Julio Díaz, a Cuban scholar and specialist on China and socialist economies, presents a different perspective. He maintains that the period 1980 to 1984 was a time of awakening of the economic sciences in China, and this period of debate and reflection led to the formulation of the concept of a socialist road with Chinese characteristics. The concept was affirmed by the Central Committee of the Party in 1984 and at the XIII Congress of the Party in 1987 (2010:76-77).
Debate and reflection continued, and the Party affirmed further concepts at its XIV Congress in 1992. It noted that the evolution of socialism in China demonstrates that practice is the foundation of truth; practice has been taking the initiative in China, and economic theory has followed. It further affirmed that, taking into account the growing material needs of the people, the development of the forces of production and improving the standard of living is the basis for discerning the correct from the erroneous; therefore, the road in course, the Reform and Opening, is the correct way (2010:77-78).
The 1992 Party Congress also affirmed the concept of a socialist market economy. Previous theory had assumed that a market economy is inherent to capitalism, and a planned economy is inherent to socialism. However, China is developing a planned market economy, where planning is primary, and the market plays an auxiliary role. In a planned market economy, the separation between planning and the market is overcome, in a form in which planning rules, and the plan defines the helping role of the market. There are various forms of property, but public property is the pillar. Rejecting both Soviet centralized planning and Maoist collectivist values as ultra-Leftist errors, China has turned to indirect control of the economy by means of macro-economic levers, including mechanisms for the regulation of property, prices, and distribution. Stocks can be emitted, insofar as doing so plays a positive role in the concentration of capital, overcoming deficiencies in the investment projections of the plan (2010:78-80, 84-86, 102-3; 2016:75-76, 143). As expressed by Wu and Wang, in a socialist market economic system, markets play a fundamental role in the allocation of resources under macroeconomic regulation and control (2014:150).
I remember once overhearing a potential U.S. capitalist investor, who was involved in preliminary conservations in Cuba, in anticipation of the end of the U.S. “embargo.” He declared that “these people [Cubans] are nuts; they do not have any idea how capitalism works.” I thought, “Their message to you is that, if you do not like our conditions, you are free to go to some other country, where the government is giving the resources away. But we do not do that here.” Cuba has found that foreign investors often adjust to conditions that Cuba has designed to promote economic development and to defend the interests of the nation. Insofar as Cuba is offering something that other countries cannot offer, and if the project includes return on the capital investment, then foreign investors accept, in spite of atypical Cuban conditions. It is a question of mutually beneficial investment, benefitting the investor and also the Cuban nation and people. This is different from both capitalism and socialism as they have historically developed in practice. It is a pragmatic form of socialism, which permits space for private capital and foreign investment, but in a form that benefits the nation and the people, under the control and regulation of the state.
These folks in China and Cuba with their pragmatic socialism that is different from capitalism and classic socialism may be on to something, perhaps the necessary road for the future of humanity. It is not a third way, different from both capitalism and socialism. It is socialism, but an intelligent socialism, adapted to the particular economic and political conditions of the nation, and seeing the need for the economic development of the nation, as a necessary precondition for a socialism that is sustainable.
Díaz Vázquez, Julio Aracelio. 2010. China: ¿Otro Socialismo? (LX aniversario). La Habana: Editorial de Ciencias Sociales.
__________. 2016. China: Economía y democratización. La Habana: Editorial de Ciencias Sociales
Li, Minqi. 2008. The Rise of China and the Demise of the Capitalist World-Economy. New York: Monthly Review Press.
Meisner, Maurice. 1999. Mao’s China and After: A History of the People’s Republic, Third Edition. New York: The Free Press.
Wu Li and Wang Lei. 2014. China, 1949-2014. Beijing: Beijing Times Chinese Press.