The corruption and degeneration of a section of the cpc were issues even before the so-called reform, and were certainly made worse by the influx of foreign capital in the 1980s. This added to growing frustration with workers’ worsening plight, forming the backdrop to the student protests beginning in 1986-87 and escalating into a series of bold mobilisations in early 1989, which Beijing answered by massacring the protesters on June 4, 1989.
Dissidents within the cpc and the people’s movement were forced into a retreat, which the Deng Xiaoping leadership seized upon to escalate the “door opening” measures into more outright pro-capitalist policies. The retreat of street mobilisations, however, didn’t stop intense questioning and debate from taking place, for example the heated debate in the 1990s, which even the official press had to carry, on the theme “What’s the surname of China’s reform?—Capitalist or Socialist?”

Despite popular pressure, the wholesale denationalisation of state firms pressed ahead in the late 1990s, often through management buyouts (mbos) at greatly depressed prices—a systematic looting of state assets by “well connected” people or cpc officials under some disguise. Under Jiang Zemin’s leadership, the cpc even formalised in 2001—on the 80^th anniversary of the party’s founding—the welcoming of capitalists as party members. The country’s constitution was amended in 2004 to provide explicit protection for private property.

The government decided to codify this protection in a new law—the draft Property Law. This law was also seen as a way to legitimise the massive wealth looted from the state, about which corrupt officials do not yet feel fully confident, being reluctant to display or reinvest it in the absence of an explicit law.

When the draft was released for public consultation in July 2005, many observers were shocked that the primacy of public property—a key foundation of New China—was marginalised. They rightly feared that this law might open wide the door for yet another swag of pro-capitalist measures. Legal Professor Gong Xiantian’s open letter, which follows, has become the focal point of a popular debate after he was, in a rare move, called in by top Beijing officials to elaborate his views and a campaign was launched by pro-capitalist legal practitioners to discredit him. The public debate was followed by a surprise backdown in March 2006, when the government delayed turning the draft into law. This development was celebrated as a small victory by the pro-socialist forces in China.

The victory was transient indeed. In the same month, a group of about 50 neo-liberal economists, legal experts and senior government officials met in a secret gathering in Beijing to plot how to push China’s “reform” from its economic stage to its political stage. The exact substance of the push for “political reform” has never been clearly spelled out, but its outright capitalist agenda is unmistakable.

Also unmistakable was the official weight of the participants, most of whom are cpc members recently involved in advising or carrying out “system restructuring” under China’s “economic reform” agenda. There is every indication that they represent a section of a crystallising pro-capitalist wing within the cpc that is now ready to come out of hiding. As one participant put it in a leaked transcript of the meeting, the so-called reformers are getting sick of having to “signal left while actually seeking to turn right”.
In the leaked transcript, there were calls to adopt the Taiwanese (capitalist) model, for the cpc to split into two factions (presumably to give more public space for the pro-capitalist wing) and for the military to be directed by the state (rather than under the cpc’s command, as at present). Who in the top cpc leadership are behind this pro-capitalist current remains unclear. But there are few signs that ex-general secretary Jiang Zemin would frown on their political direction. There is educated speculation that these right-wing forces are preparing for bigger changes in their favour at the cpc’s next congress, in late 2007.

After the 1989 setback, popular resistance to the pro-capitalist trend has been recovering in militancy but not in organisation. Increasing numbers of workers and retired workers are resisting privatisation and the price they have to pay for it, while peasants and rural dwellers fight against abuses of local officials—often on tax, land, health, education and pollution issues. They are behind the growing trend of “mass [protest] incidents”, which the police reported to have risen from 58,000 in 2003 to 74,000 in 2004. But they were mostly of a spontaneous nature and on a workplace or local level.
Popular resistance is also unfolding on a more ideological level. The pro-capitalist push has prompted one debate after another, mainly via the internet and in a more moderate way through other more controlled media, relying on a layer of Marxist intellectuals as bedrock. A big debate has centred on the massive looting of state property via mbos (see Links #27) and the rising influence of neo-liberalism.