Many left-winger journalists would give their left arm to be the resident leftist on the staff of the WSJ, but are there many if any? Prnceton has may leftists in its political science department, but who is co-opting whom? You are too intelligent and experienced to confuse selective, meticulous factual accuracy and "balance reporting" in the Western journalistic mode as unbiased reporting. WSJ and NYTimes reports on China regularly upset Chinese readers, leftists, rightists or centrists who are in the midst of the events reported. Even Chinese dissidents find these reports frequently annoyingly distorted and counterproductive .
Far from sweeping it under the rug, I have called for an open debate on the subject of privatization of SOE's. There is a continuing debate in China on this issue on several levels: ideological, political, economic theory, operational and social impacts and their domestic, international and global interfaces. A final policy decision is far from imminent. Many local trials have yielded indeterminate results. As with many other issues, size changes the nature of the problem. Privatization in a small scale yields undeniable efficiency advantages, even from the perspective of workers. However, the problem of sub-optimization becomes obvious when privatization is adopted on a nationwide basis. By the way, China has no plans to privatize Citic or any of the Itics. They are considered the models for post-reform state-owned-enterprises (until last month when Guangdong (Gitic) was closed for bad management). The privatization debate was focused on loss-making SOEs. Even begging the question why anyone, let alone Western capital, would buy loss-makers, the debate still rages on whether the government is guilty of selling future potentials for low current cash value and on the fairness of Western style acquisition procedures on workers. Workers generally do not want to buy the troubled companies they work for because they realize it is very confusing and difficult to bargain against oneself. Chinese workers are quite informed about cases like United Airline which flies to China. There have been 3 forms of ownership since liberation: State ownership on behalf of the entire people; local ownership on behalf of local juridictions, such as provinces, cities, etc., and collective ownership such as commune and cooperatives. To these three, Deng added private ownership which ahd been outlawed until 1979.
One observation that all factions in China agree is that the size of China's population changes the nature of many problems. If the Chinese population were only 2 or 300 million, instead 1.3 billion, China's problems would have been solved decades ago. That is why the lessons of Taiwan, Hong Kong and Singapore have very limited application on the mainland. China's is aware of the theoretical criticism of her policies from the Left, and she is nor doctrinaire about defending them. But we should acknowledge that China is still the most socialist system in the world as measured by any reasonable standard, and as compared to any other government in power. The market capitalism windows in the Chinese economy is less than 5% of the total economy. And its not as if China did not give radical left solutions a running chance. It took 4 decades of faithful adherence to Marxist Leninist economic doctrines, at great costs, before some pragmatist would suggest perhaps enough is enough.
As for Mao toasting champagne with Nixon, the Vietnam War was strategically over by 1973. China was then playing an important role of mopping up the mess left by the Soviet Union, to bring a cruel war already emptied of ideological purpose to a final end. The only government who could have effectively prevented American bombings with credible counter force was the Soviet Union. The problem was that the Soviet Union never believed in a socialist Asia and did her best to "moderate" the Chinese Communists into accept permanent underground status under the Nationalists. If the Soviets had taken a committed posture of solidarity with the Asian left, and faced up to hr responsibility as the superpower leader of the socialist camp, America would have never dared to go that far in either Korea or Vietnam, and everyone would have been better off. China's record on Vietnam is very respectable. It was the Soviet Union who betrayed the Third International and allowed geo-politics to take precedence over ideology and squandered the historical opportunity in the futile period immediately after the Second World War. The revolutionary movements of post WWII suffered the same fate as the revolutions of 1848. In 1848, one could not blame revolutionary France, because the radical left lost control of the government and did not control an army. The Soviets had nuclear weapons which could have been highly effective as preventive deterrents against run-away American hegemony. Instead, a Soviet-American condominium was reached on nuclear arms control scholasticism and nonproliferation, club membership to which was more important to Moscow than world revolution, thus leaving global revolutionary movements to fend for themselves. Even with Cuba, about which I admittedly know very little, Soviet support was geopolitical based. There is a view that if Castro had not been pushed into the Cold War arms of the Soviet Union by Washington, the revolution in Cuba might have developed in ways that would more responsive to indigenous conditions instead of being a client state and marxist colonial economy.
Soviet understanding of China has always been substandard. I remember having a conversation once in Shanghai in 1980 with a high level Soviet China "specialist" on economic development who remarked earnestly but condescendingly that the Chinese are just like young children and that they would learn quickly, to which I was compelled to answer that these young children were wearing silk and composing poems when their "older" Russian brothers were still running around with unprocessed animal skins on their backs without the benefit of a written language.
Finally, revolutionaries are rightfully concern with orthodoxy and fidelity while revolutionary governments have to be concerned with survival. Such is the relationship between government and revolution, the former is about power and the latter is about change. That is why anarchist criticism of government as reactionary is to the point. Yet revolutions need government as vehicle for transition from idea to practice, and in the process, loss of virginity is inevitable. It is be more useful, Louis, to get your current constructive thoughts on the subject, rather than warmed-over reprints of capitalist propaganda. This is an invitation to be part of the solution. In this regard, the lastest posting from Charles Brown re Victor Perlo is very much on target. Thanks, Charles. Happy Thanksgiving that at least there is still one major socialist power alive even if not all well.
Henry C.K. Liu
Louis Proyect wrote:
> Henry Liu
> >The WSJ is well known for twisting irrelevant tidbits into sweeping
> conclusion
> >about China.
>
> Not true. The WSJ has a reputation for integrity on front-page articles. It
> is the editorial pages that are suspect. An old friend Joel Milman, who did
> a profile on my organization Tecnica for Technology Review, dreamed of
> writing for the WSJ. As a left-winger, he said that he would get hassled
> there less than anyplace else.
>
> >Unfortunately for Wall Street, the real China is very different.
> >While Wang Jun is the head of Citic, he personally does not own a single
> share
> >of Citic stock. He holds the top management position, albeit with attendant
> >privileges and benefits, but with no stock options, golden parachutes,
> incentive
> >packages and what not common to American CEO's. Citic is 100% state-owned on
> >behalf of the entire Chinese people.
>
> It is not helpful to sweep under the rug the fact that the Chinese
> Communist Party is about to eliminate state-ownership of firms like Citic.
> As "Marxist economists", it is mandatory that we analyze the DIRECTION of
> the Chinese economy. The whole point of dialectical materialism is to
> understand the MOTION of social-economic processes. In China, the
> privatization of the state sector will cap off a process of capitalist
> transformation that was set in motion when Mao toasted champagne with Nixon
> while the Vietnamese were being bombed into the stone age.
>
> ---
>
> Financial Times (London)
>
> May 26, 1998, Tuesday LONDON EDITION
>
> Remove the iron rice bowl:
>
> MANAGEMENT INVESTING IN CHINA:
>
> Foreign investors may never be able to buy Chinese state assets as cheaply
> again. But they will suffer a culture shock, warns
>
> James Kynge
>
> What would you get for your money if, as a foreign investor, you decided to
> buy a former state enterprise in Shenyang, the centre of China's
> north-eastern industrial rustbelt?
>
> The question is more than academic. Such businesses have, in the past, been
> largely off-limits to foreigners. But China's faltering economy has forced
> the authorities to search for investors wherever they can find them.
>
> This month Mu Suixin, Shenyang's mayor, toured Europe to find foreign
> investors for 18 large state companies, with a total workforce of 309,436.
>
> Other cities in the north-east are also planning mass sales; Harbin, near
> the Russian border, is to put about 1,000 medium and small enterprises
> under the auctioneer's hammer in June.
>
> As to the question of what a foreign investor could expect, the answer is
> likely to be an appallingly managed business. But this is the main
> attraction, according to Jiang Enhong, a leading corporate turnaround
> expert in the region, who has himself taken on such companies.
>
> Rebellious workers, deception and years of inertia bred from central
> planning define the opportunities for any new investor - local or foreign -
> in China's crumbling state-owned sector, he believes. "I have straightened
> out the management of companies within 44 days, and set them on the way to
> profitability," he says. "This just shows how bad their management was."
>
> The work is arduous, but foreigners may never get the chance to buy into
> state assets as cheaply again.
>
> Foreign investors can also benefit from preferential terms, such as
> municipal tax concessions, which are not on offer to locals. Joint venture
> and foreign-invested companies also have advantages in raising local bank
> finance - which private companies in China find difficult to secure. "If
> only I could get banks to lend to me, I would not just be a tiger, but a
> tiger with wings," says Mr Jiang.
>
> His main problem has been in rationalising the many managers who clog most
> state-owned enter prises. When he bought the Shenyang Antibiotics company,
> which had not made a profit nor paid any tax since 1979, there was one
> manager to every four workers.
>
> Some managers had been awarded offices out of favouritism but their roles
> had not been clearly defined.
>
> Mr Jiang has removed two-thirds of the managers in all three state
> companies he has bought, and defined clearly the task of those remaining.
> Anyone who failed to perform their duties was fired, he adds.
>
> A measure of shock therapy was necessary to teach workers that when their
> factory passed from state to private hands, their "iron rice bowl" of
> socialist-era benefits was taken away. When he took over the Xincheng
> Pharmaceutical factory, workers were supposed to arrive at 8am but most
> came at 10am and many would return home for the day before lunch.
>
> At the opening ceremony for the factory, one worker sat down on a seat
> reserved for dignitaries. When he was told to move, he smashed the chair.
> Mr Jiang told him he would be sacked if he did not donate a new chair by
> the following Monday. "He brought the chair, but we fired him anyway," says
> Mr Jiang.
>
> Laying off workers in China has been fraught with ideological and social
> impediments. It is not as simple as Mr Jiang makes it sound, but a
> Communist Party congress in September ushered in a phase of faster free
> market reform. Redundancies are increasingly seen as unavoidable.
>
> The September congress, and the subsequent National People's Congress in
> March, also helped to overturn an ambiguous official stance on private
> ownership by permitting "diverse forms of public ownership". In Shenyang,
> this has been taken as a cue for the rapid and comprehensive sale of state
> assets. Thousands of state enterprises are to be sold this year and next.
>
> Gai Ruyin, the deputy mayor, says that a severance allowance of, say,
> 10,000rmb (£738) could be paid per worker by the new owners of state
> companies, and that the cost of providing for those who are made redundant
> may be set against the purchase price of the factory.
>
> Morale among the remaining workers is a complicated issue. But Mr Jiang
> believes that some of the control mechanisms found in state enterprises,
> such as the Communist party cell and the trade unions, should be retained.
>
> The Communist party has been invaluable in resolving industrial disputes
> because it carries the authority of China's most powerful body.
>
> One worker had lost his legs when he was run over by a train. He was
> causing trouble outside the factory, inciting others to militancy. With the
> party cell's intervention, a settlement was found. Mr Jiang's company
> bought him a mobile telephone and a stall: he now rents out the phone for
> calls and sells wine by the factory gate.
>
> But Mr Jiang is conscious that the heavy hand with which he has put his
> corporate empire in order should at some point give way to a lighter touch.
> Eventually his three factories are to be "democratised", with each worker
> owning shares.
>
> Louis Proyect
>
> (http://www.panix.com/~lnp3/marxism.html)