Since Deng Xiaoping’s reform and opening up, the People’s Republic of China (PRC) has discarded orthodox Marxism as the main goal of its economic policy. The repudiation of the Soviet-style command economy, however, has raised questions as to what the ultimate aim of Chinese Communism should be.
Incumbent Chinese President Xi Jinping has characterized China’s economy as a “socialist market economy”, thus clarifying that “socialism with Chinese characteristics” is a departure from the Soviet tradition of state-planned supply. Xi wrote in his book The Governance of China that the Chinese government should combine “the invisible hand” of the market with the “visible hand” of the state.
The market must play “the decisive role in allocating resources”, he argued, while the government should provide “scientific macro-economic guidance” and “effective intervention” in supplying services and guaranteeing fairness and efficiency. Despite his Maoist ideology, Xi so far appears to have embraced the basic concept that the economy should not be centrally planned.
However, the direction that the Chinese economy will take in the future is still uncertain. A recent article that circulated on Chinese media shows the problems and contradictions of a Communist dictatorship that has embraced market economics.
On August 19 an interview with Liu Qiangdong stirred an uproar on Chinese media, after he argued that “Communism will be realized in our generation”. Liu, a billionaire worth US$10.1 billion, is the chairman and CEO of Chinese e-commerce firm JD.com.
Talking about technological innovation, Liu stated:
With regard to China’s Communism, many people in the past believed that it would take a long time to achieve it. But given our technological progress over the past two, three years, I have suddenly become aware that Communism really can be realized in our generation.
Because robots can work for us, we have already created immense wealth, and the government can allocate it to everyone, there won’t be any poor and rich people, and all companies can be nationalized.
China needs only one e-commerce company, one retail company to achieve this. If people no longer have to work to support themselves, most people will be able to devote themselves to spiritual activities. Humans can enjoy their lives or engage in arts and philosophy.
Liu’s statement caused a controversy on Chinese media regarding the meaning of “Communism” and the interpretation of the billionaire’s understanding of the term.
Qin Shuo, the vice-chairman of Shanghai Media Group, who interviewed Liu Qiangdong, felt obliged to release clarifying remarks. “The realization of a Communist society is still very far away,” he wrote, “but as a beautiful, rich and fertile ideal with humanistic traits, the radiance of Communism continues to shine next to us.”
This controversy seems to show that Chinese people are afraid of the idea of Communism. After all, would anyone in China today give their property to the state? Would business people welcome the nationalization of the companies that they built up with much sacrifice? Does anyone want a classless, perfectly equal society? Does Liu Qiangdong perhaps have a personal reason for advocating the return of a state-led economy?
In 1994, while studying at Beijing’s Renmin University, Liu decided to start his own business. He opened a restaurant near the campus, but the enterprise failed and he went bankrupt. After graduation he found a job at the Japanese company Life. His new career was successful, enabling him to pay off his debts.
In 1998 Liu left his job and founded Jingdong Century Trading with a starting capital of just 12,000 yuan. The company sold consumer electronics, particularly magneto-optical products. The business prospered and he opened 12 stores in five years. When the SARS struck in 2003, causing customers to stay at home, Liu understood that the demand for online retail was on the rise. That was a turning point. In 2004 Liu founded JD.com, which soon became an e-commerce giant.
Yet despite being the second e-commerce company in China after Alibaba, as of August 2017 JD.com has amassed a net loss of 496.4 million yuan ($74.43 million), more than double the loss in the same period last year.
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