The New Question in Asia:

Peoples Republic of China

Background And A Discussion of Commercial Reforms

By

Thomas H. Spitters

Box 637 San Francisco, California

December 2007

94104

When one examines the original influences around the

communist revolution in China, any historian must at the
latest start with the turn of the previous century and the
troubles the Manchu dynasty had with controlling foreign
influences in the country. Though at the time, there were
many overseas Chinese that pervaded the work forces of some
western countries, especially the U.S., on the contrary
there were also significant influences within China on the
part of Portugal, Japan, Germany, France, the United States
and Great Britain. It is impossible to calculate the
intrinsic value of the institutions that were brought to
China from the West, even the feudal ones: China under the
Manchus was administratively though not politically unified
due to the size of the country and a tradition of
factionalism dating back to the Middle Ages.

At the turn of the previous century, oriental Asia hosted a

brutal but brief war between Japan and Russia that
encouraged revolutionary fervor and action in China itself.
From its earliest days, the actual revolution in China that
took so many years was a contest between imitators of the
French revolution and the Paris commune fighting the
political and military forces that would have brought
Chinese society more rapidly into the twentieth century and
would have assured, at first, a martial form of western
democracy in that country. The imitators of the Paris
commune were perhaps winners in this contest only because
they encouraged and promoted their politics, verbally and in
the literature, as that of the ordinary and apolitical
individual in the countryside; this proved to be more
appealing practically and intellectually to everday Chinese
at the time.
The ostensibly provincial character of the victors in the
Chinese revolution encouraged a denunciation of western
modernity by its nature, and encouraged a kind of rural
orientalism that resulted in an emphasis on agriculture as
it was on the mainland during the day and any sort of manual
handiwork, political or otherwise. A democratic party, the
Nationalists as they were called, followers of Chiang Kai
shek, were the opposite of this, to the extent of
encouraging modernism and a wider and more educated world
view for everyone. The Nationalists were vehemently
denounced as fascists, something that gained great appeal
after the defeat of Germany and Japan in 1945.
The original leader of the Nationalists, Sun Yat sen, did
have an idea how to integrate the communists into any new
regime in China, and this greatly depended upon dealing with
the appeals to regicide and annihilation of traces of the

empire. Pu Yi, the last emperor of China, was unfortunately

a weak ruler and was subject to the moral and administrative
accusations of his relatives who determined to a large
extent the failure and finality of the Manchu empire. This
is also true of the Japanese regime in Manchuria during WWII
where Pu Yi was financially sponsored to run a Manchurian
based regime, and then maybe China itself. The Japanese
would have put him aside had his efforts to re assert his
divine right in China again found any wide appeal among
Chinese people.
In between the insinuation of the Japanese into mainland
China and WWII and the conclusion of the revolution in the
country in 1949, was a period of helter - skelter civil
warring in China, between the Nationalists and the
Communists that did not get major world attention until
after WWII because most attention had been focused for years
on anti Semitism in Germany and the fate of Europe. The
warring began as the result of the failed efforts of Sun Yat
sen to integrate the communists into a Nationalist
government. How could Dr. Sun have constructively worked
toward this effort, or is the story of the Nationalists
forming an alliance with the communists apocryphal? The
facts were, when trouble really started in China after the
Russo Japanese war in 1905, Dr. Sun probably planned that
since the communists had enclaves established in the
country, he would let them keep them without contest as long
as they promised constructive participation in the
mainlands future constitutional government. This provoked
a propaganda war as the communist leadership was divisive
and knew Sun was physically ill, and as Dr. Suns health
declined, it became public information that he was dying of
cancer. It is important to note here that all the leaders
of the countervailing forces, probably even including the
emperor himself and his family, knew each other and of each
other from their associations as young people through their
educational institutions, the military, and through mutual
audiences as well. Dr. Sun knew that in the contest for
power over the masses people had differences, but as long as
the new government was participatory and democratic, the
different parties would have agreed in spirit to work toward
establishing an administration with civic and political
freedoms and market economics all without the influence of
foreigners. Dr. Sun represented, above all, the attitude
and conviction that Chinese people needed to take their
country back and would strive to do so.
Because foreign influences had become so pervasive during
the last years of the empire, most of China existed as a de
facto western European business regime where many people who

represented western interests ruled the country, despite the

administrative position of the emperor, mostly through their
economic or mercantilist powers; and certainly the royals
were excluded from exercising any real power, much less the
people through any plebiscite. Germans, French, British,
Americans, Portugese, and Japanese interests represented an
international citizenry and economic upper class sine qua
non that ruled China. Dr. Suns promise was to unify the
country under the implication of eliminating these
influences and their administrative, legal, political and
economic power. As he played these powers against each
other ideologically, the prospect of a world war appeared on
the political horizon during the 1920s, and for some
reasons his attitude of disparagement of foreigners in
China worked at least somewhat during those years.
Moreover, due to the expenses of preparing for war on the
part of everyone, foreign influence in China did become more
tepid and less controlling than it had ever been during the
colonial era, maybe with the exception of the territory of
Hong Kong as controlled by the English.
Dr. Sun died and a kind of terror struck the country. The
Nationalists were portrayed by the communists as an
association to further efforts at penetrating Chinese
society by the European powers and the Americans. The
Nationalists also had much western military materiel and
expertise, and common knowledge of this plunged the
communists and nationalists into battles of
misunderstanding, ideological contests, and provincial armed
conflict that implicitly and seemingly invited the Japanese
military into the principal seaports, Shang Hai and Nan
Jing, to assert their hegemony during the civil war years.
Some of the more significant events of this time are
fictionally portrayed in the novel La condition humaine, by
Andre Malraux, and another text entitled Life and Death in
Shang Hai, tells about the tearing apart of the fabric of
Chinese society after the abdication of the emperor. That
the Nationalists and communists could not reconcile their
differences did set the country back considerably, and
assured a kind of ignominy for Chinese society on the world
stage as life on the mainland was to become very secretive,
shaded and condemned by western powers.
The contest between Chiang, and Mao and the communist
leadership, started after the death of Sun and proceeded
through the epoch of the Long March which resulted in a
political victory for the leftists sometime later. Leading
up to that, it is possible that leaders of the western
powers knew Chiang would eventually accept defeat for lack
of resources, and then move to Taiwan, and that fighting the

communists as sponsored by the soviets at the time was a

foregone conclusion a huge loss. It was the time of the
Great Depression in western countries and the economy of
Russia, another communist world power, appeared to be doing
much better than what was called for at the time and
engendered western political sympathies. The too successful
business of Leninism and communism in the 1920s and
somewhat in the 1930s led the mainland into a lack of
preparedness for WWII and the challenges of pushing and
prompting China as an essentially leaderless state into the
age of modernity in the first place.
This is all background to the eventual victory of the
communists on the mainland in 1949 and the eviction of the
Nationalists to Taiwan. The communists played on the ideas
of the currents of history and permanence of domestic
political/cultural influences as approved by the communist
leadership in Chinese society on the mainland, and engaged
in specious and futile, even despotic, government
sponsored ideological and political movements including the
Cultural Revolution of which the failed Hundred Flowers
and Great Leap Forward campaigns. These projects did no
more than to terrorize most people on the mainland into
informing on and denouncing, and condemning each other
politically. This resulted in needless internal conflict
and violence on the part of the Red Army that purged many
influential and intellectual people who would have otherwise
moved the country forward.
After the bad effects of the Cultural Revolution became
apparent, chiefly after the visit of president Nixon to the
mainland, and the passing of Mao Tse tung, the Chinese
government began to re habilitate some, but not nearly all
of the victims of the Cultural Revolution, including Deng
Xiao ping, Zhao Zhi yang, and other communist party
officials who had previously been condemned to internal
exile or even jail. Many of the non influential people,
and many intellectuals, who were victims of the purges of
the Cultural Revolution and later of the events of Tian An
men Square, remain forgotten in exile or in death, even by
their own people. To date, no one has proposed a way in
which these valuable people should be re habilitated, or
that their lives made a difference to anyone, and they even
remain forgotten by their immediate families.
In the late 1970s, the government on the mainland expressed
intentions to entertain dismantling at least some of the
command economy instituted by the communist revolution
through increased industrial development in the Southeast
area of the country, and preparing for the accession of Hong

Kong to the PRC from its control by Britain. Since late in

the 1970s, and with the apparent reforms of the command
economy on the mainland, the PRC and its communist party
began to encourage some capital formation, more freedom in
the labor market, and technology innovation through research
and development contacts with more industrialized countries.
This was all characterized chiefly by primarily unilateral
technology and production transfers having to do with
commoditized items from the West. It is important not to
overestimate the role of realpolitik in these technology
and production transfer programs, especially as sponsored by
the U.S. government, that served as a rationale of the
democratic party then in power in the United States to
sponsor at least in part commercial and capitalist
development on mainland China, even in the defense
industries.
The results of these programs, be they public or private, to
help modernize China have met with fitful results as the PRC
is extremely busy commercially at this writing, but Chinas
economy is currently, and incorrectly, having its cake and
eating it, too. What this means is the mainland economy had
net growth, year upon year for many years, of 10% or more in
many industrial sectors, though its currency value has
remained invariably fixed. With the type of growth that
China has had, it does seem that its currency needs to be re
valued upward, as the economic and financial growth of
industrial China signifies a need for an upward valuation in
the event of disparities in the dry and durable goods
markets, not to mention the currency markets in order to
assure fair and efficient economics of production, revenue,
national accounts, and capital formation vis a vis the
rest of the world.
Reforms have nonetheless included attempts at relinquishing
control of industrial production quotas for some goods, and
encouraging other types of ownership apart from that of the
state. Another innovation to adapt the mainlands economy
to world trade is now letting some prices establish
themselves along the lines of supply and demand. That China
produces many commoditized products at wholesale prices does
not necessarily change the priority to re value the
renminbi and related money rates. This is in fact the
marginal reward for the mainlands efforts to commercialize
its socialist economy and to profit from the same, and any
upward currency re valuation will therefore better
regulate its domestic commerce and trade in the world.