Is China Really Socialist?

Summary

This script explores the transformation of China under Deng Xiaoping's leadership, highlighting how his famous declaration 'Let some people get rich first' signaled a shift toward economic liberalization. It examines the rise of capitalism in China, the implications of consumerism, and the persistence of inequality through policies like the hukou system. The script also discusses the resurgence of Maoist ideology under Xi Jinping, addressing the tensions between reformist and leftist factions, and challenges the popular belief that China 'lifted 800 million people out of poverty.'

Takeaways

• 📅 Deng Xiaoping’s statement on October 23, 1985, ‘Let some people get rich first,’ marked a turning point in China’s economic transformation and the embrace of capitalism.
• 💼 Despite China’s nominally socialist system, capitalism and consumerism have flourished, with visible signs like the widespread presence of McDonald's, KFC, and luxury goods.
• 🏠 China's real estate market exhibits extreme consumerism, with people buying multiple properties, many of which remain unoccupied.
• 📚 The hukou system in China restricts social mobility, tying people to their place of birth and limiting access to public services in urban areas for rural migrants.
• 🚫 While socialism remains a part of China’s official narrative, the country’s economic policies resemble capitalism in practice, leading to significant class disparities.
• ⚖️ The global financial crisis of 2008 heightened China’s confidence in its own economic model, contributing to a revival of leftist ideals and state interventions.
• 👨‍⚖️ Xi Jinping’s anti-corruption campaign sought to purge capitalist elements within the Communist Party, removing millions of officials accused of corruption.
• 🔄 Xi’s policies are seen as a return to Maoist ideals, focusing on centralized power and a more socialist-oriented agenda, contrasting the capitalist reforms of earlier decades.
• 💡 Deng Xiaoping’s reforms were seen as a pragmatic way to modernize China’s economy, but there was always a limit to how far the country would deviate from socialism.
• 📉 The popular claim that China ‘lifted 800 million people out of poverty’ is critically examined, with some arguing it oversimplifies the complexities of Chinese history and policy.

Q & A

What significant event occurred on October 23rd, 1985, that some argue marked the death of the Chinese Communist Party?

On October 23rd, 1985, Deng Xiaoping explicitly described state policy as 'Let some people get rich first,' signaling a shift toward capitalist practices and marking a significant departure from the traditional Communist ideology.

How did Deng Xiaoping's approach to economic reform differ from the original Communist principles?

Deng Xiaoping's reforms emphasized economic efficiency over ideology, symbolized by his statement 'It doesn't matter whether a cat is black or white, as long as it catches mice.' This pragmatic approach prioritized wealth creation, leading to economic liberalization and growing inequalities.

How did China's consumerism in the 1980s and beyond reflect a shift toward capitalism?

China's consumerism exploded with the presence of international brands like McDonald's and KFC, as well as a growing obsession with luxury goods and real estate speculation. This capitalist culture was starkly visible in China's cities and marked a major shift from its earlier socialist policies.

What is the hukou system, and how does it contribute to social inequality in China?

The hukou system is a household registration system that ties Chinese citizens to their place of birth, limiting their access to public services like education and healthcare if they move to more prosperous areas. This system enforces rigid class distinctions and limits upward mobility.

How did Deng Xiaoping's reforms affect the ideological landscape in China, particularly regarding student support for Communism?

Between 1986 and 1988, student support for Communism plummeted from 38% to just 6.1%, according to government-sanctioned surveys. This reflects how Deng’s reforms gradually eroded the ideological commitment to socialism in favor of capitalist development.

What was the significance of the Global Financial Crisis (GFC) of 2008 in shaping China's economic policies?

The 2008 Global Financial Crisis reinforced China's confidence in its own system, as it emerged as the only major economy to grow during that period. This led to a re-evaluation of Western economic policies and strengthened China's belief in its socialist-capitalist hybrid model.

Who was Bo Xilai, and what role did he play in the resurgence of Maoist ideology in China?

Bo Xilai was a Chinese politician who rose to national fame by promoting Maoist nostalgia through his policies, such as building affordable housing and reviving struggling state enterprises. He symbolized the growing influence of leftist ideology in China and was described as a 'mini-Mao.'

What was the purpose behind Xi Jinping’s anti-corruption campaign, and how did it relate to the capitalist elements within China?

Xi Jinping's anti-corruption campaign aimed to address the entrenched capitalist practices that had infiltrated the Communist Party, such as the second-hand market for cadre positions. It was part of a broader effort to consolidate power and reassert socialist values.

What is the 'implicit agreement' that has allowed the Communist Party to maintain power amidst increasing capitalism in China?

The 'implicit agreement' refers to the understanding that the Communist Party would make the population rich in exchange for political compliance. However, this strategy has its limits as economic growth cannot continue indefinitely.

How does the video challenge the common belief that China 'lifted 800 million people out of poverty'?

The video argues that the claim of lifting 800 million people out of poverty is a myth. It suggests that this narrative oversimplifies China’s history and overlooks the darker aspects of its development, which is explored in more detail in the video’s exclusive Nebula content.

Outlines

00:00

📅 The Day Capitalism Took Over China

October 23rd, 1985, marks a pivotal moment in China's transformation as Deng Xiaoping declared that some should 'get rich first.' This statement symbolized China's shift from socialism to a more capitalist-driven economy. The country experienced radical economic reforms, breaking away from ideological constraints. Western-style consumerism thrived, epitomized by McDonald's and KFCs, and China's wealth inequality grew. Foreigners often remark that China seemed more capitalist than America. Class distinctions, entrenched by the hukou system, became pronounced. By 1986, support for communism among students fell sharply, and China’s political theater continued despite its capitalist realities.

05:04

🕊️ The Aftermath of Mao's Death

Mao Zedong's death in 1976 plunged China into uncertainty, leading to a succession crisis. His passing allowed Deng Xiaoping and his reformist allies to rethink the nation's future, bringing modernization through economic reforms. Deng’s leadership created a more open society but retained key Maoist ideologies. China’s post-Mao leadership recognized the importance of aligning with global capitalism, even if it meant softening socialism at home while maintaining its ideological façade abroad. Deng allowed for limited discussions on Mao’s mistakes, which shaped China's shift from revolutionary socialism to economic pragmatism, all while maintaining Mao's symbolic role in the Party.

10:08

⚖️ Leftist Resurgence and the Global Financial Crisis

The collapse of the Soviet Union and the Global Financial Crisis in 2008 provided momentum for China’s leftist factions, who blamed economic reforms for destabilizing the socialist project. The Chinese government responded to the crisis by injecting massive credit into infrastructure projects, including high-speed rail and roads, keeping unemployment low. China’s ability to navigate the crisis strengthened the leftists' belief in state control over the economy, and nationalism surged as China emerged unscathed. Bo Xilai, a charismatic figure, became a symbol of the revival of Maoist-style socialism, advocating for affordable housing and support for state enterprises.

15:15

🔍 Xi Jinping and the Anti-Corruption Campaign

When Xi Jinping took power in 2012, he launched a massive anti-corruption campaign targeting millions of bureaucrats. While some saw this as a method to eliminate political rivals, the campaign addressed the deep infiltration of capitalist corruption within the Communist Party. Xi discovered that the Party’s loyalty had been compromised by economic corruption, with officials trading loyalty for wealth. His campaign sought to restore the Party's control and ideology, echoing earlier socialist ideals. Xi didn’t initiate the socialist revival but enabled its resurgence, dismantling capitalist structures within the Party to strengthen its ideological purity.

20:17

💡 The Inevitable Return to Socialist Ideals

Despite China’s economic growth, the Communist Party’s claim to legitimacy rests not on capitalism but on maintaining its socialist vision. Economic reforms were always a temporary tool to stabilize the Party, which never distanced itself from its Maoist roots. Outsiders misinterpret China’s development as a shift to pure capitalism, but Deng Xiaoping’s reforms always carried an underlying socialist agenda. As economic growth slows, China must justify its one-party rule through socialist ideology, with Xi Jinping solidifying the Party’s control. The claim that China ‘lifted 800 million people out of poverty’ is also examined critically, revealing the Party’s careful crafting of its narrative.

Keywords

💡Deng Xiaoping

Deng Xiaoping was a Chinese leader who is widely credited with spearheading China’s economic reforms in the late 20th century. In the video, his policies are depicted as a turning point for China's economy, especially his famous phrase, 'Let some people get rich first,' which symbolized the shift from Maoist socialism to a form of state capitalism. His leadership was marked by pragmatic reforms that prioritized economic growth over strict adherence to communist ideology.

💡Capitalism

Capitalism, the economic system where trade and industry are controlled by private owners for profit, is central to the video's analysis of China's transformation. Despite China being led by the Communist Party, the video argues that the country has embraced 'state capitalism,' as evidenced by the widespread presence of consumerism and private enterprise, from McDonald's to real estate speculation, signaling a shift away from socialist principles.

💡Hukou

Hukou refers to China’s household registration system, which ties citizens' access to social services such as education, healthcare, and employment to their place of birth. In the video, the hukou system is presented as a key example of persistent inequality in China, where economic reforms have led to new forms of class distinctions that are legally reinforced, limiting opportunities for those born in less developed regions.

💡Socialism with Chinese characteristics

This phrase, coined by Deng Xiaoping, refers to China's unique blend of socialism and market-oriented reforms. The video explains that while the Chinese Communist Party maintains its socialist identity, the actual policies enacted—such as encouraging entrepreneurship and consumerism—align more closely with capitalist principles. This hybrid model has allowed China to modernize rapidly while maintaining a nominal commitment to socialism.

💡Global Financial Crisis (2008)

The 2008 Global Financial Crisis is portrayed in the video as a pivotal moment for China’s confidence in its own economic model. While the U.S. and other economies faltered, China continued to grow, boosting national pride and diminishing reverence for Western economic practices. The video suggests that this crisis marked a turning point where China began to reassert its socialist roots while simultaneously capitalizing on its success in navigating global markets.

💡Xi Jinping

Xi Jinping is the current leader of China, and the video presents him as a key figure in the revival of Maoist ideology. Xi's anti-corruption campaigns and efforts to consolidate power are framed as part of a larger agenda to reassert socialist control over an increasingly capitalist society. His leadership marks a departure from Deng’s reformist approach and a return to stronger state intervention in both politics and the economy.

💡Reform and Opening

The 'Reform and Opening' policy refers to the series of economic reforms initiated by Deng Xiaoping in 1978, which opened China to foreign investment and market mechanisms while maintaining the Communist Party’s control. The video highlights this as the beginning of China's transformation into a global economic power, though it also questions whether the reforms were as purely capitalist as they appeared, given China’s continued emphasis on socialist rhetoric.

💡Leftist coalition

The Leftist coalition refers to the faction within the Chinese Communist Party that remained loyal to Maoist ideology even after Deng's economic reforms. The video explains that while this faction lost prominence during the Reform era, it has made a comeback under Xi Jinping, who has embraced aspects of Maoist governance and sought to reassert socialist values in China's political and economic systems.

💡Class distinctions

Class distinctions in China have grown significantly since the introduction of market reforms, according to the video. While Maoist China promoted egalitarianism, Deng’s reforms allowed some people to become wealthy first, creating vast economic disparities. These new class divisions are evident in the real estate market, luxury consumption, and social mobility restrictions, like the hukou system, which legally reinforces inequality based on birthplace.

💡Anti-corruption campaign

Xi Jinping’s anti-corruption campaign is presented as one of his signature policies aimed at rooting out corruption within the Communist Party. The video argues that while this campaign has removed millions of officials, it also served to consolidate Xi's power and reassert socialist discipline in an increasingly capitalist society. The campaign is seen as both a tool for political control and a genuine effort to combat the capitalist tendencies within the party.

Highlights

October 23rd, 1985 marked the moment when Deng Xiaoping explicitly endorsed economic inequality, stating 'Let some people get rich first.'

Deng Xiaoping’s philosophy: it doesn’t matter what color the cat is, only that it catches mice — signifying the shift from ideology to pragmatism in China’s economic reforms.

China's rapid transformation in the 1980s led to an economy that appeared more Capitalist than Socialist, evidenced by the proliferation of McDonald’s and KFC outlets.

China's consumerism surpasses global standards, exemplified by trends like collecting multiple homes and the obsession with luxury goods.

Hukou system enforces strict social immobility in China, where birthplace determines access to public services like schools and hospitals.

By the late 1980s, student support for Communism had plummeted from 38% to 6.1%, showcasing a massive ideological shift.

The Communist Party, post-Mao, maintained a thin veneer of tradition to preserve continuity, while adopting economic policies aligned with Capitalism.

Xi Jinping’s era represents a dramatic shift, reviving Maoist ideology while clamping down on corruption and reinstating socialist rhetoric.

The collapse of the Soviet Union and the 2008 Global Financial Crisis reignited Leftist ideologies in China, reinforcing the need for socialist policies.

Bo Xilai, a charismatic politician, tapped into Maoist nostalgia, pushing for policies that resembled ‘Chinese Socialism 3.0’ and gained popular support before his downfall.

Xi Jinping’s anti-corruption campaign purged millions of officials, aiming not just to eliminate rivals but to restore Communist Party discipline and ideology.

China’s reassertion of socialist ideals post-2008 signaled a return to state control and skepticism towards Western economic models.

Deng Xiaoping acknowledged that while reforms opened China to the world, the state could never fully distance itself from Mao’s legacy.

Xi Jinping’s leadership marks a decisive turn away from Deng's pragmatism, signaling a renewed focus on state socialism rather than market liberalization.

The Communist Party’s survival is tied to a delicate balance of economic growth and maintaining its ideological legitimacy, as seen in China’s shift after 2008.

Transcripts

In retrospect, some would say, October 23rd, 1985 was the day the Chinese Communist Party

died.

By the mid-80s, virtually every inch of the country had been transformed by well over

a decade of radical economic reform.

But after that day in October, when Deng Xiaoping explicitly described state policy, as quote,

“Let[ting] some people get rich first”, the proverbial cat was undeniably and seemingly

irreversibly out of the bag.

It didn’t matter what ‘-ism’ defined its economy, or, in the words of Deng, what

color the cat was, only that it was effective at catching mice, for ideology had no place

in this new China.

Class struggle and collectivization had already given way to new inequalities.

But with Deng’s unequivocal proclamations, gone too was even the façade.

There was nothing especially subtle about it.

Any American visitor to China in the roughly thirty years after 1980 — myself included

— inevitably returns with the same surprised observation: “China looks more Capitalist

than America”, (and that’s saying something!).

Most iconically, there are the McDonald’s.

So, so many McDonald’s.

And you can’t miss the KFCs.

Twice as many, in fact, as in America.

Street vendors everywhere trying to make a buck.

Shopping malls, Apple Stores, and designer handbags.

Chinese consumerism is globally unmatched in its ostentatiousness.

But the culture of Capitalism has seeped much deeper than mere brand names.

The American obsession with buying houses launched the greatest financial crisis of

the 21st century… yet is thoroughly put to shame by the Chinese, who ‘collect’

third and even fourth homes — all empty, bought before completion, and likely to never

be lived in by anyone — like the rest of the world collects stamps.

Then there are the class distinctions.

Americans are no strangers to economic inequality.

But, at least in theory, no law stops you from packing up and moving to Beverly Hills.

In China, your place of birth quite literally determines your place in the world.

Household registration — or hukou — means you can move from middle-of-nowhere Gansu

province to cosmopolitan Shanghai — but its public schools, hospitals, and jobs will

forever be legally off-limits.

Place of birth matters everywhere, but only in China do authorities not even pretend otherwise.

And if all that doesn’t convince you “Socialism with Chinese characteristics” is but a euphemism

for “state Capitalism” there’s plenty more evidence to choose from…

Starting in 1980, international corporations could buy advertising space in the Communist

Party’s official magazine — albeit with one exception: Coca-Cola was explicitly banned.

In the two years between 1986 and 88, student support for “Communism” fell from 38%

to just 6.1.

And bear in mind, these are officially-sanctioned surveys!

Deng Xiaoping even warned that although China should “maintain vigilance” against the

“Right”, it should be “primarily” wary of the “Left”.

Since the death of Mao, the Communist Party has maintained only the thinnest veneer of

tradition in the interest of continuity — acting out the motions of increasingly-vague 5-year

plans and increasingly-predictable Politburo procedure.

But while the rest of the world has largely played along with this political theater,

we’ve all long since realized: underneath this nearly transparent Maoist packaging is

pure, raw, Big Mac-loving, unadulterated Capitalism in all but name.

Then, Xi Jinping happened.

Today, after a decade of this new era, you wouldn’t just have to be an optimist to

not see how things have changed, you’d truly have to be living under a rock.

And to notice the similarities between Mao and Xi is to be confronted with an uncomfortable

question: Did this Maoist revival emerge spontaneously, implausibly manufactured by one man alone?

Or, did even the most clear-eyed China-watchers fundamentally misunderstand the past five

decades?

One way or another, a reappraisal is overdue.

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On the 9th of September 1976, China experienced the most traumatic and destabilizing thing

that can happen to a cult of personality — the death of that personality.

With the sole exception, perhaps, of North Korea’s Kim Il-Sung, no country has ever

had so many of its political eggs in one basket.

China was the Communist Party.

And the Communist Party was Mao.

His complete monopoly on power created a volatile vacuum of power and all but guaranteed a succession

crisis after his fatal heart attack.

How you interpret what happened next is where history diverges.

In one version — the one most of us have come to believe — the death of Mao forced

the Party — indeed, the entire country — to do some serious soul searching.

His absence gave Deng’s generation room to critically re-examine the horrors of the

past quarter century and steer the country in a new direction.

There’s simply no denying that the scale and speed of China’s modernization was a

direct result of these reforms.

Had Mao’s 4 confidants not been purged a mere month after his death, the word “TikTok”

would probably still mean an early-2000s pop song.

You wouldn’t know what “Shenzhen” is today.

In a very different version of history, Deng Xiaoping’s greatest innovation is not liberalizing

the Chinese economy, exactly, but knowing the secret passwords to join the globalized,

American-led export market.

In this world, China’s post-Mao leaders realize there’s a practical limit to the

amount of starvation the average person is willing to endure in the name of peasant revolution.

They realize, after ‘89, that photographs of tanks do a lot of damage to the national

brand, and firing squads are bad for business.

At home, China maintains the prominence of Mao and continues speaking the language of

Socialism.

But abroad, it emphasizes the “…with Chinese characteristics” part.

It’s a ruse the rest of the world is either too naive to notice or too blinded by dollar

signs to act on.

The truth, it would seem, is an uneasy mix of both.

Though, probably more of the latter.

On one hand, Mao’s death did allow for the entry of a new — previously mythical — ‘m’-word

to the government’s vocabulary — ‘mistake’.

Accompanying it were ‘democracy’, ‘opposition’, and even, if you can believe it, ‘human

rights’ — though its precise definition may have been, shall we say, lost in translation.

Yet, no sooner had Deng uttered these words, when old red lines were redrawn.

In other words, the scope of permissible speech widened by a remarkable degree in a remarkably

short period of time.

But Deng’s “four cardinal principles” still left a lot to be desired.

In the party’s own words, Mao’s “contributions to the Chinese revolution far outweigh his

mistakes…”

Another important thing to note — something we may have dismissed as a mere ‘historical

detail’ for the fifty years between then and now but today in 2022 is clearly anything

but — is the fact that Mao’s death led to the very first policy ‘debates’ in

the PRC.

For the first time in the country’s history, you could say things like “Hmm, maybe Mao

was only 70% correct”.

That’s a pretty big deal!

Much bigger than it sounds.

That 30% tolerance could be the difference between, say, China being comfortable importing

foreign-made mRNA vaccines and sealing its borders shut for years to come.

Anyway, history remembers the victor, and Deng’s Reformist camp was decisively victorious.

But that makes it all too easy to forget that there were other factions.

The more Maoist “Leftist” coalition slowly faded from the spotlight, but, in hindsight,

never quite disappeared.

Leftists couldn’t exactly speak their minds freely, yet still enjoyed some protection

under the banner of the unassailable “Great Chairman”.

Censorship is always a cat-and-mouse game and the more aggressive the cat, the more

clever become the mice.

Political groups in China quickly learned they could get away with just a little bit

more while waving a Little Red Book.

Ultimately, Leftists were at the mercy of the Reformist-led Communist Party, who reluctantly

tolerated their existence, if only as a counterbalance to the right.

But what Deng couldn’t have predicted was that several Earth-shattering global crises

many years later would unexpectedly tip the balance, once again, in the Leftists’ favor

— allowing them to re-emerge from the shadows.

However profoundly the fall of the Soviet Union may have affected the world, it hit

especially close to home in China.

The two countries had long since splintered ideologically but they still had more in common

than not.

With the Russians out of the picture and no other large, industrialized role models to

be found, China was effectively left to carry the mantle of Socialism alone.

This was uncharted territory and the stakes, clearly, were existential.

But what, exactly, was the lesson for Chinese leaders?

While Deng’s Reformers ‘learned’ that the Soviets had liberalized too slowly, Leftists

took away the opposite conclusion — that reform was the problem.

Whatever disagreements lingered, they were thoroughly put to rest after 2008.

Just as the Soviet collapse triggered anxious introspection and delivered a political win

for the Leftist coalition, so too did the Global Financial Crisis reverberate in China.

While Americans were preoccupied with real estate and the rest of the world, with its

second, third, and fourth-order effects, China buckled down for a storm, pumping an unfathomable

amount of credit into its economy in anticipation of hard times to come.

Shiny airports!

Roads.

Roads to the middle of nowhere.

Roads connecting two middle-of-nowheres.

And yes, the colossal High-Speed Rail network the rest of the world marvels at.

But the looming storm never arrived.

Even though many of these roads proved useless and high-speed trains to the desert sat predictably

empty, when the expected alternative was mass unemployment, it felt a lot like a victory.

Not only did China emerge from the global financial crisis unscathed, but it did so

as the only major economy to actually grow.

And by double digits, no less.

In just a few short months, Chinese leaders both lost their reverence for U.S. economic

policy — arguably, U.S. policy period — and gained immense self-confidence in their own

system.

…Or rather, re-gained.

The last time China stood this tall was under Mao.

The 2008 Beijing Olympics didn’t hurt, either.

Meanwhile, around that same time, the son of a powerful revolutionary named Bo Xilai

rises to national fame precisely by tapping into this Maoist nostalgia.

Bo was not a normal Chinese bureaucrat.

He was charismatic.

He liked the spotlight.

And, most importantly, he was not boring.

This highly unusual personal approach to politics both made him extremely well-liked and probably

led to his ultimate demise.

In short, Bo Xilai was described as a “mini-Mao”, and his policies as ushering in “Chinese

Socialism 3.0”.

He built affordable housing, saved struggling State Enterprises, and helped level the playing

field for poor migrants.

Above all, he proved that Socialism, at least one particular flavor, still had cachet in

China.

Not unlike Bernie Sanders or Donald Trump, his popularity exposed a long-dormant political

segment.

Now, nothing changed overnight.

New McDonald’s were still being built.

The iPhone was only beginning to achieve velocity — largely built with Chinese manufacturing

and bought by the Chinese middle-class.

But, if you were looking closely, the stage had been set.

The Chinese Leftist movement was making a comeback.

When Xi Jinping inherited power in 2012, he was reportedly shocked to discover CIA spies

working at the highest levels of the Party.

That, of course, was concerning on its own.

But even more concerning was what that meant.

After three decades of market reform, China had become near-fatally Capitalist.

We’re not talking about D.C. lobbyist Crony Capitalism here.

There was a second-hand market for Cadre positions.

Let that sink in: you could buy your way into the Communist party, albeit under the table.

That was how the CIA allegedly infiltrated the party.

They simply paid.

And if cadres were willing to sell out their country that easily, it goes without saying:

the only chairman these corrupt officials were loyal to was the Mao staring back at

them on banknotes.

Xi was horrified to find China occupied by Capitalists.

As we saw in this earlier video, public-private collusion enabled breakneck economic growth.

It turns out, the right kind of corruption can actually speed up development.

But we see now that it also threatened such necessities to the survival of the Communist

Party as its chain of command.

Xi realized this and launched a multi-year anti-corruption campaign that took down not

hundreds or thousands but millions of bureaucrats across China.

In fact, it never really ended.

Many on the outside interpreted this campaign through the lens of a dictator accumulating

power.

Corruption, after all, is a common pretext for eliminating one’s rivals.

But this misses the forest for the trees.

Of course Xi Jinping took out some competitors along the way.

But it’s doubtful he identified a million and a half competitors.

And of course he’s trying to consolidate power.

But to what end?

A closer look at history reveals that many of Xi’s signature campaigns began under

his predecessor, Hu Jintao.

Although the ship was turning too slowly for many to notice, the new course had long been

set.

As any Socialist will tell you, Capitalism becomes entrenched.

The ‘vanguard’ of the proletariat — cadres — tend to… lose sight of their comrades

once they own a BMW.

The difference between Hu and Xi is not so much ideology but that only the latter has

the political power to overcome this obstacle.

Xi Jinping didn’t instigate the Socialist revival, but he was the first to make it practically

possible.

And he doesn’t have much time.

The usual explanation for the Communist Party’s continued existence amidst a sea of Capitalism

is “performance legitimacy”, or the implicit agreement.

“We’ll make you rich”, it goes, “and you won’t challenge our authority”.

But perhaps this theory says more about us than it does about China.

If you’re really looking, there’s a mountain of evidence suggesting sincere ideology was

there all along.

It’s obvious, in retrospect, that reform had a lifespan.

Economic growth can’t go on indefinitely.

Even in a country of 1.4 billion, you can only build so many high-speed trains.

This places the Party on tenuous ground because its legitimacy would be at the whim of volatile

stock markets and real estate bubbles.

But even if growth did continue, the Communist Party’s unique claim to power would weaken

with each passing year.

While China was “getting rich”, lots of other countries were getting rich too.

Reform-era China didn’t have a compelling source of national pride.

Listen closely and China’s own leaders have made clear that “making people rich” was

never its complete strategy.

This emphasis on economic growth was always a temporary and partial measure.

Even Reformers believed in some version of Socialism.

They just disagreed on how best to get there.

Although it’s ruled by a Communist Party, it does not claim to be a Communist State.

Communism, after all, is a Utopian destination that even its most ardent supporters don’t

believe is on the horizon anytime soon.

This is the fundamental source of confusion.

Outsiders, even, or especially, experts not familiar with Chinese history, see a country

replete with markets and privately-owned c ompanies.

They see, as we did, that even Communist Party ranks can be bought for cash and conclude

that “Socialism” is obviously a façade — a misunderstanding which, ironically,

has suited China quite well.

But look even closer and it’s clear that this is itself a façade.

Deng Xiaoping said this explicitly — the state could never truly distance itself from

Mao because he was inseparable from the Party.

The writing has been on the wall, if only we were looking, since 1980 — just 3 years

after Mao’s death.

The party was only ever going to deviate from its origins so much.

And remember, that was the best case, coming from Mr. Reform and Opening himself.

Now, there’s some truth to the “implicit agreement”.

You can easily see how the proletariat would be more or less patient on the path to Utopia

depending on how many Big Macs they can afford.

But while reform could have been much longer, shorter, stricter, or looser, depending on

which coalition won, the existence of the Communist Party requires that it eventually

justify its monopoly on power.

Otherwise, anyone could rule China.

The other common justification for the party is the argument that, despite its “flaws”,

it did “lift” 800 million people out of poverty.

It’s the retort that any critique of China is met with.

But there’s just one problem: it’s not really true.

I’ve wanted to debunk this myth for years but the only way to do so honestly is with

a rather grim and gruesome inspection of Chinese history, which demonetization makes impossible

on YouTube.

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