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International Communist and Labor Press

by Lina Sankari

China: from discretion to assertion

Translated Wednesday 8 November 2017, by Annette Mitchell

The 19th Congress of the Chinese Community Party, which opens next week, is aiming to launch the country towards innovation.

“Let us patiently observe, consolidate our position, calmly manage our affairs, keep our abilities to ourselves and wait for our time” said President Deng Xiaoping in 1991. Twenty-six years later, the time seems to have come for China to assert its position on the international scene. As well as wanting to control its development, the country seeks to reduce inequality. The creation of a so-called middle-class society, a concept elaborated by Deng Xiaoping and developed by his successors, guarantees the legitimacy of the Chinese Communist Party (CCP). “Since the Imperial Period, the legitimacy of the Chinese State has relied on providing the population with a minimal level of stability, security and protection. The failure of the State to do so would threaten the political regime” says economist Michel Aglietta.

China aims to become one of the innovative countries

With China’s economic growth of 12.2% in 2010, regarded as unsustainable, the idea is to maintain GDP around 6.5% a year and double the average per capita income in cities and rural areas with an average rate wage increase of 15% per annum. China also aims to become one of the innovative countries and complete its industrialization by reducing its dependence on traditional sectors (iron and steel, construction, “low-end” production). When he came to power, five years ago, Xi Jinping aimed to establish the unemployment benefit system, strengthen the social security system which now covers the whole population, and integrate the old-age benefit into health insurance. Although they differ from province to province, the levels of contributions now approach those prevailing in Europe.

“All economic reforms are inspired by the same idea: entrust the allocation of resources to the mechanisms of the competitive market open to foreign companies, removing the monopolies and protections available to Chinese companies and national banks. But privatization is out of the question. That idea remains the pillar of the communist system. A true mixed economy, regulated by the market, must be established. The State retains control over macroeconomic policy and long-term strategy. Planning is not open to debate” according to economist Philippe Delalande (1). Through mergers and acquisitions, the Chinese State operates a concentration of companies – including private ones – to make them into competitive national leaders in the global market. Aeronautics, automobile, pharmaceutical, steel, public works… no sector is exempt and public enterprises benefit from the support of banks to obtain loans more easily. In addition, Xi Jinping strove to support SMEs, which he sees as a lever for innovation, via a support and public advisory body, to launch them onto international markets. To increase its power, Beijing has also considerably increased its direct investments abroad through the creation of four public funds. The idea is to control the gateways into countries (ports, warehouses…) acquire companies in bankruptcy to transfer their activities to China, acquire innovative technology and shares in companies that enable China, after many scandals, to exercise a tighter control over the safety of its food products. The low-profile strategy of Deng Xiaoping seems to have well and truly worked.

(1) Auteur de La Chine depuis le Congrès de 2012, L’Harmattan, 2016

Goal: Eradicate poverty by 2020

China has entered the final phase of its anti-poverty plan. But, on Monday, the eve of the 19th Congress of the Chinese Communist Party, President Xi Jinping, who knows how persistent inequality between regions threatens stability, asked leaders to step up their efforts. "This is the most difficult battle," he said. At the end of 2016, 43.35 million people were still living below the country’s poverty line, which is 2,300 yuan (296 euros) per annum. That’s about 3% of the population. The goal of total eradication of poverty by 2020 should be achieved, primarily, by the consolidation of the health system.

Translator’s note : Another less literal but more explicit headline is : China: from quiet achiever to emerging innovator

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