The LTT’s The Marxist Theory of the State made this point:

According to Trotsky’s succinct definition, “the class character of the state is determined by its relation to the forms of property in the means of production” and “by the character of the forms of property and productive relations which the given state guards and defends”. This implies a dialectical rather than a mechanical relationship between base and superstructure: it is not merely a question of the existing forms of property but of those which the state defends and strives to develop. Lenin argued in early 1918 that: “No one, I think, in studying the question of the economic system of Russia, has denied its transitional character. Nor, I think, has any Communist denied that the term Socialist Soviet Republic implies the determination of Soviet power to achieve the transition to socialism, and not that the new economic system is recognised as a socialist order.”

Has the CCP bureaucracy now become a capitalist class? Well not exactly, just as most western party and government leaders are not capitalists (Trump and Italy’s Berlusconi excepted) are not capitalists but professional politicians dedicated to the defence of the capitalist system as a whole. But it does rule on behalf of the capitalist class as the following report in The Telegraph makes clear which property relations provide its privileges; China denies claim that Communist Party offspring make up 90% of multi-millionaires. By Malcolm Moore; The Telegraph Shanghai 07 Aug 2009.

“A report that relatives of senior Communist Party cadres make up nine out of ten of China’s multi-millionaires has been firmly denied by the Chinese government. The report, which first appeared last month in Time Weekly, a Chinese magazine, quickly caused a sensation on the Chinese internet. It cited a joint project between several senior government research bodies and the Publicity ministry that claimed 91 per cent of the 3,220 people in China worth over 100 million yuan (£8.75 million) were “children of senior cadres”.”

This is how the LTT’s The Marxist theory of the state addressed the problem of the “peaceful overturn” of bourgeois property relations in Eastern Europe in 1947-48: “The cutting edge of distinction between bourgeois states and workers’ states is not some decisive degree of nationalisation (Militant/CWI), nor the existence of “central planning” (Workers Power/LRCI), nor the alleged “commitment” of the state apparatus to defend the socialised forces of production (ICL and IBT), but which class interests the economy and the state apparatus ultimately serve.”

During the Tiananmen Square protests Deng Xiaoping, the “Paramount leader of the People’s Republic of China from 1978 to the early 1990s” strongly supported the demonstrators, as did his pro-market ally General Secretary Zhao Ziyang until the ranks of the student restorationist leaders began to be swamped by the working class who started to make their own political demands. Martial law was declared on 20 May. And surely only Deng had the authority to order the massacre on 4 June. The Chinese authorities “summarily tried and executed many of the workers they arrested in Beijing. In contrast, the students, many of whom came from relatively affluent backgrounds, were well-connected, received much lighter sentences” (Wikipedia).

The CCP then began to deal “strictly with those inside the party with serious tendencies toward bourgeois liberalization”. Zhao Ziyang was put under house arrest and Deng himself was forced to make concessions to anti-reform communists. He denounced the movement; “the entire imperialist Western world plans to make all socialist countries discard the socialist road and then bring them under the monopoly of international capital and onto the capitalist road”. But it was only a tactical retreat. Resistance of all types, from the immediate restorationists as well as from bureaucratic defenders of the state and its nationalised property relations was thoroughly crushed by the 30,000 party officials charged with this grisly task. Deng was then in a position to win over the last holdout hardliners. This is how Wikipedia reported Deng’s legendary southern tour:

Chinese leader Deng Xiaoping embarked on a ‘southern tour’ in early 1992 to secure the future of the economic reforms that Deng had fought for desperately within the Chinese Communist Party at a historic meeting of the 11th Central Committee in December 1978. This tour demonstrates Deng’s determination to protect his economic reforms but also indicates the depth of resistance to his reforms within the Communist Party across China. Deng is revered in China today (and by many outside the country) for enabling the economic development that has dragged millions out of poverty and turned China into a major global influence. His family’s former home was in Paifang village in the countryside to the north of Chongqing in southwestern China’s Sichuan province is still standing and has been turned into a museum honouring his life and achievement. It is a combination of a theme park and a shrine and his statue is the focus of commemorative ceremonies on significant anniversaries.

“To reassert his economic agenda, in the spring of 1992, Deng made his famous southern tour of China, visiting Guangzhou, Shenzhen, Zhuhai and spending the New Year in Shanghai, in reality using his travels as a method of reasserting his economic policy after his retirement from office. On his tour, Deng made various speeches and generated large local support for his reformist platform. He stressed the importance of economic construction in China, and criticized those who were against further economic and openness reforms. Although there is debate on whether or not Deng actually said it, his perceived catchphrase, “To get rich is glorious”, unleashed a wave of personal entrepreneurship that continues to drive China’s economy today. He stated that the “leftist” elements of Chinese society were much more dangerous than “rightist” ones. Deng was instrumental in the opening of Shanghai’s Pudong New Area, revitalizing the city as China’s economic hub.”

“His southern tour was initially ignored by the Beijing and national media, which were then under the control of Deng’s political rivals. President Jiang Zemin showed little support. Challenging their media control, Shanghai’s Liberation Daily newspaper published several articles supporting reforms authored by “Huangfu Ping”, which quickly gained support amongst local officials and populace. Deng’s new wave of policy rhetoric gave way to a new political storm between factions in the Politburo. President Jiang Zemin eventually sided with Deng, and the national media finally reported Deng’s southern tour several months after it occurred. Observers suggest that Jiang’s submission to Deng’s policies had solidified his position as Deng’s heir apparent. Behind the scenes, Deng’s southern tour aided his reformist allies’ climb to the apex of nation”

Tiananmen Square set in motion the chain of events that enabled the CCP to purge the party and state apparatus and neuter the working class. The development of capitalist property relations was prioritised consciously by the entire bureaucracy and state in 1992 when Jiang capitulated to Deng and this was endorsed by the subsequent party congress. China then ceased being a workers’ state in any way.

Vietnam, Cambodia and Laos

Vietnam had already become a capitalist state in 1986, the first deformed workers’ state to be abolished by a ‘cold stroke’ in the period of the ‘collapse of Communism’. Wikipedia tells us:

“At the Sixth National Congress of the Communist Party of Vietnam in December 1986, reformist politicians replaced the “old guard” government with new leadership. The reformers were led by 71-year-old Nguyen Van Linh, who became the party’s new general secretary. Linh and the reformers implemented a series of free-market reforms – known as Ðổi Mới (“Renovation”) – which carefully managed the transition from a planned economy to a “socialist-oriented market economy”. Though the authority of the state remained unchallenged under Ðổi Mới, the government encouraged private ownership of farms and factories, economic deregulation and foreign investment, while maintaining control over strategic industries. The Vietnamese economy subsequently achieved strong growth in agricultural and industrial production, construction, exports and foreign investment. However, these reforms have also caused a rise in income inequality and gender disparities.”

The deformed workers’ state was transformed into a capitalist state in both Vietnam and Cambodia controlled by a ‘Marxist-Leninist’ government when they decided to promote capitalism as the source of their privileges and state planning was directed at that object. Although Vietnam effectively controlled the Cambodia state through their influence on the Salvation Front they were unable to restore a capitalist state there until 1989 because the continuing war against the US/China/Thai guerrilla armies on the Thai border made a compromise with Imperialism impossible then. The fact that Imperialism was able to force the ‘Marxist-Leninists’ from office in Cambodia but not in Vietnam or Laos does not change the dynamic of the situation.

Now we must look at Laos to complete the picture. Laos became a deformed workers’ state in 1975 with the overthrow of the constitutional monarchy under Sisavang Vong by the Communist Pathet Lao movement with the assistance of Vietnam. Laos is the most heavily bombed nation per head of population on the planet:

“During the Vietnam War, the US spread combat operations to neighbouring Laos. The US secretly waged widespread bombing runs on nearly every corner of the country… Laos experienced more than 30,000 casualties during the bombings, more than 20,000 people have died since bombing ceased in 1974 due to leftover unexploded munitions, and many more tens of thousands were needlessly displaced. A UN report notes that Laos is, per capita, the most bombed country on the planet, with .84 tons of explosives dropped per person from the years 1965 to 1974.

The Wikipedia article on Laos claims:

“The Lao People’s Democratic Republic, along with China, Cuba, Vietnam, and North Korea is one of the world’s five remaining socialist states. The only legal political party is the Lao People’s Revolutionary Party (LPRP). The head of state is President Choummaly Sayasone, who is also the General Secretary of the Lao People’s Revolutionary Party. The head of government is Prime Minister Thongsing Thammavong, who is also a senior member of the Politburo. Government policies are determined by the party through the all-powerful eleven-member Politburo of the Lao People’s Revolutionary Party and the 61-member Central Committee of the Lao People’s Revolutionary Party. Important government decisions are vetted by the Council of Ministers. The Socialist Republic of Vietnam maintains significant influence over the Politburo of Laos and the one-party communist state apparatus and military.

Only Cuba and North Korea are still deformed workers’ states

We contend that only Cuba and North Korea are still deformed workers’ states now and that China, Vietnam and Laos are capitalist states ruled by ‘Marxist-Leninist’ parties which staff the entire bureaucratic state apparatus with their own nominees but which encourages and develops capitalist property relations in the economy. In China a new bourgeoisie has emerged, mainly from the sons of the top Communist party bureaucrats who are millionaires and billionaires now. This has not progressed to that extent in Vietnam and Laos but it is moving in that direction very clearly.

List of the capitalist features of the Chinese and Russian economies and states:

1. The Chinese “iron rice bowl” of Chairman Mao is basically gone. His welfare state has been abolished apart from in a few places. The USSR welfare state collapsed quickly after 1991, with the life expectancy in the USSR/Russia fell from 62 in 1980 to 58 in 1994, and similarly declines in all of the former communist East European states. It was 74 in Sweden at that time. “The immediate cause of the rising mortality is the rise in self-destructive behaviour, especially among men. Old problems such as alcoholism have increased; drug misuse a relatively new problem in the former communist bloc has risen dramatically in recent years … Suicide rates have climbed steeply too, by 60% in Russia, 80% in Lithuania, and 95% in Latvia since 1989.”

2. There is a thriving capitalist sector in China with its own class differentiated bourgeoisie and working class. Forbes rich list puts the number of billionaires in China in 2017 at 400, Asia as a whole at 637, the US at 563 and Europe at 342. However, the US and European billionaires are far richer than the Chinese ones. China has only 2 in the top 25 richest people in the world, the US’s Bill Gates is number 1 at $86 B, and China’s Wang Jianlin comes in at number 18 at $31.3 B. Russia has about 100 billionaires with its richest, Leonid Mikhelson coming in at 46 with $18.4 B. The USA has 15.7 million millionaires, the UK 2.4, Japan 2.1, France 1.8, Germany 1.5 whereas China has only 1.3 million in a population 4 times the size of the USA, just ahead of Italy at 1.1 and Canada at 961,000. Chinese income inequality is reported to be falling since 2015 but only Brazil has a higher Gini coefficient among the world’s 10 largest economies. Russia has the fastest-growing number of dollar millionaires in the world but, with only 182,000 it comes in at 15 in the world just above Saudi Arabia, Kuwait and Norway. Russia has “an extreme level of inequality,” with the top 1% holding up to 25% of Russia’s wealth. All deformed and degenerated workers’ states expropriated their capitalists and inequality never reached those levels because they prevented that class arising anew.

3. There is a Stock Exchange and capitalist banks in both Russia and China, although, a la Bismarck, Stolypin and Keynes, they are state controlled (unlike in Britain under Blair and Brown) to ensure the better development of capitalism. All deformed and degenerated workers’ states had/have no stock exchanges. This is not neo-liberal capitalism, but it is capitalism nevertheless.

4. The monopoly of foreign trade collapsed in 1991 in Russia, but it was also gone in theory in China since the 1992 restoration but far more so since China joined the World Trade Organisation in 2001. However, the state still retains strategic control over its state banks and regulates trade as good capitalist planners. All deformed and degenerated workers’ states had/have a state monopoly of foreign trade.

5. Few now doubt that Russia became a capitalist state in August 1991; the scramble by the state functionaries for privatised state assets doled out by Yeltsin was obscene; these wealthy oligarchs emerged almost overnight. The constitutional crisis of October 1993, when Yeltsin used military force to attack the anti-Yeltsin demonstrators, dissolve the parliament and arrest its leaders was a second, consolidating victory for neo-liberal reaction just two years after the Yanayev coup. The working class eventually did rise to combat the brutally corrupt pro-Western imperialist regime of Yeltsin. But they were defeated by the state forces and the second part of the counterrevolution was consummated; the street fighting on 2 and 4 October resulted in some 2,000 deaths according to some sources; the bloodiest single outbreak of violence in Moscow since the Russian Revolution.

6. China and Russia seek to become imperialist powers; their investments in Africa, South America and Sri Lanka etc. are for purely commercial and strategic/military purposes. This is unlike the practice of the USSR where support and investment were to strengthen their hand and give them more pawns in the chess game of achieving peaceful cooperation and compromise with world Imperialism. The Chinese bureaucracy, under both Mao and Deng, sought to conciliate US imperialism by Mao’s theory of three worlds, where the first was the ‘great powers’ US and USSR who were ‘imperialists’, the second was the other advanced capitalist nations and the third world was China and the semi colonial countries. This was an opportunist capitulation which resulted in the ‘Ping Pong’ diplomacy of 1972; welcoming Nixon to China whilst he was carpet bombing Vietnam with napalm and Agent Orange. In Africa, Latin America and elsewhere China sided with the USA against the USSR in a shamefully unprincipled manner.

The USSR was prepared to sponsor, ideologically and materially, armed opposition to imperialism to achieve peaceful co-existence, China arms its clients today but, like Russia, has no ideological opposition to imperialism, however distorted, to offer. However, China still retains strong elements of a semi-colonial state in its far-flung backward regions, which are prey to US/CIA interventions as in Tibet and Uyghuristan, to begin the breakup of a developing rival. Neither China nor Russia can become fully fledged imperialist powers as long as the USA remains the global hegemonic imperialist power.