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The new prospects of the Communist Party of China

Giancarlo Elia Valori

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The Communist Party of China (CPC) – in the phase in which it is governed by Xi Jinping and by Prime Minister Li Kekiang – is changing rapidly. This is a geopolitical and strategic factor of great importance also for Europe and the United States.

 Just a few years before its centennial, the Party founded in Shanghai in 1921 is still a “hircocervus”, both for the Communist tradition resulting from the Third International and for the evolution and, sometimes, the disappearance of the Communist Parties in power in the Soviet Union, in its Eastern European satellite countries and in many Asian countries.

 Indeed, the CPC is both a large mass Party and a political organization that, following the Third International’s tradition, presides over the State and defines its political direction.

 Lenin thought of a small Party of militants and officials who developed the policy line and, through the State, imposed it on society.

 In fact, in the Soviet Union, the CPSU destroyed itself by entering civil society. Conversely, in China, the CPC grows stronger by acquiring and selecting the best elements of society and representing the great masses inside and above the State.

 We can here recall the sarcastic smiles and the biting jokes that the CPC leaders –  and, at the time, the Deng Xiaoping of the “Four Modernizations” was already in power – reserved for Gorbachev paying an official visit to China while the “Tien An Mien” rebellion of the students who wanted “democracy” was underway.

 As is well-known, the repression was very harsh. The CPC does not delegate to others the power to reform the Chinese society.

 Hence a Party like the CPC, which is fully traditional in its relationship with the State and the masses, appears to be completely new in turning itself into a mass organization, thus also remaining the source for legitimacy of the Chinese State.

 The Chinese official sources tell us that, when it was founded in 1921, the Party counted only fifty members.

 Today – considering that the CPC has been able to understand the new phase of globalization – it counts 87.7 million members, one every sixteen Chinese citizens.

 More than the population of the whole Germany.

 75% of the current members are male; 43% have at least a high school diploma; 30% are farmers, shepherds and fishermen; 25% are employed, 18% are retired, but only 8% are civil servants.

 On the contrary, the 50 or more probably 57 founding members of the CPC in Shanghai were all members of the ruling classes, with 27 students, 11 journalists and 9 professors.

 In 1949, when the Chinese Communist Party was already controlled by Mao Zedong and took power by wiping out the nationalists, the members were almost four millions.

 From the outset the CPC has chosen the best of the Chinese society, by changing its targets year after year: sometimes intellectual elites or, in other years, rural masses and working classes.

 The traditional dilemma of “Red” versus “Expert” that the CPC would never solve, not even in the harshest moments of the “Great Cultural and Proletarian Revolution”.

 With Deng Xiaoping, who put an end to the phase of the “Red Guards”, by often sending them to terrible work camps, the CPC reached a 50% of technicians, specialists, teachers and “experts”.

 Currently the university students are 40% of the Party’s new recruits.

 A CPC that does not renounce at all to be a mass Party, but also organizes the elites: it is one of the most significant traits of what the Chinese leaders called “Socialism with Chinese characteristics”.

 Furthermore, Xi Jinping no longer wants a Party “taking everyone on board” or joining militants without qualifications, but he tends to gradually turn the CPC into a more selective organization than it currently is.

 The selection is always conducted silently by the Party that listens to the candidates’ friends and colleagues and asks them whether they are “frugal”, “honest” and “correct”.

  For the sources of the CPC inspectors, silence and secrecy are a must.

 Otherwise, the Party will “not forget this.”

All State companies and all foreign companies have a Party unit inside them and this allows better relations between companies and State power.

 Hence if we were to analyze the CPC according to Giovanni Sartori’s modern theory of political Parties, we should say that the Chinese Communist Party is both a “social brokerage body” and a “mechanism of representation”.

 The Soviet Communist Party (CPSU) collapsed because it played only a social brokerage role, but was not representative, while the CPC is expanding because it plays both roles effectively.

 The goal set by Xi Jinping is to create a “moderately prosperous society”.

 It is the evolution of Xi Jinping’s theory of the “Four Comprehensives” announced in early 2015.

 The Four-pronged Comprehensive Strategy is based on the following Four Comprehensives: “comprehensively build a moderately prosperous society”; “comprehensively deepen reform”; “comprehensively govern the nation according to law” and “comprehensively strictly govern the Party”.

 It is worth recalling that moderate prosperity is a fully Confucian concept. Said moderation is that of the equilibrium of man’s faculties and of the relationship between mind and desire. It is not an anti-Epicurean “moderation” in the Western sense.

 Hence the primary factor is prosperity.

  According to the usually reliable Chinese official statistics, over the past thirty years 700 million Chinese have come out of poverty.

 Currently this happens mainly in rural areas, after Deng Xiaoping’s dismantling of rural communes – indeed, the First Modernization was the agricultural one.

 Chinese farmers, however, account for 56-68% of the total population or for 12-14% of the world’s population.

 Nevertheless Deng’s modernization of rural areas did not fully work and, in the early 1990s, the Chinese rural society was still stratified, impoverished and characterized by low productivity, while the cities grew disproportionately and weighed ever more on rural resources.

 Cities and rural areas, the two terms of Mao Zedong’s theory both within Communist China and in foreign policy – the two extreme of the Third International’s eternal dilemma, from the 1932-33 rural crises in Ukraine until Stalin’s famine of 1950.

 Hence Xi Jinping, who knows that the crisis of the Chinese rural world has certainly not disappeared with the semi-privatization of land and prices, has sent 770,000 officials and Party leaders to Chinese rural areas to eradicate poverty and hence stabilize said areas even politically and socially.

 This avoids the excess of rural population reforming a kind of Lumpenproletariat in the urban suburbs.

 With terrible effects on China’s political and social stability.

 A society with excessive income differences is never “harmonious” – just to use a Confucian concept that has now become typical of the CPC.

 And the operation has worked – at least for the time being.

 In fact, from 2013 to 2016, other 56 million people living in rural areas  came out of poverty – and the process to which Xi Jinping attaches particular importance is going on.

 With a view to having a CPC functioning as a backbone of the State and, at the same time, of civil society, corruption must be eradicated – as we have seen since Xi Jinping has been in power.

 Approximately one million Party officials punished, in various ways, for corruption until 2016 and as many as 210,000 already punished in 2017 alone.

 Currently Xi Jinping is the ultimate arbiter of the Party and its members’ careers – perhaps even Mao Zedong never had such power.

 However, instead of destroying all his competitors, Xi Jinping is creating a new blood of young executives, all coming from the CPC, who will quickly replace the old satraps of bureaucracy.

 Besides repressing corruption however, the mechanism of political scrutiny needs to be renewed and strengthened, as the CPC is doing.

 Created when the CPC was founded, the Central Commission for Discipline Inspection (CCDI) has always had very strong power, but it was abolished in 1969 following the Party’s well-known internal struggles.

 It was revived in 1977 and – as happened since 1949 – it has been included  in the Party Constitution.

 Even before Xi Jinping’s rise to power, from 1982 to 1986 the Central Commission for Discipline Inspection expelled 25,000 Party members and imposed a series of disciplinary sanctions on other 67,000 CPC members.

 A structure that has never reduced its specific powers and is the arbiter of the main careers inside the Party and the State.

 In Xi Jinping’s mind the fight against corruption – which, with his leadership, has reached unimaginable levels and has hit high-ranking executives, such as Bo Xilai and Ling Jihua – the cleansing inside the Party combines with the refoundation of the Party’s working style and the strengthening of internal discipline.

The Politburo’s “Eight Guidelines” of December 2012 already pointed to a sober and modest lifestyle for all officials and leaders. Furthermore, Li Keqiang has imposed new standards for the transparency of public budgets and reduced the number of government approvals and authorization for spending, thus eliminating evident possibilities of generating bribes.

 Currently the CPC inspectors are included – often secretly – in all government bodies and in all regional and local structures.

 The system is such that the inspectors are directly responsible for the mistakes or “oversights” of the various Party and government members’ behaviours.

 Before Xi Jinping’s rise to power (and before Wang Qishan, his anti-corruption Chief) the incentives to national or local officials and leaders were based on reaching specific economic targets. Nowadays the granting of cash prizes or of career advances is linked to the overall behaviour of officials and, above all, to their honesty – which overlaps with loyalty and  obedience to the Party, the Central Committee and, obviously, Xi Jinping’s line.

 Moreover the inspections have the strictly political purpose of safeguarding the Central Committee’s joint and centralized authority and leadership.

 Xi Jinping knows all too well that any corruption activity is a de facto form of secession from the “political centre” – as demonstrated by the studies on organized crime in the South of Italy.

 Hence return to the Party’s centralism, without the “federalist” nonsense that is destroying Europe; maintenance of the CPC leadership role on the whole Chinese society and of Xi Jinping’s role as undisputed leader of the  Communist Party of China.

 Three factors which are closely interwoven.

 So far there have been 12 cycles of inspections within the Party – inspections regarding the CPC organizations at all levels, State companies, banks and financial companies, as well as  universities.

 The revision of part of the Constitution has started from this process of  political and moral restructuring.

 The next 19th National Congress will constitute the last and final Sinicization of Marxism.

  A stronger and more authoritative CPC, but, above all more integrated in civil society – and here is the novelty compared to the Third International’s Western tradition.

 Hence development of Socialism “with Chinese characteristics”, which  means Socialism in a society that has not been industrialized by the national bourgeoisie, but by foreigners – a society which is largely rural,  while Marxism thinks above all of industrial workers (that is highly traditional), while Western socialism has inherited the most radical aspects of the bourgeois Enlightenment.

 The aim of this CPC exercise – made authoritative by the struggle against corruption – is that of Xi Jinping’s “moderately prosperous” society, namely a balanced progress of the economy and of political organization, as well as of the cultural, social and environmental evolution.

 Hence self-control of the Party, and – for the first time in the CPC history – reaffirmation of a typical concept of the Western political tradition, namely the “rule of law”.

 As recently stated by Xi Jinping at the Interpol General Assembly in Beijing on September 26 last, China’s inclusion in Interpol is a tool for building a world integrated collective security system both strategically and for the repression of personal crimes and offences.

 The new security – and here Xi Jinping spoke of international policy between the lines – shall be common, global, cooperative and sustainable in the future.

 Hence support for the security of developing countries and perception by all actors of the others’ interests.

 We could speak here of Confucian geopolitics.

 Thinking also of the others is not a difficult process. The issue lies in changing the thinking style and putting ourselves in other people’s shoes, to avoid excessive reactions and, above all, dangerous for the best interest of nations, i.e. world stability.

Hence, stability and security at internal level, with the centralization and moralization of the CPC; security and stability in the international context, with Xi Jinping vigorously defending globalization in Davos, against the resurgence of economic nationalism in the United States; security and centralization of the Chinese interests in Central Asia, which will soon become the launching pad of China as great global power, far beyond its already significant economic potential.

Advisory Board Co-chair Honoris Causa Professor Giancarlo Elia Valori is an eminent Italian economist and businessman. He holds prestigious academic distinctions and national orders. Mr. Valori has lectured on international affairs and economics at the world’s leading universities such as Peking University, the Hebrew University of Jerusalem and the Yeshiva University in New York. He currently chairs “International World Group”, he is also the honorary president of Huawei Italy, economic adviser to the Chinese giant HNA Group. In 1992 he was appointed Officier de la Légion d’Honneur de la République Francaise, with this motivation: “A man who can see across borders to understand the world” and in 2002 he received the title “Honorable” of the Académie des Sciences de l’Institut de France. “

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East Asia

South Korea should go with the United States

Sun Moo Kim

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Now, previous success won’t guarantee same success in future in the age of the Fourth Industrial Revolution, We are expecting generation that ability to create new and missing things is more important than keeping existing assets.

The economic survival strategy also changes.

There is no longer continuous growth in this new era, even for a major growing corporation. For example, an automobile can be a mobile computer with value added on software and electronics. Every industry becomes IT related company, not only food and pharmaceuticals industry, but also construction and banking business as well. Now, a company own by person who counts the money in front of the vault and calculates the stock number can’t be survived. Although the South Korean economy has global competitiveness in mobile phone semiconductors and some industries, South Korea is facing huge challenges.

South Korean companies must challenge upcoming new business in order to servive. South Korea has strong engineering system. But even Germany which has world’s most powerful engineering system is having difficulties in developing new business areas. South Korea has no resources and can’t be self-sufficient. It is the fate of South Korea to look out for the world.

The US and China trade wars of two axis of the global economy are becoming reality.

As the United States imposed a $ 60 billion tariff in retaliation for China`s breach of intellectual property rights, the Chinese Department of Commerce immediately launched a counterattack by imposing a $3 billion tariff on 128 U.S. products.

Global stock markets plummeted dramatically and The WSJ reported that world was horrified by the terrible of uncontrolled commerce war. This trade war is a step in keeping the United States ” Economic security “on the rapid growth of China’s high-tech sector.

China, once called the “World Factory” by cheap labour put their hand to rebellion. To take an instance from smartphone, Huawei, Oppo, Vivo’s superiority in Apple designed by California and produced by China is striking. Oppo and Vivo are focused on advanced technologies, not only low-price.

China is moving from ‘Made in China’ to ‘Created in China’ through the ‘China Manufacturing 2025’ plan for the manufacturing powerhouse. By the manufacturing 2025 project has an ambition to boost China’s competitiveness to surpass the US, Germany, and Japan levels and to become the world’s No.1 in 2049.

According to Financial Times that the Trump government emphasized “economic security is the security of the country,” that is meaning the United States to take aim at the Chinese manufacturing 2025.

It is not so simple in terms of South Korea reality.

In South Korea, China and USA are first and second market highly dependent on exports of Korea that counts 25 percent of China and 12 percent of US market.

If the market shrinks due to the friction between the U.S. and China, South Korea could be caught in the middle of the market and not be able to choose either

But The true global leader in today is the United States and Unites States is really strong.

South Korea should go with the United States.

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East Asia

Power Projection of China

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A coin has always two faces, an analyst is ought to analyze the both sides.

China is considered as flag holder of soft power with a global agenda of peaceful rise. At moment, the world is facing a new emerging global order by the rise of multiple actors in the international arena. Now there are two school of thoughts who are proposing contradictory views like one wing regarded it as optimistic Sino rise who believes that China’s rise is peaceful. Its foreign policy is viewed as one of the most harmonious policy ever structured. They believe in the mutual cooperation and peaceful coexistence. Rise of China is an optimistic opportunity which is justified by different aspects. As African states were facing a massive number of problems at all levels, many super powers came and ruled the world but they didn’t bothered the prosperity of third world countries.

China started invested in African region and assured the chances of prosperity over there. Due to this economic integration of China in Africa, a demise of Indian influence in that has been observed as well. Their economic cooperation is based on model of helping underdeveloped countries by initiating the projects like Belt and Road Initiative. They are extending the helping hand to developing countries by selling products at cheaper rates. They respect the ideologies of other countries, for example, China didn’t celebrated Pig year in Muslim countries. Regarding Pakistan, here the optimistic view is prevailed at higher context. Pakistan’s policy makers favor Chinese investment in Pakistan, as it will help Pakistan in economic prosperity. China helps Pakistan at almost all of the international forum. Friendship of china and Pakistan is the strongest one to be observed. Pakistan can learn a lot from them. The proper use of diplomacy, image building, projection of soft power and individualism in ideologies and beliefs. Long term planning strategies can be learned from them. China is all weather friend of Pakistan but self-skills are significant, as there is a famous Chinese saying, “to serve a guest by fish is a good way but to teach them how to catch fish is the best way to serve them.”

On the other hand, there are supporters of pessimistic Sino rise who believe that China’s rise is threat for globe. This pessimism is oftenly prevailed by western analysts. They think that rise of China can disturb the existing world order. For example, China is competing with American economy in the international market. Balance of power is coin of international politics, so other actors are emerging now. But the rise and demise of powers after a certain time period is one of the laws of nature. Specially America is feeling threatened by this emergence of China as a super power which can be seen through events like Huawei issue over 5G technology, its sensitization, trade war between china and America, claim of copyrights by America etc. increasing influence of China in majority of states is posing the seriousness of issue. Chinese model of Confucianism is spreading as it has started practices in South Korea as well which is predicted through their cultural stimulus.  Pessimistic school of thought deny the authenticity of foreign policy of China, they consider that it is a mere framework which has nothing to do with reality.In reality China’s behavior is like relations having towards Taiwan, South China Sea etc. Interest of states are very important which may differ from each other. Lensing through these views, this unpredictable situation leaves a humans mind into a chaos, whether the rise of China is peaceful or just a myth?

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East Asia

The origin of the Four Modernizations and President Xi Jinping’s current choices

Giancarlo Elia Valori

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On September 13, 1971 Lin Biao tried to flee to the USSR with all his family, aboard a Trident plane of civil aviation, which had left with little fuel and no active radio contact.

The crash of the aircraft in Mongolia, where both Lin and his whole family died, was caused by the order given directly by Mao to shoot down the plane.

 What had happened, obviously in political and not in personal terms?

 The answer is simple: Lin Biao was very strongly opposed to the new agreement between China and the United States and hence had organized a military coup. For Lin Biao all the room for US geopolitics was to be found in what the Third International’s forces traditionally defined as “imperialism”.

 For Mao Zedong, imperialism was vital for both the USSR and the USA- and considering that he was far from the continent that was the prize for which of the two won the Cold War, namely Europe-he refused to make too many differences between the two.

 As a man of Tao and Zen, Mao treated an evil with another evil.

  Mao Zedong, however, also knew that a new economic relationship with the United States was needed, after the long economic crisis and the factional instability within the Chinese regime. The Soviet Union could certainly not give it economic stability and hence the “Great Helmsman” turned to the distant enemy rather than to the near quasi-friend.

 Nothing can be understood about China, including current China, if geopolitical choices are separated from economic, financial and industrial ones which, however, are subjected to the strategic “policy line” defined by the Party – a policy  line that is cultural and always based on a very long term.

 On September 29, 1972 the diplomatic relationship with Japan were resumed, along with those with the United States. An evident overlapping of different geopolitical lines which, however – in the minds of the Chinese decision-makers -were similar also from the symbolic viewpoint.

 In 1973 Deng Xiaoping reappeared in public, upon direct order by Mao Zedong.

 Those were also the years of the late definitive success of the “policy line” of Zhou Enlai, who had successfully gone through the Great Cultural and Proletarian Revolution, which had partly overwhelmed him, and led the 10thCPC Congress.

 That was the compromise which held the Party together, after Lin Biao’s elimination. An unstable agreement between the reformist “Right” (Zhou had spoken of “four modernizations” many years before, exactly in 1965) and the Left, silenced by Mao, that had crossed the red line of the Cultural Revolution and the failed communization of rural areas.

 In those years, also the Party’s Left lacked mass management of the people and the Party and had to agree with the other factions, while Mao mediated and also created “third wheels”.

  Create something from nothing – one of the Thirty-Six Stratagems of the Chinese Art of War.

 In 1973, just before the equilibrium between Zhou and the old CPC apparata broke again, Deng Xiaoping was fully rehabilitated and also became member of the Chinese regime’s deep axis, namely the Central Military Commission.

 In 1975 Deng was elected vice-President of the Central Committee and member of the Politburo Standing Committee.

 The connection between the reformists – if we can call them so – siding with Zhou Enlai, and the “centre” of the Party’s apparatus – that regained its roles and posts by ousting the Armed Forces -prevailed once again.

 Again in 1975, the National People’s Congress praised the “Four Modernizations” already proposed by Zhou and, in its final statement, hoped “that China would be turned into a modern and powerful Socialist country in the approximately twenty years before the end of the century”.

 Political transformation through the new economy, as well as preservation of the regime through political transformation itself.

 We could call it “the Tao of geoeconomics”. Acceleration of industrialization and modernization, but without creating the disaster of rural masses, who were objectively unable of providing the start-up capital for implementing any of the Four Modernizations. This was the real difference with the USSR of the 1930s.

 That capital had to be produced in innovative companies and be attracted from outside.

 At the time, however, the CPC was not yet firmly in the hands of any factions. In September 1975, the national Agriculture Conference saw the harsh clash between Deng Xiaoping and the old “Shanghai group” of the Cultural and Proletarian Revolution that, however, no longer controlled most of the Party.

 Zhou Enlai died in January 1976 and shortly afterwards, in Tiananmen Square, there were severe incidents, albeit with the constant presence of many wreaths reminding of Zhou.

 Later there were also strikes and unrest, until the capture and trial of the “Gang of Four” in Shanghai. It had inspired the “Cultural Revolution” and was then directly accused by Hua Guofen – the man appointed by Mao to lead the transition- of having prepared a coup.

 China’s transformation, however, began again from rural areas: at the second Agriculture Conference in Dazhai, in December 1976 – where various cases of corruption and “social polarization” were described and stigmatized- the discussion focused on the First Modernization, namely that of rural areas.

 When you regulate too much, a parallel and illegal market is created. This always happens.

 Obviously this also happens when total communization is applied to the economic cycle of rural areas.

 Certainly those were residues of Sovietism in the CPC’s  doctrine, but also of the a-dialectical implementation of Marxism-Leninism in historical and social contexts in which the analysis of the founder of “scientific Communism” had never focused.

 In fact, when you read the works and correspondence that Marx dedicated to the Russian agricultural issue, you note that the author of “Capital” foresaw a direct Socialist social transformation stemming from the maintenance of the social and community networks in traditional villages. It may seem strange, but it is so.

 This system operates only with a non-industrialized State that is scarcely widespread in the territory. Otherwise, the problem is that of capitalism in rural areas to generate the surplus of urban and industrial investments.

 Even in the Second Volume of “Capital”, Marx’s model is essentially this one.

 It is precisely on the agricultural issue that the stability and success of many Communist regimes isdefined and, not surprisingly, the first of Zhou’s and later Deng’s Four Modernizations was precisely that of agriculture.

 The topic characterized all Party’s organizations, but it was in late December 1978 that the Third Plenary Session of the 11th CPC Central Committee decided to decentralize the economy – another factor strongly different from the Leninist tradition – and even to liberalize it, in addition to a process of ideological revision, namely Gaige Kaifang that roughly means “reform and opening”.

 That was also related to the request for opening international trade based on the criterion of “mutual benefit” and equality between the various countries.

 Hence, also from the ideological viewpoint, Deng became the Supreme Leader of the Party – as well as of the State apparatus – and announced the Open Door policy.

 An extremely important fact was also the separation of the Bank of China from the People’s Bank of China, so as to serve as single State body for foreign exchanges.

 That was the start of the “Long March” towards the Four Modernizations, with an unusually united Party, and currently towards “Socialism with Chinese characteristics” , as well as – at geopolitical level -President Xi Jinping’s New Silk Road.

 In January 1980, the “four freedoms” – of work, people, goods and capital – were abolished.

 The new planning needed to manage all aspects of productive forces.

  That was explained by a covert war of the Chinese economy against the penetration of foreign capital and joint ventures, which in fact were immediately regulated by specific legislation enacted the previous year.

 The great British operation of economic control over the South-Chinese coasts was resumed from Hong Kong, but the Chinese government eliminated the possibility of such an action by Great Britain (and by the USA, at least partly).

 Hence the Party’s unity had to be reflected in a new context and, to some extents, in the whole society, so as to prevent the liberalized Chinese economy from taking the Party and Socialism away. A new rationale for the CPC’s Leninist unity.

 The new Act on contract law was enacted in March 1981, and in 1982 also the new civil procedure law was enacted, which became effective on October 1, 1982.

 In September 1983, at the 12th CPC Congress, there were three groups within the Party: the nostalgic Maoists, a small and narrow majority for Deng Xiaoping; the Orthodox group that still wanted a nationally planned economy, as in USSR -hence probably the heirs to Lin Biao; finally the real reformists.

 Deng won with a clear, but not overwhelming majority.

 Hence, everyone was waiting for the Four Modernizations to fail, so as to go back to the old routine of the Plan.

 As also happened in the USSR, it was often fully imaginary compared to the actual reality of the things done and produced.

 It was in 1983, however, that the Third Front strategy was implemented, i.e. Mao’s directive – drawn up as early as 1962 – according to which the national strategic industries had to be moved from the coasts – militarily and politically difficult to defend – to the internal areas. Without said Mao’s directive, the New Silk Road could not be understood even currently.

Hence 14 open coastal cities that were declared so in 1984, but with a new law on profits that served as mainstay of Modernizations: companies were asked to pay a certain share of profits to the government, but they could withhold some profits if they matched and exceeded the requirements of the contract with the State.

 In 1985 a new regulation also involved government bonds. The seventh Five-Year Plan began, underlining a “scale” approach, in which the coastal areas – gradually freed from traditional strategic companies – were driving the economic development, which later spread like wildfire even in the internal areas.

 It was the Hong Kong model that Deng Xiaoping’s executives copied and adapted.

 For a short lapse of time, Chinese analysts and Party planners also looked to the Singapore model, with the (single) Party of Lee Kuan Yew.

 It isby no mere coincidence that Shenzen was close to the former British colony, and often the Chinese attracted and favoured the companies of the British area towards the new Chinese coastal areas also characterized by free-market economy.

 Advanced and high-tech services in coastal areas, and lower value-added, but still inevitable, productions in internal regions.

 A new dualism, where rural overpopulation had to be gradually absorbed by inland strategic companies.

 A double geopolitical status of inland areas which, in many cases, is repeated also in the current Belt and Road Initiative.

 In 1986, the “open-ended” contracts for the manpower working in State-owned companies came to an end.

 In October 1987,the 13th CPC Congress was held, in which – for the first time – there was talk about the “commodity economy”, i.e. a two-tier mechanism, in which the market is matched and also “corrected” by the old national planning.

 A sort of re-edition, for internal use, of the formula “one country, two systems” implemented by China with the agreements for Macao and Hong Kong.

 In 1988, however, the 7thNational People’s Congress officially legitimized the private initiative (not the mere ownership) and enabled private individuals to buy State-owned companies.

 The term “People’s ownership” was also deleted, while individuals and groups, even non-Chinese ones, could buy land with a system similar to that of the British real estate leasing.

 Profits, wherever made, had to be reinvested in the company that originated them, before requesting any financing from the People’s Bank.

 The Special Economic Zones, modelled again on the Hong Kong system, became five.

 Hence innovation on the coasts and strategic companies in the central regions – mainly public ones, which still remained almost completely public.

 In April 1989, Jiang Zemin rose to power.

 Student demonstrations also began in Tiananmen Square, where, year after year, the various anti-regime organizations gathered: Falun Gong, the networks of many illegal parties, unrecognized union organizations and many “spontaneous” groups.

 And some old “Red Guards”.

 Zhao Ziyang, the Party leader already defenestrated by Jiang Zemin, was in fact at the centre of “spontaneous” organizations.

 The various Autonomous Federations of Workers -spread by location and not by industry – were legally created.

 Gorbachev’s visit took place in May 1989.

  That was the key moment of a long series of doctrinal, practical, cultural and historical differences that – from the very beginning – divided the two great Eastern heirs to the Marxist-Leninist Third International.

 What really mattered to the Chinese leadership was that the Russian crisis did not overwhelm the Chinese Communists: that was the meaning of the declaration signed by Gorbachev, which regarded the “peaceful coexistence” of the two Communist regimes.

 The leader of the Soviet Party was made fun of – not even so elegantly – not because he had reformed the Soviet economic system – in a way, however, that the Chinese deemed wrong – but for one reason only: he had relinquished the Party’s role in the reformist process, which the CPSU had to lead and guide for China, from the very beginning.

An “economicist” mistake, as the CPC’s ideologues said – yet another proof of the Marxist roughness of the “Northern enemy”, as Deng Xiaoping called Russia.

 Sarcastic sniggers on the lips of Chinese leaders. Then Gorbachev explained again his perestrojka and glas’nost, but the Chinese leaders, whose power was based on Party’s bayonets, kept on not taking him seriously.

 Days before the arrival of the Soviet leader, at least one million people had gathered in Tiananmen Square.

 The problems that the Chinese leadership had to solve in a short lapse of time were radical: the “hard” wing that was previously a minority prevailed and managed to convince Jiang Zemin.

 The Party and its authority – the basis of any transformation, even the most radical one – were re-established without much talk. It was impossible to think about a heir to the “Long March” that dissolved the Party within “society”.

 On May 19, the CPC decided to follow the hard line and the military forces reached the areas near the Square, from the outskirts of Beijing.

 Few hours later, the Square was completely cleared, but that was done the hard way.

 Shortly afterwards, at the 4th CPC Plenum, Jiang Zemin –  also following the experience of Tiananmen Square – returned to one of his old theories and developed the “Three Represents” model, i.e. the idea that the CPC’s power was based on its “vast representation” of the Chinese productive forces, of the cultural and technological avant-gardes and of the wide strata of population.

 In other words, the Chinese society – and its economy, in particular – was reformed by bringing the elites together, part of whom were in Tiananmen Square, but also the large crowds still organized by the Party.

 A Confucian middle way that was particularly successful.

 Hence, Zhao Ziyang definitively lost the game within the Party that, however, was also inside the Tiananmen Square insurgency.

 Once the crisis was over, Deng Xiaoping left also the last very strong power in Jiang’s hands: the leadership of the Central Military Commission.

 Shortly afterwards – and there was nothing more symbolic than that event – the Stock Exchange of Shanghai reopened. A reopening that had been expected since the 1930s.

 Later also the Shenzhen Securities Exchange opened. In both of them, any securities – including those issued by the State – were traded, but there was only one deep logic: to acquire productive capital to generate strong and self-sustained development of the coasts and of the high value-added industries that had to compete on the world free market, without granting protection and aid that would go to the detriment of the deep productive structures of the internal regions.

 In 1992, Deng’s journey to Southern borders had a clear route, although the CPC’s leadership had always had some doubts about the “free economic zones”. The core of the issue was that the GDP had to be increased in the lapse of time between the 1990s and the beginning of the Third Millennium.

  It had to be rapidly increased from 6% to 10%.

 Without that “quantitative” assessment – just to use the old Communist jargon – there could be no “qualitative” transformation of Chinese society.

 Everything had to be done soon – well, but soon. That was the characteristic of Deng Xiaoping’s years – extraordinary years, in some respects.

 In a short lapse of time, the Party developed the concepts of “Socialism with Chinese characteristics” and of “market Socialism”, which are so important also in President Xi Jinping’s current policy line.

 There were also other changes that, in a few years, led to the current Socialism with Chinese characteristics, as advocated by President Xi Jinping. However, everything could be done from a legal view point began in those years.

 The transformation process of the Chinese economy is long, powerful and complex, but – unlike what is often said in the West – it is never a mere market mechanism or a naive adaptation of the Party or the State to the absolute Western rules of globalization.

 As early as the 1990s, China has decided to govern market globalization and not just being a part of it. It wants to lead the process so as to be – now that the end of the century about which Deng thought has long been over – the axis of globalization and the centre of the new global hegemonies.

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