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(DV) Petersen: Capitalism's Ugly Head in China







The Counterrevolution
Capitalism’s Ugly Head in China
by Kim Petersen
June 23, 2005

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Economist Lawrence Lau pronounced on the Chinese economic miracle: “Chinese economic reforms have not only achieved ‘gain without pain,’ but also actually maximal ‘gain without pain.’” (1) The villagers in Shengyou, Hebei province would be hard-pressed to agree with that assessment of painless gain. On June 11, a group of about 300 armed thugs brutally attacked farmers opposed to the expropriation of their land by the state. Part of the approximately one hour-long rampage was captured on video and posted on the Washington Post website. In the video, screaming, shotgun fire and flares are audible.


The dispute is between farmers and the state-owned Hebei Guohua Power Company plant. The power-plant developers seek to build a storage capacity on 26 hectares of agricultural land, but hundreds of farmers occupied the land in 2003 in opposition to a compensation offer they deemed unacceptable.


The farmland occupiers have faced violent reprisals. In the first gang attack, 20 thugs, speculated to have been hired by the power plant or the local government, wielded metal pipes against the farmers. However, one attacker, identified as Zhu Xiaorui, was captured and has been held by the farmers.


Zhu, who is reportedly well treated, confessed to being hired in Beijing for 100 Renminbi (12 USD) to attack the villagers. (2)


In the most recent outbreak of violence against the villagers, five commandeered busloads of men, many wearing construction helmets and camouflage clothing, attacked with shovels, hoes, hunting rifles, flare guns, sharpened pipes, and blade-edged clubs. The farmers defended themselves with farm implements, killing one of the attackers.


In the aftermath of the attack, 10 villagers are dead and two local government officials were relieved of their posts. It was reported that the government paid thousands of dollars in compensation to families of the victims. (3)


Winds of Change


The unrest in Shengyou exemplifies one of several manifestations occurring in villages around China (see Three Gorges Probe News from other Sources). The uneasiness stems from winds of ideological change sweeping over the Chinese political landscape.


The state media continue to trumpet the illusion that China is socialist, taking solace in the superiority of the Beijing Consensus to the Washington Consensus. (4) But China has been dismantling socialism ever since former chairman Deng Xiaopeng crowed that being rich was “glorious”.


The perception of socialism still resides with the Chinese. So, when US-based business magazine Forbes published a list of wealthy Chinese entertainers it stirred up controversy. (5) The listing exemplifies a historical shift in Chinese society. What had previously been an egalitarian society has witnessed a widening wealth gap. Communist leaders are aware of this inequality. In 2002, then Premier Zhu Rongji identified the need to lessen the distance between the haves and have-nots. (6) Beijing economist Han Dejiang agreed with Zhu. “But, he argued, “given the condition of globalization and neoliberalism, the government has little space to do so.” Current Prime Minister Wen Jiabao has also agreed on the need to tackle the growing inequality. (7)


Prior to the Chinese Revolution, ownership of the land distinguished the peasantry from the landholding gentry. Thus the peasants’ battle for equality is historically rooted in the land.


Yet, in March 2004, China embraced capitalism through legislation of property rights -- as if property itself could have rights. Traditional communist theory views private property as an evil of capitalism. The legislation has rendered the Chinese Communist Party a contradiction. The Chinese for “communism” is g¨°ngch¨£n zh¨³y¨¬, which translates to “ideology of sharing property.”


Race to the Labor Bottom


In its haste to develop, China has also sacrificed the workers. Labor researcher Anita Chan described the economy in China as growth without trickle down. (8)


The US retail behemoth Wal-Mart personifies capitalist exploitation both at home and abroad. Vehemently anti-union, Wal-Mart has found fertile ground for its owners in China. It excels at squeezing profit from a hard-worked and miserably remunerated labor pool. Factory engineer Surely Huang lamented, “We have to constantly cut costs to satisfy Wal-Mart.” (9) Nonetheless, to access Wal-Mart’s store shelves, China remains a willing player. Labor and consumers worldwide are the losers.


In China’s headlong rush to capitalism’s promise of tomorrow’s prosperity, the workers are today’s victims.


A Revolution Turned on its Head


In a lecture to the Norwegian Nobel Institute, Wang Gungwu asserted, “Capitalism is a stage that cannot be skipped on the way to socialism.” (10) China has followed a “pragmatic” course since it began its open-door policy in 1981. The economy has boomed and so has the GNP. But there are many major faults; China falls short on democracy, egalitarianism, openness in media, and respect for human rights at home. Under laissez faire capitalism, it is inescapable that there be winners and losers. Given the massive rural population in China, it is the poor Chinese villager that stands to be the greatest loser.


Officially, China is still communist and the revolution lives on as the Beijing Consensus. It was the peasants and workers who formed the backbone of the Communist Revolution. Consequently, if the political elites turn their backs on the peasants and workers, they turn their backs on the ideological underpinnings of the revolution that freed China from its semi-feudal past.


Outside China, the consensus is that a counterrevolution has taken place.


Kim Petersen is a writer living in Nova Scotia, Canada, and has previously lived in China. He can be reached at: 

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(1) Lawrence J. Lau, “Gain Without Pain: Why Economic Reform in China Worked,” 43-70 in Wang Gungwu and John Wong (eds) China’s Political Economy (Singapore University Press, 1998).


(2) Xinhua, “Officials sacked for land dispute,” Shenzhen Daily, 15 June 2005.


(3) Geoffrey York, “Peasants fighting back in rural China,” Globe and Mail, 18 June 2005.


(4) Wu Shuqing and Cheng Enfu, “The ‘Washington Consensus’ and ‘Beijing Consensus’,” People’s Daily Online, 18 June 2005. The former depiction of China’s economy as “Socialism with Chinese Characteristics” appears to have been redesignated as the “Beijing Consensus.” Cheng Enfu views the Beijing Consensus as ameliorating the socialist market economy system leading to a “harmonious socialist society.” This is contrary to the Washington Consensus which aims at the “establishment of a new global economic order dominated by the developed countries and global expansion of Capitalism.”


(5) Raymond Zhou, “Forbes list of big stars stirs controversy,” China Daily, 24 February 2004.


(6) Xinhua, “Income Gap to Be Narrowed: Premier,” National People’s Congress, 15 March 2002.


(7) Xinhua, “Urban-Rural Income Gap Larger: Survey,”, 25 February 2004.


(8) Anita Chan, “A ‘Race to the Bottom’,” China Perspectives, 46, March-April 2003.


(9) “Chinese Workers Pay for Wal-Mart’s Low Prices,” Washington Post, 12 February 2004.


(10) Wang Gungwu, “China’s New Paths for National Reemergence,” 95-147 in Wang Gungwu and John Wong, op. cit., 105.

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