The short answer is, “not as much as it used to be.” China still claims to be a socialist country, but it has deviated from the Marxist path it set out on, by letting its society become richer — and more unequal.
In 2017, Chinese President Xi Jinping gave a speech so long that when he was done and returned to his seat, his predecessor, Hu Jintao, gestured at his watch.
In the 3.5-hour-long report, delivered at a once-every-five-years gathering of the ruling Communist Party, few words were said as often as “socialism.”
But it wasn’t just any socialism.
Out of the 73 mentions of “socialism” in Xi’s report, 59 of them were really “socialism with Chinese characteristics.”
And here’s the first thing you need to know: China certainly says it practices socialism, but what this means is up for debate.
Figuring out how China is run is important not just because it directly affects the lives of 1.4 billion Chinese citizens. It’s also important because China’s system of governance, whatever it’s called, could soon be coming to a country near you.
“The path, the theory, the system, and the culture of socialism with Chinese characteristics,” Xi said in his 2017 speech, “offers a new option for other countries and nations who want to speed up their development while preserving their independence; and it offers Chinese wisdom and a Chinese approach to solving the problems facing mankind.”
First up: what exactly is socialism?
Like many other “isms,” socialism doesn’t have a single definition that’s universally accepted. But it essentially calls for a more equal redistribution of wealth and power.
Socialist policies can be implemented in both democratic and authoritarian countries. Its followers generally advocate more progressive taxes, a better social welfare system and a larger state role in the running of the economy. Or any other means that help better balance the rich and the poor, and create a more egalitarian society.
But in the case of China, socialism is not only about equality. It is supposed to take the country towards an ultimate goal – Communism.
Communism, according to German philosopher Karl Marx, is a society without class divisions… or any government. In that perfect world, everyone would be voluntarily working for the public, and at the same time, receiving whatever they needed from publicly owned institutions.
Between the abolition of capitalism and the establishment of full Communism, Marx said there would be a transitional period when the working class rules the bourgeoisie.
Later, Russian revolutionary Vladimir Lenin built on this idea. He said a “vanguard” party would assume power on behalf of the working class during the transitional period he called “socialism.” That party would decide on all political and economic matters.
The Chinese Communist Party was established in 1921 for that purpose. Until now, officials still maintain the idea of building a socialist society and, one day, reaching the goal of Communism.
In discussing whether is China is still on the path that it set out on, political economists say we need to consider two questions:
To answer the question of whether China is socialist today, we’re going to take you back to the roots of modern China, to a time when it was certainly considered a socialist country.
When the People’s Republic was founded in 1949, China embraced the Marxist-Leninist style of socialism wholeheartedly. During the reforms of the 1950s, rural China was divided into numerous “communes:” big, collective farms owned by the state.
Urban China had work units. Private property was abolished.
People shared everything in the communes, from farm work to harvests and meals. Even private cooking was banned: all the woks, bowls and utensils were contributed to public kitchens.
The result? Folks didn’t have much incentive to work. This helped lead to rampant poverty and contributed to a massive famine from 1958 to 1962 that claimed at least 30 million lives, including some relatives of the Inkstone team.
Things began to change in 1978. Then-party leader Deng Xiaoping initiated economic reforms. For the first time in decades, farmers were allowed to sell the crops they grew. Entrepreneurs were allowed to start businesses. And foreigners were allowed to invest in China.
This could have been an awkward transition for the Communist Party, given that Marx had famously summed up his Communist theory with one line: “abolish all private property.”
But Deng insisted that his policy was in line with socialism and named it: “socialism with Chinese characteristics.” He argued that socialist countries could have market economies.
The decision has brought drastic changes to China and the rest of the world. At the moment, the private sector now accounts for more than 60% of the economy and employs more than 80% of Chinese workers.
And since the global financial crisis of 2008, China has contributed more to global economic growth than any other country. And it is a major reason why almost everything you buy (clothes, electronics, Ikea furniture) is so cheap.
But despite the existence of vibrant private businesses, the Chinese economy is still largely run by the state. The government sets a grand development plan every five years and directly owns companies in the most important, strategic sectors.
According to the Fortune Global 500 List, the top 15 Chinese companies with the biggest revenues are all state-owned. Together they dominate China’s energy, banking, telecommunications and rail sectors, where there are few private players.
Chinese officials also regularly intervene in the markets – stocks, housing, currency, etc – even as they allow a measure of market forces to do their thing.
Plus, the government still owns all the land in China, which is in turn leased out to individuals and companies. By this definition, the state owns much of the means of production. That’s a classic tenet of socialism.
While the Chinese government’s strong hand in the economy qualifies it somewhat as socialist, the country is obviously much less socialist when it comes to providing public goods and services.
Public services are subsidized, and there is welfare. But many Chinese often struggle to afford education and healthcare. Millions of rural children have dropped out of school early. Poor families sometimes resort to fundraising to pay for major surgeries.
“China has a strong state that plays a dominant role in developing the economy. However, it is not very effective in redistribution [of wealth] or public goods provision,” said Ruixue Jia, an assistant professor of economics at the University of California, San Diego.
Margaret Pearson, a government and politics professor at the University of Maryland, College Park, said that in terms of redistribution, China is less “socialist” than classic welfare states like the ones in Northern Europe.
In fact, China’s inequality is among the worst among large economies, with more billionaires than any other country but 30 million people living below the national poverty line.
Also, tax rates for the rich are much lower than in countries like Sweden, Finland and Norway.
“China is clearly different from the Nordic countries: income tax only accounts for a small part of government revenues; the government is not effective in redistribution,” Professor Jia said.
Greater social benefits funded by a more progressive tax system, as in Northern European countries, is something American political candidates who see themselves as socialists, from Bernie Sanders to Alexandria Ocasio-Cortez, have advocated.
Lynette Ong, an associate professor of political science at the University of Toronto, put it even more bluntly: “China is a capitalist country with a socialist facade. Adam Smith wearing Karl Marx’s suit.”
Socially and cultural speaking, this is entirely true. Modern Chinese dream of being wealthy, often to ensure consistent access to services that are supposed to be freely provided by the state.
Some people will resort to whatever means to achieve this wealth. On a popular 2010 dating show called If You Are the One, a 22-year-old female contestant famously said she’d rather cry in a BMW, than laugh on the back of a bicycle.
It’s hard to measure exactly how socialist China is or isn’t today, but few scholars would dispute that the country is much less socialist now than when it was founded.
Jeffrey Wasserstrom, a professor of history at the University of California, Irvine, said he found it more appealing in the 1980s, when China was more equal than the US.
“It felt like there was just less of a sharp divide between the way ordinary people and privileged people were living,” he said.
But today, there is a drastic gap in income, education level and lifestyle. While the son of Chinese billionaire Wang Jianlin once bought eight iPhone 7s for his pet dog, the “Ice Boy” of Yunnan survives mainly on potatoes. Similar to the US, the wealthiest 10% of the Chinese families account for 75% of the nation’s savings, according to the 2013 China Household Finance Survey.
“More people are paying for private education. More people are paying for private medical care. So there’s been in many ways a retreat from socialism in China,” Wasserstrom said.
In Xi’s 2017 marathon speech, he declared that “socialism with Chinese characteristics has crossed the threshold into a new era.” Summarizing his first five-year term, he said that China had become stronger and richer than ever.
But in other ways, Xi is moving away from socialism. He has vowed to step up market reforms to free up exchange rates and bring more private capital into state-run sectors.
Regardless of any particular campaign of the day, the Communist Party maintains that as long as it is in charge, ruling the country on behalf of the people and serving their needs, it is upholding what Marx called “the dictatorship of the proletariat” and continuing its march toward communism.
Obviously, some Western scholars do not find this argument convincing. They have argued that the Communist Party is only paying lip service to communism, even as Xi has reiterated time and again the party is setting out to achieve the “noble ideal.”
“You can't judge it according to criteria outside of the party’s control: i.e. what Marx said, or what socialist countries like the Soviet Union or social democratic countries like Sweden do. Socialism means whatever the Chinese Communist Party wants it to mean,” said William Callahan, a professor of international relations at the London School of Economics and Political Science.
“The labels can outlive the reality,” UC Irvine’s Wasserstrom said. “So the Chinese Communist Party still has ‘communist’ in its name. It still claims to be a socialist party: so its policies are what it needs to be able to say ‘this is socialism’ – even though it doesn't look like what you're used to.”
But whatever China’s form of socialism is, it is certainly trying to sell it.
The new era of “socialism with Chinese characteristics,” Xi said in his speech, “means that the path, the theory, the system, and the culture of socialism with Chinese characteristics have kept developing, blazing a new trail for other developing countries to achieve modernization.”
And that has raised fears that China is trying to export its authoritarian rule, rather than any economic model or form of governance.
It’s no secret that labels sometimes don’t reflect reality.
The Chinese Communist Party isn’t truly communist. Australia’s Liberal Party is socially conservative. And the Democratic People’s Republic of Korea, aka North Korea, isn’t exactly democratic.
The name of a thing does not matter as much as what it does.