Chinese Socialism: The Only System set to Adapt to the New Economy

By James Carey

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By James Carey

BEIJING – We all know that the global economy is changing. We know the industrial-based economic models of the 20th century are quickly becoming obsolete and being replaced with a highly technical global economy. This economic transition is already – and will continue to – cause major disruptions within every economy, including those of the developed world. Yet while some countries like the United States are currently attempting to hide from these new developments, one nation is building a socialist system for the 21st century that is poised to make them the most likely to succeed in these massive transitions: China.

 As the world moves further into a post-industrial state, most countries realize that these changes will soon begin to cause major disruptions in their labor markets, displacing massive numbers of workers. The introduction of new technologies in the wealthier countries will soon begin to replace jobs in every sector from lower skilled manufacturing positions as well as more “skilled” positions like those in the legal and medical sectors.

While these new technologies will allow countries like the United States to bring manufacturing “back,” as Donald Trump would describe it, actual jobs will not be coming back to the factories. This was most recently demonstrated in the US when plans were announced to build a new Foxconn production facility in the state of Wisconsin. The new factory in the US would take production jobs previously done by Foxconn workers in Asia and replace them with machines operating in Wisconsin manned by only a few hundred fairly low paid workers. This whole endeavor is also heavily subsidized by over $3 billion taxpayer dollars courtesy of the state government in Wisconsin as the only way to make the move actually seem appealing to Foxconn, which has caused outrage in a state currently suffering under austerity measures.

This kind of race to the bottom strategy is illustrative of the type of measures the US takes to appeal to businesses in the global economy in order to bring production back to their country. As this process continues and jobs continue to become more automated, however, there will be even less actual work created for humans, especially those without some level of technical training. Most countries realize one way to counter this is through initiatives in education, but the US is unlikely to rise to this challenge as their education system is always facing cuts and even more so now, under the control of a private school magnate seeking to gut the United States’ public school system.

With the US clearly unprepared to fight the upcoming worker displacement with better education for their workforce, this also means more citizens will be seeking help from the welfare state. This is also constantly under threat of destruction from both major parties in the US making it unlikely to be prepared for a massive influx of new beneficiaries.

China, on the other hand, is a different story. China has quickly become the one nation that is preparing to take some of these necessary measures to ensure their country is properly positioned to handle the economy of the future.

First, when it comes to education, unlike the US, the government of China is currently on a spending spree when it comes to educational investment. Since the 1990’s Chinese expenditures on education as a percentage of GDP have nearly doubled the amount to a yearly total of about 2.5 trillion yuan (about $37b US). While this still doesn’t bring China into the top spenders on education globally, it is still impressive for a country that has pulled millions out of poverty.

 A key difference between the manner in which countries like the US and China spend money on education is also how effective their investment is. This is where China shines and shows that they’re not only willing to continue increasing spending on their education but also focusing their investment to create a quality system which will best prepare their students for the economy of the future.

 Aside from the general spending on education, there are also special programs launched by the Chinese government such as Project 985, an initiative that will cost the government billions of dollars but is expected to pay off by lifting 39 Chinese universities into the top positions of the global university rankings. China has also attracted universities from the west seeking to open campuses there in order to recruit Chinese talent (although Beijing has a variety of programs to encourage citizens to stay in China and build their home country).

 This is because China has a massive skilled workforce who are quickly proving to be rising stars in the crucial science, technology, engineering, and mathematics (STEM) fields. China, which used to only graduate the same amount of STEM students annually as their much smaller neighbor Japan at the turn of the millennium, now graduates the most students in these fields of any country on earth (including the top 8 EU nations combined). China is now also home to four of the world’s top STEM schools, the same amount that the US has.

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This education strategy in China is set to build the type of workforce they need for the future as well as continuing to supply Chinese citizens with increasingly skilled – and increasingly well paying – employment. This means the Chinese can continue to expect a rising standard of living even as many other economies across the globe are still walking a tightrope.

 China has also taken the earliest of the necessary steps to improve their social safety net. While still lacking from some of the larger western economies, again, China’s welfare state is impressive for the stage of economic development they’re currently in and is still being expanded under the policies of Xi Jinping.

 Many of those already raised from poverty in the process of economic development in China is due to a combination of the welfare state and the planned economy easily facilitating the necessary employment. This will likely continue to be the case as even NGOs like Oxfam acknowledge China has one of the fastest growing social spending systems in human history.



But will this training for new workers and the improved welfare state be enough to offset worker displacement?

 This is where China has an advantage over other countries. Like many of their fellow Asian nations, China has an aging population, with the current median age at about 37 and the projected age of 49 by 2100. Yet this may provide China with an advantage in the future as the aging population will offset some of the pain of jobs that will be phased out by automation. The higher paying jobs that remain will allow those who do remain in the workforce to contribute more into social programs for the displaced sectors of the labor force.

There is also the factor of state ownership of giant corporations in China which is able to divert more resources from the business sector into public investment. Even the companies that China doesn’t have ownership of are encouraged to do business responsibly on Chinese soil or face the risk of being ejected from the globe’s largest consumer market. Facebook’s unwillingness to play by China’s rules and the several times Google has been ejected from the country are perfect examples of what happens to corporations that won’t comply with the Communist Party and the Chinese State.

 Western leftists often claim that China is not a “real socialist” state but they should take a closer look at these figures and ask themselves; how did China lift millions from poverty? The answer is simple: The planned economy.

Socialism with Chinese Characteristics and Xi Jinping thought are exactly the kind of developments in Marxist thought the left should be seeking in all countries. China is building the socialism for the next century and the fact that they are the only country actually prepared for the next century, it is about time more people have started to notice. While Xi Jinping has expressed China’s socialism may only work for China, there is still something to be learned from this generation of Chinese leaders which is designing a socialist system for the 21st century and beyond from scratch.

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James Carey is a Detroit-based socialist labor militant and activist, a contributor at Mint Press News  and Fort Russ News, Co-founder at Geopolitics Alert  and writer at The Fifth Column

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