What is socialism with Chinese characteristics

Start of the market economy with Chinese characteristics

"Capitalism is a poisonous gas with a fragrant smell",

warned Mao Tse-tung, from 1943 to 1976 the leading politician in the People's Republic of China in various capacities. The communist rulers relied on a planned economy with rigid state interventions, some of which had catastrophic consequences for the people. As General Secretary of the Communist Party, Deng Xiaoping was also significantly involved, for example in the so-called "Great Leap Forward": From 1958 to 1961, the red cadre forced the farmers to leave their fields and melt their shovels and hoes. So they wanted to drive the industrialization of the country forward. The harvest sank and an estimated 30 million Chinese died of starvation. After Mao's death and the interlude by the left-wing radical quartet around Mao's wife Jiang Qing, known as the "Gang of Four", Deng became the new strong man in China.

He came into a difficult legacy: the state and economy were shattered and many Chinese went hungry. The ideological hardliner turned into a pragmatic reformer. He initiated an economic turnaround in China that was to change the country and the world. Deng then:

"Our modernization must be based on China's realities. We must learn from the experience of other nations. But the success of others cannot simply be copied. We must go our own way. We must achieve socialism with Chinese characteristics."

China remained fundamentally socialist, but it opened up to ideas from outside, including capitalist ones. Farmers were allowed to plow privately again. The rulers now tolerated the private sector and allowed foreign investments.

The question of the right economic course remained a matter of dispute in the communist unity party. After the Tiananmen Square massacre in 1989, it even looked at times as if the critics of economic openness might gain the upper hand. The phase of uncertainty and internal party struggles lasted three years. Then in 1992 Deng undertook a trip to the south of China, which was supposed to commemorate similar trips of the earlier emperors and which drew its symbolic power from it. Deng's economic reforms had begun in the south, where the politician enjoyed particularly strong popular support. He used the environment and put forward some theses on capitalism, which he redefined.

"Do not think that the planned economy is socialist and that the market economy is capitalist. Both are just measures. The market can also serve socialism."

According to this reading, the market economy was no longer a product of capitalism, but a means to an end. People believed Deng. The Communist Party also supported his view of things. In the same year they discussed and approved Deng's plans for the construction of a socialist market economy at the XIV party congress, to be implemented by the end of the century.

Key measures were the separation of the government and management of the state-owned companies and the plan to build up comprehensive social insurance. The corresponding constitutional amendment took place on March 29, 1993. On that day, the MPs replaced the term planned economy with a socialist market economy and changed the phrase "state-run companies" to "state-owned companies". The resolutions triggered a surge in growth.

"Some have to get rich first",

Deng said in the mid-1980s and emphasized at the same time:

"Our politics will not lead to polarization, to a situation where the rich get richer and the poor get poorer."

What a mistake. Prosperity in China is extremely unevenly distributed and the gap between rich and poor is widening. The planned social security for all people does not exist to this day. The Chinese enjoy great freedom as consumers, but not as citizens. The economic liberalization was not followed by political liberalization. And the party leadership is no longer ready to privatize the entire economy. Some industries such as defense, power generation, oil and petrochemicals and telecommunications are said to remain under the absolute control of the state.