A turning point has been reached in the Chinese bureaucratic revolution. Recent events have forced the hands of the new rulers.
They are now in the process of accelerating a change in policy which they had expected to accomplish gradually, or as Mao Tse-tung never failed to emphasise, “by stages.”
The Stalinist government has increased taxes and revenue in kind in order to feed its newly conquered cities. In fact, it has attempted to woo the workers, from whom the party has been alienated these last 20 years, by tying wages to the rice-price index. This has been done in Shanghai and Nanking as part of the “labour honeymoon,” a prelude to integrating the workers into the CP-controlled apparatus. In Manchuria, where the CP is securely in the saddle, such “leniency” towards labour is long past.
In the face of the disaster to agricultural production in the stricken areas, the CP has undertaken not only to feed the cities, then, but also to provide fixed food income of the workers. The resulting squeeze on the peasantry has brought about the first rumblings of revolt in the countryside. The Red Spears secret society has again become active and other groups seem to be able to rally small peasant oppositions. They do not represent threats to CP power by any means but they are straws in the wind whose significance has been grasped by the new ruling class. For while engaging in suppression of every show of discontent, a change in policy has been ordered.
When the army launched its drive for the Yangtze Valley in March the public manifestos promised that “the feudal land-ownership system in the rural areas is to be abolished.” However, “it must be eliminated only after adequate preparation and stage by stage.” In other words, no agrarian revolution which would transform social relations through the activity of the peasants themselves. The stages were to be regulated by the rate of CP consolidation. “The land problem can only be solved after the People’s Liberation Army has arrived and work has been carried on for a considerable period for its solution.” The nature of the change must not too sharply upset the agricultural system so that all social classes emerging from agrarian reform should owe their status to the CP. “Generally speaking, reduction of rents should be carried out first, and land distribution later.”
Thus the hinterland of the newly taken cities is still under the traditional semi-feudal structure except that its rich peasants have waxed ever richer as a result of food shortages. Reform by “stages” has now developed into a danger because the swollen-rich peasants are strong and can new resist any change more effectively. They can also demand their own prices. The secret societies are not so much peasant organisations as rich peasant organisation.
Therefore, Lin Piao, Central Committee members, has ordered acceleration of land reform. On July 21, he declared: “In Central China, where industry is weak, the cities at present rely greatly on the villages for their supply of food and raw materials — while feudal influence and KMT secret agents are still very strong in the villages. It is very important that the feudal system in rural areas be overthrown ... The central emphasis must first of all be on work in the countryside.” (Emphasis in original — J. B.) For a time the emphasis must shift from the great Yangtze cities.
However, even where the agrarian reform has been carried out its results have not always been exactly as planned. The basic law of agrarian reform which the CP has promulgated not only retains class divisions in the village but allies the party with the “new rich peasant” — the village Stakhanovitch-kulak. This class, freed from feudal overlordship with its economically depressing burdens, increases production and accumulates wealth so that the tendency toward a “scissors crisis” has already become a major problem in North China when CP rule is less than a year old. From Tientsin on March 24 the official New China News Service reports: “One of the problems still to he worked out is the restoration of a balanced relation between the economics of the city and the surrounding countryside. The purchasing power of the peasants has increased greatly after the land reform and they are able to buy more goods than the old village industries can supply.”
Antagonism between the needs of city and country is part of the backwardness of China but has been accentuated precisely by the nature of the CP agrarian programme of abetting the “new rich peasant” class. In Central China, where even this reform has been awaiting the readiness of the bureaucrats, those problems are even more distorted and extreme because they still have a feudal form. On top of this, natural disasters of flood and drought have enhanced the position of the rich peasant to a commanding position, while it has brought disaster elsewhere.
It is likely then that the party will attempt to change its relations to the peasantry:
1) It will intensity land reform in newly conquered areas as a measure of preventive consolidation.
2) It will raise taxes in kind, particularly on the rich peasant “ally”.
3) It will begin to tighten up on capitalist elements and change its emphasis to the middle and even poor peasantry to increase its base of village support. These policy changes are indicated from the present growing crisis. However, it is unlikely that anything more than, temporary alleviation of the most pressing difficulties will be accomplished.
The real problem that presses even more irresistibly against the new social structure is industrialisation. The regime has built up an enormous pressure in the countryside by its “stage” policy and its encouragement of the “new rich” peasants. It has taken them into the CP, given them all manner of prestige and honours, organised congresses of these “labour heroes” and in fact has organised agriculture around them — the rich peasant Wu Men-yu has been made a national symbol like Stakhanov and Boussygin were in the first Five Year Plan.
Industrialisation cannot be put off or develop slowly with American and British imports, as have been expected until recently. A new sharp turn is necessary, the first outlines of which are already emerging. It is the peasant and the worker who will be made to pay for a new forced pace. Even lifting the blockade will not change this now.
The tendency of Stalinist economic policy is toward withdrawal from the world market. At a time when the Chinese party has embarked on intensified industrialization it has made autarky its watchword: not a complete withdrawal but sharp limitation on imports. The difference between the world market costs and the higher production costs will be borne by the masses of workers and peasants. What the CP leadership has in mind is not identical with Stalin’s programme of “building socialism in one country.” For as Mao Tze-tung stated in his major declaration of July 1: “Internationally we belong to the anti-imperialist front, headed by the Soviet Union, and for genuine friendly aid we must look to this front and not to the imperialist front.” China’s industrialisation will occur at a political price.
This is the reality behind the new relationship to the US. So that none miss the point, Mao said: “We are told that we must do business. Certainly business must be carried on. We are only against our own and foreign reactionaries who hamper us from doing business... We are told that we need the aid of the British and American governments. Today this is childish reasoning. Imperialists still rule today in Britain and the US. Will they give assistance to a people’s state?”
What Mao is saying is that it is not primarily a matter of “business” but of “assistance” or subsidies. “The CP and also the progressive parties and groups in these countries are now campaigning for the establishment of trade and diplomatic relations with us. These are good intentions.” But they do not answer the main need since the amount of potential trade is so limited.
Such vast economic alterations will bring tightened state control. Although the “alliance” with the “national bourgeoisie” is not yet over, its arena will be increasingly limited under the restricted economy that is being built and the entire arena of the “new democracy” will be narrowed.
The first cost of these problems is to be transferred to the working class. On July 23 the entire Shanghai press suddenly discovered that workers in many cigarette factories had asked for wage cuts to assist in the emergency. The groundwork is being laid for an attack on the workers’ standard of living as the “honeymoon” draws to an end under present exigencies. Such cuts may become a form of pressure on workers to leave Shanghai; hunger is an instrument of Stalinist economic policy.
On the part of the State Department, a harder attitude is emerging. To begin with, policy is no longer based on expectations of an early Chinese Titoism. The recent White Paper not only “wrote off” China but in effect acknowledged extension of the Iron Curtain to China’s bordering nations. Washington’s China policy will tend increasingly to coincide to its general policy toward Russia and its satellites. De facto recognition, a probability, will not alter this. No economic aid is likely while an economic squeeze is probable.
Certain conclusions can be drawn indicating the changed relationship.
1) The antagonisms between the US and Chinese Stalinism are fundamental. being both economic and political. An early accommodation is unlikely since no basis exists for it.
(2) Chinese economy is being reorganised to reduce dependence on all imports and certainly on American imports for which no economic basis exists. This will have enormous repercussions. Internally, the state will assume decisive economic power and for industrialisation will develop capital accumulation through in exploitation of labour and larger taxes on the peasantry. Totalitarian measures will be strengthened. All “Western” influence will he driven out.
3) Between Stalin and Mao Tze-tung there are differences but not, at this time, irreconcilable differences. In all likelihood some economic agreements have been reached, of which the recent Manchurian trade treaty is one. There is no prospect of Chinese Titoism in the immediate future. Only after the present stage has been overcome and new difficulties arise will this question again arise. What is likely is early recognition of the new “people’s democracy” by Russia as soon as it is formed.
(4) The inherent tendencies toward Stalinisation will be speeded up. Class antagonisms in the village and inside the CP itself will come to the fore more rapidly, demanding solution. The CP will be put to the decisive test of whether it can organise a new ruling bureaucratic class out of the varied elements it has rallied to it before the pressures get beyond control.
August 29, 1949