Analysis China Economy Pakistan

Imran Khan’s Chinese Model for Poverty Alleviation

By Lal Khan

In his first post-election speech from Banigala residence, Imran Khan once again eulogised the Chinese model for the elimination of poverty in Pakistan. He has repeated this notion in his speeches for the last few years. But it’s not just him who is impressed by China’s high growth rates and the alleged poverty alleviation but several right-wing populist leaders from Turkey’s Tayyip Erdogan to Narendra Modi in India have followed it. This is not surprising as after the 2008 crash of the world capitalist economy the failure of unbridled market economics became so glaringly evident that the state’s intervention was brought back and protectionist tendencies evolved even in most of the advanced capitalist countries.

It’s not clear that whether Imran Khan really understands the economic and historical factors that led to a high growth rate in China and reduction of absolute poverty to relative poverty or he is just jumping on the bandwagon of the rhetoric of ‘Chinese Miracle’ also praised by western bourgeois experts. While the corporate media lauds the massive reduction in poverty, it conceals the fact that the deprivation and social unrest in this relative poverty has in many ways exasperated the economic, social and psychological torment for the vast majority of ordinary Chinese. The historical irony is that the ‘miraculous rise’ of China as a capitalist economic giant and superpower was based on the social and economic transformation brought by the 1949 revolution under Mao. During and after the long march and the revolution the landed estates were expropriated and the land was distributed amongst the landless peasantry. This gave a great impetus to the Chinese economic and social development. But the decisive step that transformed China from a primitive and beleaguered society was the expropriation of imperialist and national capital, economy and industry. The health, education and vocational skills of the Chinese working class were developed on the basis of a planned economy. The average growth rate in China from 1949 to 1978 was 9.2 per cent, one of the highest in the world. But with feudal lords and capitalists in the top echelons of the PTI’s leadership, Imran Khan will not dare to touch the existing capitalist and feudal relations that have set this rot in Pakistan. With the utopian mantra of improving the economy and creating jobs through Foreign Direct  Investment parroted by the economic bosses of the PTI, how can Khan dare to touch imperialist assets that are flagrantly exploiting and plundering the labour of Pakistan’s toilers and its resources?

The Chinese revolution, however, was not based on the workers’ democratic control and management of economy and society. Instead of Marxist Internationalism, as was initially the Bolshevik revolution of 1917 under Lenin and Trotsky’s leadership, the Chinese revolution was based on its caricature; National Socialism. Hence the economic stagnation and social crisis was inevitable within a single state. This crisis led to the pro-capitalist wing of the Chinese Communist Party i.e. bureaucracy to emerge under Deng Xiao Ping’s leadership. In 1962 Mao had incarcerated Deng for instigating capitalist restoration in the party. China’s counter-revolutionary process of capitalist restoration started after the demise of Mao Ze Tung and Chou en Lai when Deng Xiao Ping took power through an intraparty coup in 1978. The Chinese bureaucratic elite sold off this formidable advantage of the planned economy to the imperialists to enrich themselves through capitalist restoration. As Deng Xiao Peng himself put it: “to get rich is glorious.”

Whereas the collapse of the Soviet Union was “sudden” the Chinese bureaucracy started a gradual process of capitalist restoration under tight party control. The Chinese bureaucrats closely monitored the events in Russia as the ‘communist’ bureaucrats in different Soviet ‘republics’ of the USSR rushed to become filthily rich by hastening the separatist tendencies to grab the resources of those republics whipping up narrow nationalisms. This led to an economic collapse in the former Soviet states and the bureaucrats in Beijing learnt the lessons.

Deng allowed the private sector to operate their businesses under patronage and regulation of the state. Special economic zones were established along China’s eastern coast for attracting foreign investments. Due to these counter-reforms, China has gone from being a country with a planned economy opposed to capitalism to one with property rights, profits and free market competition.

Today the Shanghai Stock Exchange is the third largest in the world by market capitalization. Markets for goods and services are dominant in China. Through the price mechanism, firms buy services, raw materials and machinery from firms and sell their produce to consumers and other firms. Already about 95% of consumer goods’ prices are market determined. China has entered into a number of regional and bilateral ‘free’ trade agreements with imperialist financial institutions, including the International Monetary Fund (IMF) and World Bank, that have endorsed a new China-led international bank, the Asian Infrastructure Investment Bank (AIIB). Chambers of Commerce exists in all large cities of China.

This, however, does not mean that China can become a ‘normal’ or a ‘healthy’ capitalist economy. Nor the Chinese elite can morph into a classical western bourgeois as its economic rise comes in the epoch of the decay of world capitalism. President Xi Jinping at last November’s party congress enshrined “Socialism with Chinese Characteristics” into the constitution yet again. This is a sign of fear on the part of the regime as the penetration of corporate capital is creating contradictions and social conflicts in China that can unravel beyond the state’s control. It’s not an accident that China is perhaps the only country that spends more on internal security than external defence.

But the Chinese economy crashed from a growth rate of about 14 per cent in 2007 to 6.8 per cent in 2016. The gigantic investments of the state in domestic and foreign projects like the ‘One Road One Belt’ that includes the CPEC are desperate attempts of the Chinese aristocracy under Xi for the revival of its growth rates through Keynesianist policies of state’s credit financing. Chinese total debt has soared to more than 300 per cent of its GDP.

However, inspite of this economic growth and development since the late 1990’s based on imperialist, state and private investments there has been an intensification of exploitation and a growing disparity between rich and poor. In particular, there is a yawning gap between rural and urban areas, inland and coastal. Even in urban areas, many workers find it hard to afford decent accommodation, suffer long commutes and work long hours. China has the largest inequality in the world after South Africa.

It’s one of the top five poorest countries in the world. Nearly 500 million Chinese people live on less than $2 a day. At least 920 million people in China live below 5 dollars a day. 85% of China’s poor live in rural areas, with about 66% concentrated in the country’s west. There is also a huge discontent and feeling of deprivation amongst national minorities from Tibet to Xinjiang.

Migrant workers within China cities are maltreated and discriminated. Rural communities are outraged about land grabs by gangster property speculators, often connected with communist party or the Peoples Liberation Army, a major stakeholder in the economic affairs. In urban areas, too prime land and property is extorted from locals. State brutality is intense. To dissipate simmering discontent Xi Jinping started a cracked down against corruption incarcerating some of the high-ranking party officials.

If the Chinese capitalist economy could not bring mass prosperity even with the social and physical infrastructural basis already laid by the 1949 revolution, how could this capitalist model develop Pakistan suffering from catastrophic economic crisis and crumbling infrastructures. Imran Khan has hyped the illusions of development and prosperity mainly in the erratic middle classes. These will shatter sooner rather than later. All parties dominating the present political suprastructure have capitalist economic ideologies representing sections of the ruling elite. To end this nightmare of deprivation, poverty, misery, violence and sociocultural suffocation, the toiling masses shall have to rise in class struggle to overthrow the system itself. Pakistan needs a Chinese model closer to the revolution of 1949 without the bureaucratic stranglehold and with workers control. Deng’s Chinese capitalist model will spell disaster.