Market Maoists: The Communist Origins of China’s Capitalist Ascent

by Jason M. Kelly

Long before Deng Xiaoping's market-based reforms, commercial relationships bound the Chinese Communist Party to international capitalism and left lasting marks on China's trade and diplomacy.



China today seems caught in a contradiction: a capitalist state led by a Communist party. But as Market Maoists shows, this seeming paradox is nothing new. Since the 1930s, before the Chinese Communist Party came to power, Communist traders and diplomats have sought deals with capitalists in an effort to fuel political transformation and the restoration of Chinese power. For as long as there have been Communists in China, they have been reconciling revolutionary aspirations at home with market realities abroad.

Jason Kelly unearths this hidden history of global commerce, finding that even Mao Zedong saw no fundamental conflict between trading with capitalists and chasing revolution. China's ties to capitalism transformed under Mao but were never broken. And it was not just goods and currencies that changed hands. Sustained contact with foreign capitalists shaped the Chinese nation under Communism and left deep impressions on foreign policy. Deals demanded mutual intelligibility and cooperation. As a result, international transactions facilitated the exchange of ideas, habits, and beliefs, leaving subtle but lasting effects on the values and attitudes of individuals and institutions.

Drawing from official and commercial archives around the world, including newly available internal Chinese Communist Party documents, Market Maoists recasts our understanding of China's relationship with global capitalism, revealing how these early accommodations laid the groundwork for China's embrace of capitalism in the 1980s and after.

Genres: China, History, Economics, Nonfiction

320 pages, Hardcover

First published May 11, 2021

About the author

Dr. Jason M. Kelly's research and teaching examine modern China and East Asia from an interdisciplinary perspective. He is particularly interested in U.S.-China relations; Chinese trade, security, and diplomacy; and East Asian international relations.

Before joining the faculty at Cardiff University, Kelly was an assistant professor in the Strategy & Policy Department at the U.S. Naval War College. Prior to his life in academia, Kelly was a U.S. foreign service officer and worked in the U.S. Embassy in Beijing.

Reviews

[John-92 · Rating 4 out of 5]

A well-documented book to examine the continuous foreign trade in Mao's China. The author reveals the CCP's longstanding practices of utilizing the global market from the 1930s to the present day, and by analyzing the continuity, the author argued:
[To overlook these Maoist roots is to misunderstand the nature of the historical forces behind China’s engagement with global capitalism in the late twentieth and early twenty-first centuries. What China and the world witnessed in the Reform and Opening era and afterward was not simply the rise of capitalism in post- Mao China, but rather the continuation under new historical circumstances of the Party’s long-standing willingness to use markets to achieve political aims, foremost among which remained the development of a strong, modern Chinese state capable of “standing up,” as Mao said, for its own interests.] (p. 211)
This important book helps us reexamine the origins of the "reform and opening up" and the emergence of the market economy (with Chinese characteristics). It also reminds us of the flexibility and the practicability of the Party, which continue to shape the Party's economic decisions. The writing of the book is also vivid. I really enjoyed the rhythm of the prose and the balance between details and analysis. I do think the author can provide more discussions about foreign trade at the provincial, municipal, or even grassroots levels, as the book seems to focus more on the decision-makers in Beijing (and to a lesser extent, on the traders at China Resources in Hong Kong). Having said that, it is still a groundbreaking book.

[David · Rating 4 out of 5]

"Lei Renmin worked this message with particular flair during the conference. “I am firmly convinced,” he concluded during a working group meeting on the morning of April 7, “that the nations being interconnected as they are, the artificial barriers could be removed and international trade would be able to develop normally.” His message was plain enough: trade was normal, a natural pursuit for all nations no matter their ideological predisposition, and the Americans were preventing it."

A Chinese entrepreneur in last month's Financial Times? No, the minister of foreign trade at a commercial conference in 1952, when maoism was in full swing!

Fun, concise, meticulously sourced read. On the continuity of Chinese world trade between 30's Civil War, post-49 revolutionary construction and the tribulations of the Great Leap Forward, the Cultural Revolution and the consolidation in the 70s. Bibliography is nearly all original Chinese sources, which spices up what might otherwise be a dry description of economic evolution with debates amongst administrators, various diplomats and Party members. Most of these snippets are probably translated to English for the first time; a great contribution in its own right.

Prime political takeaway is that, as in other matters, the only constant in Chinese foreign policy is putting itself first. After 49, trade with capitalist nations diminished to 25% of the total, while the lion's share was entertained with the Soviet Union, Eastern Europe and various third world nations. This was never due to a conscious effort to stymie capitalist trade: exchanges with the 'imperialists' increased absolutely, but were simply dwarfed by those with blocs that didn't require dollars. After the Korean War began and Taiwan gained the sole diplomatic recognition for all of China, China fell under the 'trading with the enemy' act, which made commercial relations with the West difficult. However, few countries could resist the massive market that China represented, and countries re-established trade on an individual basis. Eventually, even the US allowed its own subsidiaries in other countries to trade with China.

The office of foreign was staffed with experts; a dangerous fact in a country where the pendulum swung back and forth between "red" and "expert", with tumultuous consequences. Mao accepted trade with the imperialist bloc as a necessity and, in its own way, a struggle to exploit contradictions among imperialist nations. But those overseeing the trade were always regarded with a wary eye. During the Great Leap Forward, production faltered and contracts were reneged on, damaging Chinese credibility. Its this commercial decline that set the stage for the Sino-Soviet split, which in turn tore away any Chinese preference for trading with comradely nations. Making virtue out of necessity, China bought Canadian and Australian grain en masse, imported West-German and Japanese technology, and invited Western(-educated) experts to replace the Soviets. This integration was hobbled by the breakdown of production and administration during the Cultural Revolution ('67-76) but never broke down entirely.

The book's great virtue is fleshing out the struggles of state administrators to do their jobs under careening ideological leadership. What one day bore the scent of imperialist collusion, could the next day become the hallmark of Chinese patriotic resistance against Soviet revisionist-socialist-imperialism. What remains out of focus are the political and macro-economic evolutions within China proper, which may lead the reader to overestimate the importance of foreign trade in the evolution of the party-state. Kelly has indeed written a very neat narrative, in a way the Chinese counterpart of Oskar Sanchez-Sibony's Red Globalization: The Political Economy of the Soviet Cold War from Stalin to Khrushchev. Even the periodization lines up: China after Mao doesn't figure much in it, just as Sanchez-Sibony stops in the late 60s. This is a missed opportunity. China today seems much more opaque in its thrust to integrate in the global markets. Mao justified this by pointing both to the need to build up Chinese economic firepower and a pragmatic handling of imperialist contradictions. 21st-century China would take this integration to unimaginable levels; how is this process experienced and justified nowadays? What big picture, if any, hangs over the desks of foreign trade officials? Late maoism gave birth to the Three Worlds Theory: the US and the USSR were on top, propped up by nuclear and economic dominance; Europe and Japan were economically successful but not hegemonic; and the Third World, China included, struggled at the bottom. This framework de-emphasized ideological blocs while valorizing the developmental ladder, setting the stage for the titanic take-off under Deng, as much as it justified unlikely alliances with right-wing regimes. Does this frame survive in a secularized version? We're left speculating.

[loitering outside 711 · Rating 4 out of 5]

Ah yes, famous proponent of world trade and the global capitalist market, Mao Zedong