principle of private ownership. The intention was to have 75% of China’s farmland in private small holdings.[14] The CCP permitted the sale, purchase and renting of land and allowed rich peasants to keep their property and use hired labour.
The Bolsheviks had nationalised the land to create an agrarian system which was the most flexible for taking the socialist revolution into the countryside. In doing so, they had demonstrated that a contradiction can exist for some time between a peasant rural economy and state superstructure during a transitional period, that private production on the land (like private ownership of retail trade) was not a decisive factor in determining the class nature of the regime.
However, the huge preponderance of peasants in Chinese society made the changes in land policy good indicators of the direction in which the regime wanted to travel. Not nationalising the land was an important signpost for the direction in which the Mao regime intended to proceed. “Land to the Tiller” was not anti-capitalist and the New Democracy promised a “rich peasant economy” based on the private ownership of land and the continuing, if limited, presence of landlordism.[15] Simultaneously the CCP and PLA were ready to put down independent actions by peasants who wanted a revolutionary policy.
During the civil war (1947) the land policies of the CCP had been formulated to win peasant support against the KMT armies; immediately after the civil war (1950) the CCP was attempting to re-assure the national bourgeoisie that the New Democracy was no serious threat to its existence, and with the Korean War (see below) it was to increase support for the regime and to protect it from bourgeois sabotage.
There is thus, a chronology to the land policy of the CCP, but there are also geographic considerations: (a) the liberated areas and Soviets with over 100 million people where agrarian reform was completed before 1948, according to the Agrarian Reform Law of October 1947; (b) the Yangtse valley and surrounding regions with over 150 million people where land was distributed during 1950-51 according to the Agrarian Reform Law of June 1950; (c) the south-central region of China and the coastal region of eastern China where land reform was completed only at the end of 1952. This latter area contained nearly 100 million people. Given the considerable differences between areas, the implementation and monitoring of the Agrarian Reform Laws was delegated to regional administrations.[16]
In 1949 the advance of the PLA was so rapid that only partial and incomplete peasant associations could be formed before the PLA arrived and took control. There were some attempts at organising non-payment of rent which were tolerated but the CCP emphasis was on not disrupting the harvest, and thus the start of land redistribution was postponed until the autumn of 1950. In the plan for agrarian reform adopted in May 1950, excessive actions by the poor peasants and landless labourers against the landed proprietors and rich peasants were prohibited and special emphasis was given to ‘the gradual execution of land reform’. As stated above, the immediate actions taken by the CCP were to limit rent to no more than 37.5% of the harvest and to lower interest rates to 15% though, as previously, the latter proved almost impossible to enforce.
The Land Law of 1947 had decreed the expropriation of all property of the landlords and the surplus land of the rich peasants (the area of land they owned above that of the typical local middle peasant). The 1950 Law declared that the land of the rich peasants, whether cultivated by members of the family or hired hands or rented out to poor peasants, had to be protected and must not be distributed. This, naturally, led to an outcry from the majority of peasants who saw their peers in the north being given land while they had to wait.
To give the CCP greater control, the land distribution programme was implemented in a specified order: first combat bad gentry, then reduce rent and interest rates, and finally expropriate land. The process took place sequentially village by village so the process was completed in one area before commencing in another. Since, in any given village the process could last many months, land distribution was slow.
The CCP’s policy of protecting rich peasants, often giving them the best and the largest share of the land on the grounds of maximising food production, placed the rich peasants in a superior position in the rural economy. Rich peasants were in the business of loaning money to poor peasants; these activities could now flourish and rapidly did so. Many poor peasants who had been given their share of land were again sinking into poverty often due to debt repayment and a lack of the tools needed for farming. The land reform allowed the buying and selling of land on the open market and poor peasants were selling their land in order to maintain themselves. The rich peasants soon re-emerged as the dominant social factor (e.g. as head of the local Peasants’ Association) controlling increasing areas of land.[17]
11.2.4 The New Democracy and Marriage Reform
In April 1949, the CCP founded the All-China Women’s Federation (ACWF) and on 1 May 1950, the PRC enacted a New Marriage Law announced by Mao Zedong personally: “All marriages are to be based on the free consent of men and women.” The Law raised the minimum marriageable age for males to 20 years and for females to 18, it banned marriage by proxy and both parties had to consent to a marriage. Under the slogan “Smash feudal marriage”, Chinese law for the first time granted women the right to divorce their husbands and a right to a share of family property. This represented a dramatic step-change in the position of women and became an important part of land reform.
However, these changes were incomprehensible concepts to many peasants, certainly in the south of China where the CCP had no traditional base and women were considered as less than human, more like a sheep or a cow.[18] Women were encouraged to attend village mass meetings, convened under CCP guidance to decide how to share out confiscated lands. The form was preserved, but the reality was that almost all these women, most of whom had not been outside their homes for years, were terrified of speaking in public and had little effect on the outcomes.
Where cadres of the Women’s Federation persuaded young women to attend and speak out they were usually ignored and occasionally physically assaulted. However, unlike in Jiangxi where the Women’s Associations took direct action to end the physical intimidation, the Federation trod very softly.
Within three years the CCP, bowing to patriarchal pressures and fearful of a bad harvest, had dropped any co-ordinated effort to implement the land rights elements within the Marriage Law. It was argued that giving land to women was unproductive because: women lacked agricultural skills, a large number of women could not work the land because they were crippled having had their feet bound, women had to look after their children so could not spend enough time on the land, and the patriarchal family structure meant many women were unable to turn their legal rights into actual control of the land.[19]
Leader is clear that CCP cadres – at least in southern China – were sympathetic to peasant views which considered women the property of their husbands, and saw the attempts to liberate women as little more than legalised theft.[20] Leader points out that even though the number of divorces under the new law was minimal (less than one twentieth of one percent of marriages) the threat of divorce became a very real weapon for the emancipation of women. This was not presented positively by CCP cadres as a weapon to be used to obtain better treatment within the family but as a serious and severe threat to social stability; as “high treason against the natural order”. It appears that cadres covered up, or even led, criminal activities to terrorise young women who threatened divorce using such slogans as: “A good woman hangs herself, a bad woman seeks divorce.”[21]
By 1953 it is estimated that as many as a quarter of a million women (mostly aged under 25) had committed suicide or been murdered as a result. It can be argued that these women were paying the price for a bureaucratic approach to an age-old problem with very deep roots. The bureaucratic mentality sees issuing an order as resolving the problem, but here substantial preparatory educational work was needed and then strong support for the women affected.
Engels in The Origin of the Family, Private Property, and the State, had predicted that as women became increasingly economically independent, they would be able to abandon the institution of marriage and engage freely in sexual unions based on love. The CCP, however, was vehemently opposed to women engaging in non-marital sexual unions and attempted to ensure that women fulfilled their biological destiny within the family. Party leaders did make public statements encouraging men to share in the division of household chores but at the same time made it clear that the primary responsibility for the well-being of the family, including cooking, making clothes, economising, cleaning and minding children, was that of women:
Participating in agricultural production is the right and duty of rural women. Taking care of children and dealing with housework, however, is also a responsibility that women cannot reject. This is the special way in which women and men are different.[22]
The CCP leadership had considered the Marriage Law for at least two years before enacting it and with their experience of similar laws in the liberated areas must have expected a hostile reaction. However, what they had not expected was the outbreak of the Korean War and to avoid any undermining of the support of the peasantry, the Marriage Law was soft-pedalled from at least 1950 and by March 1953 had been effectively abandoned. The bureaucracy undermined the value of the Marriage Law because it needed the family as a prop to the regime, just as had Stalin.
The official statement issued by Zhou Enlai and entitled “Thorough Enforcement of the Marriage Law” was notable because the content was the opposite of the title. Zhou ordered restricting the grounds for divorce and, with the 1st Five Year Plan (FYP) just around the corner, placed responsibility for smashing the feudal family on women’s organisations within a framework of united, reconciled and harmonious families engaged in gainful production.[23]
The 1st FYP would be a contradictory experience for women in China. Official propaganda called on Chinese women to turn to industry, emphasising that joining the paid labour force was essential for their emancipation. But the plan did not specifically address jobs for women, and women tended to be confined to low skilled jobs (on the co-operatives for example, women planted rice seedlings while men drove tractors); despite official policies female unemployment was high and women were often paid less for work of equal value (women formed over half the agricultural labour force but got only 35% of total pay), and on getting home, women were stuck with housework and childcare.
By 1955 it was clear that with the influx of peasant men into the towns there were few jobs for women, and the CCP proposed a new mass line: women were to stay at home, encourage their husbands to work hard, and to manage their homes with “industry and thrift.”[24] The proportion of women in employment fell sharply and those who continued in work were required to perform the same physical labour as men with dramatic consequences for their health and for their children’s care.[25]
-
Mao Zedong, The Present Situation and our Tasks, Dec. 1947, w.m.org.
-
Harris, N. The Mandate of Heaven, 1978, Quartet Books.
-
Zhaojin Ji, A History of Modern Shanghai Banking, East Gate Books, 2003, p243.
-
Lee Tak, Chinese Bankers … the Case of Chen Guangfu, Univ. of Hong Kong, jds.cass.cn.
-
Mandel, E. The Third Chinese Revolution Part II, 1950, w.m.org.
-
Hsieh Yueh, Mao Tse-tung’s “Revolution”, Report on Chinese Stalinism, 1949, www,marxists.org.
-
Wales, N. Why the Chinese Communists Support the United Front: An Interview with Lo Fu, Pacific Affairs, 1938, 11(3)311-322.
-
Mao Zedong, The Chinese Revolution and the Chinese Communist Party, 1951 edition, w.m.org.
-
Thompson, T. China’s Nationalisation of Foreign Firms 1949-57. Univ. of Maryland, 1979.
-
Labour Laws and Regulations of the People’s Republic of China, 1956, p65.
-
Harris, Op. cit.
-
Far Eastern Economic Review, 26 January 1950.
-
Duncan, J. and Li, P. Women and Land Tenure in China, 2001, Rural Development Institute.
-
Mao Zedong, New Democracy, 1940, w.m.org.
-
Twitchett, D. and Fairbank, J. (eds) Cambridge History of China, CUP, 1987, Vol.14, p81.
-
Ibid, p54.
-
Kazuku Ono, Chinese Women in a Century of Revolution, Stanford, U.P., 1989, p179.
-
Duncan, and Li, Op. cit.
-
Leader, S, The Emancipation of Chinese Women, World Politics, 1973 26(1) 55-79.
-
Kazuku Ono, Op. cit. p180.
-
People’s Daily, 16 May 1956, quoted in Manning, K. Marxist Maternalism … The China Review, 2005, 5(1) 81-108.
-
Leader, Op. cit.
-
People’s Daily, editorial, Mobilize all Women to Build up the Country and Manage Family Affairs by Industry and Thrift September 9, 1957.
-
Leader, Op. cit.