Is China Communist?

Reader’s Question: for many years American referred to people’s republic of china as communist. Why would that label be misleading today?

China is still contolled by the Chinese Communist Party, so we could say that politically China is Communist. However, economically, China is no longer being run by Communist economic ideology.

Important ideas of Communist economic theory include:

  • Common Ownership of the means of production’ (usually this means state ownership, nationalisation)
  • Equality of outcome ‘From each according to his ability, to each according to his need

Why China is no Longer Economically Communist

  • Privatisation – State owned industries sold to the private sector
  • Rising Inequality – The benefits of economic growth are being distributed inequitably creating a growing gulf between middle classes and largely poor agricultural workers
  • State No longer directs What to Produce, How To Produce and For Whom. In most industries it is the free market and private enterprise who decide what to produce.

China is not completely a free market. The government have a fair degree of economic intervention such as foreign exchange reserves keeping the value of the Yuan undervalued. But, generally speaking, the economy would be classified as a mixed economy and not Communist in nature.

See also:

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