The “Chinese path”: uneven development, projectment, and socialism

Abstract

Numerous indicators have demonstrated the robustness and resilience of the Chinese development process over the past decades. However, it is not uncommon to perceive, in current analyses, the Chinese process as just another case of successful catching-up, a latecomer of Asian matrix like Japan and South Korea. In fact, Chinese development is not trivial given its history and starting point: in 1949 China was the country with the lowest per capita income in the world and today it is competing with the United States for the technological frontier. In this article, we propose the categories "uneven development", "projectment", and "socialism" as fundamental supports in a background analysis of the real explanatory reasons for the Chinese success.

China; development; uneven development; projectment; socialism

Resumo

São inúmeros os indicadores demonstrando a robustez e a resiliência do processo de desenvolvimento chinês ao longo das últimas décadas. Porém, não é incomum perceber nas análises correntes o processo chinês somente como mais um caso de catching-up bem-sucedido; um latecomer de matriz asiática como o Japão e a Coreia do Sul. Na verdade, o desenvolvimento chinês não é nada trivial, tendo em vista sua história e seu ponto de partida: em 1949 a China era o país de menor renda per capita do mundo e hoje disputa a fronteira tecnológica com os Estados Unidos. Propomos, neste artigo, as categorias de “desenvolvimento desigual”, “projetamento” e “socialismo” como suportes fundamentais em uma análise de fundo sobre as reais razões explicativas do sucesso chinês.

China; desenvolvimento; desenvolvimento desigual; projetamento, socialismo

Introduction

One of the main issues raised by China’s consolidation as a world power in trade, manufacture and even finance, is how its “model” can be categorized. Two general opinion trends can be identified in regards to that issue: there are those who see the country becoming a “free market” economy ( Lardy, 2014 ), and those who see it as a sort of “State capitalism” ( Naughton, 1995 ). The concept of “State capitalism” has functioned as an umbrella for the views presented by both heteredox and marxist thinkers connected to the academic world, think thanks and the mainstream media. One of the few existing consensus between orthodox and heterodox thinkers lies on the notion that China’s successful path to development implied its turning into a capitalist country that gained influence and space in international economics and politics.¹

This consensus arises from a set of ideas that range from the supposed “end of history”²to many kinds of generalization, transcendental categories and outdated theories whose historical expiry date has not been duly considered. For instance, in our view, the notion of an “entrepreneurial State” ( Mazzucato, 2014 ) serves both to validate the Keynesian principle of effective demand as supposedly an universal concept as well as to admit visions of capitalism in stages – with “State” (monopolist State capitalism, end of XIX century) preceded by “free competition capitalism”. This explains why China is framed in these two kinds of capitalism.

But there is another approach to this debate, one widely ignored by the West, based upon intellectual work done by non conventional western thinkers and Chinese ones. To this heterogeneous group, China has to be seen not only as an experience of socializing strategy, but also, specially from 2017, as a “socialism with Chinese characteristics" that would be now entering a “New Age”. This new age would seem to be marked by systemic issues and contradictions regarding innovation, green development, common prosperity and the building of a new international order, having China as part of the “Global South" and founded on two principles: 1) the five principles of pacific coexistence, established in the African-Asian Bandung Conference in 1955 and 2) the idea of a “community of common destiny for mankind”.³

In addition to that, the common approach to the Chinese case, coming both from orthodox and heterodox thinkers, usually overlooks a fundamental historical fact. Such generalizations come to treat China as another case of Asian success through obliviousness of the following mark of its history:

According to reports from The Conference Board, in 1952, at the start of the post-war era, China was the poorest of 110 countries (though there were no data for Yugoslavia and former Soviet Republics), with a GDP per capita in 2021 international dollars, converted using purchasing power parities (PPP), of US$233.8. Next came Myanmar (US$427.9) and Mozambique (US$553.1). India was ninth poorest (US$884.9). ( Dunford, 2023 , p. 2)

China’s historical peculiarities (as a country assuming its position in the “Global South”)⁴lies in that the poorest country in the world undergoes a transformation process that leads it to be the second world economic power. To reach that goal, a particular political force (China’s Communist Party, the CCP) won the Japanese occupation war and the civil war against the Kuomitang. Since its revolution in 1949, the country took a different path compared to its Asian counterparts, thus following a route to development that was not underpinned by United States' geopolitical schemes. Between 1952-1978, before the economic reforms, its GDP growth average was of 6.2%. The basis for the real great leap forward in 1978 were fundamentally set still under Mao Zedong: establishing new relations with United States and Japan and a new integration to the capitalist world.

Chinese experience is a typical case of “start from scratch”, meaning very low levels of productive forces development. But, as we have been arguing lately, the economic reforms started in 1978 and their consequent integration to the capitalist world brought about a new class of socioeconomic formations ( Jabbour & Gabriele, 2021 ; Jabbour, Dantas & Espíndola, 2022; Gabriele & Schettino, 2012) . Its dynamics are associated to the appearance of a powerful public economic sector as well as to the emergence of an ancillary, however strongly active, private sector. It is also characterized by successive cycles of institutional innovations, through which new conditions were set for the start of new and superior forms of economic planning. ( Jabbour & Dantas, 2021) .

So, given the historical peculiarities aforementioned, we may add their technical advancements and their ever greater capacity to consciously intervene on reality, to declare that the Chinese case is increasingly harder to understand from the traditional orthodox and heterodox standpoints. A new social science must be constructed to decipher the concept manifested in that movement of reality.

With this in mind, the article aims to present three categories that might be critical to understand the Chinese path. The first of them is uneven development. This choice is meaningful because China is a significant object of Political Economy, within which lie important advancements in terms of economic planning. As the economy orbits politics, we consider planning instruments as functional for the political power, since they are a form to control the law of uneven development as the “fundamental law in the transition period from capitalism to socialism" (Lefebvre, 1955 [2020], p. 206). We will argue that the concept/law of uneven development is critical to understand the reasons and the strategies that sustain the Chinese development process.

Another category is currently under elaboration (Jabbour; Dantas; Espíndola & Vellozo, 2023; Jabbour, Dantas & Espíndola, 2022; Jabbour & Dantas, 2021) to highlight the theoretical, conceptual and functional connotations of the country’s development dynamics vis-à-vis the emergence of new levels of economic planning. The category of projectment , created by Brazilian economist Ignacio Rangel, may be key to fully understand the impacts involved in the absorption of disruptive technological innovations, such as Big Data, 5G internet and Artificial Intelligence, by the governance and planning of the Chinese development process in a superior way.

Lastly, we put forth socialism as an analytical category. Our goal is to move beyond the usual attempts to frame China in some rigid pre established structure. Here, we approach socialism as a category within which lies a determined socioeconomic formation, that is historically constructed. Socialism can be an explanatory category of the Chinese case as long as it is seen in its political/superstructural dimension (the political power exerted by a historic compound under control of a Communist Party) and its economic dimension (public ownership of means of production as the nucleus of national economy, large scale planning, increasing influence of CCP over private investment decisions etc.).

Besides this introduction and initial conclusions, the article contains three other sections. The first will be reserved to expose the law/category of uneven development as a valid theoretical source of insight on aspects generally ignored by conventional analysis. The remaining sections will explore the categories of projectment and socialism. Some conclusions will be exposed in the end.

Uneven development

Uneven development is by itself perceivable in the different speed by which transformations take place in the fields of economic foundations, superstructures and, it should be noticed, in the pace of subjective transformations. Thus, human societies are produced and reproduced in amidst constant and varying forms of “units of opposites”. This is verified in the socioeconomic formations, as well: they develop unevenly. In other words, societies, countries and nations develop according to different paces. In certain cases, those who start in advantage over others may increase their superiority, but the same differences in development pace may see the ones that got left behind to overtake the initial forerunners.

Within each socioeconomic formation, this law applies as well, given that different historic forms of production and exchange can coexist in a single society. To a large extent, the study and comparison of specific development processes lies in the analysis of differences, inequalities and specificities of each social formation. A socioeconomic formation is a result of combinations of different modes of production. Hence, we advocate a wide open vision of totality, when it comes to study complex historic processes. Here we are placed in disagreement with the principles of conventional approaches, and more, even with western Marxism. From a theoretical/philosophical standpoint, we agree with Lefebvre, to whom:

The law of uneven development has (...) a considerable importance by itself and the consequences it carries along. It is the main discovery made by Lenin in the economic field: the great law of socioeconomic formation. (Lefebvre, 1955 [2020], p. 193)

It would not be exaggeration to proclaim China as yet another explicit proof of how valid is the category of uneven development. The issue to be worked further is to understand how that country, first literally dragged into the international capitalism orbit, can highlight the fact that the foundation of CCP is a byproduct of the uneven development of capitalism.⁵Another debate would be: how did China make use of this law as a means to plan its adherence to the international system, build a socialist market economy and quickly become the second economy in the world exactly along the time when financialization eroded the ability of central capitalist countries to keep their leadership and, simultaneously, new powers emerged in the capitalist periphery?

As the fundamental law of socioeconomic formation and of transition periods from capitalism to socialism, we assume that uneven development operates in China with peculiarities little explored by the dominant views. If disparities in development levels between countries are a intrinsic characteristic of capitalism, we should also be able to watch them working in the countries' internal development dynamics, given their differences according to regions and modes of production structured in specific internal socioeconomic formations.⁶In the Chinese case, we should observe these issues, as much as the role of planning, as an instrument of political domain over territories, which is a true attribute of socialism.

The history of Chinese development comprehends a wide array of experiences, many of them under different conditions. From tackling hyperinflation soon after the takeover of power, the Korean war and strong sanctions imposed by the West (which led them to ally with the USSR for, later, part with it), to erratic bypaths such as the “Great Leap Forward" and the Cultural Revolution, which deepened their foreign isolation.

A peculiar route known as “socialism with Chinese characteristics" was inaugurated when China approached the United States, and was fully admitted in the international capitalist market by the end of the 1970s. As mentioned above, currently this “socialism with Chinese characteristics" enters a so called “New Age”, conditioned by the emergence of another wave of internal contradictions (social polarization, environmental issues, youth unemployment etc) as well as external ones (imperialist siege). Nevertheless, China seems to be able to propose an alternative to the neoliberal globalization process commanded by the USA (Jabbour, Dantas & Vadell, 2021).

In the first years of People’s Republic of China, as a result of a revolution undertaken by a wide patriotic movement, it was expected a more significant insertion in the world markets, as well as the institution of a “State capitalism" similar to the New Economic Policy implemented by Lenin in the USSR. But the historic conditions presented after the Revolution in 1949 led the country to adhere to a pattern of accumulation more commonly seen in states of exception characterized by the soviet model.

Just as the planned coalition with the national bourgeoisie was set aside, so were the plan to attract developed-country loans and investment (at least until the US blockade was lifted in the early 1970s). Instead, China sought, first with Soviet assistance, to develop an economic order comprising: large-scale, domestically oriented and capital-intensive state-owned industrial enterprises (SOEs); danwei-provided welfare services; a People’s Bank that received deposits and lent to enterprises; a Soviet-style planning system; worker mobilisation; and fair distribution in a context of an acute capital shortage. In the countryside, the rural population was organized into collective farms, creating markets for equipment and permitting the appropriation of rural food surpluses, ending the centuries old immobility of the countryside and providing resources for industrialisation – what Preobrazhensky (1965 [1920]) would have called ‘primitive socialist accumulation’, where expansion of the socialist industrial sector requires a surplus product in a society where surplus value no longer exists. ( Dunford, 2023 , p. 6)

We allow ourselves to consider the “soviet model" as one whose accumulation dynamics is typical of a “state of exception" (country under blockade, with no access to foreign capital and restricted policy space for import substitution and foreign credit, etc), resulting in a particular form of catching-up by use of the advantages that lied in their lagging behind. It is actually surprising that, even if under spasmodic and turbulent zig-zags, Mao Zedong’s China, however poor, constructed a basic industrial system that served as the trampoline for later reforms. Chinese economic growth, between 1952 and 1978, averaged 6.6% ( NBS, 2023) . The country saw its life expectancy increase from 35 years in 1949 to 57years in 1957, and 68 years in 1981, while the population grew from 554.4 million to 1.014 billion ( World Bank, 1982) .

In comparative terms, however, the early taking off of China was not sufficient to catch the neighbors up, notably Japan, South Korea and the province of Taiwan. East Asia had been the cradle of a dynamic capitalism as well as of new technological standards (3rd Industrial Revolution). China’s disadvantage kept some geopolitical goals on hold, such as the reintegration of Hong-Kong, Macao and even Taiwan. This is the general context under which China reinstates relations with the United States (1971) and starts its Reform and Opening-up in 1978. These movements pointed to the very context we live today.

Chinese leadership was clever enough to understand the structural change taking place in the capitalist system. The forsaking of foreign exchange policies established in Bretton-Woods, decided by the USA in 1971, the 1973 crisis, the fall of profit margins in the G7 countries, and the emergence of a new pattern of accumulation based on finances, were all factors harnessed by China. If in 1973 the country used a U$4.3 billion international loan to acquire modern western machinery, in 1978 its admission in the international capitalist order was official. From the standpoint of the uneven development law, it is evident that China should take advantage of the diaspora of productive chains from the G7 countries, seeking lower production costs, to promote a widespread modernization and catching-up policy. Two points deserve note as to characterize the period inaugurated with the reforms:

1. A fundamental trait of China’s integration process to the capitalist world was the turning of their foreign trade into a State planned public asset ( Jabbour & Dantas, 2017 , p. 794). In this case, planning includes the conditions under which the country started to regulate foreign investment in their territory, and

2. The combination of Chinese socialism with the emergence of domestically acknowledged forms of private ownership (in China’s official documents they are named “non public”), as well as with large scale foreign investment, leads us to conclude, mainly in comparison to the fall of the first socialist experiences, that in China socialism was reinvented through market institutions . In a certain way, this dates back to a policy from 1940s' China, when “organized socialist markets" were created in some areas controlled by the CCP in order to drive the national economy. ( Weber, 2023 , p. 129).

In our view, China puts up a significant theoretical challenge. For instance, the building of a “market socialism" whose development happens within the frame and under restrictions imposed by global capitalism and its “metamode of production”⁷must lead to questions and answers that move away from a priori notions about the nature of socialism, which includes a vision both thorough and flexible on the category/law of uneven development.

The introduction of non public forms of ownership, and consequently the admission of the law of value in a socialist oriented socioeconomic formation, leads to a characteristic form of uneven development, with deep impacts on territory, economy and society.⁸Here is the Chinese path. It reaches a theoretical limit, demanding full acceptance of that notion by which the concept finds manifestation in the movements of reality.

The projectment

Uneven development opens up wide possibilities to interpret the distinct national paths to socialism. But before, it is mandatory to put into question certain postulates about the nature of socialism. If this law/category leads us to analyze the current transition to a superior socioeconomic formation, we are compelled to found our investigations upon the human relations to the territory. (Lefebvre, 1955 [2020], p. 209). It is precisely at this point that we restore and rework the concept of projectment, relating to China’s current reality and level of technical development.

The category of projectment was originally conceived by Brazilian economist Ignacio Rangel, in his 1959 book “Elements of a Projectment Economy”. His definition responds to a specific historic process. According to Castro (2014 , p. 202):

The author’s goal becomes clear as we read him. To build an economic theory of projectment upon the heritage of Economics and its schools. A theory to be seen as the Economics that was being designed by the historical process during the twentieth century, resulting from the coexistence of financial capitals, keynesianism and soviet planning.

The emergence of historic forms⁹that provided mankind with domain over its own destiny, as far as economic cycles are concerned, helped to turn economic planning into an instrument of government, thus allowing for conception and execution of large projects to be affirmed as an expression of such instrument. Rangel’s challenge was to take the act of projecting to such a level where it could be regarded as a science. This science, the projectment, has cost and benefit as its fundamental categories:

Cost and benefit, in the sense chosen hereby, are the fundamental categories of projectment: useful abstractions for the approach of implicit problems (...) All theory of projectment is no more than an effort to determine these two terms in order to build a reason out of them (Rangel, [1959]2005, pp. 366-367)

The bold mark over the word reason has strategic meaning, and highlights the link between projectment and uneven development as a fundamental law of transition from capitalism to socialism. But more than that, the very conceptual definition of socialism emerging in China is now under the understanding of what we call “strategic sense of reason" ( Jabbour et al., 2021 ).

We might define the Chinese path as a process in which, after the colapse of the USSR and the emergence of financialization, projectment is re-experienced as “New Projectment Economy”. We, therefore, incorporate the original contribution by Rangel, but name it in accordance to its current historical form, as a superior stage in the development of Chinese socialist market economy, which in turn is a product of new and superior ways of economic planning fabricated in that country along the last decade.

We sustain that the emergence of that “new economy" is based upon two intertwined historical processes. The first one was the reform in Chinese public economy initiated in the late 1990s, whose results included, at the time, the formation of 199 Large State-Owned Enterprise Conglomerates (LSEC).¹⁰During this process, changes took place in the planning procedures: a previously central planning was replaced by a market-based planning. That was a response from China to its admission into the world capitalist order, through the formation of state-owned market oriented industrial complexes. The second process we refer to was when, in 2003, China created the State-Owned Assets Supervision and Administration Commission of the State Council (SASAC) as a key institution of “market socialism”, with the mission to manage state assets in the main LSEC.¹¹This has been a complete strategic turn for the public assets, and inaugurated a whole new historic form of public property under the socialism, as a historical experience started in 1917.

Another significant process is found in the strategic decision taken in the 11th Five Year Plan (2006-2010) to recreate a national system of technology and innovation as an environment formed by the LSEC, private conglomerates, public financial system and universities. This system was responsible for disruptive innovations in areas such as 5G internet, Big Data and Artificial Intelligence. There is a clear connection between these innovations and the new and superior forms of economic planning, that is, the New Projectment Economy. What now happens in China is a further step of human domain over nature (planning), and over the inherent anarchy seen in capitalist oriented economies.

It is worth noting, thus, that we do not see the Chinese innovation system merely as a means to attain economic goals, but as an instrument to feed the State and the public productive base with economic forces to complement the inauguration of superior forms of economic planning. This is translated into a higher capacity to concentrate on large projects, as was done since the “soviet model”, as well as into the creation of an environment where public ownership is both the nucleus and the spreader of new productive capacities and means to overcome capital’s anarchy, by giving the State abilities to take strategic decisions in a very quick way.¹²This is planning as an instrument for political domain taken to a different level.

There is indeed a lateral perception worth remembering, since there are not few analysis relating the emergence of Big Data with the “renaissance" of economic planning. Wang and Li (2017) take on Oskar Lange’s contributions on the economic calculations in socialism to propose a “market socialism" founded on general information technologies, particularly Big Data:

This kind of economy system should coordinate centralized planning and democratic planning, take big data as technical condition, platform economy as institutional and organizational conditions, to forming the big data–based and state-owned enterprises leading operated Internet platform economy. ( Wang & Li, 2017 , p. 138).

Compelled to observe human relations with and over the territory, we came to consider the Chinese process unique because of two historic unfoldments. The first was the immense capacity demonstrated by the Chinese State, through deliberate action of its 99 LSEC and development banks, to execute the fiscal package launched in November 2008, valued in U$586 billion. The fiscal package in itself is not the central issue, rather we highlight the ability to plan and coordinate thousands of projects simultaneously, something that is unheard of in human history. The second historic unfoldment has been the extraordinary capacity demonstrated by China to tackle the enormous challenge posed by Covid-19, in the face of which the country referred to large scale use of Big Data and Artificial Intelligence. It is still to be measured the role that platforms such as Big Data and Artificial Intelligence played in the end of extreme poverty in the country.¹³

The category “Projectment Economy" must be incorporated as part of the “Chinese path”.

Our turning point in regards to dominant postulates coming both from orthodoxy and heterodoxy lies in the perception that China is now in a new kind of accumulation process, where the overcoming of all types of restrictions and the introduction of new technologies in the economy opened ways to qualitatively increase the rationality of productive processes, consequently turning the Chinese economy into a true machine of large public assets, and even of use value. (Jabbour et al, 2020, p. 20)

From a merely empirical standpoint, there is no space to analyze the impact, the agility and the magnitude of the many transformations in Chinese economy and territory after the fiscal package launched in 2008, as well as their economy of emergencies, widely based on disruptive technological innovations and put up to the public eye during the Covid-19 crisis. There is no doubt left that such facts render unable the current economic theories, when it comes to understand the Chinese reality. Moreover, it should be enough to highlight that, between 1990 and 2017:

China added over 120,000 kilometers of railways, 130,000 kilometers of expressways, 3.7 million kilometers of road, and 740,000 kilometers of coastal quay lines to its national transport system. India, a country of similar size, and a private property system in keeping with neoclassical requirements, added 4,320 kilometers of railways from 1990 to 2016. ( Jefferies, 2021 , p. 311)¹⁴

Thus, the New Projectment Economy is part of an effort to combine uneven development as an objective law of transition to socialism with planning as an element of political domain. Planning is one of the historic forms of human reason that allows for societal qualitative leaps. It expresses “the exclusively human capacity to understand and nurture its own evolution" ( Jabbour & Gabriele, 2021 , p. 42).

Socialism

It would make no sense, since we have stated how essential are the categories of uneven development and projectment, to build an alternative view on the Chinese path without considering another central, but often forgotten, category: socialism. Socialism must be treated as a historic category; as such, its definition must be reached through its historical developments as much as its manifestation in current reality – in this case, in the experience of People’s Republic of China.

It is paramount to isolate this category from “utopian" elements, or short-termed idealizations in which there would be no place for conflict and contradiction. Here, the category of socioeconomic formation gains new importance, because as long as we take socialism as an object of study, we also face it as part of “taking the object by its entirety" – meaning the existence, influence and material power of inferior modes of production (capitalism), and the necessary mediations and transitions that take place in a complex society when capitalism and its metamode of production are still widely dominant.

If utopian idealizations are overcome, it is easier to consider what should concern those who are really busy with human emancipation: the management of political power and its different forms, as conditioned by history and geopolitics. In our view, with Losurdo (2022), not to think Marxism as the science of transforming reality is unproductive. Therefore, it essentially is a science of employment of political power . Hence the central spot of categories such as uneven development and projectment in our approach.

Both categories closely relate to the constant movements in the material base of society and its production relations. Thus, a valid starting point lies in the Communist Manifesto, where it reads:

The proletariat will use its political supremacy to overtake, little by little, all capital from the bourgeoisie, in order to centralize all instruments of production in the hands of the State, that is, the organized working class turned into dominant class, and to enhance, as fast as possible, the sum total of productive forces. (Marx and Engels, [1848] 1998, p. 56)

Could this passage, written by the founders of historic materialism, be deemed the ABC of socialism, a guideline for its first steps? It will depend on the consequences one will derive. In it, we can possibly find the need for the coexistence of different modes of production in a single socioeconomic formation – yet another law of the transition capitalism-socialism – as well as a supposed central role of productive forces development during the transition. These two views must be historicized under the light of uneven development law/category.

Centralizing the strategic means of production in the State, as a way to ensure a material base for the new political power, and retain a dominating planning power over the economic cycles, are the fundamentals of power exertion under socialism. New productive relations will not just appear before the old ones exhaust their possibilities, for the new does not emerge with the immediate disappearance of the old.

A society does never disappear before all productive forces it may contain are developed, and the new and superior productive relations never take their place before the material conditions for these relations have been inoculated in the very bosom of that old society. (Marx, [1859] 2008, p. 48)

Development is uneven between the socialist productive forces with their technical progress near the technological frontier, and the maintenance or even emergence of non public forms of production and exchange. The synthesis of this unit of opposites would be an uneven historic form, a contradictory one, involved in economic strangulation and under permanent political tensions, a context in which adherence to subjectivism could lead to the experience being completely defeated. The survival of the law of value imposes challenges to a new political order where planning is a quintessential part. Socialism is a path, not a model. A forceful path to economic development.¹⁵

In a historic perspective, it is quite clear that the political choice for socialism must be the main explanatory element to understand the Chinese path started in 1949. Here we highlight some important elements for debate: 1) the same capitalism that allowed for “prussian ways" of catch-up processes for Japan, Germany and even Brazil was, indeed, externally denied to China since the Opium Wars (1839-1842); 2) Russian bourgeoisie had been unable to withdraw Russia from World War I and lead the country into modernization, a task that fell on the shoulders of the Bolshevik Party as a true “Modern Prince" as in Gramsci’s famous expression. The same reasoning fits the CCP; 3) a historic power coalition formed by forces that reclaim socialism. Capitalists are not the most politically powerful class in the country, which does not mean the country is free from the struggle of classes, for it actually is a part of the political scenery. China’s political superstructure is unparalleled by any other East Asian experience, much less by any European one or the United States; 4) The productive and financial nuclei are under hegemonic influence of the LSEC, public development banks and other types of market oriented non capitalist companies. It is within this nucleus that chain effects are generated for the whole economy, as well as, differently from all capitalist socioeconomic formations, it generates the internal accumulation cycles; and 5) large scale and multifaceted planning is the main governance instrument. Planning is not socialism’s exclusive, as much as the markets, as a historic category, may or may not exist in capitalism. However, no capitalist country has brought about such advanced forms of State intervention on reality as did China.

Are the aforementioned elements sufficient to point out a definite view on the Chinese path or are they the beginning of reflections to establish uneven development as the concept that sets contradictions as the very logics of the system? This is an important question, since the goal of conceptualizing the "Chinese path" necessarily leads us to face the “main contradiction" in the country’s current reality:

China’s overall productive forces have been significantly improved from the supply perspective. As a result, China’s production capacity has led the world in many areas, and its backwardness of social production has been fundamentally reversed. However, the more significant problems are that its development is inadequate overall and unbalanced between parts of the country and society. Its development is also behind some global economic powerhouses to some extent, and the structural problems are evident. These have turned into significant constraints while meeting people’s growing needs for a better life. (Fang & Xiaojing, 2022, p. 38)

If once China’s “main contradiction" was centered in the backwardness of its productive forces, currently it is placed in issues such as income distribution and inequalities between top and base of the social pyramid, and between regions. This is something that could put into question the regime’s legitimacy. 1978’s reforms, besides inaugurating a new kind of socioeconomic formations, also leads uneven development to a whole new level through the emergence of a powerful private sector.

That new socioeconomic formation advanced many steps further by starting and pushing on private capital in all levels, both through the appearance of small businesses and through a wide privatization program in the 1990s, which took place at the same time the LSEC¹⁶were being formed. For instance, sectors like Technology and Construction — both highly monopolistic — emerged under wide private control, as well as their ancillary sectors. This economic accumulation dynamics had lower wages as one of its characteristics, and once it was added to private capital taking on essential public services like health and education, a significant gap between rich and poor in China started to open. We might say, using Lenin’s expression, that China saw a growth in depth of the capitalist mode of production in the beginning of this century. It is a fact that one of the characteristics of those economic reforms lie in a significant expansion of private sector, to the detriment of public sector.

With the suspension of grain price regulation by the State, differences between countryside and urban areas started to explode, after decades under tolerable levels up until mid 1990s. China saw the largest increase in billionaires, and became the largest world market for luxury products. The construction of an immense productive sector generated multiple contradictions, under the “auspice of a disordered expansion of capital”.¹⁷

But there is a historic process to be assessed in detail. Was this growth in depth of private sector not being closely followed by the strategic repositioning of the State, aiming to forge the conditions for a similar move in the public sector? If we stretch out the consequences of uneven development category/law, was this not a new set of combinations between different modes of production, mediated by waves of institutional innovations ( Paula & Jabbour, 2020 ), such as the Company Law, the growing influence of public financial system and the very founding of SASAC? Was it not that private sector grew in depth while public sector grew in breadth?

It is important to mention a number of measures taken since the end of 1990s to prove the growth in breadth of China’s public sector, among which: 1) The Great Western Development Strategy (1999) represented a quality leap in China’s domain of uneven development category/law ( Jabbour, 2005 ); 2) a series of rural policies gave farmers rights to contracted land and transference of use rights, as well as improved rural infrastructure and public services for rural communities, aiming to establish a new socialist rural development until 2010 and, from 2003, the introduction of a new cooperative medical care system for farmers and guarantees of minimum life conditions in rural areas ( Dunford, 2023 , p. 20); and 3) priority of destination for rural regions in the fiscal package of U$ 596 billion in 2009 for policies such as: social housing, rural infrastructure, transport (rail, airports and roads), health and education (hospital and school construction included), energy and environment, technological innovation.

In short, and not denying any of the significant negative consequences of non-public sector economic expansion over society, we tend to adhere to the view below:

A widely accepted explanation of plan-market dynamics in post-Mao China was given by Barry Naughton in his book Growing Out of the Plan (Naughton, 1995). He argued that the rapid growth of the non-planned economy in the 1980s and early 1990s, along with simultaneous stagnation or decline of the state-dominated planned sector, reduced the importance and range of state planning and facilitated the emergence of an increasingly market-dominated economy. The “growing out of the plan” framework is, however, focused on explaining the atrophy or reduction of certain core features of old-style socialist planning, such as innumerable mandatory targets, material supply balances, direct state allocation of resources, and state control over investment, credit, prices, and foreign trade. This narrative is not incorrect, but it is incomplete. ( Heilmann e Melton 2013 , p. 582)

Going even deeper, we find that many of the contradictions within the Chinese development process were addressed by the strategic repositioning of the State, which took place through wide use of fiscal instruments and through the shocks imposed by the new urban working class,¹⁸formerly rural inhabitants whose “rebel DNA" had been responsible for numerous political unrest situations, the last of which induced Mao Zedong’s CCP to power in 1949. Far from being an insignificant part of society, the working class in China is a key element for the future of “socialism with Chinese characteristics”. But again on the “main contradiction” contained in the issues of income distribution, it is obvious that the new waves of institutional innovations must go beyond the strategic repositioning of the State to touch more sensitive matters. Among them, the question of ownership is the most important.

There are two points of discussion. The first relates to how the State advances on territories of private sector, thus generating new historic forms of property and the policies of contention for the aforementioned “disordered expansion of capital”. It became evident, after the 2008 financial crisis, that a movement was gaining traction to transform the growth in breadth of the Chinese public sector into growth in depth . “The State advances, the private sector retreats" is an expression of this new phase in Chinese public sector’s development. A concrete example is in how state-owned companies increased their share in private companies:

The number of private owners with direct investments from the state almost tripled between 2000 and 2019, and the number of private owners indirectly connected to the state via investments from private owners with state connections increased 50-fold. The increase in the registration capital share of the two groups of state connected private owners accounts for almost all the 20 percentage point increase in the share of private owners between 2000 and 2019. ( En Bai et al., 2021 , p. 2).

Since concepts manifest in the movements of reality, we can see here a slow and gradual absorption of private sector by the State, generating historic forms of ownership never listed in any kind of textbook, whether a priori or a posteriori. It is impossible to measure the amount of different forms ownership in China, but it is easy to perceive the increase in State ownership, and more than that, the higher influence of the CCP on the whole economic panorama, affecting even private investment decisions:

The socialist foundation of China’s economic system is the unconditional supremacy of the Chinese Communist Party. Consistent with Marxist-Leninist tradition, the Party directs the law. Regulations, laws, and administrative rulings are applied in accordance with current Party policy. Just as a Party position corresponds directly to each key position in government, a Party hierarchy parallels corporate governance in banks, SOEs, listed non-SOEs, hybrid enterprises, joint ventures, and sufficiently large private businesses. Party cells throughout business enterprises constitute parallel internal accountability systems to those established by enterprises themselves, keeping an enterprise’s Party Secretary and Party Committee up-to-date and able to provide timely advice to its CEO and board. Imported corporate governance regulations, mandating independent directors and the like essentially ignore Party involvement in enterprise governance (Fan, Morck and Yeung, 2011, p. 11)

The second point referred above are the measures taken to contain the “disordered expansion of capital”. As an example, we could mention the unequivocal decision of putting the whole students tutorial business in the underground economy, in 2021. This was a U$ 100 billion/year sector, all dependent on the fierce competition between young Chinese to gain access to the best universities, an extremely relevant factor of social and regional inequality (China…, 2021). This is also about an ideological battle for the so called “consciousness sector”. This movement hit the core of Chinese big techs and their growing monopoly power, as well as data maintenance and foreign interference, given that Alibaba is a listed company in the New York Stock Exchange and other markets.

Some days after entrepreneur Jack Ma openly criticized the regulations of Chinese financial system, the government decided — unilaterally — to suspend that which would be the largest initial public offer in history, planned by Ant group, valued in about U$ 37 billion (Chinese President…, 2020). Jack Ma’s destiny was a sort of “exile” in Japan. Other companies underwent a similar scrutiny, and their owners left the country. Billionaires’ and millionaires’ assets have been diminishing impressively: in 2021, the total wealth amassed by 1,305 persons with a minimum liquid asset of 5 billion Yuan (U$ 710 million) fell by 18% compared to the previous year, to U$ 3.5 trillion (Chinese…, 2020).

Having studied all of the exposed above, the categories in itself and the harsh exertion of the political power, how are we supposed to define socialism in our times — admitted that currently China is the most advanced experience? The history of socialism in the 20th century and the experiences of “market socialism" can give us some fundamental principles of Political Economy, of which some could be deemed “economic laws of socialism”.¹⁹The issue of political power is the most important of them. There is no capitalism without capitalists in charge of political power.

Historic coalitions whose class compositions differ from liberal democracies,²⁰which includes Asian latecomers, do command the historic process in such experiences, sometimes under extreme conditions of siege, annihilation and multifaceted sanctions — not to mention the limits imposed by the metamode of production. The history of socialism is the history of a constant state of exception ( Losurdo, 2004 ), which influences directly how this kind of socioeconomic formations develop. In the Chinese case, this experience includes the CCP controlling ever larger pieces of non-public ownership forms, as well as its direct control on immense LSEC and the largest development banks in the world.

Socialism with Chinese characteristics inherits elements from the soviet experience, but it also keeps local traditions in terms of the National State, planning, state bureaucracy, tolerant and non-theological civilizational philosophies. It is both continuity and disruption with the Asian mode of production, which includes historic forms based both on free market or price control principles ( Weber, 2023 ). Planning as “political dominance” has been gaining new shape in China. It started as soviet-style central planning, experienced with market-based planning and, today, it ventures into a project-oriented planning in a framework of disruptive technological innovations, opening the way for a new historic form of socialism, which we call “New Projectment Economy”.

Socialism was the path found by China to reach a fast development of their productive forces away from the North-American geopolitical schemes, making use of the deep transformations in the international order, thus rationalizing the category/law of uneven development in favor of their national project. From poorest country in the world to the second world power, this has been a path through and along CCP’s hegemony, the dominance of public sector over the large production and large finance. The force of their planned economy enabled China to manipulate the intrinsic logics of “uneven development" in order to manage rationally the national territory and to construct an alternative globalization, through initiatives such as the Belt and Road and their active participation in several events and institutions designed to reshape the future of the Global South.

In the “new age" inaugurated in 2017 and its corresponding shift in the understanding of the “main contradiction”, it became imperative to control the disordered capital growth, to combat the significant social inequalities related to the so called "Three Mountains" (housing, health and education costs), to tackle the climate crisis, the semiconductors gap to the USA and, finally, the military siege resulting from the United States forsaking the One China policy when it comes to Taiwan.

The socialism unfolding in China is a historic form that breaks away with childish visions about post-capitalist societies. It is an embryonic socialism ( Jabbour & Gabriele, 2021 ), and its analysis cannot be bound by what is transcendentally imagined. It could sound ironic, but it really is not, that financialization created its own negation when it allowed for the emergence of a society founded on the turning of reason into an instrument of government, to be used in favor of the vast majority of the population . A kind of s cience-led government , managing historic issues of international communism with particular solutions. Whether it shows up through the birth of a non-liberal democracy based on communities and urban neighborhoods, whether by the slow uptake of private property into the strategic interests of the socialist State.

Based upon the turning of reason into an instrument of government, we can come to a social form able to account for the totality of the Chinese historic process. The “New Projectment Economy”, opening ways for superior methods of economic planning, is the synthesis of this socialism arising in Asia, and of a society where the unprecedented development of productive forces and victory over extreme poverty indicate “projectment" as the point of arrival of what one day Marx named “power of knowledge, objectified" (Marx, 2011 [1857-1858] p. 944).

Initial conclusions

This is debate that can no longer be banned. To discover what is the concept behind the movement of reality in the Chinese development process may be the most significant task for the social sciences in our time. Not just because it is such a large country. A human experience is taking place where the usual scope of concepts and categories of both orthodox and heterodox economics is insufficient; this applies to western Marxism as well. It is not just one more latecomer. Our proposition has been to demonstrate certain “exceptionality" in the Chinese case, rendering useless notions such as “State capitalism”, “free-market” and even “developmental State”, “entrepreneur”, “businessman”. In that region of the world, a new socialist oriented socioeconomic formation emerges with a Political Economy yet to be built.

We wished to present three marxist categories to validate theoretically our proposition. The category/law of uneven development, projectment and socialism open up possibilities for theoretical experiments based on the Chinese experience. The siding of these categories and the historicity of the Chinese process give us a chance to understand socialism as a product of movements of reality, which generates a society founded on a new type of political power, fundamentally characterized by public ownership of production and finance. The “new age” of this “socialism with Chinese characteristics responds to a shift in the definition of “main contradiction”. Of course, there are no few obstacles and contradictions to defy that experiment. But perhaps mankind still had no access to a historic form where the “power of knowledge, objectified" were sufficiently developed as to build a nation, therefore becoming the benchmark for the whole of the Global South.

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Notes

• 1
  The financial crisis that took place between 2008 and 2009 started to open some cracks in this. Naughton (2001) did a truly honest self-critique about almost everything the most influential economists believed to be true regarding the Chinese development process. Such beliefs turned out to be debunked after 2008, and even more in the last three years. According to him, China inaugurated a new type of economic system, characterized by a growing domain of the State over the markets, an affirmation he founds on solid grounds of evidence. Blanchette (2020) also takes a turn, but not strong enough to escape the “consensus”, by mentioning a new species of State capitalism which he names "Chinese Communist Party Inc.” (CCP Inc).
• 2
  One example of such admission may be found in Milankovic (2019), when he divides the world between “political capitalism” and “liberal meritocratic capitalism”.
• 3
  See Dunford (2023) ; Cheng (2023) ; Cai & Zhang (2022), Enfu (2021) and Staiano (2023)
• 4
  According to the current China’s Foreign Affairs chief executive, Wang Yi (2023): Our circle of friends is always in the third world. Remember: those developed countries in the West will not take us to play, and in their eyes always have a “sense of superiority”. The West will always look down on our values and always consider China to be “backward”. In the eyes of Westerners, there will always be “East-West differences”. Don’t think that you can integrate into the Western world, and naively think that you can.
• 5
  Here we see how socialism has become a shortcut for development, prevented by Colonialism and the brutal actions of Imperialism in the world’s periphery, in general, and particularly in China. There would be no Chinese development without the CCP.
• 6
  It adds to the fact that history cannot be made under chosen circumstances, that is, the development of socialist oriented socioeconomic formations is strongly constrained by global scale capitalism ( Jabbour & Gabriele, 2021) . We should bear in mind that uneven development deeply conditions non capitalist development experiences. It is not only about, according to Lefebvre (1955 [2020], p. 195), a “law of capitalism’s difficulties and crisis”. It is also a law of restrictions, both internal and external, to the development of socialism.
• 7
  According to Jabbour and Gabriele (2021, p , p. 115-116): A longterm historic situation may take place where: 1) A mode of production is globally dominant; 2) Two or more modes of production coexist in some countries. They are unevenly developed, more or less stable, and a work in progress. Which of them shall prevail nationally (and, possibly in the longterm, internationally) is far from cleared matter. 3) The level of freedom for expansion found by each mode of production (including the dominant) is finite. They are not limited only by the global prevalence of the dominant mode of production, but also for immanent and universal structural restrictions that can be found to apply to any sustainable mode of production that may arise and establish during a certain time. As such, these restrictions would be found to work against all national attempts to seek a development strategy in keeping with the basic principles of any given mode of production, even if it became globally hegemonic (signaling a slow transition for a new global and dominant mode of production). Under these circumstances, the above mentioned complex of restrictions acts as a kind of meta structure, which limits and restrains the levels of freedom of each sustainable mode of production to get inherently different from the others. This is a real world characteristic that has strong influence over policy makers, their choices and results. We refer to it as the Metamode of Production (MMP).
• 8
  See Cheng (2023) , the qualified analysis of the hypothesis of competition between socialist primitive accumulation and the law of value in China.
• 9
  In Capitalism, the effective demand principle, while in Socialism the socialization of strategic means of production.
• 10
  Currently, there are 99 LSEC. See Jabbour and Gabriele (2021) . We could add another fundamental aspect: the formation of a public system of financial services directed specifically to longterm financing. The connections between large scale production and large scale finance, both under public control, mould the face of a unique economic system in the today’s world, exactly because it is based on public ownership.
• 11
  On SASAC, see Gabriele (2010) . Jabbour & Gabriele (2021) , Chen (2017) .
• 12
  To a certain extent, Naughton (2021, p. 13) moves in the same way as we do when we claim the ambition to use disruptive technological innovations as a means to widen the possibilities and the role of State in the economy: (...) from about 2015-2016, it became clear that artificial intelligence and big data had huge potential economic effects on economies worldwide. As technological change has accelerated, the ambition of China’s planners and policy-makers has also expanded, and intervention has continued and increased. Indeed, China’s development strategy today may warrant a new name: China aspires to be the first ‘government-steered market economy.’
• 13
  A research study promoted by the Tricontinental Institute points out that: Big data is used to monitor the situation of each of the nearly 100 million individuals, facilitate information flow between governmental departments, and identify important poverty trends and causes. Mobilizing the people and gaining public support are at the heart of the effort to carry out this work.
• 14
  Between the years of 2001 and 2020, the country built 40,000 kilometers of high speed rail lines, a network that exceeds in three times the sum of all similar rail lines out of China. This rail network will reach 50,000 kilometers until the end of the current Five Year Plan (2021-2024), thus connecting all cities in China with a population of more than 500,000 inhabitants. (China's high-speed railway network exceeds 40,000 km. State Council. Available at: http://english.www.gov.cn/news/topnews/202201/03/content_WS61d22c5fc6d09c94e48a3121.html )
• 15
  We agree with much of Domenico Losurdo’s works, according to which Socialism is a large learning process, deprived of a pre model to be followed and applied. It is a clear and constant trial and error process.
• 16
  This is a consequence of the “Grasp the large, lei it go of the small” policy.
• 17
  Xi stresses further regulations on capital expansions, calls for 'fair competition' for all. CGTN News. 22/4/2022. Available at: https://news.cgtn.com/news/2022-04-30/Xi-stresses-healthy-development-of-capital-in-China-19EAzHrKkJG/index.html
• 18
  According to Pinheiro-Machado (2018, p , p. 122), something about 3,000 strikes and between 100,000 and 200,000 protests take place yearly in China.
• 19
  20th century experiences and the Chinese experiences of today teach us about a series of laws and functioning logics of a socialist oriented socioeconomic formation. Among them, we find: large scale planning, obedience to the limits imposed by the metamode of production and the law of value, hegemony of large scale market oriented public ownership, construction of a productive sector able to generate surpluses to the improductive sector, regulation and political control over non public forms in order to avoid the appearances of monopolies and this reestablish competition in the economy.
• 20
  In the Chinese case, this does not mean the occurrence of a monolithic state, deprived of dispute and insensitive to social classes interests that permeate society and the very CCP.

Translation: this article was translated from Portuguese to English by Fausto José de Pinho e Souza Oliveira, email: [e-mail]

Publication Dates

• Publication in this collection
  01 Dec 2023
• Date of issue
  Apr-Jun 2024

History

• Received
  3 Aug 2023
• Accepted
  9 Aug 2023