China: Marxism Fails Again

Over the past hundred years, there have been more than two dozen attempts to build a socialist society. It has been tried in the Soviet Union, Yugoslavia, Albania, Poland, Vietnam, Bulgaria, Romania, Czechoslovakia, North Korea, Hungary, China, East Germany, Cuba, Tanzania, Laos, South Yemen, Somalia, the Congo, Ethiopia, Cambodia, Mozambique, Angola, Nicaragua and Venezuela. All have ended in varying degrees of failure.

China’s second try, under the dictatorship of President Xi Jinping, is soon to join the list. It seems the poor Chinese people must once again endure upheaval and suffering just as their parents and grandparents did under the “Great Helmsman” and Marxist, Mao Zedong.

Mao established the People’s Republic of China in 1949. He did so by winning over peasant farmers and labourers by gifting their landlords’ land to them and by cancelling their debts. Mao believed in continuous upheaval, so to purify the communist revolution he ordered political purges, mass imprisonments and executions of “enemies of the people”.

After six years, a policy reversal forced peasants to surrender their privately-owned plots and become employees of large, state-owned collective farms. A Chinese Communist Party (CCP) propaganda jingle at the time declared, “Communism is paradise [and] the people’s communes are the way to get there”.

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This was the beginning of the disastrous “Great Leap Forward”. It resulted in plummeting grain production and widespread famine leading to some 40 million deaths. The Chinese people blamed this catastrophe on central planning, causing Mao’s influence within the party to wane. Fearing loss of control, he unleashed the brutal “Cultural Revolution”, a movement designed to destroy his “revisionist” enemies. The purges and ensuing chaos resulted in the deaths of another two million people and the ruination of millions more lives.

After Mao’s death in 1976, a “revisionist”, “capitalist roader”, Deng Xiaoping emerged as China’s leader. Promoting “Socialism with Chinese characteristics”, he de-collectivised agriculture and encouraged the entrepreneurial business class to take market-based risks. “To get rich is glorious” became an official slogan.

But market-driven economic success and the growing financial independence of the Chinese people threatened the CCP’s very existence. For the communist elite, the party’s supremacy is paramount so, on the retirement of Hu Jintao, Xi Jinping, a “princeling” whose own father was purged during the Cultural Revolution, was appointed general secretary of the Party.

Xi still rejects claims that Deng and his successors were responsible for China’s economic miracle. He believes empowering individuals is a “bourgeois fallacy” and that free speech, equality under the law and other rights must be “delayed” or “controlled”. Xi was the ideal candidate so, with one dissenter, he was elected China’s national president in 2013.

From day one, the ruthless but outwardly affable Xi decided he alone was capable of steering the nation to communism’s promised land. Opponents were targeted as “saboteurs” and “wreckers”. Faithful to the communist doctrine, he quickly consolidated his authority. Through numerous purges he made it clear that no one was safe. Using the Central Commission for Discipline Inspection, he waged a relentless anti-corruption campaign against his political enemies.

He oversaw the systematic dismantling of law-and-order institutions and the end of an independent public service. He is widely recognised as the “chairman of everything”. Even the Chinese constitution includes a preamble that cements “Xi Thoughts on Socialism with Chinese Characteristics for a New Era”.

While it is a far cry from Deng Xiaoping’s vision for China, the CCP recently passed a “historic resolution” which elevated Xi to the same status as Deng and Mao, effectively making him dictator for life. The official narrative became that Xi Jinping is the embodiment of “Marxism for the twenty-first century” and “the essence of the Chinese culture and China’s spirit”. Xi’s version of Chinese history is China’s record.

Louisa Lim, in The People’s Republic of Amnesia: Tiananmen Revisited, describes how “For a country that has long so valued its history and so often turned to it as a guide for the future, the Chinese Communist Party’s efforts to erase actual history and replace it with distorted narratives warped by nationalism, has created a dangerous vacuum at the centre of modern-day China.” Her analysis has much to recommend it.

Last December, a symposium to commemorate the 130th anniversary of the birth of Mao Zedong was held in the Great Hall of the People. Despite Mao’s unspeakable record, President Xi lauded his life as “devoted to national prosperity, rejuvenation, and people’s happiness”. Meanwhile, the 1989 Tiananmen massacre has been airbrushed from China’s history.

As George Orwell observed, “Who controls the past controls the future.” However, as Xi Jinping is realising, not even he can control the forces he has set in motion. Indeed he and his politburo colleagues know that China is struggling socially and economically. The population is ageing and declining. The fertility rate is plunging and is half what it was in the 1980s. It is even lower now than the fertility rate of Japan, a country notable for its low birth rate and ageing population. Women face increasing inequality.

Last year, more than three million students took the public service exam to compete for 39,600 vacancies at central government and affiliated institutions. That’s roughly seventy-seven candidates for every position. Likewise, only 17 per cent of students who sat the post-graduate entrance exams nationwide found vacancies. The officially approved, but understated, unemployment rate for sixteen-to-twenty-four-year-olds is 14.9 per cent. Many young disillusioned Chinese are moving to rural areas where living costs are cheaper.

Having once told the young to “dare to dream”, Xi now orders them to curtail their expectations and “abandon arrogance and pampering”. To the disgruntled, he says, “Eat bitterness”. But, given the mess they are inheriting, China’s youth is entitled to be bitter, and Xi’s bullying attitude carries the potential for civil unrest.

After decades of profligacy, corruption and concealed bad debts, the younger generation faces unemployment and a financial sector at risk of collapse. The property sector, which once represented 30 per cent of the economy, is a disaster of gargantuan proportions. On the latest reckoning, about 70 million apartments in urban China are abandoned or unfinished. Evergrande, the country’s second-largest developer, and Country Garden, once China’s largest property developer, have both defaulted on bond payments.

China’s gross national debt is dangerously high at 320 per cent of GDP. The International Monetary Fund offers no joy. Medium-term growth forecasts are below 4 per cent, less than half that for most of the past four decades. Capital Economics, a London-based research firm, puts China’s trend growth even lower at just 3 per cent and says it will fall to around 2 per cent by 2030. In 2021, China’s share of world GDP was 18.4 per cent; it is now 17 per cent and falling. Increasingly word is leaking out that the Chinese people are beginning to contrast Xi’s stifling centralism with Deng Xiaoping’s emancipating reforms, and they are unhappy.

These developments are being noticed abroad. Beijing was once seen as a commercial world-beater. Now global businesses are building supply chains in places like India and Vietnam.

To add to Xi’s woes, his beloved Belt and Road Initiative is collapsing. Italy’s recent departure reflects this. What initially seemed mutually attractive has turned into resentment as many borrowers struggle to meet debt repayments. Sri Lanka, Pakistan and Zambia are just some of the countries protesting against de facto Chinese colonisation.

President Xi must also worry about the rise and rise of his democratic adversary, India. Boasting the largest population on the planet, with an average age of 28.5 years, and growing economically at 8 per cent a year, India will soon become the world’s third-largest economy. Its military has some 3.5 million permanent members and reservists. It has one of the world’s most powerful nuclear arsenals and boasts sophisticated anti-satellite weaponry.

Yet naive and ignorant Western journalists and intellectuals ignore India and continue to view China much as they did the Soviet Union just before its ultimate collapse. Australia’s former prime minister Paul Keating exemplifies this mindset. In a remarkable demonstration of obeisance and self-delusion, he told Beijing’s Foreign Minister, Wang Yi, that “China’s development and revitalisation are unstoppable.”

The Australian government broadly shares Mr Keating’s ideological leanings. They believe in the superiority of elitist rule and demonstrate disdain for liberal capitalist democracies. According to a former Japanese ambassador to Australia, Shingo Yamagami, these sympathies and Canberra’s desire to trade with China are overshadowing its security obligations to the region and itself—not to mention Australia’s economic best interests.

As Xi Jinping pulls on nationalistic heartstrings to deflect attention from China’s domestic ills, he proceeds with a massive military build-up and the harassment of smaller nations in the region. Defence spending is budgeted to grow by 7.2 per cent. Australia’s ambivalent stance will give him encouragement.

Xi Jinping is a committed Marxist-Leninist ideologue who believes the survival of the communist state depends on staying the course and the world embracing communism. Through dominating the United Nations, shameless intellectual property theft, propaganda, outright bribery and the skilful application of soft power, he is well on the way to achieving his goal.

The question remains: Will China go the way of all socialist experiments before the West, weakened by seventy years of attacks on its values and institutions, tumbles into the same dark Marxist abyss? If the West is first to go, it will be left to India to keep the liberating flame of democratic capitalism alive.

Maurice Newman AC is a former Chairman of the Australian Stock Exchange and a former Chairman of the Australian Broadcasting Corporation