II. The Principles and Achievements of the Cultural Revolution Are Being Revised and the Economic Laws of Capitalism Restored - 1. Acute Shortcomings and Misdirected Developments in Chinese Economy

After the death of Mao Zedong, the new leadership in China headed by Hua Guofeng and Deng Xiaoping decreed the program of the four modernizations to be the central political task for the next 20 years of building socialism. In the years to come, according to this program, economic development will be pushed with a focus on the four sectors agriculture, industry, national defense, and science and technology, to put China in the ranks of the big industrial nations by the end of this century.

It has been two years now since the new leadership started the race for the year 2000, and serious difficulties already are arising. In Beijing Review, lately we could read of failings, setbacks in production, and a gross disproportion between agriculture and industry.

The new Chinese leadership clearly overextended itself on its megalomaniac investment programs, as it now has to admit itself. Premier Hua Guofeng, for instance, now demands

“to resolutely narrow the scope of capital construction.” (Beijing Review, No. 27, 1979, p. 12)

As he had to confess at the Second Session of the Fifth National People’s Congress in June 1979, there are serious supply shortages:

“The main problem now facing us is that our agricultural expansion cannot as yet keep up with the needs of industrial development, and at times [!] cannot even keep up with the demands of a growing population.” (ibid., p. 11)

The purchase prices of grain, cotton, oil-bearing crops and pigs – important staple foods and raw materials for the people! – were raised, shifting the additional cost onto the consumer prices, which means an increase in prices:

“Though the purchase prices … have been raised this year, the state has nonetheless tried its utmost to allocate funds for improving the livelihood of workers and staff and the urban population in general. But since the state’s revenues are limited, the sums diverted for this purpose cannot be very large. These are the difficulties we face, and we hope our workers and staff and other urban inhabitants will understand.” (ibid., p. 19)

Through their pricing policy, the new leaders also want to regulate the family and demographic policy. The raised prices mostly affect large families:

“… except for a very few families whose livelihood will unavoidably be slightly affected for the time being because they have more mouths to feed, the actual living standards of the great majority of workers and staff and other urban inhabitants will not suffer.” (ibid.)

Unemployment – which did not exist in the China of Mao Zedong – is getting out of hand:

“Employment is a prominent question at present.” (ibid., p. 20)

The extent of the unemployment can be inferred from Hua Guofeng’s words when he says:

“This year’s plan is to employ over 7 million people in state-owned or collective-owned units, and to allocate a certain amount of funds to large and medium-sized cities to run service companies.” (ibid.)

This is only a small ‘anthology’ about the immediate consequences of the revisionist course. Here, for once, we have no reason to doubt Hua’s statements!

Still, the Chinese leaders spread optimism, relying on ‘sober views,’ as is stated in the 1979 Renmin Ribao May Day editorial:

“We are confident that after a certain period of effort and after the task of readjusting the national economy has been completed in the main, China’s socialist construction will go forward much quicker. Even sobre-minded people in capitalist countries can see this.” (Beijing Review, No. 18, 1979, p. 8)

How and why these economic difficulties and capitalist evils have occurred in China we will examine in the following. We will contrast the economic policy of the new Chinese leadership with the fundamental statements of the classics of Marxism-Leninism and demonstrate where the new leadership has left the road of Mao Zedong.