The Conundrum of Permanent Termination of Class Struggle

According to Marxist theory, a person’s political status is determined by his economic status. A landlord or capitalist who has got his assets taken away and who has lived on the income from his labor shall have his class status changed from landlord or capitalist to that of a laborer after he has been a laborer for three years or longer. That was the case in the Soviet Union but not in China. Some years after deprivation of landlords’ and capitalists’ assets, the Soviet Union announced that there were no landlord or capitalist classes in its society.

China denounced that Soviet practice as revisionist. In China, a landlord or capitalist remained a landlord or capitalist after his assets had been taken away by the communists long ago. In fact, in Mao era, he was to remain labeled a landlord or capitalist and be politically discriminated and persecuted all his life.

That was the case with Deng Xiaoping and Zhao Ziyang’s relatives and friends. Deng and Zhao supported the communists in taking away their relatives and friends’ assets and expected that their relatives and friends would become laborers and enjoy the good life China’s socialist construction would bring them. They were sad to see that their relatives and friends had been labeled as landlord or capitalist and discriminated and persecuted though they were entirely innocent and had lived on their own labor for a long time while China did not become rich and remained poor in spite of the assets it has got from landlords and capitalists.

To put an end to such social injustice and switch the nation’s focus onto economic growth, Deng declared termination of class struggle and removed all the discriminating political labels.

As a result, with labels removed the landlords and capitalists who were mostly well educated began to make their contributions to China’s economic growth. Lots of them wrote to their successful entrepreneurial relatives and friend abroad and even went abroad to visit them in order to make them invest in China. Most of foreign investment that helped China’s economic development came from those overseas Chinese.

It makes the Chinese Communist Party understand China’s traditional wisdom of seeking harmony.

Article by Chan Kai Yee


China wants to reshape the global order

Bill Bishop of Sinocism January 19

The Chinese Communist Party emphasized its expanding global ambitions in a remarkable 5,500 character treatise on the front page of Monday’s “People’s Daily.”

“The world needs China, as all humans are living in a community with a shared future … That creates broad strategic room for our efforts to uphold peace and development and gain an advantage.”       — Communist Party “manifesto” on China’s role in the world

Why it matters: This is further evidence of the seriousness of China’s broad global vision. President Xi Jinping sees a remarkable opportunity, enhanced by the Trump presidency and its “America First” policies, to reshape the global order in ways that legitimize the Chinese political system and create more strategic advantages for the China.

The Xi Era and its growing global ambition was ushered in during the 19th Chinese Communist Party Congress last fall, where Xi vowed to increase China’s global influence and reshape global governance. As Xi said in his report to the Congress: “It will be an era that sees China moving closer to center stage and making greater contributions to mankind.”

This week’s article — called 紧紧抓住大有可为的历史机遇期 or “Tightly grasping the very promising period of historical opportunity” and signed by the pseudonym “Xuanyan 宣言,” which means manifesto — called for the nation to grasp the historic opportunity now before the nation, according to state-run media.

•Noting the problems facing the world, such as a “democratic deficit,” “governance deficit,” “development trap,” wealth gap, terrorism and climate change, the article said “the drawbacks of capitalism-led political and economic systems are emerging; the global governance system is experiencing profound changes and a new international order is taking shape.”

Under the headline “Make China Great Again,” the South China Morning Post quoted the manifesto calling out the “drawbacks” of the the capitalist economic system and said “a new international order is taking shape,” with China facing an historic opportunity to “restore itself to greatness and return to its rightful position in the world.”

Be smart: China is not getting back into the business of exporting revolution as it did in the Mao-Era, and China’s style of Leninist-Mercantilism is unlikely to fit other countries. But Xi and the Communist Party’s Marxist theoreticians who believe in “historical determinism”, a phrase that appears repeatedly in the manifesto, see America’s retreat as a moment to increase China’s influence in the world.

Source: AXIOS “China wants to reshape the global order”

Note: SCMP’s article believes the People’s Daily article means China wants to replace the US as world leader. It quotes Jonathan Sullivan, director of the China Policy Institute at the University of Nottingham, as saying, “It reflects the Chinese leadership’s belief that right now is a huge opportunity for China to stake out a global leadership role.”

If China wants world leadership now, its leaders are stupid as China is far from strong enough to be world leader. I believe AXIOS’ note “Be smart” is more sensible. As I pointed in my previous posts, Xi Jinping Though on Socialism with Chinese Characteristics is but China’s declaration that China can say no. What China wants is but to enhance its influence in the world to put an end to US world hegemony and make the world a multipolar one.

Full text of SCMP’s article can be found at

The Conundrum of Communists’ Pursuit of Capitalism

Chinese People’s Victim Mentality
For decades China has been saying that it wants peaceful rise, but why does China want rise in the first place?

That was Deng Xiaoping’s dream.

Most people regard Deng and his generation of Chinese communists as inveterate communists. If that was the case, how could Deng bring a U turn to China from dogmatic communism to pragmatic capitalism?

Patriots Turned into Communists
In fact, those old communists were mostly of well-to-do family background and had received Chinese traditional and Western education. They were all Chinese patriots anxious to make China strong so as to put an end to China’s predicament at that time of being bullied by foreign powers for a century. Like Doc. Sun Yat-sen they at first wanted China to become a capitalist democracy like the United States and believed that China may become rich and powerful through capitalist democracy. However, warlords’ rule and constant wars broke their dream. They switched to communism and hoped China could change its fate through communist revolution. However, their family background and education make communism unacceptable at the bottom of their hearts.

The most important factor for them to become communists at that time was that of all world powers, only the Soviet Union was willing to help China grow strong through communism. Those old patriots set up the Chinese Communist Party (CCP) and conducted communist revolution with Soviet aids for almost two decades, but only their resistance to Japanese invasion made them strong and finally be able to win the civil war and become China’s ruling party.

Most Chinese communist officials of the second generation are dogmatic communists, but there are also quite a few high-school students of well-to-do family background who joined CCP to fight the Japanese invaders especially in 1938, the second year of Japanese invasion. They are first of all patriots and became communists only when they have joined the CCP and received some communist education. They are usually called 38-style cadres. No doubt, their first priority is national salvation. Communism at best is their second priority.

Experience of Failures of Orthodox Socialism
When Deng returned to power in 1978, the first generation of communists like him and lots of 38-style second generation of communists like Zhao Ziyang had experienced and saw enough failures of communism in China and the Soviet Union, but became impressed by the success of capitalism in Japan and the four Asian dragons. As a wise leader with the ability to make quick decision, Deng switched to capitalism abruptly in order to make China rich and strong without being able to convince most of the communists younger than him. Making China rich and strong was his dream. It does not matter whether by communism or capitalism. “The cat that catches mouse is a good cat no matter whether it is a white or black one”, according to him.

However, Deng’s decision was reasonable as it was made after seeing the failures of China’s 1911 revolution and communist revolution and construction and the success of private sector after he had returned to power. As a mature politician, he began to realize that there was no foreign example that China could follow blindly.

China’s pursuit of American democracy failed. The presidents of the Republic of China established through armed revolt were all despots until Taiwan’s democratization.

China’s communist revolution fared even worse. Most communist officials who had received good education came from rural gentry or urban capitalist families. They betrayed their own classes in pursuit of their communist ideal for a fair and common rich society. Instead, they got a society as poor as before the communist revolution and direly unfair in discriminating and persecuting intellectuals and members of former gentry and bourgeoisie.

Those educated communists sacrificed their families’ interests for that ideal for a rich and strong China with a fair and common rich society. What they had got from the communist takeover and the end of the Cultural Revolution? The discrimination and persecution of their relatives and friends and the common poverty of all Chinese people.

Seeing the benefits capitalism has brought to their country and people, they naturally switched to capitalism.

Article by Chan Kai Yee

China is a disruptive force, U.S. Pacific military chief says

Sanjeev Miglani JANUARY 18, 2018

NEW DELHI (Reuters) – The head of the U.S. military’s Pacific command called China a disruptive power in the Indo-Pacific region on Thursday and urged countries in the area to build capabilities and work together to ensure free and open seas.

Admiral Harry Harris, known for his combative views on Beijing’s South China Sea expansion, was speaking at a security conference sponsored by the Indian government, where he was joined by the chief of staff, joint staff of Japan and the head of the Indian navy.

The three countries – the United States, Japan and India – have grown increasingly concerned about China’s assertive military posture in the region and sought to draw closer, with Australia, in a “quad” of liberal democracies.

“I believe the reality is that China is a disruptive transitional force in the Indo-Pacific, they are owner of the ‘trust deficit’ that we all have spent the last hour talking about,” Harris said referring to the discussions of the panel.

The United States has criticized China’s construction of islands and build-up of military facilities in the South China Sea, saying they could be used to restrict free nautical movement.

China says there is no issue with freedom of navigation in the South China Sea and opposes efforts to use it as an “excuse” to infringe on China’s sovereignty and security interests.

Harris said China’s actions had cause disquiet in countries stretching from the Philippines to Malaysia and Vietnam. He said it was time countries took firmer measures to ensure maritime stability.

“We must be willing to take the tough decisions to ensure the Indo-Pacific region and the Indian Ocean remain free, open and prosperous,” he said. “This requires like-minded nations to develop capacities, leverage each other’s capabilities.”

Harris had earlier proposed joint patrols with the Indian navy in the Indian Ocean. New Delhi, worried about a backlash from China, said no such actions were planned.

But India has begun holding trilateral naval exercises with the U.S. and Japan that military experts say could eventually include Australia as well.

Reporting by Sanjeev Miglani, editing by Larry King

Source: Reuters “China is a disruptive force, U.S. Pacific military chief says”

Note: This is Reuters’ report I post here for readers’ information. It does not mean that I agree or disagree with the report’ views.

Exclusive: Trump considers big ‘fine’ over China intellectual property theft

Jeff Mason JANUARY 18, 2018

WASHINGTON (Reuters) – President Donald Trump said on Wednesday the United States was considering a big “fine” as part of a probe into China’s alleged theft of intellectual property, the clearest indication yet that his administration will take retaliatory trade action against China.

In an interview with Reuters, Trump and his economic adviser Gary Cohn said China had forced U.S. companies to transfer their intellectual property to China as a cost of doing business there.

The United States has started a trade investigation into the issue, and Cohn said the United States Trade Representative would be making recommendations about it soon.

“We have a very big intellectual property potential fine going, which is going to come out soon,” Trump said in the interview.

While Trump did not specify what he meant by a “fine” against China, the 1974 trade law that authorized an investigation into China’s alleged theft of U.S. intellectual property allows him to impose retaliatory tariffs on Chinese goods or other trade sanctions until China changes its policies.

Trump said the damages could be high, without elaborating on how the numbers were reached or how the costs would be imposed.

“We’re talking about big damages. We’re talking about numbers that you haven’t even thought about,” Trump said.

U.S. businesses say they lose hundreds of billions of dollars in technology and millions of jobs to Chinese firms which have stolen ideas and software or forced them to turn over intellectual property as part of the price of doing business in China.

The president said he wanted the United States to have a good relationship with China, but Beijing needed to treat the United States fairly.

Trump said he would be announcing some kind of action against China over trade and said he would discuss the issue during his State of the Union address to the U.S. Congress on Jan. 30.

Asked about the potential for a trade war depending on U.S. action over steel, aluminum and solar panels, Trump said he hoped a trade war would not ensue.

“I don’t think so, I hope not. But if there is, there is,” he said.

In Beijing, foreign ministry spokesman Lu Kang said there were no laws in China to force foreign investors to transfer technology, but acknowledged such things may happen as part of “market behavior” between companies working with each other.

“There is absolutely no government meddling in these actions,” Lu told a daily news briefing on Thursday.

“At the same time, I want to stress that China will resolutely protect its legitimate rights,” he added, without elaborating.

Jeffrey Schott, a senior fellow at the Peterson Institute for International Economics, said the penalties under Section 301 of the Trade Act of 1974, which authorized the investigation into China’s intellectual property practices, would probably include a package of both tariffs and restrictions on Chinese investment in the United States.

“I suspect the U.S. measures will involve restrictions in areas where we don’t have WTO (World Trade Organization) obligations,” Schott said. “Trump likes to talk about tariffs so that may be part of the package too. The Chinese would have the legal right to retaliate against tariff increases.”

Throughout his 2016 election campaign, Trump routinely threatened to impose a 45 percent across-the-board tariff on Chinese goods as a way to level the playing field for American workers. At the time, he was also accusing China of manipulating its currency to gain an export advantage, a claim that his administration has since dropped.

Trump said on Wednesday that China stopped meeting the criteria for currency manipulation after his election, and he said making that designation while trying to work with Beijing to rein in North Korea would be tricky.

“How do you say, ‘hey, by the way, help me with North Korea and I‘m going to call you a currency manipulator?’ It really doesn’t work,” Trump said.

The president also said he and Chinese President Xi Jinping had not discussed China’s plans with regard to purchases of U.S. Treasury bonds.

Bloomberg reported earlier this month that Chinese officials reviewing the country’s foreign exchange holdings had recommended slowing or halting purchases of U.S. Treasury bonds.

Trump said he was not concerned such a move would hurt the U.S. economy.

“We never talked about it. They have to do what they do,” he said.

Additional reporting by James Oliphant, Ayesha Rascoe, Lesley Wroughton, David Lawder, and Ben Blanchard in BEIJING; Editing by Alistair Bell

Source: Reuters “Exclusive: Trump considers big ‘fine’ over China intellectual property theft”

Note: This is Reuters’ report I post here for readers’ information. It does not mean that I agree or disagree with the report’ views.

China’s 2017 GDP growth accelerates for first time in seven years

Kevin Yao, Elias Glenn JANUARY 18, 2018

BEIJING (Reuters) – China’s economy grew faster than expected in the fourth quarter of 2017, as an export recovery helped the country post its first annual acceleration in growth in seven years, defying concerns that intensifying curbs on industry and credit would hurt expansion.

The official growth figures released on Thursday are welcome news for Beijing policymakers who are looking to cut debt and pollution in older industries without stunting growth in the world’s second-largest economy.

China’s gross domestic product grew 6.8 percent in the October to December period from a year earlier. That was better than the 6.7 percent growth forecast by analysts in a Reuters poll and unchanged from the previous quarter.

The headline numbers and signs of property market resilience support economist views that fundamentals will remain intact in 2018, although some see headwinds from tighter regulations, U.S. trade protectionism and a softer consumer sector.

“China’s growth is very healthy,” said Iris Pang, a Hong Kong-based Greater China economist at ING.

“The risks that we worried about in 2017, for example overcapacity cuts having a negative impact on GDP, did not happen because new sectors are actually coming out to help production to grow.”

Growth for the 2017 full year picked up to 6.9 percent year-on-year, the first annual acceleration for the economy since 2010. The annual growth easily beat the government’s 2017 target of around 6.5 percent and quickened from 6.7 percent in 2016, the weakest pace in 26 years.

Investment by private firms rose 6 percent in the Jan-Dec period, up from 5.7 percent growth in January to November, a sign that the private sector outlook may be improving.

A synchronized uptick in the global economy over the past year, driven in part by a surge in demand for semiconductors and other technology products, has been a boon to China and much of trade-dependent Asia, with Chinese exports in 2017 growing at their quickest pace in four years.

With fixed asset-investment growth at the weakest pace since 1999, exports helped pick up the slack.

“Real growth of overall exports…more than fully (explained) the pick-up in GDP growth last year,” Oxford Economics head of Asia economics Louis Kuijs wrote in a note.

But there could be rising headwinds to further expansion of China’s net exports this year.

China’s excess production capacity has emerged as a major trade irritant for the world’s leading economic powers, prompting them to consider new steps to protect domestic industries and jobs from a flood of Chinese imports.

U.S. President Donald Trump’s administration is considering several unilateral tariff actions on steel, aluminum and China’s intellectual property practices likely to draw disputes from WTO members.

China’s exports and imports growth slowed in December after surging in the previous month.

“Downside risks remain, in particular from more forceful U.S. trade restrictions on Chinese exports, given the further increase in the U.S.’s bilateral trade deficit with China last year,” said Kuijs.

Economists say growth momentum in the economy is likely to weaken this year as firms face higher borrowing costs, the government tries to rein in credit and policymakers step up a war on pollution that has hurt the industrial sector in many parts of the country.

“The priority this year is to control risks, especially financial risks. This will, to some extent, affect financing of the real economy. I think growth will be 6.6 to 6.7 percent,” said Wang Jun, chief economist at Zhongyuan Bank in Beijing.

Retail sales growth of 9.4 percent was the slowest rate since February 2006, down from 10.2 percent growth in November and badly missing forecasts.

There were some positive signs in the household sector in 2017, however, with disposable income growth picking up to 7.3 percent from 6.3 percent in 2016, and final consumption playing a bigger role in driving overall growth last year versus investment than in 2016.

“The decline in December retail sales growth is mainly due to slowing auto sales last month. The data is a reflection of consumption of physical goods, but right now consumption growth is in services, which is not included in the data,” said Zhang Yiping, an economist at China Merchants Securities in Shenzhen.

“I don’t think retail sales can reflect the trend in consumption any more.”

Several recent public revelations by regional governments of fraudulent government data have again raised doubts about the quality of China’s economic numbers.

Chinese provinces and cities have long been suspected of cooking up numbers, with the focus on local government officials, whose performance is often assessed based on how well their respective economies have performed.

The head of China’s statistics bureau Ning Jizhe told reporters on Thursday that China will look into reports of irregularities in regional economic data, and will deal with any impropriety according to the law.

Capital Economics senior China economist Julian Evans-Pritchard believes the official numbers are hiding the true extent of some of the economy’s soft spots.

“We think tight monetary conditions and slowing credit growth will continue to weigh on the pace of economic expansion in coming quarters,” Evans-Pritchard said in a note.

“Indeed, we expect growth to average a mere 4.5 percent this year, though investors will probably need to look beyond the official GDP figures for evidence of this.”

Reporting by Kevin Yao and Stella Qiu; Writing by Elias Glenn; Editing by Sam Holmes

Source: Reuters “China’s 2017 GDP growth accelerates for first time in seven years”

Note: This is Reuters’ report I post here for readers’ information. It does not mean that I agree or disagree with the report’ views.

Shocking Scene of China’s Drone Swarm Military Operation

Launch of China’s drone swarm. Image from Hunan TV footage.

According to a primetime news report at Hunan TV, the Intelligence Science College of the National University of Defense Technology has conducted the test of a group of tens drone to form a formation to conduct automatic renaissance at designated area and fulfilled that renaissance task on their own.

Source: “Shocking Scene of takeoffs of drone swarm combat operation developed by National University of Defense Technology” (summary by Chan Kai Yee based on the report in Chinese)