Privatization is the main erroneous tendency in China's economic field

This short article outlines the basic tasks of the primary stage of socialism and the challenges faced at this point in China's economic development. The fundamental question is in which direction will China go. Will the reforms that support a market economy and the development of private enterprise reach a tipping point where the underlying socialist foundations of the economy are eroded to the point of no return, or will the state-owned sector be protected and promoted to ensure the continued development of the socialist nature of the economy? The ultimate question is whither China? Those who promote privatization also promote “universal values,” a code word for “human rights,” and “democratization,” a code word for the liquidation of the Communist Party, its transformation into a reformist Social Democratic Party and the implementation of a bourgeois democratic multi-party, bicameral parliamentary system of governance. During the recent National Peoples Congress Wu Banguo, Chairman of the NPC Standing Committee announced the “Five NOs” as the guiding principle of the State during the next five year period, no multiparty election (maintenance of the political monopoly of the Communist Party) , no diversified guiding ideology systems (maintenance of Marxism-Leninism-Mao Zedong Thought as the guiding ideological system), no separation of powers (subservience of the political system to the Communist Party), no federal system (maintenance of central control of the economy) and no privatization (state-control of the commanding heights of the economy). 

Privatization is the main erroneous tendency in China's economic field

Liu Guoguang 　

The precondition for persisting in the primary stage of socialism, the basis of our economy, is to maintain the socialist market economy and to avoid both privatization and the single public ownership system. Currently the main erroneous tendency is not towards the single public ownership system but privatization. As regards the two tendencies, the crucial point is not to beat the one down, but to realistically and gradually retreat from the tendency towards privatization.
 
The criteria that Marxism uses in evaluating the system of ownership is not just looking at the proportional make-up of the ownership system. Neither does Marxism advocate not looking at this proportion. If, however, the proportion of the public sector of the national economy is constantly being reduced, reduced to a very low level, tending towards zero, that cannot be considered socialism. Over the last few years our macro-economy has seen the decline of public ownership and the rise of private ownership, "The nation recedes while the people advance." Some scholars estimate that public ownership no longer holds the predominate position. If that determination holds true then the basic economic system enshrined in our constitution is in imminent danger. This needs to be urgently reversed.
 
The basic economic system not only requires that public ownership occupies the dominant position in the economy but that the state plays a dominant role in the economy. The state should have control over the economic lifelines of the national economy. The power of the state to control, influence and compete must be enhanced. In the socialist economy, the role of the state in the economy is not like that in the capitalist system, in which it is only engaged in supporting private sector companies, does not want to operate departments that supplement private enterprise and seeks to rectify the inadequacies of market mechanisms. In the socialist economy the role of the state is to achieve the sustained, stable and coordinated development, consolidation and improvement of the socialist system. The state-owned economy should be focused on the energy, transportation, communications, finance, infrastructure and pillar industries, and other important industries and key areas in the life of the national economy, and should have "absolute control", "strong control ", "or a controlling interest" in these industries.

Another task of the State-owned economy is to protect social justice and an equitable economic base. Areas in which state-owned assets are not important for the regulation of the economy, but are very important in order to safeguard justice and fair competition should also be regarded as "important" and "critical" areas, and the state should strive to do a good job. Therefore, the task is not only to preserve the controlling power of the state-owned sector's natural monopoly position in the economy but at the same time to safeguard its development in the competitive arena, display its stability, ability to create employment, guarantee social well-being and its function in supplying public services, strengthening national transfer payments and carrying out the fair redistribution of economic power and strength.
 
The State-owned economy must not, as some neo-liberal elites and members of the chattering class within the system keep shouting, "completely withdraw" from the competitive field. The proponents of the privatization of the state-owned economy require that it not only fully withdraw from the field of competition, but also that the so-called lifelines of the national economy, the important industries and key areas, pull out of the state-owned economy. One of the measures advocated is to create conditions to encourage private enterprises to enter the "monopoly industries," this is the dream of the advocates of privatization because these monopoly industries are generally high profit industries. It should be made clear that in regard to national security the problem is not that there should be no control of economic lifelines and the natural monopoly industries in strategic sectors,, but rather who will be in control and who will monopolize. In general, in these particular sectors and industries, public ownership rather than private ownership of business enterprises better reflects the country's strategic interests and the public interest.
 
The private economy has two sides, in addition to the positive side which is conducive to the development of productive forces,, it also has the negative side of exploitation, which should be bound by the society because the nature of exploitation and the pursuit of self-interest gives rise to a number of social consequences, such as labor disputes, polarization, etc. Marxist political economy must be aware that it is not only necessary to study the private economy and private enterprise in order to guide their healthy development in legitimate business in appropriate industries, but also to limit their illegal and unhealthy management behavior and control their areas of business, such as they should not be allowed to control the lifeblood of key sectors and not be allowed to enter the monopoly sectors, these sectors are naturally highly profitable sectors but are also in the national and public interests, it should be borne by the public sector and cannot be for making a fortune for private capital to expand the gap between rich and poor.

 ("Global Vision globalview.cn" No. 371, taken from the "Social Science Report," January 6, 2011, the original title is "consolidating the institutional basis of the socialist market economy - the primary stage of the basic economic system")