Ian Welsh

The horizon is not so far as we can see, but as far as we can imagine

Category: Chinese Communist Party

Understand China’s Plan To Become A Full Socialist State

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On August 5, 2026

28 Comments

“The banks, as we know, are centres of modern economic life, the principal nerve centres of the whole capitalist economic system.”

–Vladmir Lenin

Deng had four principles for his changes to Chinese Communism:

  • Upholding the socialist road (or socialist path).
  • Upholding the people’s democratic dictatorship (originally often referred to as the dictatorship of the proletariat; the phrasing was later standardized as “people’s democratic dictatorship”).
  • Upholding the leadership of the Communist Party of China (CCP).
  • Upholding Marxism-Leninism and Mao Zedong Thought.

    Chinese and American flags flying together

In Marxist thought the capitalist industrial stage is necessary before the final condition of a state completely controlled by the workers, without class.

This is because a significant surplus is required for everyone to have a good life, and it’s capitalist industrialism which creates that.

You can easily create a heavy industrial state in a command economy: both the Soviets and the Chinese under Mao did so. What they could not do was create a state with a lot of consumer goods.

Mao created the pre-conditions: heavy industry, basic infrastructure, and an educated people.

But notice the principles are all “stay socialist and stay in charge.”

The major banks in China are state controlled. The banks that aren’t state controlled are under strong supervision, and in most cases have party members in leadership positions.

Banks (and various shadow banks in the West) are the main way firms get money. If the banks won’t loan, your business won’t happen or won’t survive. If they will loan to you at preferential rates because you are doing what the Party wants, usually based on the five year plan, then you’ll have a good chance of success.

When I wrote my article on principles for running a left wing government I included taking control of the banks and taking control of media as absolute, immediate, necessities.

China has kept control of both.

This issue became especially urgent after the fall of the USSR and the CPC spent a LOT of time studying why the Soviet Union fell.

But despite Deng’s principles what was happening before Xi was the corruption of the CPC and its mingling with the new capitalist rich: after all, if as a party official you helped a firm, they could kick back to you and you’d get rich. Do enough of this and you could become obscenely rich.

This imperiled all four of Deng’s principles, as decision making around loans and regulation was increasingly made not in alignment with the CPC’s goals, but to make people rich. (One example is the massive housing bubble which Xi has since popped.) This is not the issue the Soviets had specifically, but is related: people with power no longer really believed in Communism or put the Party’s power first. (Gorbachev deliberately removed power from the party.)

When Xi took charge his first and most important programs was anti-corruption. At the time I cynically assumed it was a way of taking out his enemies, and that he would tolerate corruption for his faction.

I was, mostly, wrong. Xi’s anti-corruption is real. He’s a sincere Communist who wants to keep the CPC genuinely in charge and not let it be corrupted.

The goal is simple enough: stay in charge, make China vastly prosperous and transition to full socialism. Markets are useful for this, but must be kept under control or they will take control of the party, and capitalists aren’t going to be committed socialists.

Xi, in this light, is just an extension of Deng: actually making Deng work. Deng’s policies caused rapid technological advance and improved light industry massively, but the principles were not actually being enforced.

Xi enforces them. Not just anti-corruption but changes in how the party recruits and trains and promotes, all intended to keep the CPC on the path to socialism.

Will they succeed? Well the transition will come, if it does, with the next leader, most likely. Xi is putting his successor in a good position. AI and robotics are being directed towards physical activities, there are dark factories with no workers, and so on.

Genuine socialism means people shouldn’t have to work a lot if they don’t want to, and should still live a good life. AI and automation, done properly, offers that possibility.

Of course huge problems around distribution and production remain and will have to be figured out. If China stays the course they’re trying to create something which has never existed: something genuinely new. Westerner’s might call it “fully automated luxury communism” though I don’t know if it’ll get that far.

But the ducks are in a row: massive productive capacity, ways to reduce the amount of workers needed, and keeping control of politics and the economy.

This is the plan. No one knows if it will succeed, but it’s not a stupid plan or one that will obviously fail, IF China can deal with resource depletion, ecological collapse and global warming (all of which it is doing more to mitigate than any other country, though it’s far from perfect.)

China is the future. It’s success or failure will determine what political/economic models are considered usable and successful. The age of liberal democracy is near its end.

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By The People? For the People?

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On November 25, 2025

19 Comments

The simplest measure of a government’s legitimacy is whether or not it works for the benefit of the people. Democrats also believe the government should be selected by the people.

America does not meet either criterion at this time. Yes, there are elections, but the duopoly means that voters tend to choose from a small slate, pre-selected by others. The most visible occasion of this was when Obama had every Democratic presidential nominee candidate drop out so that Biden could defeat Bernie Sanders. Year in, year out, most of the candidates put up for election are those chosen by party insiders.

This is not always true, of course. It is less true on the Republican side, where primarying incumbents often works and where a vocal but grassroots minority does have significant power in choosing candidates. On the Democratic side it’s mostly true, but some candidates do slip thru: Mamdani for New York City mayor being the most recent example.

Still, overall, it’s questionable that Americans really choose their own government, and that’s true in most Western countries. In Romania, for example, the unacceptable candidate who was going to win was simply arrested and banned from running and there is a movement to make Germany’s AfD illegal. In Canada the party leaders simply refuse to allow pro-Palestine candidates, even those who are selected as candidate by their riding, to run.

The more accurate view is that political parties in most ostensibly democratic countries are political oligarchies. How much this is true varies. First past the post system tend to have very strong oligopolies, while proportional representation countries allow more flexibility.

Perhaps worse when outsider candidates do break thru and win they usually don’t wind up voting for and doing what they ran on. You can see this (though it’s a bit of a stretch to call him an outsider) with Trump. It’s visible with AOC, the darling of the left who has voted for almost all Israeli aid packages and who has clearly decided to become an insider.

So first there’s a huge barrier to electing people who support outsider views, then most of them are co-opted. If there’s a real threat of an outsider taking the top seat, the establishment works hard against them. We saw that with Corbyn, where one academic study found that about 80% of all news stories lied about his policies.

It’s fair to say that most Western countries don’t really have “government by the people.” The mechanisms still, partially, exist. The form is there, but the reality isn’t. They’re political oligarchies. (The EU is worse than the US.)

And we all know that most Western governments aren’t “for the people.” For fifty years they’ve been immiserating their own people, becoming rich themselves and forcing money upwards, creating a financial oligopoly on top of the political oligopoly. I often say that for most Westerners their most dangerous enemies are their own politicians. Putin isn’t a danger to you as a EU member or America. But Macron or Von Der Leyen are. They’re the ones destroying your standard of living and piecemeal destroying social supports. This is even more the case in Britain, where there hasn’t been a Prime Minister whose primary legacy wasn’t hurting most Britons since the 70s. (Well, maybe Tony Blair had that as his secondary goal, his primary goal being hurting Iraqis to toady to America.)

Great systems are judged by their great opponents. For much of the 20th century that was the USSR and it is not entirely a coincidence that when the USSR was strong, Western governments treated their people well. Of course that isn’t all there is to it, there were the oil shocks, Vietnam, etc… But the West was ideologically scared of communism and when it seemed to work, they felt they had to make capitalism work.

These days the great opponent is China, and the one party communist state running a hybrid capitalist/socialist economy. And the problem for the West is that China’s government, while not “by the people” is definitely “for the people”. They’ve brought more people out of poverty than anyone else ever has. They keep rent and housing and health care prices low, as deliberate policy. Incomes are lower than in the West, but costs are much lower. You can buy enough food to feed someone for a week for $50 in most of China, with ease.

They also create the future: high speed trains, for example. They build real public infrastructure. I was very impressed when they built rest and relaxation places for delivery workers: they cared that such workers were miserable and exploited. And they build things like this:

Now it’s fair to say that this isn’t precisely “socialism” vs. “capitalism”. There was a time when the West built lots of public parks and so on. It’s the difference between a real rich society and a financialized society. One has plenty of excess capacity, the other has plenty of money but very little actual ability to build and create and no desire to do so if someone can’t make an unfair profit from it.

The problem for the West is simple: China is better governed than almost any (perhaps actually any) Western country. And that governance shows plenty of signs of being in the interests of the vast majority of Chinese, whose lives it has vastly improved. Democracy itself is in danger. If it doesn’t produce better results for ordinary people, and if it’s basically fake anyway, why keep it?

The risk here is that the anti-democratic forces in the West aren’t the CPC, they’re billionaires who think the problem with the current government is that it still does some things for ordinary people which aren’t primarily about benefiting billionaires. They’re fascists, at best.

Democracy, if it wants to survive as a major force in the world, needs real reform (all so-called reforms in the West over the past 50 years have been about hurting ordinary people to benefit rich people). If it isn’t re-aligned to work for the majority, its day as a major force in the world faces a bloody sunset.

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If You Understand Only One Thing About Chinese Government

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On September 2, 2025

4 Comments

It should be that almost always they do what they promise, and they meet their goals. An American-Chinese silicon valley type spent some time in China recently (I don’t agree wit the whole article, but you should read it), and among the bits that stood out to me was this:

In the US, when politicians make campaign promises, I never actually expect them to follow through. But Chinese leaders do—for better and for worse. The 2025 plans to build 1,350 Shenzhen parks or reduce China’s energy dependence aren’t mere propaganda. (Neither, tragically, was the one-child policy.) Accountability is built into China’s bureaucratic system through KPIs, and you can see the results firsthand.

This echoes what Naomi Wu noted: that the Communist party attains their goals, and that many of them are the smartest most capable people she knows. (I think the one child policy wasn’t a mistake, as it happens, though it probably continued too long.)

This chart is of average rent as a percentage of income.

As a westerner this is mind boggling. My entire life rent prices have just increased and increased and increased. So have housing prices. One of my big criticisms of China for years was that they had overly-relied on housing bubbles to fund their growth and that it was causing significant discontent. Every young Chinese person mentioned it as a problem.

So then they just… went and fixed it? And yes, it’s been painful, and led to some softness in the economy, but when it’s done, the economy will be much stronger. (See, “China is Transitioning, and So far successfully“).

China faced a challenge during Trump’s first term: he slapped export controls on chips. They didn’t have a significant domestic industry. So they built one. They knew that if America had done this with one industry, they could do it with all, so they set a national goal to become self sufficient industrially: to be able to make everything they needed. As this was happening, they realized housing was too expensive, so they made that part of the solution, they rotated investment out of real estate into industry.

To a Westerner who has lived their entire adult life under neo-liberalism, this is mind-boggling. Wait, the government can “just do things?” And when it decides to do things, it succeeds? It isn’t just bullshit?

I mean do things other than de-regulate and say “well there isn’t anything we can really do, this is just how the world is.” Do things other than just make the rich even richer? Do things other than constantly de-funding science and engineering and the humanities? Do things other than making medicine fantastically expensive? Do something other than blowing another asset bubble?

I’m 57, and I remember the world before neoliberalism, but I remember it as a child. In my entire adult life I have not seen a Western government capable of doing what China does: set an important goal which benefits the population as a whole and crush it.

China is winning because China deserves to win, because it is better run. I’m not going to whitewash it: there are a lot of things I don’t like about how China is run. But bottom line, it’s run more for the benefit of ordinary citizens than most Western countries, and those countries which seem to be run for the benefit of the population as a whole are running on legacy systems: the entire EU it seems, is considering gutting their social welfare systems to spend more money on American weapons. For my entire life things have been getting slowly worse in France and Germany, and quickly worse in the UK. In China, on the other hand, life keeps getting better for the majority of the population.

Are you worried about Democracy? You should be. But one simple threat is this: China isn’t a democracy and its actions clearly benefit the majority of its people more than the actions of American or British or EU governments benefit their people.

Democracy isn’t just a something word you wave around. If it doesn’t produce better results, people will stop believing in it.

China’s winning because the CCP gets results and the results it chooses to get are, much more often than in the West, good for the majority of its people. That means it deserves to win, and we deserve to lose.

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