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Chen Yun’s Thoughts in the 1970s on Research, Utilization, and the Vigilance against Capitalism and Its Contemporary Value

{Editor’s Note: For years, the U.S. government, media, and scholars have characterized the U.S. China policy as a process of engagement. The thinking was that, through contact and exchanges, the U.S. would gradually transform China into a free and democratic society under the rule of law. The Chinese regime, however, from the very beginning, viewed this process, as an opportunity to make use of capitalism while, at the same time, preventing the West from transforming China. A plethora of articles and documents, official and unofficial, support this point. This article, which is just one example, quotes from Chen Yun, one of the most influential leaders of China during the 1980s and 1990s.

The following is a translation of selected excerpts from the article.} {1}

Excerpts from Chen Yun’s Thoughts in the 1970s on Research, Utilization, and the Vigilance against Capitalism and Its Contemporary Value

By Lyu Weizhou

“I. The Main Content of Chen Yun’s Research on the Utilization of and the Vigilance against Capitalist Ideas”

“A. Thoroughly study the new situation of capitalist finance and the monetary field as well as the law of capitalist economic crises”

“Studying the laws of the capitalist economic crises and its response measures is another key point that Chen Yun raised and followed closely. The capitalist economic crisis that the oil crisis triggered in 1973 had a grave impact on the economies of developed countries. After the crisis broke out, the economic growth of all industrialized countries slowed down markedly. The industrial production of the entire capitalist world fell by 8.1 percent. A large number of enterprises went bankrupt, the number of unemployed people increased sharply, and the international trade and the balance of payments deficit widened. (See: {United States} Daniel Yergin: “The Prize: An Epic Quest for Oil, Money and Power,” Xinhua Press, 1992, p. 643.) Chen Yun realized at a deep level that the economic crisis was a comprehensive reflection of a number of conflicts in the capitalist world and that the cyclical nature of the capitalist economic crises directly affects the growth of China’s foreign trade. Therefore, it is necessary to ‘study the several rebounds and the stagnation of the capitalist economic crises seriously.’ Based on this, he stressed, ‘We must study the factors of the law of the capitalist economic crisis, such as the number of occurrences and the length of the cycles. This is very relevant to our foreign trade, especially to our import trade.’ (Collections from Chen Yun, Vol. 3, pp. 415, 416.) … Based on in-depth research and an analysis of the capitalist economic crisis, Chen Yun boldly proposed to take full advantage of the anxieties of major capitalist countries to get out of the crisis and the flooding of international hot money quickly and to import foreign capital and technical equipment in a big way. (Shen Chuanbao, “Chen Yun’s Research and Understanding of Capitalism in the Early 1970s,” Research on the History of the Communist Party of China, Issue No. 6, 2005.)”

“B. Make full use of the raw materials, capital, technology, and commodity exchanges in capitalist countries”

“First, (China) should use the raw materials of capitalist countries. Based on the domestic situation in the early 1970s when China had abundant labor but was short on raw materials, Chen Yun clearly put forward the idea of ‘using domestically rich labor to produce finished products for export.’ In his view, ‘We have a labor force that can generate foreign exchange revenue for the country. Doing so, in the final analysis, is to accelerate the country’s industrial development.’ (Selected Works of Chen Yun, Vol. 3, People’s Publishing House, 1995, pp. 223, 224). In particular, at that time, domestic cotton crops were poor and the supply of cotton cloth was tight, while the price of international cotton cloth was high and the price of cotton was low. Imported cotton could be processed into cloth both to satisfy domestic needs and earn foreign exchange through exports. Not only could this alleviate domestic difficulties; (China) could also obtain certain foreign exchange and profits.”

“Third, (China) should use the capitalist commodity exchanges. Chen Yun also conducted in-depth research and was thinking about whether we could use the capitalist commodity exchanges to serve ourselves. He clearly pointed out that we can use the exchanges. “Exchanges have two characteristics: one is speculative and the other is as a volume trading venue. In the past we only saw its speculative side, ignoring that it is a volume trading venue. This is one-sided. We should not be afraid to approach the exchanges. We can use the exchanges. We should learn to swim in the storms.” (Chen Yun Chronicles, Vol. II, p. 178.)”

“C. China should be highly vigilant against the speculative behavior of capitalists and the erosion resulting from the decadent capitalist ideological style”

“In the report to the State Council drafted in 1973, Chen Yun emphasized that the use of commodity exchanges is to prevent foreign businessmen from ‘taking the opportunity to raise prices.’ He also clearly stated, ‘Exchanges in the international market are speculative venues. … The use of exchanges is a roundabout protective measure so that we do not suffer or we suffer less.’ (Selected Works of Chen Yun, Vol. 3, p. 222). After the reform and opening up, in his analysis of China’s economic situation and lessons, Chen Yun explicitly asked that (China) ‘be extremely cautious,’ especially when using those foreign debts for assistance purposes. He pointed out, ‘We must clearly see that foreign capitalists are also capitalists. … Be wary of foreign capitalists when welcoming them.’ The point that he emphasized the most was ‘Using foreign capital and introducing new technologies is currently an important policy measure, but be clear-headed.’ (Selected Works of Chen Yun, Vol. 3, p. 277.)”

“III. The Contemporary Significance of Chen Yun’s Thoughts on Research, Utilization, and the Vigilance against Capitalism

“A. Thoroughly studying the laws and trends of the internal development of capitalism is an important reference when we formulate relevant policies.”

China’s development cannot be separated from the world. In today’s world where capitalism still dominates, deepening the study and analysis of contemporary capitalism will help us more accurately assess the essence of contemporary capitalism and the future of world socialism to promote the development of socialism with Chinese characteristics more effectively.”

“If you know the enemy and know yourself, you need not fear the result of a hundred battles.” “Chen Yun’s research on capitalism in the 1970s covered not only the old brand developed in capitalist countries such as the U.S. and the U.K., but also the emerging capitalist countries of Australia and Mexico at the same time. It included the stages of the production, circulation, and distribution of capitalism, as well as price, finance, currency, foreign exchange, stocks, interest rates, and other factors. … Chen Yun’s research on capitalism touched on a wide range of topics and the research had great depth. It was in the extensive and in-depth study of capitalism that Chen Yun developed insight into the essential characteristics of capitalism, grasped the development trends of capitalism, mastered the development law of capitalism, and guided the formulation of China’s economic society, and especially foreign trade countermeasures.”

“B. Taking full advantage of the advanced science and technology and management experience of capitalism is an important conduit through which we can make up for shortcomings and improve ourselves.”

“Lenin often said that socialism would not exist if it deviated from the development path of human civilization. ‘We cannot imagine that there is other socialism than the socialism built upon all the experiences and lessons learned from the capitalist culture.’ (The Collected Works of Lenin, Vol. 34, People’s Publishing House, 1985, p. 352.) The ideological opinions and policy measures that Chen Yun put forward included using raw materials, capital, technology, and the commodity exchanges of capitalist countries. It was based on his systematic research on capitalism in the 1970s, which played a positive role in promoting the development of China’s economy and society, especially the development of foreign trade.”

“C. Be highly vigilant against capitalism’s plot to contain and erode, ‘divide’ and ‘westernize’ China. This is a necessary measure to prevent and resolve national security risks effectively.”

“The process of using capitalism is also a contest in which socialism and capitalism, two social systems, two ideological systems, and two modes of production, compete against each other. Therefore, while Chen Yun advocated the use of capitalism, he consistently stressed the need to remain clear-headed when using foreign capital and introducing technology. In response to the ‘peaceful evolution’ strategy that the capitalist countries pursued, Chen Yun stressed a long time ago, ‘It is high time that we called attention to this question.’ (Selected Works of Chen Yun, Vol. 3, p. 370.). He introduced a series of thoughts about opposing ‘peaceful evolution,’ guarding against the erosion that capitalist decadent ideas caused, and preventing and resolving the numerous risks that the reform and opening up brought about.”

“In today’s world of great changes and adjustments, the conflicts and struggles between the two social systems on issues such as ideology and the social system are increasingly obvious and intense, Especially with the continuous improvement of China’s overall national power, the international community has been paying more attention to China’s development path and to the concept of development. The hostile forces are constantly changing the means they use to infiltrate into the ideological field of our country, with increased intensity and indiscernibility. From the ‘China threat theory’ to the ‘China collapse theory,’ to the ‘China arrogance theory,’ to the ‘China responsibility theory,’ all the way to the ‘state capitalism theory’ that mainstream scholars in the West have arduously stir-fried. In essence, these arguments are nothing but intentional smears and the Western countries’ deliberate attacks against the socialist system in the ideological field. Developed countries with the United States in the lead, directly or indirectly suppress China using a number of means; they vilify China’s international image, undermine China’s social stability, and attempt to subvert the Communist Party’s ruling status and China’s socialist system. For example, they accuse China of using the loopholes in the international rules of the game to have a ‘free ride.’ Based on these grounds, they constantly create economic and trade conflicts targeting China; they view China as their main adversary, promoting the so-called ‘Asia-Pacific Rebalance’ strategy in East Asia and strengthening the deployment of troops against China; they intervene in the territorial and maritime rights disputes between China and its neighboring countries for the purpose of complicating the relevant issues. These factors gravely threaten our country’s national security and the stability of our external strategic environment.”

{1} People’s Daily Online, “Chen Yun’s Thoughts in the 1970s on Research, Utilization and Vigilance of Capitalism and Its Contemporary Value,” February 3, 2016.