THE GIANT AWAKENING

THE GIANT AWAKENING

Is China ApproachingTrue Socialism?

by

JAMAL S. SHRAIR

The Giant Awakening: Is China Approaching True Socialism

Copyright © 2000 Jamal S. Shrair All rights reserved.

ISBN: 1-58112-737-5

Universal Publishers/uPUBLISH.com USA • 2000

www.uPUBLISH.com/books/shrair.htm

ContentsHopes and Illusions ..................................................................... 1

Chapter 1The Evolution and Supremacy of Social Orders ............... 21Ancient Civilisations .............................................................. 21Classical Civilisations ............................................................ 22Feudalism ............................................................................... 23Mercantilism........................................................................... 27The Industrial Revolution and Early Capitalism .................... 29The 1920�s and the Crash ....................................................... 33The Depression and the New Deal ......................................... 34The Keynesian and Monetarist Debates ................................. 36The Environmental Crisis and Global Capitalism.................. 39

Chapter 2Contrasting Arguments ........................................................ 47Socialism and Rationality ....................................................... 47The 20th Century�s Radical Revolutions ............................... 49The Inevitable Decline of Capitalism..................................... 50The Importance of Economics and Centralisation ................. 56Democracy and Human Rights in North/South Relations ...... 58

Chapter 3The Leninist State ................................................................. 70The Prerequisites of a Socialist Revolution ........................... 70The Bolsheviks, Democracy and Mistakes ............................ 74

Chapter 4The Stalinist Empire ............................................................. 78The Rise of Stalinism ............................................................. 78Stalin�s First Victims .............................................................. 81

Trotsky ......................................................................................... 81Radek ........................................................................................... 82Zinoviev ...................................................................................... 83Kameniev .................................................................................... 84Bukharin ...................................................................................... 84Rikov ........................................................................................... 85Tukhachevsky .............................................................................. 86

Stalin�s Economic Theory ...................................................... 87The Post-Stalin Era ................................................................. 96

Chapter 5A Brief Review of the Modern History of China ............. 100The Han and Buddhism ........................................................ 100The Dynasties ....................................................................... 101The Opium Wars, Reform Attempts and Colonisations ....... 102Dr. Sun Yat Sen and the Republic of China ......................... 104Formation of the Communist Party of China ....................... 105The Civil Wars and WWII .................................................... 106The New Democratic Revolution .......................................... 114

Chapter 6The Glorious Revolution and Grave Mistakes ................. 117The Reconstruction Period .................................................... 117The First Five-Year Plan ...................................................... 122The Grave Mistakes ............................................................. 124

The First Arbitrary Concept ...................................................... 124The Second Arbitrary Concept .................................................. 127

Centralization, Decentralization and Growth in theEra of Mao ............................................................................ 132Mainstream Maoism ............................................................. 147

Chapter 7The Supremely Wise Reforms ........................................... 158An Historical Turning Point ................................................. 158The Correction Period .......................................................... 159Evaluating and Reforming the Political System................... 162The Gradual Development of Socialist Democracy ............. 166The Theoretical Foundations and Debates for theEconomic Reforms ............................................................... 169The Ownership Debate ......................................................... 178The First Results of the Reforms.......................................... 182

Coastal Development and the Free Trade Zones ....................... 183Agriculture ................................................................................ 187Industry ...................................................................................... 195Science and Technology ............................................................ 201

Environmental Protection in China ...................................... 205Ecological Programs ................................................................. 209Natural Forest Protection .......................................................... 211Efforts and Commitments .......................................................... 213

Chapter 8The 15th National Congress of theCommunist Party of China ............................................... 219Deng Xiaoping�s Theory and thePrimary Stage of Socialism .................................................. 219Future Development Proposed by the 15th Party Congress . 224

Chapter 9The Most Likely Scenario for the Socio-Economic Develop-ment of China in the First Half of the 21st Century ....... 230Major Factors for Growth .................................................... 232

Agricultural Growth and its Modernization .............................. 232Energy ....................................................................................... 234Science and Technology ............................................................ 235The Ocean ................................................................................. 237Foreign Trade ............................................................................ 238

Additional Factors ................................................................ 239Population ................................................................................. 240Raw Materials ........................................................................... 241Service Sector ............................................................................ 241

External Conditions .............................................................. 242Conclusion ............................................................................ 244

Bibliography ............................................................................. 245

References ................................................................................ 248

Acknowledgements

I would like to express my profound thanks to all themany people whose help has made this book possible,especially to Prof. Dr. Tálas Barna and to my friends,Nagy Zoltán Lajos and Magyar Peter, and othercolleagues.

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Hopes and Illusions

Preface to"The Giant Awakening"

by Jamal S. Shrair

The book the reader is now holding was written under unusual cir-cumstances by an unconventional author at the turn of the millen-nium when the 20th century, distinguished by unprecedented progressin the material, intellectual and cultural development of humanity,has become the 21st century. The 20th century, however, was alsostained by heretofore unimaginably destructive wars threatening todestroy entire nations and jeopardising the very existence of man-kind. The old century yields its place to the new one by opening anew avenue in the development of civilization, while at the sametime confronting humanity with a moral dilemma more severe thanever before.

The essence of this moral dilemma is rooted in the solution pro-posed to the problem of determining the future development of civi-lization and socioeconomic modernization of humanity. The ques-tion to be answered is the following:

Will the model of development, in which the lives ofroughly one-fifth of the world�s population has soaredto previously undreamed of levels of quality in the 20thcentury, be adaptable in the 21st century to thepopulations of the so-called developing countries, whichcomprise the other four-fifths of humanity and remainat a backward stage of socioeconomic development?

Scientists and politicians around the world concerned with the fun-damental issues of humanity have responded with an unequivocallyand uniformly negative answer to this basic question. This response,

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however, immediately raises the inevitable question, �What now?�for everyone on the threshold of the new century and millennium. Itis this pivotal question that the present book attempts to answer. Asfor the qualifications and experience of the author, Jamal S. Shrair isa Libyan-born scientist residing in Hungary who has been exposedto multiple influences. Prior to moving to his present home where hehas immersed himself in Western European Christian culture andcivilization, Dr. Shrair was brought up in accordance with the spir-itual heritage of the North African Arabic civilizations and in theIslamic religion. Remaining open to modern scientific ideas and pro-gressive ideologies, he chose scientific research as his vocation.

Although his professional field of specialization is Particle Phys-ics, Dr. Shrair has always shown great interest in, and an inexorableattraction to, the social sciences, in particular to political science,political economics, sociology and social psychology. The mainsource of this abiding interest is that since his youth the author hastried to find satisfactory and reassuring answers to such pressingquestions as Why is the world divided into rich and poor countries,with the rich getting even richer while the poor sink into ever greatermisery? And What is the underlying reason creating friction betweenpeoples and nations of different races and religions, causing hatredto spring up in their relations?

This chain of thinking led the author to familiarize himself withthe different views and currents of international leftist movementsrelatively early in life, including Marxism in its distorted �interna-tional� version created by Stalin and now known as Marxism-Len-inism, and the distorted �Chinese� version introduced by Mao Tse-Tung, known as Maoism.

Initially, the author had great expectations of these ideologiesand their ability to transform the world and its future, especially inrelation to the practical realization of socialist ideas in the moderni-zation and the socioeconomic development of the so-called socialistcountries. Consequently, it should pose no major difficulty to thereader to imagine the great disappointment and ideological shockthat rocked leftist-oriented young people, Jamal S. Shrair amongthem, at the end of the 1980�s and at the beginning of the 1990�s,upon the collapse of �existing� or �real� socialist systems, first in

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Eastern and Central Eastern Europe, and then in the Soviet Unionitself. These momentous, historic events raised the question, Whydid socialism fail only in Eastern and Central Eastern Europeansocieties and in the former Soviet Union, terminating in a blind al-ley of modernization and socioeconomic development, whereas inthe world�s most populous�and until recently very backward�coun-try, China, socialism not only prevailed but proved to be vigorousbeyond all expectations?

This book was written in an attempt to answer just these ques-tions which have such far-reaching implications. It is the outcome ofan extended and challenging period of in-depth research, involvingoccasional contributions on my part as coauthor. I felt that if, inaddition to performing his other duties the author could dedicate somuch of his energies to writing this book, then I could not refuse hisrequest for assistance in furthering his understanding of China. Inthe same spirit, neither could I refuse assistance in writing the chap-ters about Chinese modernization and socioeconomic development,nor in reviewing the entire manuscript with a trained, professionaleye.

The only way we can reasonably formulate a scientifically sup-ported prediction concerning the expected evolution of the socio-economic development of civilization in the unfolding destiny ofhumanity, and of any single nation, even in the short run, is to criti-cally dissect the past and the historical path trodden so far. Then,and only then, we must systematically discard each and every idea,theory of evolution and ideological framework that has been foundto be flawed and unsuitable for practical realization. That is, we haveto abandon our faith in illusions, no matter how credible those illu-sions may have seemed to us in our youth, and turn our attention toideas and theoretical deductions that are truly able to stand the acidtest of trial�and then hope and trust.

In speaking of the future, we of course must put faith into ourlonging that sooner or later, in the decades to come, humanity willfind that long-sought path of material and intellectual developmentthat will lead to the formation of a more just social order. Such asocial order would insure more equal chances for every individual,while preserving, or if need be, restoring, the ecological balance of

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our living planet. We must stand tall and hope, in spite of the obser-vation that the entire development of humanity in the 20th centurymanifested a trend running mainly against this course. For it is myfirm conviction that we will have to wait no longer than a couple ofdecades before the era dawns on our planet when the required livingconditions for every niche of the living world, including us humans,can be sustained in the long run only in terms of balanced develop-ment and harmonious cohabitation between man and nature. Conse-quently, in recapitulating the historical evidence of the 20th century,we have to devote special attention to all those socioeconomic andideological-political factors that prevented left-wing politicians pro-pelled to power from choosing the best course of development interms of human survival and subsistence for their peoples and theirnations.

Marx and Engels were the first to appeal to the oppressed, ex-ploited and poor disillusioned crowds and masses with the mirageof creating within a foreseeable historical timespan a social orderbased on equality and fairness. On the one hand, they explored therules and motive forces driving the operation and changes of histori-cally developed socioeconomic formations created during the evo-lution of humanity by means of a thorough, systematic scientificanalysis. In this way they laid the groundwork for dialectic materi-alism and scientific socialism as appreciation of our world. On theother hand, though, in anticipation of the prospective future of thecapitalist socioeconomic order, the topic they chose to investigate atlength and in considerable detail, they turned out to be merely sub-jective idealists and mechanical materialists in their theory of revo-lution.

They failed in this respect because they contemplated that thecapitalist socioeconomic order would easily be uprooted �by revo-lution�, i.e., by forcefully expropriating the expropriators via �revo-lutionizing� and �awakening to self-awareness� the industrial work-ing class that was still on the road of change. From that point on,they argued, after a brief transition period, one would be only a stone�sthrow away from the socialist or communist society, free from ex-ploitation, based on the voluntary association of free producers on a

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global scale, and ensuring an equal chance for everyone to developfully his or her abilities in service of the common good.

After the deaths of Marx and Engels, some of the followers ofMarxist teachings recognized the erroneous beliefs contained in therevolution theory of the �founding fathers�, and therefore set out to�revise� their mistaken views. It was this initiative that led to thecreation in the beginning of the 20th century of the reform-focusedinternational movement of socialist and social democratic workers�parties which, rallying round the banner of the �Socialist Interna-tional�, survive and function to the present day.

There was another group of followers of the Marxist way, the so-called �revolutionary Marxists�. Unlike the members of the previ-ous group, these individuals�with the Russian Bolsheviks and Leninat the forefront�mechanically clung to the revolution theory of Marxand Engels; they even attempted to apply the theory in practice tothe reality of backward Russia with its outdated socioeconomic setup.

Thus, the Russian October Revolution announced the advent ofadapting, with distortions if needed, the theories of Marxist revolu-tion and scientific socialism to the practical necessities of the Rus-sian revolution, a process that reached its peak after the death ofLenin, and �culminated� in the �theoretical work� of Stalin.

The �Communist International�, formed in Moscow in 1919,played a particular role in these developments. It became the centralforum for spreading the �Marxist� ideology as distorted by Stalin,and the tool for ideologically and politically controlling and holdingin thrall the communist parties of the world. It was this metaphysi-cal and scholastic ideology that the world came to know as �Marx-ism-Leninism�, or �Marxist-Leninist Theory� from the 1930�s on,especially after World War II. It was also this ideology that the ma-jority of Chinese communists adhered to, and it was only later that�Mao Tse-Tung Thought� and finally �Deng Xiaoping Theory� wereadded as supplements.

Summarizing the experience of leftist movements of the 20th cen-tury, in retrospect we can definitely state that it was neither the re-formists nor the social democrats but rather the revolutionary Marx-ists who, from the strategic point of view, consistently misinterpretedthe historical circumstances and the revolutionary opportunities

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created in the wake of the imperialist wars. The cumulative interna-tional experience gained so far in �building socialism�, in additionto a comprehensive set of historical facts, all point towards the rev-elation that the subjective and objective conditions meeting the re-quirements of scientific criteria set out by Marxian formation theoryfor abolishing commodity production and exchange based on capi-tal relationships, and for historically stepping beyond and super-seding capitalism, were not present not only after World Wars I andII, but are lacking even today, no country being an exception.

In some countries of colonial or semi-colonial status with under-developed capitalist societies, more often than not muddled and weak-ened by fighting, revolutionary forces led by �Leninist-type� partiessucceeded in seizing power due to the revolutionary seeds left be-hind by imperialist wars. Yet, these radical people�s revolutions,without exception, failed to turn into motors of world-wide revolu-tions of the proletariat or of socialist forces subsequent to both WorldWars I and II.

A no less meaningful historical moral of 20th century leftist move-ments is that nowhere in the world to this day, even when in posses-sion of total, absolute state domination, have revolutionary commu-nist and workers� parties in power ever managed to implement thebasic program of socialist revolutions: to �build� a socialist societygoing beyond capitalism, that is, being higher in status in every re-spect. This statement is also supported by the deductions of the in-ternational socialist movements.

Once in a governing position, the socialist and social democraticparties have uniformly failed to alter and transform the socioeco-nomic conditions characteristic of the capitalist formation, even inthe most developed countries of our time. And this is true even whenthey achieved spectacular results, for the most part, in improvingliving standards and working conditions, in elevating the social rankof the working classes, while at the same time strengthening thesocial security net. Yet, in both �socialist� and capitalist societies,there appeared�in the form of bonuses, performance-based supple-ments, social aids, gratis or complimentary benefits and fringe ben-efits�the elements of a system of distribution according �to needs�or �work done�, hypothesized by Marx and Engels for the post-

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capitalist, socialist or communist societies. These elements did not,however, become ruling or dominant distribution forms.

All this evidence points towards the conclusion that the defini-tion of the international communist movements, according to which�our age is the age of revolutions of the proletariat and the transi-tion from capitalism to socialism�, much heralded even at the end ofthe 1970�s, has proved profoundly wrong. There was not a singlerevolution of the proletariat�in terms of Marxian formation theory�that took place in the 20th century; therefore the revolutionary tran-sition from capitalism to socialism could not even commence. Thoserevolutions that succeeded in the 20th century in countries that werebackward and underdeveloped, and thus relegated to the peripheryof capitalist development, were radical people�s revolutions sup-ported by the broad masses rather than the proletariat. In their fea-tures, contents and historical functions, these revolutions were massmovements in which the elements of three markedly different revo-lutionary processes were moulded: the anti-feudalist bourgeois demo-cratic revolution, the anti-imperialist national liberation revolution,and the anticapitalist revolution of the proletariat. It is no accidentthat in the 20th century such radical people�s revolutions triumphedsystematically only in those countries and societies where capital-ism was weakly developed and where the bourgeoisie and the indus-trial proletariat constituted a thin layer of society which was notdominant in numbers. The main strength and manpower behind theserevolutions, in addition to the working class, insignificant in head-count, originated mainly from the poor segments of the population:village and city paupers, poor peasants, cotters, coolies and casuallabourers, and the radical elements of the city petty bourgeoisie.

In terms of both theoretical and practical consequences, classify-ing these radical people�s revolutions as revolutions of the prole-tariat, and setting out for them as their short term objective the un-realistic task of achieving the historical transition to socialism,proved to be a grave strategic misconception as well as a seriouspolitical mistake. The �revolutionary Marxists� did so because theywished to avoid or simply bypass the historical stage held to be mostimportant by Marx and Engels in attaining post-capitalist socialism

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and communism, the stage of mature, fully-fledged and universalcommodity production.

This attempt was thus doomed to failure from the outset, and theonly way to avoid failure would have been for the leaders of theserevolutions to recognise that in the economic development of soci-ety the stage of mature and world-wide commodity production andexchange based on capital relationships�that is, the stage of capi-talism�is inevitable for any society. However, such recognition gen-erally came too late, if at all, with the exceptions of China and Viet-nam. There, in the spirit of reforms and of opening up to the outsideworld, the most vital ideological corrections were made in time, andthe required economic and political steps were taken in favour ofmigrating from a bureaucratically planned economy to a much moreflexible and competitive market economy.

The ponderous, historical task of epic scope�according toLenin�of transition from capitalism to socialism or communismcould only be �accomplished� formally in a few decades in the So-viet Union, supposedly the �first socialist state in the world�. Inreality, the political élite in power, fronted by Stalin who enjoyedabsolute authority and domination after the death of Lenin, system-atically �disregarded� the material-technical prerequisites, objec-tive features and Marxian-Engelsian criteria for a change in socialformation. Instead, distorting and turning upside down the entirephilosophy of Marxism, Stalin �worked out� a system of primitive,metaphysical, subjective and voluntaristic criteria that converted theMarxian-Engelsian ideological system of scientific socialism into aspecific half-breed of utopism and opportunistic pragmatism.

The gist of the Stalinist distortion lay in the fact that forces ofproduction were excluded from the Marxian concept of the economicfoundation of society, which originally represented the means of pro-duction, i.e., the dialectical unity and interaction of the forces ofproduction and the means of production, while the means of produc-tion were restricted to the forms of ownership. This made it possible�theoretically� to lean on the legal devices and repressive organs ofstate power and lay down �the foundations of socialism� throughthe �socialist transformation of ownership relations�. In effect, thismeant the violent and merciless implementation of nationalization

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and collectivization programs which would allow the authorities todeclare, after a couple of years, the socialist society of the SovietUnion �completed�.

This distortion is an exceptionally primitive and vastly oversim-plified interpretation of a change in socioeconomic formation. Incontrast to the Marxian view, it denies the material determination ofsocial forms�their dependence on the development level of the pro-ductive forces, on the technical background of human labour, andon productivity�and thus the core of historical materialism. On theother hand, in opposition to the concept of the economic foundationof society, it assigns capital importance and a decisive role in thecreation of the new socioeconomic formation to the �socialist na-ture� of the elements of the superstructure, and among them, espe-cially that of state power.

Despite the criticisms and stigmatization it drew, it was this�Marxism� turned upside down of Stalin�s that served, and indeedserves even today, as the �theoretical foundation� for the promotionto the rank of socialist society those societies �building socialism�where the �socialist transformations� have already been terminated,by saying that in these societies further development will take placeon �socialist bases�.

After 1953, this �theory� of Stalin�s was accepted and adoptedby Mao Tse-Tung, in spite of his former view which regarded theChinese popular revolution not as socialist but as �new and demo-cratic�. The direct objective of the new democratic revolution inChina was not the preparation of the �socialist transition�, but theestablishment of the state power of the new democracy based on thealliance of the �Four Revolutionary Classes�: the peasants, the pettybourgeoisie, the national bourgeoisie and the working class. The nextgoal was the creation of a new democratic society having its eco-nomic foundations in the coexistence and inter-operation of manyforms of ownership.

According to Mao�s original idea, the new democratic revolutionand society differed from the corresponding bourgeois democraticrevolution and society only because the former is led by the politicalparty of the peasants and the working class (the Chinese CommunistParty) and not by that of the petty bourgeoisie. To support this, he

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argued theoretically that in semi-colonial and semi-feudalistic Chinacapitalism was not sufficiently developed and the national bourgeoisiewas weak; therefore, the tasks of the bourgeois democratic revolu-tion can only be successfully performed with the aid of the broadestrevolutionary forces, and with the guidance of adamant revolution-ary leaders.

In the summer of 1953, a few months after Stalin�s death, Maorevised his standpoint. He then defined in a few sentences the �gen-eral outline� of the transition to socialism. Later on Mao became theadvocate of �socialist industrialization� and the urgent �socialisttransformation� of the non-socialist elements of the economy. The�foundations of socialism� were laid down fairly smoothly in thehistorically record time of one year and a half; then, in 1958 Mao setfor the party and the enthusiastic crowds the goal of direct transitionto communism by means of the Great Leap Forward. But the failureof the voluntarist policy of the Great Leap became obvious to every-one by 1960.

This failure, and the cruel hardships accompanying �Three Diffi-cult Years�, greatly eroded the fame and the reputation of Mao as aMarxist-Leninist revolutionary leader on both the domestic and in-ternational scenes. Subsequently, starting with the first half of the1960�s, the increasingly bitter Chinese-Soviet confrontation and ideo-logical debate made it clear to the international communist move-ment outside China that the ideological standpoint and political prac-tices of Mao were even further removed from the theory of scien-tific socialism and from political practice based on Marxist princi-ples than were those of Stalin.

Considering the several decades in power of these two leaders,who possessed nearly unlimited power and unassailable authority,the questions that naturally present themselves are: With referenceto and in the framework of what ideology and what political party isit that so many unspeakable horrors could be committed and gounpunished? And what manner of socioeconomic system is the onefashioned in the spirit of this ideology, under the direction of theseleaders and their parties?

We have already offered an answer to the first question above.

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None of them can be regarded as Marxism, although for the mostpart they tended to use its terminology, and subsisted on its reputa-tion as parasites for decades, thereby significantly contributing tothe loss of its appeal which has been observed over the past halfcentury. The Marxist dialectic and materialistic approach to history,and the formation theory lying at the heart of the theory of scientificsocialism have not yet been proved false by the facts associated withsocial development, because no post-capitalist society has appearedin the 20th century.

As for the nature and essence of these parties, each one of themwas of the Leninist type rather than of the Marxist type, with hierar-chical organizational structures, underground operating traditions anda sect-like discipline which allowed power to be concentrated, bothat the local and the central levels, in the hands of the most violentgo-getters and the shrewdest schemers who were well-trained in partyposition infighting.

The forms of socioeconomic system that emerged in the 20th cen-tury, first in the Soviet Union and later in other countries, which callthemselves socialist are certainly not post-capitalist in terms of for-mation theory; rather, they are distinctly pre-capitalist social for-mations. This is fully understandable and actually quite natural sinceit was so much simpler to slide back from the backwards state ofsmallholder peasant societies into a state of pre-capitalist naturaleconomy than to create a post-capitalist socioeconomic formation.The reason for this regression was that in these smallholder peasantsocieties, which were already heavily burdened by feudal residues,capitalist commodity production existed only in certain areas, i.e.,mainly in the cities, and these circumstances did not allow the for-mation of a unified domestic market.

The subjective and objective prerequisites, both internally andexternally, for a unified domestic market were completely missingin these societies. Therefore, it is not merely incidental that in thesocioeconomic and political system of �existing� or �real� social-ism, almost all the characteristics and features of pre-capitalist so-cial formations discovered by Marx were detectable both at the foun-dation and the superstructure levels, and not only in traces but asimmanent traits of the system�s operation. Some examples worth

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mentioning, without attempting to be comprehensive, are as follows:a natural economy realized on the national scale within the frame-work of a planned economy; the deformed and underdeveloped stateof product and financial relations; the limited sphere of applicationof the law of values; the extra-economic constraints; the lines ofpersonal dependence; the limitations imposed on free movement andjob seeking, especially for the �class enemy� and for peasants repre-senting the majority of the population; the omnipotence and autoc-racy of political power; the absence of civil organizations and con-stitutional rights; the privileges of certain individuals and socialgroups; the cult of personality of the leaders; and the clan spirit andpaternalism.

On top of all that, these immanent, characteristic features of thesystem had to be tolerated by its citizens as if they truly believedthey lived in the most democratic, humane and progressive societyin the world, and they were expected to behave accordingly. Moreo-ver, they had to express their thanks and gratitude to their leaders,and incessantly praise their �wisdom�, �heroism� and �immense his-torical stature�, which eventually resulted in a particularly schizo-phrenic state of mind, both in the consciousness of individuals andof society as a whole.

The above-mentioned pre-capitalist features of �existing social-ism� gradually faded, becoming less pronounced in some socialistcountries in the last decades of the 20th century. These changes weredue to certain historical developments, most importantly the eco-nomic and political reforms which were then unfolding. But radicalchanges were brought about in the system only in those Eastern andCentral Eastern European countries in which the former regime felldramatically from power once and for all in the years 1989-90, withthe ensuing, concomitant changes in the political systems.

Although the former �socialist system� formally ceased to existin the other Eastern and Southeastern European countries, and mostprominently in the heir/successor states of the Soviet Union, the rem-nants are so firmly rooted in the conscience of relatively broad lay-ers of the society that one cannot a priori exclude the possibility ofa reversal and return to a milder, more liberal version of the formersystem. The communists of these countries now generally set the

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Chinese model of �socialist market economy� as the example to fol-low, in no small part due to the fact that it has proved to be vigorousand has stood the test of time even when grave difficulties loomedas a result of the recent financial crisis which struck Asia, and priorto that when the other socialist systems fell apart one after anotherlike so many houses of cards.

These communists are eager to discover how to construct an op-erational and internationally competitive socialist market economywith the leadership of the communist parties and without discardingthe basic principles of socialism that would raise these backwardcountries and societies closer to the levels attained by developedcountries. Since Jamal S. Shrair�s book subjects these issues to closeand careful scrutiny, I feel compelled to end this lengthy prologueby acquainting the reader with such preliminaries as my understand-ing of the basics of the Chinese socialist market economy in termsof formation theory, and Deng Xiaoping�s theory concerning �build-ing socialism with Chinese characteristics�.

The first to ponder the issues raised by studies concerning thenature of the socioeconomic system formed in China by the end ofthe 1950�s were the research institutes of the Chinese Academy ofSocial Sciences (CASS), created in 1977 during the reorganizationof the Chinese Academy of Sciences that took place towards the endof the 1970�s. This beginning coincided with, and for a time ranparallel to, the study of theoretical and practical questions aimed atreforming and transforming the planned economic system. Soon,however, it was extended to incorporate the analysis of availableinternational experience and evidence, including, among others, theHungarian economic management reform, or �new economic mecha-nism�, initially introduced in 1968.

By virtue of this research, the present writer had the rare chanceof thoroughly discussing the problems of the theoretical questionsand schedules linked to the �transition to socialism� with the mostimportant Chinese experts in the field. These were four prominentCASS institute directors and researchers during their visit and studytrip to Hungary in the early autumn of 1979. The discussions showedthat a significant fraction of Chinese social scientists eventually re-alized, in no small part due to the bitter aftermath of the �Great

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Proletarian Cultural Revolution� between 1966 and 1976, that ithad been inappropriate and far too early to classify their social sys-tem as �socialist� in 1957.

These discussions revealed at the same time, however, that it wasnot possible to radically alter the former opinion regarding the dec-laration of the system as �socialist� if the reputation, credibility andinfluence of the CPC were to be preserved and restored. Only theperformance of refinements of the opinion and the shifting of itsrelative importance were admissible, with the accompanying lim-ited degree of definitiveness. Therefore, already in 1979, when So-viet Union social scientists were still trying to �theoretically found�the notion of �developed socialism� and then have it accepted bygeneral public opinion, in China the underdevelopment, the primi-tive stage and the weak material-technical background of socialismwere being stressed. Later in 1982, Deng Xiaoping first stated therequirement of �walking one�s own path� and �building socialismwith Chinese characteristics� at the 12th Congress of the CPC. Atthis point it became evident that socialist modernization and build-ing a socialist intellectual civilization in China were long term, his-torical tasks that would encompass the lifetimes of several genera-tions. At the same time, the pragmatic theory concerning the estab-lishment of a socialist system with Chinese characteristics allowedthe presentation of all successful reform measures as �particularlyChinese methods� of building socialism, so as to gain their accept-ance within the conservative wing of the CPC.

From the point of view of the reform of the Chinese socioeco-nomic system, the document entitled �Resolution of the CPC CC onthe Reform of the Economic System�, accepted at the 3rd PlenarySession of the CPC 12th CC in October, 1984, was an important stepforward, defining as it did the comprehensive reform and full-scaletransformation of the previous, planned economic system. The docu-ment urged the integrated application of reform of the economicsystem through mandatory plans in macro-economy and market regu-lation. These reforms would be initiated at the level of micro-econo-mies, in the spirit of the principle �the market regulates the com-pany, and the state orients the market�. At the same time, throughcomprehensive decentralization and liberalization, the operating

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freedom and decision-making competence of companies was con-siderably expanded by regional economic management agencies.

The most important theoretical progress was made during the13th Congress of the CPC held in the fall of 1987 with the introduc-tion of the �initial stage of socialism� as a new concept togetherwith its underlying arguments. According to its reasoning, Chinesesociety, having entered the transition period leading to socialism fromthe base of a backward and semi-colonial society, will remain in theinitial stage of socialism as long as the �Four Modernizations� arenot carried out, that is, as long as China does not attain the status ofa prosperous, strong, democratic, civilized and modern socialist greatpower. The expected completion date for such development was prog-nosticated by the Chinese leadership for the middle of the 21st cen-tury, the centenary of the foundation of the PRC. By that time, ac-cording to their calculations, the per capita gross domestic product(GDP) in China could reach the level of that of average developedcountries, which of course would mean that the volume of cumula-tive performance of the Chinese economy would become one of themost important, if not the greatest, in the world.

Throughout the initial stage of socialism, the principal tasks arethe development and upgrading of the productive forces, the crea-tion of the economic and infrastructural conditions required for thesimultaneous development of both material and spiritual civiliza-tions, and the consistent reform and never-ending improvement ofthe economic and political systems so that they become increasinglybetter-adapted to the requirements of the era. At the same time, dur-ing this stage it is imperative, as set forth in the Resolution of the13th Congress, to respect the �Four Basic Principles� and the �TwoBasic Views�, the latter meaning the retention of the policy of re-form and openness. Neither the former nor the latter can be inter-preted rigidly and dogmatically, and neither of them can be givenpriority at the expense of the other, because this would inevitablyresult either in an exaggerated leftist deviation, or in an adverse bour-geois liberalism.

Leftist reflexes are so deeply encrusted in China that indownplaying or denying the importance of the reforms and openingup, the resolution judged the threat of leftist deviation to be the greater

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danger. As yet another significant theoretical conclusion, the resolu-tion emphasized the necessity of comprehensively and fully devel-oping, in the initial stage of socialism, the commodity economy, be-cause �the full bloom of a commodity economy is a crucial stage ofsocioeconomic development, and also a fundamental, indispensablecondition for the socialisation and modernization of production�.With reference to talks delivered by Deng earlier, the Resolutiondevoted a separate chapter to the reforms of the political system;however, the tasks defined there have not been satisfactorily per-formed to this day.

It must be mentioned though, that the internal disturbances dur-ing the spring and summer of 1989 as well as the dramatic eventsthat took place in the majority of the self-styled socialist countriesof Europe beginning with the autumn of 1989 obviously played abraking role here and contributed to this tardiness. These occurrencesmade the Chinese leadership wary and more prudent in implement-ing the political reforms because they surmised that the collapse ofthe socialist system in these countries was prompted above all bythe political and ideological liberalism, and the immoderate desireto compromise, of the leaders of the parties in power.

Nothing can justify the objective necessity, and the social sup-port, for the Chinese policy of reform and opening up better than thefact that not even the events of the summer of 1989 were able toreverse the reform process set on its way in 1979. Under the direc-tion of Jiang Zemin, the new secretary general hand-picked by Deng,the top senior leadership of the CPC managed to consolidate theinternal situation, and began to gain confidence in acting on the in-ternational scene as well. Events in the former socialist countries inEastern and Central Eastern Europe and in the former Soviet Unionalso contributed to this recovery, in part because they seemed tojustify the definitive hard line taken by the Chinese leadership againstthose who were called �different thinkers�.

The leaders argued that had they not acted in the way they did,the political situation would have also become unstable in China,and the PRC would have suffered the same fate and demise as theSoviet Union, endangering not only the dependable livelihood ofthe Chinese nation but the peace and security of the entire world as

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well. Since China comprises one fifth of the world�s population, thedestiny and continuing civilized development of humanity dependvery much on the stability of the political situation in China, thepace of its economic growth, and the overall speed and direction ofits economic and political reforms.

At the beginning of 1992, after a few years of initial slow-down,the policy of reform and opening-up in China received fresh incen-tives and gained new momentum subsequent to a �monitoring trip�in South China by Deng, then aged 88 and no longer holding anyoffice. During his visits to the large coastal cities�the vanguard ofreform and opening-up�and especially to the �Special EconomicZones�, the elderly party leader, commonly held in very high esteemand still enjoying the sympathy of the people, summarized his find-ings in rare words of warm praise.

In the status quo, Deng stated that �only rapid development canstand the test of common sense� and �slow development is not so-cialism�. His argument that �What distinguishes socialism from capi-talism is not that in the former there is a planned economy and in thelatter there is a market economy, but the objectives the economyactually serves; whether or not they are favourable for the develop-ment of the productive forces, the increase of the complex strengthof the socialist state, and the raising of the living standards of thepeople� acquired particular emphasis and significance.

In fact, in saying this Deng actually criticized those conservativeviews that judged rapid development and the application of marketeconomy methods damaging and dangerous with respect to the re-quirements of planned and commensurate development, thus regard-ing a market economy as an economic form alien to, and in morethan one way hostile to, socialism. On the other hand, Deng alsopointed out that both planned and market regulations are merelytools and methods that can be, and indeed are, employed both in thecapitalist and the socialist economies; therefore, from their pres-ence or absence one cannot, and in fact must not, draw definite theo-retical or ideological conclusions concerning the nature or substanceof a given social system.

Fuelled by this statement, those central and local leaders urgingthe deepening of market economy reforms and broadening the