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The Myth of Communist China PDF Print E-mail
Saturday, 12 September 2009 06:54

On one forum I visit frequently, there are more and more threads started about "Communist China", "Red China", and of course, Rush Limbaugh's favorite term, "ChiComs" (short for Chinese Communists).  When most conservatives learn that I - a radically right-wing conservative - live and work half my life in "that hell-hole of Communism" they are shocked.  And when I state "I like it" well, let's just say the floor has many different jawlines imprinted.

But the capper is when I tell them, in fact, China is not Communist, the look of confusion, the assumption that I must be insane is quite obvious.  No, my friends, I have not been brainwashed by Maoists, I do not wear my grey uniform, practice Tai Chi at 6 AM, and salute the red flag!  However, I do live in Shanghai, travel extensively within this country, and have learned a thing or two (and yes, I love the you tiao for breakfast, and the food in general - it's quite good!)

First and foremost, we must define what is Communism.  Communism is, in the best explanation I've found:

a family of economic and political ideas and social movements related to the establishment of an egalitarian, classless and stateless society based on common ownership and control of the means of production and property in general, as well as the name given to such a society.  The term "Communism", usually spelled with the capital letter C, is however often used to refer to a form of government in which the state operates under a one-party system and declares allegiance to Marxism-Leninism or a derivative thereof, even if the party does not actually claim that the society has already reached communism.

In practical terms, it can be summarized by Marx's statement:

From each according to his ability, to each according to his need

Essentially, what you produce is given to the State; what you have, the State gives to you.  Your house, car, job, clothes, food, health care, all are appoprtioned by the State for you.  You live to serve and "feed" the State, and the State - in its "beneficence" returns back what you need.  Of course, if you and your neighbors don't produce enough, or the State doesn't really recognize your real need, we have a problem.

Probably the best example of Communism on Earth was the old USSR, or China before ~1983.  In each case, the State decided what your job would be.  Where you would live.  How much you would be paid.  When and where you can see the doctor.  How much food you get, what clothes you can have, and basically everything about your life.  In exchange for becoming an automaton, the State promised to let you at least live (provided there were enough resources to meet your needs, and you didn't speak up or develop an identity of your own).

Now, we all know that the USSR collapsed in 1989, and since then has broken into dozens of independent nations.  The Western States are free, and joining the EU; the Southern nations are going their own way, thriving off their oil reserves.  And mighty Russia is still drinking itself to death with vodka.

What about China, though?  It has not crumbled; on the contrary, China has gained territory!  Macau and Hong Kong are now Chinese owned, their Portuguese and British masters fled to the comfort of "the Continent".  And China is flexing her muscles regularly in regards to North Korea, Taiwan, and Vietnam.  Clearly things have not fallen apart, they must still be Communist, right?

Well, actually, wrong.  You see, Deng Xiaopeng started something 25 years ago, a movement towards capitalism.  Yes, that evil scourge of socialists and communists alike, the bane of human existence, the "free market".  Twenty years after Mao's Great Leap Forward, China was still a virtual 3rd world nation, with nary an asset save fields, rice patties, and some inefficient, ineffective State heavy industries.  Little progress, little hope.

Deng changed that when he opened up China to foreign investment.  Suddenly money started flooding in.  China's three natural resources - people, coal, and land - were in high demand as capitalists with a need to build product, and Chinese laborers tired of the farms or steel mills decided they could work together and make a buck (or RMB) to share.  And thus it began.

What is China now, is it not still Communist?  Doesn't the CCP - the Chinese Communist Party - still run things?  Well of course the CCP still controls the Government, and as a result much of China.  But Communist?  Let's look down the list:

- China does not guarantee you a job; if you can't find work on your own, tough - you don't work
- China does not guarantee you a home; if you can't afford a house or apartment, then the street is your bed
- China does not guarantee you food; no job, or lost your money?  Time to starve or pick through the trash
- China does not guarantee you health care; broke your arm?  Well, pay your copay first and then the doctor will see you

And so on.  In fact, most of what we in the US take for granted, or assume that the Government will give us (or in the case of health insurance, should give us) is not guaranteed for the average Chinese "Communist". 

In the US, if you lose your job, you get unemployment insurance and the Government will retrain you; in China, you go find your own and learn your own skills, no coddling here.

In the US, if you lose your house or cannot afford one then there's always section 8 housing for you; in China, better find a friend or family member to take you in or you're out on your own.

In the US, if you cannot afford food, we give you food stamps and Government cheese; in China, it's the grace of friends and family or you're eating grass.

In the US, if you need medical treatment, walk in to any hospital and you get treated, even if you cannot afford it; in China, they'll gladly see you right after you pay the cashier your initial copay to see the doctor.


In the US, if you risk your funds and it pays off, the Government demands a share of the profits via the capital gains tax (of course, they didn't take any risk in the investment initially); in China, you get to keep the profits of your wise investments.


And so on.  In fact, much of what one would think of as a Communist nation doesn't exist in China.  You get the house you can afford, you get the car you can afford, you get the food you can afford.  If you make dirt, you live in squalor; if you make millions, you live like a king.  And everywhere in between.

Now, it is true that the CCP still runs things politically; however, they are less a "Communist" group than a fascist oligarchy.  Fascist in that the CCP still maintains a lot of control over several industries (health care, banking, heavy manufacturing like cars - sound familiar?) and the party loves the grand, miliaristic television productions; an oligarchy in that it's the same small group of families and friends who have run things for the last 50 years.(again, sound familiar with the long-term political families in the US?).  Communist?  No,. Democracy?  No.  Fascist oligarchy?  Yes.


In terms of dissent, you still need to be careful in China; if you try dissenting or demonstrating without first acquiring the proper permits, you will end up in jail for 48 hours and fined 1000-2000 RMB (about $150 to $300).  That's the extent of it.  You read in the newspapers - both in Chinese and English - editorials critical of the Government's policy in one way or another.  But at least the media is generally free to do what it wants, and all pretty much have the same access (unlike the Obama Administration's approach to Fox News).

Here is where it gets interesting...  Above I made some comparisons between the US and China, with regards to jobs, housing, food, medicine.  What we see is that the US is further along the scale of "freedom - to - communism" than China!  And it's not just in those areas. 

Consider business.  In China, you can just set up a shop and start - no license needed if you don't plan on hiring someone else, or don't sell to another business (where your transaction would be B2B, and taxed).  Buskers, no problem.  Street vendors - have at it.  Good luck trying that in the US!

How about taxation?  China taxes you nominally on your income, with a high "standard deduction"; but it is on salary only.  It is NOT on all forms of income!  If most of your income is in bonuses - even monthly - then you pay no income tax.  No capital gains tax for gains made outside of China.  Heck, if you earn a lot for another company, then that company must withhold for you, and you don't even have to file tax forms.

China makes most of its taxation on the VAT/Business-to-business tax.  It's 17% on reported invoices between businesses.  I say reported, because there isn't really any enforcement here in China.  You don't have to report your sales; of course, that means the purchaser doesn't receive an "official" (reported) invoice, so they cannot use it for tax deduction purposes.  But if that's OK with both sides of the transaction, it goes "free" - not reported.

For exports, China sets the B2B tax rate at 6%, thereby encouraging companies to export, since they can make 11% more on the same product sales.  And people wonder why the Chinese are so fixated on exporting - it's a "free" 11% additional income for them!

Overall, China's not the Communist hell-hole most Americans think.  In many ways, it's much more capitalistic and free-market and libertarian than the US!  In other ways, it is still pretty controlled.  Big industries are still dominated by the Government; of course, with the US Government controlling GM, Chrysler, and half a dozen of the biggest banks, that's not so different now, is it?  China doesn't have the prosperity of the US yet, but they have learned from our past, and are rapidly correcting their mistakes.

Unfortunately, it seems we in the US did not learn from their past, and are rushing headlong to repeat their mistakes.


Last Updated on Thursday, 03 December 2009 17:45