The afterlife of Marx’s footnote on Chinese currency

The number of times a Chinese person has cited Marx is by now, with the Chinese Communist Party approaching its centennial, surely uncountable. The number of times Marx cited a Chinese person is countable, and small.

It is an interesting piece of socialist trivia that in his Capital, Marx mentions only one Chinese person by name: Wang Maoyin, who held a position something like chancellor of the exchequer under the Xianfeng emperor of the Qing dynasty. He appears in footnote 36 to Volume 1, Chapter 3, the chapter on money and the gold standard, where Marx mentions Wang being reprimanded for a monetary proposal he had made to the emperor.

This mention has not, of course, escaped notice in China. The English-language Peking Review in 1983 excerpted an article about Wang that explains the background:

The debate took place between 1853-54 during the reign of Emperor Xianfeng of the Qing Dynasty. Wang Maoyin, Vice-President of the Board of Revenue and Population, opposed a proposal to mint copper coins in large denominations. During the debate, Emperor Xianfeng was in favour of coining this devalued currency. He and his ministers mistakenly held that the value of metal currency was determined by the state and that the people could not violate it. At the time, the capitalist commodity economy was not developed in China. Wang Maoyin understood that “the state may determine the value of the currency, but cannot impose restrictions on the prices of commodities.” To counter devaluation which results from issuing unconvertible metal currency, Wang suggested that a limited amount of convertible banknotes be issued. The emperor not only refused to accept his suggestions, but dismissed him from office.

The economic historian David Faure, in his China and Capitalism: A History of Business Enterprise in Modern China, also credits Wang for being one of the early Chinese thinkers to be aware of the “independence of the market”: the reality that the state could not simply dictate economic outcomes, because companies and people would respond to its actions. This idea was an independent development out of China’s own “statecraft” tradition of literature on the practical management of resources, taxation and markets. Faure summarizes Wang’s argument as “although the government had the power and means to devalue the coinage, it did not have same power and means to prevent the people from raising prices.”

At the time of the Peking Review article, the idea that economic activity was a realm subject to laws of its own was making a comeback in China. The people who were trying to move China away from arbitrary, politicized decision-making argued that the government had to respect reality and “seek truth from facts.” The idea that there were economic laws, and that China needed to figure them out and respect them, was an important piece of the intellectual framework of the early reform era. It’s interesting how vehement the author of that 1983 piece is on this point:

This footnote by Marx indicates that there is an economic law governing the relationship between currency and commodities, which is independent of man’s will. Marx affirmed the correct view of Wang and jeered at the self-indulgent rulers who knew nothing about the objective laws of economics.

It’s pretty obvious who the author is using Marx to implicitly criticize here, just a few years after the death of Mao, the end of the Cultural Revolution and the trial of the Gang of Four.

But while the invocation of objective laws of economics was, in the political context of the 1980s, usually a way to argue for the government to step back from interference in the economy, it does not have to serve that function. Xi Jinping is himself clearly a believer in such objective laws, but he sees them as enabling rather than preventing a strong government. Because such objective laws exist, they can be understood and mastered; as I put it in an earlier post, Xi thinks that there are laws of history, and they work in China’s favor.

Statue of Wang Maoyin in his ancestral village in Anhui

A very fine reallocation of resources

The launch of China’s reform era is conventionally dated to 1978, when the Communist Party’s Third Plenum agreed on a major change of economic strategy. But a major sign that China was embarking on a new direction came a year earlier, in 1977, when Deng Xiaoping directed universities to restart entrance examinations. Many universities had by that time reopened, after closing for a few years at the height of the Cultural Revolution. But admission was still reserved for “workers, peasants and soldiers” and admission decisions were largely driven by political recommendations. Deng’s instruction to de-emphasize politics and emphasize competence were a welcome sign that rationality and pragmatism were on the way back.

The general outlines of this story are well known, but I enjoyed the details in this account:

Young people, many of whom had seen their schooling opportunities delayed for more than a decade, hastily dusted off their textbooks and began studying to prepare for the college entrance exams. That year, 5.7 million entered their names for the exams, and 273,000 were enrolled. Because the number of applicants far exceeded the expected figure, for a time the authorities could not procure enough paper to print the exam papers. The problem was not resolved until the central authorities made the urgent decision to ship in all the paper previously allocated for the printing of the fifth volume of the Selected Works of Mao Zedong.

I just love that last bit–it perfectly captures how poor and politicized China was at that time. The quote is from Breaking Through: The Birth of China’s Opening-Up Policy, a book by former vice-premier Li Lanqing (in English translation).

The consequences of that decision to reallocate resources away from propaganda and towards education were far-reaching, and the experiences of that first wave of new students have been subject of numerous books and articles. Many of the people who took those 1977 exams and enrolled in university went on to become rather influential figures (see these recollections by longtime foreign correspondent Jaime FlorCruz, who was one of them).

Indeed, we may now be living at the peak of the influence of the so-called Class of 1977. A September press conference ahead of the celebration of the 70th anniversary of the People’s Republic of China gathered together three of China’s top economic technocrats: central bank governor Yi Gang, Finance minister Liu Kun, and National Bureau of Statistics director Ning Jizhe. In an unusually personal moment for such an event, they mentioned that all three of them had taken the college entrance exams in 1977.

September 24, 2019: (l-r) Moderator, Ning Jizhe, Liu Kun, Yi Gang

Who deserves the Nobel for China’s economic development?

The awarding of the Nobel Prize in economics to three academics “for their experimental approach to alleviating global poverty” has prompted some caustic commentary about how much, or little, global poverty has actually been reduced by the highly targeted, small-scale policy interventions evaluated by such experiments.

It’s well known that most of the reduction in global poverty in recent decades, however it is measured, is accounted for by rapid economic growth in big Asian economies. On the World Bank’s numbers, China alone accounts for about 60% of the decline in the number of people living in extreme poverty worldwide (China’s poor population declined by 742 million people, while the world’s declined by 1.16 billion people).

The contribution of randomized controlled trials to China’s poverty reduction has been, to a first approximation, zero. Yao Yang, the dean of the National School of Development at Peking University, wrote in an English-language op-ed that “Experiments might help policymakers improve existing welfare programs or lay the foundation for new ones, but they cannot tell a poor country how to achieve sustained growth.” In a similar vein, Harvard professor Dani Rodrik tweeted: “Remarkable how little today’s development economics has to say about the most impressive poverty reduction in history ever.”

So if the Royal Swedish Academy of Sciences were to award a prize for “contributions to sustained economic growth in China,” who should it go to? This is not a straightforward question. The prize is usually given to academics for contributions to theory and research, not to practitioners for implementing economic policies. As Bruno Frey noted in a 2018 article on China’s absence from the history of winners of the economics Nobel, “It may be argued that the Chinese economy has been successful without the help of high-ranking academic economists.” There are also few Chinese economists that appear in lists of the most-cited scholars–possibly because Chinese economists have historically tended to focus more on advising their own government than publishing in English-language journals.

It’s true that the decisions that led to China’s sustained economic growth were not mostly driven by research published in peer-reviewed journals. But that does not mean that economic ideas did not play a role in those decisions, or that the role of economists was not important. At least, as long as one does not hold to an excessively credential-focused definition of “economist” as meaning only a person holding an economics PhD. Pieter Bottelier’s recent book, Economic Policy Making in China (1949-2016): The Role of Economists, introduces many of these Chinese economic thinkers, few of whom are widely known abroad. One figure particularly stands out: Xue Muqiao. Bottelier writes:

I agree with Wu Jinglian that Xue (who died in 2005, when he was almost 101) was the most important Chinese economist of the 20th century. He was already involved in economic policy and management before the establishment of the PRC in 1949, and after 1949 under Mao. He then became one of the principal architects of market reform under Deng Xiaoping. The evolution of Xue’s thinking on how to develop a “socialist economy” mirrors Deng’s.

While Deng Xiaoping is these days often remembered mainly as an economic reformer, in fact he was not a specialist in the economy, and largely delegated economic management to other leadership figures. Xue seems to have been quite influential in the formation of Deng’s economic thinking.

Xue is particularly famous for is a letter he wrote in 1977, after Mao’s death but before reforms had begun, to Deng and Li Xiannian that laid out many of the problems in the economy. He focused in particular on agriculture, noting that farm output had grown no faster than the population despite collectivization and massive investments in machinery. The letter is translated in the English-language Collected Works of Xue Muqiao:

The CPC Central Committee has pointed out the importance of having agricultural production catch up with industry’s Great Leap Forward. The Ministry of Agriculture and Forestry has recently proposed twelve significant measures to attain this goal. It recommends an increase of investment into agriculture of RMB 30 billion. These measures are necessary, but I think it is more important to implement agricultural policies that improve farmers’ lives, and that arouse their enthusiasm for agricultural production. … It is hard to motivate farmers if growth in agricultural production cannot bring corresponding growth in income. Any interest in working suffers if extra work is not rewarded. … Boosting farmers’ enthusiasm for agricultural production therefore outweighs improving the conditions for agricultural production.

“Enthusiasm” is the term often used in Chinese during this period for what we would today call “incentives.” And there is no economic insight more fundamental than “incentives matter.” This early insight by Xue laid the intellectual groundwork for the later decision to allow farmers to break out of agricultural collectives and farm their own land–a massive change in incentives for agriculture that resulted in a huge boom in productivity. For Xue to be able to break through the deadening grip of Maoist political correctness and recognize that incentive problems were keeping China’s rural population mired in poverty must surely be counted as an intellectual achievement of the highest order.

Over his long life and career, Xue did much more than write one well-timed and well-placed letter. The economic historian Fan Shitao last year made a catalog of Xue’s achievements in the pages of Caixin magazine, in a letter arguing that “Xue should be credited with making the most comprehensive contributions to China’s early reform and opening-up.” I won’t reproduce the entire thing here, but here are a few highlights:

In a long speech presented to the Central Party School in autumn of 1978, Xue was the first official within the ruling Communist Party elite to criticize the catastrophic consequences and painful economic lessons of Mao’s “Great Leap Forward.” By warning that similar mistakes should not be replicated in the future, Xue’s speech paved the way for subsequent adjustments to China’s economic policies. …

As the most authoritative expert on price in the Communist Party, Xue was the first person to point out that price reforms were key to China’s economic reforms. He also differentiated between overall price stability and flexibility of individual prices. In agreement with German economic expert Armin Gutowski, Chinese American economist Gregory Chow, and experienced economist Edwin Lim, Xue promoted price reforms, which was one of the major decisions of the Third Plenary Session in 1984. …

In 1978 Xue pointed out that instead of administrative regions, economic development should focus on economic zones based on resource flows. The economic zone in Shanghai contributed to its becoming one of China’s most capital-abundant cities. Xue’s proposal also later led to the launch of other regional development plans.

So Xue’s intellectual influence can arguably be detected in agricultural decollectivization, the overhaul of central planning, the transition to market prices, and the coastal export manufacturing boom. That is a pretty staggering list.

Of course, China’s decades-long series of economic reforms had no one author or leader. But China’s system of closed-door debate and collective decision-making has long obscured the important contributions of individuals like Xue, and Du Runsheng, another major figure in rural reform.

Xue Muqiao

Rawski on the costs built in to China’s system

Loren Brandt and Thomas Rawski, two of the best economists and economic historians working on China, have a new edited volume out under the somewhat daunting title of Policy, Regulation and Innovation in China’s Electricity and Telecom Industries. It promises to be essential reading for anyone interested in how industrial policy works in China–a topic that, thanks to the massive scale of various subsidy programs like Made in China 2025 and the US trade war that has been launched in response, is now of far more than specialist interest.

I have not yet read the book, but I did watch a September 26 event at CSIS in which Brandt and Rawski discuss their work, under the catchier title “Can China’s industrial policy work?” Sadly, if not surprisingly, the book does not provide a simple answer to that question. Here is how Rawski put it:

We have no big theory. We cannot predict which policies will produce success and which policies don’t. We see the same policies affecting the semiconductor industry, which has done very poorly, the thermal power equipment industry, which has done well, and ultra-high-voltage power transmission, which is a world leader technologically. What is the key? Perhaps it is the difficulty of the technical obstacles that these firms confront. Perhaps it is quality of management. It’s hard to say. There’s no simple way of saying what works and what doesn’t work in China’s industrial policy.

If they do not have simple answers, they do provide a lot of important insights into how China’s system, with its hybrid of market mechanisms and top-down political direction, actually works. I particularly liked the concept of “system costs” which Rawksi brings up in his very interesting discussion of the electricity industry (these are my notes from the video, lightly edited):

Another feature that we see across the board is that they prioritize technical objectives over economic objectives. I think this partly reflects the Soviet legacy. One of the lessons of this book, for me at least, is that the legacy of Soviet influence in the Chinese economy is much larger than I thought it was when we started out on this project. The objectives of the Made in China 2025 program read like the first Five-Year Plan. There’s no discussion of markets, there’s no discussion of competition–it’s about physical targets.

Another important conclusion is that this is a system that has very high built-in costs. Electricity provides a vehicle for looking at this because it’s simple: there’s one product, five firms produce half the output, two firms distribute 90% of the output. So by looking at a very small number of firms we can see what’s going on in the whole industry. We can quantify some of the system costs people like Ken Lieberthal associate with China’s “highly negotiated” political system.

Negotiation means time and energy, and to us that means system costs. In the American electricity industry, the share of managers is 6.8%; in China it’s 17.8%. You need this extra manpower to work things out. We find that the cost of generating and delivering electricity is 30% higher in China than it is in the US, even though the ingredients are cheaper in China than they are in the US.

Our authors find many areas in which technical upgrades produce no economic benefit. As one engineer at a power plant said to us: we spent a large amount of money improving our equipment to lower our coal consumption, but of course if we had just increased the utilization of the existing plant, we could have gotten the same reduction in coal consumption at zero cost. Many episodes of this sort. We find low utilization in the telecom networks, in the electricity grid. In the US, engineers recommend 15% extra capacity compared to peak load in power systems. In China, the provincial average is 90%. In Inner Mongolia, which is the biggest power generating province, it’s over 200%.

And finally, quality issues. A deputy minister says that Chinese machinery is useful but not too reliable because of small defects. In high technology industries, this is very dangerous.

So what we’re looking at is a tug of war. We see huge resources being poured into innovation, we see the creativity and entrepreneurship of the Chinese people and Chinese firms. This is good. And we see also system costs and inefficiencies which are moving in the other direction.

The Q&A also covers China’s role in the global productivity slowdown, safety in nuclear power, the use of labor in coal mining, and other interesting topics. Worth watching.

Housing and the Chinese middle class

I have thought for a while that China’s privatization of urban housing is one of the most important and least understood events in its modern economic history. The entry into the World Trade Organization in 2001 has been exhaustively studied and its effects are still being vigorously debated today. The downsizing of state-owned enterprises in the late 1990s has also been repeatedly dissected and analyzed.

Housing privatization, which like SOE reform had its high-water mark around 1998-2003, has received much less attention. Which is strange, because the launch of a private housing market not only created the Chinese business cycle as we know it–basically all of China’s booms and busts over the past two decades have been driven by housing–but created the major source of private household wealth. So it seems obvious to me that housing reform deserves a comprehensive economic and social history, which I have not yet seen.

I dug into Luigi Tomba’s 2014 book The Government Next Door: Neighborhood Politics in Urban China in hopes of getting closer to that. He seemed to immediately grasp the central role of housing in the transformation of urban Chinese from socialist functionaries to a prosperous bourgeoisie. In the introduction he recalls how his initial fieldwork in Beijing in the early 2000s looking for a “middle class,” he found that

Most of the young people I was talking to did not fit the image of the wealthy entrepreneurs that dominate the mainstream portrait of a glamorous Chinese middle class often presented by the international media. Rather, they seemed to be, in large part, professionals and public employees whose housing careers often owed much to their position “within the system” of public employment.

That initial insight led Tomba to start to piece together the complicated story of just who got housing and how. Still, this book is not a complete account of housing reform, nor does it claim to be. Only one chapter of his book is really about housing reform, and most of the rest is too heavy on political-science jargon and too light on detailed history for my taste. But it does contain some important insights on how housing works in China, particularly its political implications:

Housing privatization, which began with a massive transfer of housing stock from public to private hands in the 1980s and 1990s, has provided an opportunity to engineer a middle class systematically, through selective incentives and subsidization. It also built on the converging interests of local governments and developers in selling and developing their land, which remains the main source of income for urban governments to balance their budgets and finance infrastructural projects. These policies have inevitably favored those who had already been privileged by the unequal redistribution of housing in the socialist period because of their employment in the public sector. The resulting boost for a property-holding middle class went therefore mostly toward employees and families actively employed in the public sector, who became the first large cohort of Chinese homeowners during the housing reform of the late 1990s.

The key point here is that housing privatization replicated and amplified, rather than overturning, the pattern of inequality inherited from the planned economy. In that system, there was little inequality in wages or money income, but there was greater inequality in living standards, because housing and consumer goods were preferentially allocated to those with higher political status. The combination of SOE downsizing and housing privatization did remove some socialist foundations, particularly the ironclad guarantee of a job and housing for urban residents. But reform replaced them with something that would prove much more valuable over the longer term: privileged access to assets that were rapidly appreciating in value. So rather than weakening political support for the Chinese government, housing reform bolstered and broadened it:

China’s long-term processes of privatization and reform have, in fact, worked to reinforce, rather than reduce, the legitimacy of the authoritarian rulers, as the state and its policies are perceived by the weakest groups as the last line of defense against the deregulation of the market and by the middle classes as the guarantors of newly acquired “rights.” …

It is increasingly becoming clear that the political apparatus of the socialist hierarchical state is still in place; after more than three decades of marketization, there is little sign of the system that would successfully supplant it. Its role in defining the practices of power is still overwhelming, although perhaps more fragmented and not felt as directly by some of its citizens as in the years of mass campaigns and class struggle.

So China’s housing privatization, in addition to being one of the largest transfers of wealth in history, may also have been one of the most successful political strategies.

What triggered the China backlash?

Richard McGregor’s new short book Xi Jinping: The Backlash is a useful summary of how much of the world’s view of China has changed over the last few years, and not for the better. The catalog of the things that have upset foreigners dealing with China is now quite a long one:

The construction, and then militarisation, of islands in the South China Sea from 2013 galvanised hawks in Washington and allies in the region, not least because of its sheer audacity and scale. Foreign businesses, once advocates of engagement with Beijing to open the Chinese market, became disillusioned when they saw their access truncated. The seemingly ceaseless theft of trade secrets and technology hardened cynicism in governments and companies alike. The detention of up to a million Uighurs in re-education camps in Xinjiang in the name of anti-terror from 2017 highlighted human rights abuses in a way the jailing of individual dissidents never could.

And that is even without going into the somewhat different dynamics of the developing world’s backlash against China’s Belt and Road Initiative. Given all this, it may be a fool’s errand to try to identify any single trigger for the world’s reaction to a more assertive China. It is overdetermined, in the social science jargon, with many causes all pushing in the same direction. Nonetheless I very much agree with McGregor’s assertion that:

If there is a period that crystallised perceptions of Xi, and his world view and ambitions, that moment was in late 2017 and early 2018 when foreigners, and many Chinese as well, finally started to take him at his word. Xi was reconfirmed as leader of the Chinese Communist Party in October 2017 and then abolished term limits on his presidency in March 2018, removing any obstacles to his remaining in power in perpetuity. … In one decision, Xi confirmed his critics’ view that he was an unrepentant autocrat willing to take China backwards in the service of his agenda.

This jibes with my own observation of the dramatic shift in the consensus of the US China-watching community (and here is a similar observation from someone with more foreign-policy expertise than me) . As a few people have pointed out, what has really changed over the last couple of years is not the views of the China hawks–it is the views of the China doves. People who had long felt that China, was moving, albeit imperfectly, in a more positive direction over the long term, began to concede that, in fact no, China was not really moving in the right direction anymore. Xi’s decision to abolish term limits helped convince the waverers and solidified this trend. It was a move that was almost perfectly indefensible. After all, abolishing term limits is something only tinpot dictators of third-world countries do.

China clearly did not anticipate the blanket foreign-media coverage and criticism of the move, but its explanations only highlighted how poorly officials understood the perceptions of their system abroad. Chinese official media justified the removal of term limits as being a minor administrative adjustment to bring the term limit for the presidency in line with the other two offices Xi holds (Party general secretary and Central Military Commission chairman), neither of which have term limits. The official argument is that it’s important for the leader in China’s system to hold all three offices (something Jiang Zemin, the first to do so, had also said). What this argument actually implies is that Xi had already decided to stay for a third term as general secretary, and that the rules had to accommodate this decision by not forcing him to give up the state presidency.

Given the consequences that have since flowed from it, Xi’s decision on term limits must go down as one of the greatest geopolitical own-goals of all time. So I was a little disappointed that McGregor, author of the classic and still-relevant The Party: The Secret World of China’s Communist Rulers, did not dig deeper into the background of this decision. Not that anyone in the Chinese system would have any incentive to talk to him about it. The full story of that fateful moment in early 2018 is likely to emerge only after Xi eventually passes from the scene.

Does China have an ideological “red line”?

Not so long ago, the conventional wisdom in the US was that Chinese leaders were essentially hardcore pragmatists, capitalists in all but name, who would do whatever they needed to do to keep the economy growing and unrest contained. Now it seems that the pendulum has swung the other way, and the Chinese government under Xi Jinping is often portrayed as a hyper-politicized system locked in to an ossified Communist ideology. Those who hold this view do not expect much out of the US-China trade negotiations, since they think Chinese officials are so ideologically committed to their current system that they cannot accept any changes.

It would indeed be a mistake to deny the important role of ideology in China’s socialist system. But the ideology that the Communist Party is promoting these days is curiously content-free when compared to the demands of the original early 20th-century socialists. Having recently spent some time reading a few of the latest ideological tracts, I can report that they contain nothing about class struggle. Indeed they contain almost no statements at all about the right and proper way to organize a society or manage an economy–quite strange since such demands were what socialist ideology was originally all about.

The ideology of socialism that the Communist Party promotes today has one key principle: that the Communist Party must be in charge of China. As Xi Jinping himself said, in a phrase that has been endlessly repeated:

The leadership of the Communist Party of China is not only the most essential feature of socialism with Chinese characteristics, but also the greatest advantage of the socialist system with Chinese characteristics.

Why does the Communist Party get to be in charge? Because it always makes the right decisions. Here is how Wu Degang, of the Central Research Institute of Party History and Literature, expressed it in a piece in the People’s Daily in April:

The Communist Party of China thoroughly grasps the laws of a ruling Communist Party, the laws of building socialism and the laws of human social development, so that its leadership always follows objective laws, reflects the wishes of the people and promotes practical development. This is the fundamental reason why the socialist system with Chinese characteristics has great vitality and superiority. …

Practice is the only criterion for testing truth…Whether it is in overcoming disastrous floods, or fighting SARS, or recovering from earthquakes; whether it is dealing with the 1997 Asian financial crisis, the 2008 international financial crisis or the current complicated international situation, the socialist system with Chinese characteristics has, under the leadership of the Communist Party of China, fully demonstrated its superiority. Without the leadership of the Communist Party of China, China would not have withstood so many storms.

What’s interesting about this is that Wu does not tell us what the objective laws of human social development actually are, as a previous generation of socialists would have been only too eager to do. He believes that there are such objective laws, and that the Communist Party knows what they are. But it is not the people’s job to hold the Party to account for whether or not it acts in accordance with those laws, but rather to uphold the Party’s political leadership. Even as he insists that results have validated the Party’s rule, he enters into a kind of circular logic familiar from authoritarian systems: the Party leads because the Party’s decisions are correct, and we know those decisions are correct because the Party made them.

The ideology of the Communist Party is, mostly, that the Communist Party is always right. And indeed it would be hard to come up with a strict ideology that would logically encompass all of the twists and turns that China has gone through since 1949. The Party has both collectivized and decollectivized agriculture, and Party members must believe that both decisions were correct. The Party has both nationalized private firms and privatized state firms, and Party members have to support both decisions.

In fact, it’s a distinctive feature of recent Communist Party slogans that they emphasize the simultaneous pursuit of conflicting objectives: “unswervingly” developing state enterprises while “unswervingly” supporting the private sector, or strengthening the role of both market forces and the role of the government. There is no objective standard that people can bring to bear to know what is the right way to balance those conflicting objectives: they must simply obey political guidance from the top.

So I generally don’t see ideology as a real constraint on what policies China’s leaders can pursue, or on what kind of deal they can negotiate with the US. If Xi Jinping decides that X is good, then Communist Party ideology means that X is good and that Party members need to fall in line. China’s June white paper on the US-China trade declared that there are “red lines” beyond which China cannot go in the negotiations, but it did not say what those are. That’s because it is the Communist Party’s privilege to decide them.

Of course, none of this means that China’s leaders are likely to be willing to overhaul their economic policies just because the US asks them to. They like their system and they don’t see any real reason to change it. If anything, US pressure may just make them feel more strongly attached to it (see this previous post). My point is just that ideology in the contemporary Chinese system lacks a lot of specificity, and so is not really a constraint on the tactics the government can pursue at any given time.

Nor do I think that this tactical flexibility and ideological emptiness mean that China is no longer actually “socialist.” There is a lot of useless debate about the meaning of socialism these days, but I still hold to the classical definition of socialism from Janos Kornai, the great Hungarian scholar of socialist economics: “The primary attribute of the socialist system is that a Marxist-Leninist party exercises undivided power.” Xi Jinping could not have put it better himself.