Maoism is our identity, not a tail, says Mohan Baidya Kiran

You are considered as a hardliner in the Maoists’ Party. Tell us briefly where and on what account you differ sharply with the party?

Kiran: I feel that conspiracies are on to foil the Maoists’ established credentials. After I was released from the Indian prison, talks of artificial division in and among the hardliners and the liberals have cropped up. I think specifically the revolutionary ideology of the Maoists is being targeted deliberately. The trend has been that if one talks on ideological grounds he or she is labeled as a hardliner.

As far as differences are concerned, I do not have any objection to the party. And of myself who would always tell my mind without hesitation. However, the moot questions remain intact. There is the great danger that in the name of liberalism whether the party will loose its basic ideology? Are we forgetting our commitments? Whether our commitment to National Sovereignty is on the continuous wane? Is the party falling into the trap set by the Rightists? These are not my personal concerns, instead should be the concerns of the party as a whole?

Tell us something about the hullabaloo over changing the party’s tag? There is a kind of competition among the Maoists and the UML in removing Mao’s name from the party tag? What say you?

Kiran: As far as the UML is concerned, I personally feel that it is not even a Communist party. There are some leaders in the UML camp who believe in communist ideology but the party is not a communist party. Thus there should not be any debate even if it declares that it is no more a communist party. However, in our case changing the party tag is irrelevant and illogical.

Your Party Chairman has already said that the debate over abandoning the party tag is on in the party for over two years now? Is Mao’s name a tail now?

Kiran: As is normal of a political party we too discuss and debate over several critical and crucial issues. Nevertheless, without making a formal decision over the contentious issue, nothing can be taken for granted. For us, Maoism is the party’s identity---it is not at all a “tail” as it is being interpreted by some both within and without. It is the prime identity of the peoples’ revolt. In the UML’s case it is indeed a tail but not for the Maoists as such.

Unless a formal decision is taken by the party whosoever is advocating the case of dropping the tag are his/her personal considerations.

Regarding the Communist unity is concerned I do not rule out the possibility in the distant future but for the time being it is not possible.

What about the inner rife in your party as regards the Militia integration is concerned?

Kiran: It is also a critical issue but there is no difference as you have pointed out. We have charted out clear party lines over the issues of peace process, constitution drafting and the Militia integration. We need rather to devise modalities for the integration process—we need thorough discussion over this issue as well.

What about the emerging differences between you and party president?

Kiran: The political situation is such that it demands debates and discussions. That’s all.

Where is the Maoists’ party heading towards?

Kiran: Revolutionary spirit is still kicking and alive in the party paraphernalia. Nevertheless, we need to continuously rectify our mistakes as there is the concern among our supporters whether the party is deviating away from its prime ideological premises. The central leadership, unfortunately, has kept itself away from the people—which should not have been the case.

The party is undergoing a transition as the State too is. We are yet to totally dismantle past set-up and rebuild a new one.

Tell us about the debate on People’s Republic and Democratic Republic?

Kiran: We are still mulling over the issue. It needs ample discussion as it is directly linked to drafting the new constitution. It is my belief that Democracy as such needs to be redefined in the Nepali context else drafting the constitution becomes redundant.

And it is only but normal that in such critical issues various opinions emerge and there also the collision.

Why is it that there are so much of differences in the Maoists’ Camp?

Kiran: More than concentrating on making determined efforts we have exhibited flexibility. No compromise should be made on our ideology---this is what I believe.

The Maoists have come this far ahead after holding intense debates and discussions. The party will continue to serve the people in this way. However such discussions and debates should not become public---that will invite anarchy.

How do you evaluate the government performance?

Kiran: It will only become a premature evaluation. We want to move ahead, yet we do not have the needed absolute majority. Old mindset prevails in the bureaucracy. Nevertheless we are determined in our set objectives.

Political revolution vs. economic revolution—it is also being debated in the party?
Kiran: Political revolution is yet to conclude. It is still on. We are still within the framework of the democratic republic. Some of our friends have begun talking of the economic revolution. I don’t’ think that unless political revolution comes to a positive end, economic revolution is possible.

(Courtesy: Naya Patrika Daily, October 21, 2008)

National Conference of CPN Maoist postponed to third week in November

The national cadres conference of the CPN (Maoist), scheduled to start form November 10 in Kathmandu, has been postponed to the third week of November.

According to party sources, the national conference has been put off because of the busy schedule of party leaders in the government and the Constituent Assembly. According to them, the conference is likely to start from November 20.

Sources also claimed that the postponement has nothing to do with reports of growing rift between the hardliners and the moderates in the party.

A recent meeting of the party's central committee had decided to hold the assembly to review organisational and policy issues.

Two meetings and a book reveal capitalist character of contemporary China

A Meeting in Utrecht on the 21st of October by Professor Pau yu Ching and another in London on the 23rd October by Nickglais address the question of the social character of contemporary China. Both speeches are posted here below.

October 2008 also see's the publication of Professor Minqi Li's new pathbreaking book about the Rise of China and the demise of the Capitalist World Economy published by Pluto Books.

Professor Minqi Li deepens the Marxist Leninist Maoist analysis of global capitalism and capitalist China's role in the world economy has the global crisis of capitalism unfolds before our eyes.

Today we have the spectacle of the Chinese Premier Wen Jiabao in Beijing saying financial innovation needs to be balanced with regulation and acting as a saviour of Global capitalism.

We at Democracy and Class Struggle place our trust and confidence in the Chinese working class and peasantry and not the capitalist elite in China who are joined at the hip to global capitalism to renew the struggle for socialism in the 21st Century after absorbing the lessons of 20th century defeats..

Deepen your knowledge of Marxism Leninism Maoism by reading the two contributions below and buying Professor Minqi Li's new book this month.

Thirty years of Capitalist Reform in China by Pao yu Ching

Prof. Pao-yu Ching speech at NDFP office in Utrecht 21 st October 2008.

It has been over thirty years since Deng Xiao-ping began his capitalist Reform; here are some of the voices of the Chinese people.

Ordinary Chinese people ask: “What good is the health care reform? Now we can no longer afford to see the doctors.”

And: “What good is the education reform? Now we can no longer afford sending our children to school?”

Tens of millions of workers laid-off from former State enterprises say: “You took the factories we built with our blood and sweat and sold them to new capitalists, or foreigners; destroying buildings and machinery and then taking the land; you squandered away our country’s wealth and left us nothing to survive on.”

Peasants say, “We worked so hard for 30 years to build socialist agriculture and overnight we are back to pre-liberation days.”

Progressive intellectuals say, “The Reform has cloaked itself in socialist clothes but in fact it is capitalism of the worst kind – turning an independent socialist China into one that is increasingly polarized between the rich and the poor, and one that is dependent economically and politically on Western powers.”

With the exception of perhaps a very small minority, Chinese people agree that the current regime is corrupt to the core.

The Reform has cost human lives and caused human suffering, wasted China’s precious resources, devastated the environment, and turned China into a neo-colony of foreign powers. China has transformed from a socialist country, which supported oppressed people all over the world into one, which is allied with the oppressors in Asia, Latin America and Africa in order to acquire resources and expand its economic and political influence.

On the other hand, the Reform has taught Chinese people what capitalism really is all about. Thirty years after the capitalist Reform began the majority of workers and peasants have not only endured much suffering but also have realized that if the capitalist Reform continues, their sons, daughters and grandchildren will have no future. Progressive intellectuals have also realized that the future of China is indeed at stake. With this real life education Chinese people have finally understood the meaning of the two-line struggle and Mao’s warning of the return of the bourgeoisie.

I. China’s economy – imbalanced and unsustainable

Thirty years after the Reform began, China’s economy is grossly imbalanced, making it impossible to continue along the path set forth by the reformers. China’s economy is out of balance with the rest of the world and as well as domestically.

Internationally, China in the past 15 years has maintained very large trade surpluses, especially with the United States. China’s foreign exchange reserves increased rapidly since the early 2000s, then until this summer, accelerated in the past three years – from $659 billion in March 2005 to 1,682 billion in March 2008 – a 155% increase in only three years1. By the end of the third quarter of 2005 China became a net capital exporter.

China, Japan, South Korea and other Asian countries with United States trade surpluses have in fact loaned the US money in order for the US to buy their products. Common sense tells us this practice cannot be sustained for an extended period of time. Also, it is grossly unjust for the Chinese people. China is still a poor country that needs capital for its own development and for the immediate needs of its people – such as clean water, basic health care, and basic education to export its capital, yet a great part of China’s capital has been exported most of which goes to the United States, the richest country in the world. China’s trade surplus accelerated until it reached 11% of its GDP in 2007 meaning during that year, 11% of what China produced was not consumed domestically, nor was it invested in China or spent by its government; the net export of 11% of the GDP was simply changed for additional foreign exchange, which amounts to a stack of foreign IOU’s, sitting idly in China’s Central Bank.

Obviously, the gross imbalances would have to be dealt with2. The adjustment of China’s economic imbalances with the rest of the world started this past year, when the growth of China’s exports slowed, from over 20% to 7% a year from June 2007 to June 2008 (http://business. theage.com. au/business, July 11, 2008). According to Bai Jing-fu’s report, 60% of China’s GDP growth came from the growth of its exports3. Therefore, lower growth rates of exports slowed the growth rate of China’s industrial production to the lowest point in the six years (http://bloomberg. com, September 11, 2008). China’s currency, the RMB, has been devalued by 18 percent since July 2005, thus raising the price of China’s exports (http://iht.com, July 10, 2008). The prices of energy and raw materials China needs to import for its exports have increased significantly. Also, Western nations have stepped up their efforts to restrict Chinese imports. Finally, the global crisis of capitalism has slowed down the demand for Chinese exports. The repercussions of the slowing down of China’s export growth have been serious especially in the coastal region where most export industry factories are located. Many factories, which have served as contractors for foreign multinationals to produce shoes, clothing, toys, furniture and consumer electronics, were earning very thin profit margins to begin with, and now many are losing money and have to close their doors. There were many large laid-offs in these factories.

China’s domestic economy has also been imbalanced. The high rates of GDP growth have been fueled, on the one hand, by the fast growth in the export sector and, on the other hand, they have been the result of high growth rates in investment – especially the tremendous investments in infrastructure by different levels of government. The share of GDP that goes to domestic consumption is extremely low by any standard. Bai Jing-fu estimated that the domestic consumption share of GDP for 2003 was merely 43.4%. Another more recent figure given by Xin Zhiming of the People’s Daily was even lower – a mere 37%, almost 5% lower than the 41.6% of the investment share of the GDP (http://chinadaily. cn, December 11, 2007). This distorted distribution of the GDP is another way to show the extremely unequal income distribution, and concretely it means that except for a rich minority, the majority of the working population cannot enjoy what their labor has produced due to low wages, lack of benefits, and low earnings from farming.

The imbalances of China’s economy both externally and internally mean that, as the recent development has proven, more severe adjustments are yet to come, and that it is not sustainable. There are other equally important factors for the un-sustainability of China’s capitalist Reform. One of these factors is the deterioration of China’s agricultural production (See Section III), and the other is the depleted natural resources and the devastation in China’s natural environment caused by the Reform (See Section IV).

II. What has Reform meant for workers and other urban dwellers?

After the Reformers broke up the communes, they started to fundamentally change the relations of production in the industrial sector. Labor reform was a necessary component of that change. The goal was to dissolve the permanent employment system and turn workers in State enterprises into wage laborers and their labor power into a commodity.

The Reform first attempted to change the basic eight-grade wage system by adding bonuses to entice workers to compete. Workers resisted this change by sharing the bonuses equally to compensate for rises in the costs of living. They also resisted the Reformers’ attempts to replace monthly wages with piece-work wages, because they recognized it as a tactic to divide them; workers learned a great deal during the Cultural Revolution about how material incentives could be used against them.

During the 1980s the Reformers were able to gradually change workers’ permanent employment status by assigning temporary contract status to newly hired workers. The big push came in the early 1990s when large-scale privatization and restructuring of the former State enterprises began, and by 1999 the percentage of workers in former State enterprises (including a small number of urban collectives) decreased to 47.5%. This great wave of lay-offs and/or forced retirements from factory closings and restructuring threw tens of millions of workers out on the street. The majority of these workers were paid only a small severance pay. Many of them lost their pensions or only receive a meager amount to barely keep them afloat. These pensions – 500 RMB to 600 RMB a month often have to be stretched to support the workers themselves and their unemployed sons and/or daughters.

Most of the laid-off workers also lost their benefits, and with the cost of medical care skyrocketing, most can no longer afford any medical care. Hospitals, which have been changed into profit making institutions, charge a great deal of money to run mostly unnecessary tests before dispensing expensive imported medicine, so that doctors can receive bonuses. Without health insurance or any preventive health care, people often delay seeking treatment until their minor medical problems progress into major emergency cases. When they are finally rushed to the hospital, they are refused admission unless they pay a large sum of money up front.

The housing reform began before the big wave of laid-off and sold each housing unit, which workers and families lived for decades, to the workers. But once housing was privatized, factories no longer provided housing for its workers as they had done during the socialist era. Since the end of the 1990s, only a little more than half of the workforce was still employed in the formal sector. Today workers are lucky if they still hold regular jobs, and their wages are often too low to afford rent. The cost of housing has increased by between fifty and a hundred times, and rent has closely followed. Younger workers either continue to live with their parents or have to double up in very crowded quarters.

Those who work outside the formal sector find whatever odd jobs they can to support themselves and many of them live on or below subsistence levels of income. A lot of them work as small vendors selling food or other low cost items on the street4. Many others are also hired for a few hours or a few days at a time.

These temporary and casual jobs pay below subsistence level wages – usually about half of the minimum wage of regular workers in the formal sector. Successful food peddlers may earn a higher income, but to begin with they need capital and may have to pay high rent for a small space to do business. They also have to endure the harassment from the police. In order to avoid arrest, they have to use a substantial portion of their income to bribe corrupt police. People no longer see the police as their protectors but rather as abusers, who do not hesitate to use brutal force to evict people and charge people large fines and pocket the money.

In addition to workers who lived and worked in China’s urban areas, more than 200 million migrant workers from the countryside have flooded into the cities looking for work. The majority of female migrant workers have been hired by export industries located in coastal areas or work in the service sector including domestic work for rich families. Most of the male migrants work for the construction firms. These workers are forced to leave home, because (as described below), they can no longer subsist on what they earn from growing crops. Migrants come to the cities and take the hardest, dirtiest, and most dangerous jobs to send money home in order to support their families. Since they do not have legal urban resident status, they are often mistreated or abused by their employers and owed back wages. If a family migrates together, their children cannot attend city schools for lack of legal status. Factories in the export industry provide often dangerously over-crowded dormitories, and those who work in construction often are forced to sleep in tents near the construction site. The treatment they receive in their own country is not too different from the treatments that undocumented foreign migrants receive around the world.

Even more critical, workers in China have lost the dignity and respect they once had. In the socialist era they were referred to as the “masters” of the country and had a lot of power to make decisions and control their workplace. During the Cultural Revolution, most factories went through struggles to eliminate unreasonable rules and regulations. Workers were empowered to speak out against management and did not fear dismissal or punishment. Workers had a high level of political consciousness and debated important issues amongst themselves.

The status of workers in society and in the workplace has sunk to a pre-Liberation level. Workers are constantly afraid of losing their jobs. Older unemployed workers are outraged when the former State enterprises that they built with many decades of hard work are squandered away by the privileged few, who have connections with the politically powerful. They feel a very strong sense of injustice. A former model worker now in his seventies told me how they used to volunteer for overtime work on Sundays without any overtime pay or bonuses. He also said that older workers in his factory routinely went to the factory on Sundays and holidays just to make sure everything was all right. They put forth best efforts and treated the factory as their own. When the Reformers claim that State enterprises were inefficient due to lax and lazy workers as an excuse to institute the Labor Reform, these workers are infuriated.

At the same time that workers lost their health insurance, they have been increasingly subjected to hazardous and toxic working conditions. Many high-tech firms, which relocated to China to take advantage of the low wages, also went to escape environmental regulations in their home countries. The loss of lives and injuries caused by working in unsafe and contaminated environment are staggering. People of different ages work without any protection to extract toxic metals from hazardous electronic waste exported by the United States, while miners work in dangerous coal mines suffering high fatality rates. According to the official record in 2003, four miners died for every million tons of coal mined, ten times the death rates of all Western countries as well as Russia. (China.org.cn)

In addition to a small minority of extremely rich people – corrupt bureaucrats and the new capitalists – who live extremely luxurious lives, there is also a segment of the urban population, around 20% to 30% who have also lived well in the past 30 years. Some are professionals who work for large domestic and foreign businesses. They receive high salaries and are able to afford a high standard of living comparable to the so-called middle class in Western countries. Not only are their salaries high, they also have large expense accounts, which they use to enjoy expensive meals in upscale restaurants. Most of these people own lavishly furnished apartments and many also own a car. Others in this class of the urban population are current or retired middle level government bureaucrats, including university professors. The government deliberately favored these intellectuals in order to buy their support. They also enjoy high salaries and (unless retired) sizable expense accounts. Majority of these “middle class” individuals are very satisfied with their lives and support Reform policies. However, they are not a homogeneous group; despite their rather comfortable living, a small but growing number are increasingly critical of the Reform and have recently become very vocal, voicing sharp attacks.

The opinions of the well-to-do urban population are bound to change when they experience the increasingly worsening economic crisis. Some of them have already started to complain about the government’s lack of action when they lost their savings in the stock market, which fell about 60% in the past year. The impending bursting of the housing market bubble, the increasingly depressed economy and the ongoing higher cost of living is going to further hurt the interests of this group.

III. How have the peasants suffered under the Reform?

The Reformers moved to dissolve the commune as soon as they consolidated their political power in 1979. The Rural Reform first used higher grain purchase prices to entice peasants to leave collectives and go out on their own, so they could pocket the extra income from selling their crops themselves. Peasants took the bait and worked hard to increase production, resulting in a substantial gain in crop production from 1979 to 1984. By 1984, the land had been largely redistributed to individual peasant households.

After the communes were dismantled, China’s agricultural production continued to increase for a short period of time then it has stagnated. One reason is that the agricultural infrastructure built during the commune years began to fall apart and there has been very little investment available in agriculture for even any kind of repairs. In addition, the collapse of the communes has meant that labor can no longer be organized for such agricultural infrastructure projects. Moreover, agricultural machinery bought by production brigades and communes began to age quickly, and individual peasant households did not have the money to invest in new ones. Moreover, in some areas, such as the Yangtze Delta, where land was been subdivided into small strips5, it is no longer possible to use agricultural machinery. Peasants in these areas went back to the ancient ways of farming their land before collectivization, each with simple farm tools. In central and northwest China, where individual land plots average around one mu (1 mu equals 0.067 hectare), major crops (wheat and corn) are still harvested by combines. Private individuals invested in combines, and they harvest (or hire drivers to harvest) crops from farm to farm, charging 40–45 RMB per mu. Combine owners can earn tens of thousands of RMB during the harvest season, and make a substantial profit6.

Another very important factor has been the rapidly shrinking arable land, which has been diverted to industrial and commercial uses and has also been abandoned by peasants because of the low return on farm production. As explained below, natural disasters, both floods and drought, and environmental pollution, have claimed large areas of land and exacerbated problems in agricultural production7 (See Section IV). Moreover, after the large outflow of productive labor from the countryside to the cities, there have been labor shortages in China’s countryside. China has also started to import more grain and other agricultural products since 2003, to meet one of the conditions required for China's ascension to the World Trade Organization. (See Ching, August, 2008)

In the late 1980s, peasants’ lives, especially those who sell crops as their main source of income, have become poorer and more precarious. As the government took further measures to liberalize the agricultural market, the price of crops fluctuated, while the price of agricultural inputs continued to rise. Beginning in the 1990’s increasing number of people started to migrate to cities. Today many of the 320 million peasants who still depend on selling crops as their main source of income suffer from a low and unstable income with little hope for a better future. Moreover, until recently, the peasant population had a heavy tax burden. Even though the central government eliminated taxes on agriculture two years ago, local governments have continued to collect high fees and other levies.

The burden of such collections is too heavy for the peasants to bear. In the past two decades more and more people have been forced to migrate to cities to work and sent money home for their families to survive. As stated earlier, today, nearly 200 million peasants work as migrants in cities. This shows that China’s agriculture can no longer support its rural population; just like other Third World countries, poor migrants in the cities are the sign of agricultural bankruptcy.

While younger and stronger family members leave to find work in cities, the children, the elderly, and the weak have been left behind, subsisting mainly on the money sent home. A recent report indicated that one of the three biggest barriers to agricultural production is the shortage of labor. The other two are the high price of inputs and backward agricultural infrastructure. The report said that without the labor, even if peasants could afford to buy fertilizer, they have no way to transport it or to apply it to their land. (Jing-ji can kao bao, March 26, 2008)

The cooperative hearth care system that was set up as soon as the commune system was established collapsed as communes were dismantled. After the breaking up of the commune system over 20 years ago, former commune members lost their health and other benefits that had carried them through hard times. As far as health care is concerned, peasants in the countryside suffer even more than city residents. According to the Status of Rural China – 2003 –2004, participation rates for peasants in any kind of insurance are very low. In 2002, the participation rate for the rural population in old age insurance was 7.7% but only 1.4% of the insured actually received an old age pension (about one tenth of 1% of the rural population)8. Only about 5% of rural residents participate in cooperative health insurance, because they cannot afford the high premiums and co-pay. In 2002, 170 million people were affected by natural disasters, but only 9.4 million, about 5%, received any kind of disaster relief (Li, 63).

The absence of any preventive healthcare has meant that infectious diseases, such as tuberculosis, schistosomiasis, and many others, which were basically wiped out in the 1950s, have returned in full force9. In addition, new infectious diseases, such as HIV/AIDS and SARS have caused suffering for tens of million people, not only from the effects of the disease, but also from government denials and cover-ups, and the low priority government places on public health.

After the collapse of the communes, the rural education system organized and managed by the communes also fell apart. The commune welfare fund, which supported elementary and secondary schools in the countryside, is gone. Support from the Central government, which paid for building schoolhouses and teachers’ salaries, was also reduced or completely cut off. (There is currently a plan for the Central government to increase its spending on education in rural areas.) Some rich villages have built their own schools, but the many more poor villages do not have the resources. In the early 1990s their schoolhouses were already falling apart, badly in need of repair. Many teachers continued to teach even when they did not get paid for many months, until schools in many villages closed down altogether.

After thirty years of hard work, peasants in China are again on their own, often working with primitive tools, and they are helpless when disasters, either natural or man-made, strike. The government no longer supports nor protects them. Instead, government bureaucrats collect fees and evict them when they make deals with developers.

IV. Thirty years of Reform has devastated China’s environment and depleted China’s natural resources

China has limited natural resources and very scarce arable land. Any sustainable development has to be based on the conservation of natural resources and arable land. Thirty years of capitalist Reform has implemented policies opposite to what is required for a country without plentiful natural resources to develop.

China has only 9% of the world’s arable land and has to feed 22% of the world’s population. Its per capita arable land is only one third of the world average. As stated earlier, significant land loss occurred since the Reform began through converting agricultural land to industrial and commercial use, as well as due to land abandoned by peasants. The speed of land loss has accelerated from a yearly loss of about 335,000 to 469,000 hectares in 1981 to 1984 to a yearly loss of 2,546,000 hectares in 2003, equaling 2% of the total arable land.10 In 2006, Worldwatch estimated that the total land loss since the Reform to be around 7% of the total arable land. (See Worldwatch, 2006, 15)

The average water available per person in China is 2,200 cubic meters, a quarter of the world’s average. The high growth of industrial production and urbanization has increased water usage, drawing water away from agricultural irrigation and rural residents. According to the Ministry of Water Resources, factories and urban residents used 34% of the total water supply in 2004, up from 25% in 1998. (Bloomberg.com, February 22, 2006) Since the late 1990s, more than 300 of China’s 617 major cities have faced ongoing water shortages. Studies show that with water demand for residential use continuing to rise, less and less water will be available for agriculture. Moreover, the problem of water shortage has been compounded by serious water pollution. The Water Resources Ministry stated in its publication, China’s Water Resources 2000, that of all the water in China’s rivers, a total length of 114,000 kilometers, only 28.9% is of better quality (ranked class I and II), and 29.8% is of lesser quality (ranked class III). About 16.1% of water is dangerous for human to touch (class IV) and the rest, or 25.2% of all water in rivers, is too polluted to use for any purpose (class V). The serious incidents of chemical spills in the Song-hua River and the cadmium spill by a zinc smelter in the Yangtze River caused international attention and alarm.

The dwindling water supply from rivers became critical when in the late 1990s the Yellow River, which provides water needed by 170 million people in this region, ran dry (not reaching the sea) for a record breaking 226 days. Not only is water supply from rivers dwindling, China is also rapidly depleting its groundwater from overuse. The Ministry of Water Resources stated that the fast rate of ground water depletion has increased the risk of earthquakes and landslides and speeded up the already serious problem of desertification. (Bloomberg.com, February 22, 2006)

As the rate of export growth has accelerated since the early 2000s, China’s energy consumption has also increased rapidly. China’s oil consumption increased 100% and its natural gas consumption went up 92% from 1990 to 2001. China’s oil consumption surpassed that of Japan in 2005 and became the second highest oil consumer in the world, second only to the United States. In order to produce huge volumes of exports, during the same period (1990 – 2001), China’s consumption of steel, copper, aluminum, and zinc increased 143%, 189%, 380%, and 311%, respectively. (See Bai’s Report, point 5)

The tremendous consumption of these metals, lax environment regulations, and corrupt government officials has all contributed to the devastation of China’s environment. The situation with air pollution and ground pollution are just as serious as the water pollution. Of the 20 most polluted cities in the world, 16 are in China. Air pollution has caused serious respiratory diseases for city dwellers, and water and ground contamination are more damaging to the rural population; in some villages, cancer rates are 20 or 30 times the national average.

The over-consumption of natural resources and the deterioration of China’s natural environment are the direct result of China’s mindless strategy of pursuing high rates of GDP growth via accelerating growth of exports. More and more people are now aware of the adverse consequences of this strategy of pursuing growth at any cost. Opposition voices have pointed out the dangers of the Reform strategy of pursuing this kind of growth, and more and more people are organized to oppose actions such as setting up polluted factories in their communities.

V. Chinese people are fighting back

As I stated above, the Reform has educated the Chinese people on what capitalism really is through their experiences during the past thirty years. No one really believes anymore that China is still a socialist country. The attacks launched by the Reformers on China’s working population have been brutal and relentless. The process of destroying the socialist economy by forcing former State workers into waged labor in the industrial sector, and forcing peasants off the land to work as migrants is similar to the primitive accumulation phase of early capitalist development in European countries. There is, however, an important difference: primitive accumulation in Europe was able to release labor from the control of the feudal lords. In China, workers and peasants have already gone through thirty years of socialist transformation, and they know what they can accomplish by working collectively under the leadership of the real Communist Party following the proletarian line of Mao Zedong.

In the past 15 years, more and more people have been organizing themselves in resisting Reform policies. Many laid-off workers take over their factories to protest against their sale and/or closing. Older workers forced into retirement have protested against authorities for back wages and for better benefits. Peasants protest against land confiscation without adequate compensation and against factories being built in their neighborhoods that cause serious pollution. Many people both in urban and rural areas have protested against the brutality of police and local officials. In 2005, the official numbers of demonstrations involving 100 or more people reached 200 to 300 a day, or 74,000 over the year. By 2006 the figure reached over 90,000, after which the government stopped publishing the data – undoubtedly because the number has continued to rise.

Also important is the increasing numbers of intellectuals who have risen to challenge the many lies broadly spread by the Reformers. Many of these intellectuals were fooled in the early stages of the Reform, believing the line that the Reform was “socialism with Chinese characteristics” . Many, including some who had joined the 1989 student movement (ending in the Tiananmen Massacre), also believed that the free market approach would solve many of China’s problems.

In the last 15 years, progressive intellectuals started to challenge the Reformers by refuting many lies told by them. For instance, the Reformers claimed that there was little development during the socialist era, but these intellectuals proved that the opposite was true by publishing data showing tremendous accomplishments during the thirty years before the Reform. The Reformers have also falsely claimed that China’s development based on self-reliance during the socialist era was self-imposed isolation, which led to China’s backwardness. These intellectuals have repudiated such claims, accusing Reformers of being over-dependent on foreign capital, foreign technology, and foreign markets, handing the country over to the foreign monopolies, and causing China to lose its economic and political autonomy.

In the past two years, discussion and debate in China, online, in publications, and in public forums, have been lively and intense. The scope and the depth of these discussions and debates have been much wider and deeper than anytime since the Reform began. Attacks on the Reform have also become much bolder and more direct, putting those who still advocate continuing the Reform on the defensive.

In a letter written and signed by 170 prominent people in September 2007, and submitted to the Delegates of the upcoming 17th Congress of the Chinese Communist Party, the signatories openly charged that power holders of the Chinese Communist Party no longer represented the interests of China’s proletariat, and that they betrayed the principles of Marxism, Leninism, and Mao Zedong Thought11. Developments in the past two years show the forces opposing China’s capitalist Reform are gaining strength. Although there is no doubt that the struggle for socialism in China, like elsewhere is going to be long, hard, and treacherous. China’s socialist legacy and the theory and practice Mao left behind will carry the struggle to triumph in the end.

Contemporary China - What is its social character is it capitalist or is it socialist ?

Speech delivered by comrade Nickglais to meeting in Conway Hall London on 23rd October 2008 organised by Second Wave Publications and Distribution

Let us look at China's Response to the current economic crisis. Has the crisis of global capitalism made the Communist Party of China think of a return to socialism and regulation and control its capital markets ? .

Here is the Chinese State Council response as reported in Time Magazine by Bill Powell its Shanghai correspondent. on Tuesday October 7th 2008

" Earlier this week Beijing sent a clear signal that, notwithstanding the mess in the U.S. and Europe, it still seeks to develop, slowly but surely, a more sophisticated capital market. China's State Council has approved a plan to allow margin trading and short-selling, giving domestic investors in China's A-share market "new opportunities to hedge and leverage their positions," says Jing Ulrich, head of China Equities at JPMorgan Securities in Hong Kong".


We should remember that short selling has been banned in UK and US and Australia and nobody today needs reminding of the effects of margin trading and leverage has contributions to the current crisis.

Is this action of the Chinese authorities an aberration or is it part of something much more profound and fundamental relating to contemporary power and class relations in China ?

Lenin in the Three Sources and Three Component parts of Marxism written in 1913 said something which many comrades need to be reminded of when trying to understand China.

"People always have been the foolish victims of deception and self-deception in politics, and they always will be until they have learnt to seek out the interests of some class or other behind all moral, religious, political and social phrases, declarations and promises"

Let us follow our Chinese Comrade Pao-yu Ching to understand the class basis of the current leadership of the Communist Party of China today.

If we trace the origins of the Deng Xiaoping Reforms after Mao’s death. The reform formally began after the Third Plenary Session of the Eleventh Congress of the Chinese Communist Party in December of 1978.

When Hart-Landsberg and Burkett explain how Deng began the Reform and how the capitalist restoration has continued for the past thirty years, they searched for reasons beyond personal greed and explained that the capitalist restoration, once started, generated “structural contradictions” that have kept it going.

We, of course, have to look for reasons other than personal greed to explain the political, economic, and social development in China or in any other countries; however, Hart-Landsberg and Burkett seemed to imply that the Reformers did not have a clear idea about their Reform programs and that they indeed have been “crossing the river by touching the stones” – a famous saying of Deng Xiaoping and – and once the Reform got started it seemed to generate enough contradictions to keep it going.

However, if we look into the history of class struggle in China, we would reach a very different conclusion. Deng’s Reform programs--the dismantling of the Commune, the privatizing of state-owned enterprises, the Labor Reform, the opening up of the economy to foreign investment, and many others--all have their origins long before 1979. Deng and his predecessor and mentor, Liu Shaoqi, tried repeatedly to institute these programs since the 1950’s. Therefore, contrary to what Deng openly said, the Reform that began in 1979 not only had a clear direction but also a well-planned road map.

One example of this plan is the history of the post 1979 Labor Reform that Hart-Landsberg and Burkett documented. Contract Labor instituted in 1986 was part of the overall Labor Reform that abolished the permanent employment system in State-owned enterprises, and it has its origin in the 1950’s. Pao yu Ching wrote the following in “Labor Reform - Mao vs. Liu – Deng” in 1993:

...The Labor Contract System, implemented since the beginning of the Reform, did not originate with the current reformers. As early as the 1950's Liu Shaoqi began advocating the advantages of the Contract Labor System. An essay from the recently published Labor Contract System Handbook revealed the history of Liu's attempts to institute temporary contract workers in state owned factories.

The essay stated that in 1956, Liu sent a team to the Soviet Union to study their labor system. Upon its return, the team proposed the adoption of the Contract Labor System modeled after what the Soviet Union had adopted. However, when the changes were about to take place, the Great Leap Forward started, thus interrupting its implementation.

The essay continued in stating that in the early 1960's Liu again attempted to change the permanent employment status by adopting a "two-track system," enterprises were to employ more temporary and fewer permanent workers, and the mines were to employ peasants as temporary workers.

Then, in 1965, the State Council announced a new regulation on the employment of temporary workers, indicating that, instead of permanent workers, more temporary workers should be hired. The regulation also gave individual enterprises the authority to use allocated wage funds to replace permanent workers with temporary workers.

Again, according to the author of this essay, the Cultural Revolution interrupted Liu's effort to reform the labor system, and, in 1971, large numbers of temporary workers were given permanent status. Although Liu could not fully implement his labor reform, he had "experimental projects" going on here and there, and before the Cultural Revolution began, large numbers of temporary workers had been hired.

The author of Labor Contract System Handbook expressed his regrets that these earlier efforts to institute labor reform failed, and he stated that if there had not been the Great Leap Forward and the Cultural Revolution, it would have been possible to carry out these Labor Reform long before the current time.

In fact, Liu-Deng and their allies had a plan to develop capitalism in China since the 1950’s. The afore-mentioned Labor Reform was only one of the many projects they prepared to carry out . Their plan to develop capitalism in China before 1979 consisted of projects to be implemented in every economic, political, social, and cultural sphere writes Pao yu Ching.

That was and is the precise reason for the past and current class struggles in China.

China started its economic reforms by abolishing the people's communes. Suddenly, without the collectives, the peasants had to privately purchase seed, fertilizer and water rights, and to pay higher taxes to support a large cadre of local party officials.

But the prices of farm products were kept low, forcing many to work as migrant workers in the cities. Others followed when their land was seized for urban and industrial development. Once in the cities, they were given neither residential status nor legal rights and protection, but they were nevertheless expected to be gainfully employed.

Otherwise, under the "custody and repatriation" laws, beggars, vagrants and those with no employment were repatriated back to their villages, held at detention centers, or even used as forced labor. The Chinese version of the English "enclosure" process created approximately 150 million impoverished migrants who had to sell their labor cheaply in order to survive.

Meanwhile, state enterprises were slowly privatized. Their employees no longer enjoyed the guarantee of "the iron rice bowl" and had to find jobs on the open labor market. The masses of rural migrants, joined by growing numbers of laid-off state enterprise workers, provided China with an endless supply of cheap labor.

There is some plausibility (but wrong) in calling China State Market Socialist in the early years of the Deng Reforms when you just had a few isolated Special Economic Zones and there were limits on the size of private enterprise in China but by 1992, if you use the intellectual apparatus of Marxism ,what you see is the extention of Market Reforms to the rest of the Chinese Provinces and wholesale dismantling of the State sector with an attack on collective property and the wholesale implementation of the Guangdong free market model for the whole of China.

We see entirely new production relations emerging in China in the 1990's. The end of the Danwei or work unit which combined production and consumption,education and health the separation of the means of production from working people with privatisation of State assets.The laying off of the old working class in the factories and in the mines the use of hired gangs from the countryside with no knowledge of mining causing one of the highest mining accident rates in the world.

This is evidenced by persistent labor safety violations that have led to spectacular industrial accidents, including gas explosions, mine cave-ins and flooding that killed 100,000's of people every year. While China accounted for 80 percent of the world's total coal mining-related deaths it produce only 35 percent of the world's coal.

Comrade Gong Xiantian in his famous open letter about the Property Law informed us that the ouput from the State sector is below 17% of total output in China and that basically the market has put itself in command and not the party and the people as in the past.

The creation of a new working class based on super exploitation in the new factories of peasants pouring in from the countryside without rights of residence in the factory towns and cities basically second class citizens depriving them of access to education and health services which are just provided for locals..

Discussion has started in China to privatise land has they have already done with industry hopefully this will re-energise the peasants and workers to combine and re-establish the fight for socialism.

Production relations in China have changed in most dramatic way in the last 30 years, The means of production have been wrested from the working class and privatised.The most equal country in the world in 1978 is now heading for the inequality of South Africa and Brazil..

Take the State Industry sector the Govenor of the Central Bank of China Zhou Xiaochuan boasts how one third have been fully privatised one third put on hold for potential buyers and one third closed. Even nominal State shares in privatised companies are scheduled to be sold by State to pay pensions.

The Township and Village Enterprises built up in Mao's time and which formed the basis of China's economic growth have become private property in most cases taken over by a local bureaucrat has his own possession.

The robbery of public assets and public property by powerful individuals in China is one of the biggest expropriations of the working class in history and the new bureaucrat "cadre" capitalists are not satisfied with that now they are eyeing the land for privatisation.

According to a report by the China Rights Forum, only 5 per cent of China's 20,000 richest people have made it on merit.

More than 90 per cent are related to senior government or Communist Party officials. The richest among them are the relatives of the very top officials who had used their position to pass the laws that have transformed state-owned industries into stock holding companies, and then appointed family members as managers. In this way the children of top party officials – China's new "princelings" – took over China's most strategic and profitable industries: banking, transportation, power generation, natural resources, media, and weapons.

Once in management positions, they get loans from government-controlled banks, acquire foreign partners, and list their companies on Hong Kong or New York stock exchanges to raise more capital. Each step of the way the princelings enrich themselves not only as major shareholders of the companies, but also from the kickbacks they get by awarding contracts to foreign firms. to call this "socialism with Chinese characteristics" is a joke.

The Chinese Princelings are the direct equivalent of the Russian Oligarchs.

I have to say that the China Rights Forum is correct and their position is validated by my personal experience in China..

There are clearly voices in China in the Society the State and even the Communist Party not just unhappy with this turn of events but seeking to re-orientate China away from the market direction which has now run its course - and put Socialism back on the agenda but they have a tough time as the bureaucrat capitalist elite is firmly entrenched in the Party and State machine.

Just for you to know how tough it is here is an example of a political and labour rights activities in China in the early 21st Century.

1. Let us look at case of Yao Fuxin from Liaoning in 2003

Yao Fuxin was the leader of large-scale worker demonstrations at Liaoyang Ferro-Alloy Factory after it declared bankruptcy and failed to make wage/benefit/ pension payments to workers.
Leader of "All-Liaoyang Bankrupt and Unemployed Workers' Provisional Union." He was convicted with Xiao Yunliang of subversion by Liaoyang Intermediate People's Court and sentenced on May 9, 2003 to seven years' imprisonment.

His appeal was rejected by Liaoning Higher People's Court on June 27, 2003. Serving sentence in Lingyuan No. 2 Prison, where he reportedly suffered a heart attack in August 2005.

This is not untypical of what happens workers leaders in China.
Status: Due for release on March 19, 2009.

2. The Zhengzhou 4

It was in Zhengzhou on September 9, 2004,on the 28th anniversary of Mao's death that a worker activist Zhang Zhengyao, passed out a leaflet Mao Forever our Leader attacking the Communist Party and government for deserting the interests of the working classes and taking part in widespread corruption

His flyer also denounced the restoration of capitalism in China and called for a return to the "socialist road” taken by Mao. Both he and the coauthor of the leaflet, Zhang Ruquan, were arrested, after police raided their apartments. Their case soon became a cause celebre in China, with many leftists from all over the country traveling to Zhengzhou to protest outside the closed trial of the two in December 2004.

In 2004, when they were each sentenced to three years in prison.together with Ge Liying and Wang Zhanqing—who assisted in the writing and printing of the leaflet, and who have also been harassed by the police—these worker activists have come to be known as the "Zhengzhou 4.”

A petition letter, to President Hu Jintao and Prime Minister Wen Jiabao, calling for their release, attracted over 200 signatures—about one half each from inside and outside China. This was an unprecedented show of support for leftist workers, especially given the potential risk for those who signed it, uniting Chinese intellectuals and activists with their international peers.

Though the government did not respond directly to the letter, Zhang Ruquan was later released from prison, ostensibly for health reasons, which some activists believe was at least partially a result of the pressure generated by the petition and other related solidarity activities, such as the posting of sometimes quite lengthy information and analysis regarding their case on left websites.

The Zhengzhou 4 represent the refusal of workers in China to passively accept the new conditions imposed on them by the party and state, the persistence of Maoist ideology and activism in their ranks, and the growing support which they are gathering from others throughout the society and even abroad.

But this case also brought out the divisions as well as the renewed strength of the Chinese Left. It was mainly the younger leftists who took the lead in signing the Zhengzhou 4 petition letter, using the internet to circulate it widely, while criticizing those among their elders and mentors who, at least at first, had tended to hold back. For the young generation, solidarity with workers who were taking a public stand on the left took precedence over concern with having the exactly correct "line.”

For the older leftists, on the other hand, past divisions and struggles over ideology and policy often prevent the ability to unite for common action. In their case, it is harder to lay aside historical conflicts in order to face the new conditions of the present.

3. The Yantai case .

In 2008 the case of rank and file union activism in China can be seen in Yantai. In the North-Eastern Chinese port city of Yantai there are workers' willing to struggle for two years for their right to form their own union that will stand up for their rights.

The company in question is Ole Wolff (Yantai) Electronics Ltd, a Hong Kong and Danish co-owned company that produces cell phone speakers, receivers and other electronic productions.
"It is the first Chinese independent trade union to be set up through strike in China"

The OleWolffYantaiTrade Union has taken a oppostional stance towards both the company and the local union branch.

It describes itself boldly as a "red union" (i.e. Socialist) while dismissing the All China Federation of Trade Unions has a "yellow union"

The union's internet blog has article, entitled: "Where there's oppression, there will be resistance!" .Class Struggle is alive and well in China.

The movement for Socialist Renewal in China is young like the new century but it will grow and win back the lost positions of the last 30 years in the economy in the the party and society in China has it gains clarity abouts its defeats and its future.

But this in no way is helped by describing contemporary China has socialist - primary stage of socialism - socialism with Chinese characteristics, in fact it is essential to understand the capitalist character of contemporary China has many in China are now recognising as a pre condition for that essential vital Socialist Renewal that China needs to undergo.

The rebirth of Chinese Socialism is the rebirth of the Marxism Leninism Maoism and and has Henry CK Liu writes on his essay on Mao and Lincoln :

"The full impact of Mao's revolutionary spirit is yet to be released on Chinese society. A century from now, Mao's high-minded principles of mass politics will outshine all his neo-liberal critics".


Sources : Pao-yu Ching, Professor Emeritus of Economics, Marygrove College in Detroit USA - The origin of Deng's Reform - the case of Labour Reform.
Zhou Xiaochuan Govenor of Peoples Bank of China at speech ar World Bank 26/4/2004
Gong Xantian Law Professor in Beijing Author of the famous Open Letter
Part of letter on Political Economy Reserch on Internet
China Study Group on Internet Source for information on Political and Labor
Activism in China including Mao forever our leader leaflet of Zhengzhou Four.
Mike Servethepeople for Yantai workers information.

Mohan Baidya resigns from Constituent Assembly - Ideological Struggle intensifies in CPN Maoist

Kathmandu, Oct 22: Senior Maoist ideologue and Constituent Assembly member Mohan Baidya resigns from Constiuent Assembly Baidya's notification for resignation in the Parliament secretariat on Monday was confirmed by the party yesterday. Central leader of CPN-Maoist Matrika Yadav confirmed his resignation. As Baidya has to concentrate his efforts for party and he could not spare time to attend the Constituent Assembly meetings, so he decided to quit the membership, said Yadav, a close associate of Baidya.

CA Chairman Subash Chandra Nembang is likely to announce Baidya's resignation today. The resignation by Baidya has been regarded by political analysts as his move to sacrifice Parliamentary membership to capture the party organisation. It also highlights major rift between the hardliner faction within the party led by Baidya and soft-liners led by Prachanda.

Four party meeting fails to reach agreement on special committee

The meeting of the top leaders of the four parties – Maoists, Unified Marxist Leninist (UML), Madhesi Janadhikar Forum (MJF) and Nepali Congress (NC) – failed to reach an agreement on the formation of special committee, which will be authorised to implement the process of army integration.

“They (the Maoists) said they will lead the committee. That is not acceptable to us,” said NC vice president Ram Chandra Poudel.

According to him, the Maoists cannot head the committee as it will be entrusted to carry out the process of integration of army including the Maoists’ People’s Liberation Army (PLA).

“We have asked them to bring new proposal. Let’s see what kind of proposal they bring,” Poudel said.

He said that NC feels either the committee should be headed on rotation basis by each major party or it should be headed by a party other than Maoists.

He said that if the NC’s proposal is rejected, the party will stay out of such committee.

After NC made its position clear, the other three parties who are partners in ruling coalition are set to consult among themselves regarding the NC’s stand.

The meeting had been held at Baluwatar, Wednesday evening, a day ahead of the cabinet meeting scheduled to form the committee.

DEMOCRATIC REPUBLIC OR PEOPLE’S REPUBLIC? by Harry Powell

Democracy and Class Struggle is pleased to publish a report from comrade Harry Powell in Nepal.

The Communist Party of Nepal (Maoist) is engaged in a sharp two line struggle over the way forward for the Nepalese people. On one side are those, such as Comrade Kiran, who want to proceed rapidly to the establishment of a new democratic type of regime.

On the other side are those such as Comrade Prachanda, Party Chairman and Prime Minister, who seem to be envisaging a fairly long period of bourgeois parliamentary democracy which could eventually lead to some sort of new democracy.

Prachanda has been proposing that some of the other communist groupings, who opposed the People’s War, merge with the CPN(M) to form a new Communist Party of Nepal. Some other leading comrades are vigorously opposed to such amalgamations.

A Party Conference to debate these issues commences on 6th. November.We should be careful of trying to understand contemporary political developments in terms of making crude historical analogies with past conjunctures. But on this occasion it might be useful to make some comparisons with the situation in Russia in 1917.A prominent comrade said to me that while the Maoists have formed a government, they do not yet have state power.

One major issue is the question of the integration of the Nepal (formerly Royal) Army with the People’s Liberation Army. The Nepal Army commanders and the reactionary Nepali Congress party are opposing such a change. They say that PLA personnel could apply to join the Nepal Army. This is unacceptable to the CPN(M) who want full integration on a basis of equality.This particular issue highlights the fact that in Nepal today there is a situation of “dual power” rather like the one in Russia between February and October 1917.

Then there was a bourgeois liberal government presiding over the old Tsarist state apparatus but at the same time the Soviets (councils of soldiers, workers and peasants) had arisen and exercised considerable popular power. In Nepal although as a result of the Constituent Assembly elections the CPN(M) have formed a minority government, the rest of the old reactionary state apparatus remains in place. The Nepal Army, the police and the civil administration remain unreconstructed.

Counterposed to this is the continued existence of the PLA, the militant Young Communist League and strong Maoist-led trade unions. The key issue in Nepal is whether or not the old army and police can be neutralized or dismantled. Otherwise there is the danger of a military coup at some point.

Another parallel with 1917 is that “Menshevik” and “Bolshevik” factions seem to emerging within the CPN(M). On the one hand are those who see the future of Nepal in terms of a fairly long period of capitalist development which could eventually lay the basis for socialist transformation. On the other hand are comrades who want capitalist economic development to be closely supervised by the state and to fairly quickly start implementing socialist developments.

A positive feature of these controversies is that the Party’s two-line struggle is out in the open. There is no attempt to impose “monolithic unity”. Unity comes through struggle.

Prachanda and Khanal of UML agree to form special cabinet committee on army integration processs

Photo Khanal UML leader

At the meeting between Prime Minister Prachanda' and general secretary of Unified Marxist Leninist (UML), Tuesday morning, the two leaders agreed to form a special cabinet committee at the soonest to carry out the army integration process.

According to Minister for Peace and Reconstruction Janardan Sharma Prabhakar, the two leaders agreed that the committee would start the process of integrating the army at the earliest.

He said that PM Prachanda will meet with leaders of other coalition partners to finalise the composition of the committee. At the meeting between PM Prachanda and Khanal, they had agreed to bring in opposition party and experts also in the committee.

Meanwhile, at the meeting, the two leaders agreed to bring the situation in Dhading district to control. They agreed to ask their respective youth cadres to back down. The situation in the district remains tense due to clashes between cadres of Maoist-affiliated Young Communist League (YCL) and UML-affiliated Youth Force

Mohan Baidya and Prachanda debate future of Nepal Revolution at Central Committee Meeting

KATHMANDU, Oct 18th - A 'dissent' paper, proposed by senior Maoist leader Mohan Baidya during the party's recently held Central Committee (CC) meeting, has revealed serious ideological differences between two factions in the CPN-Maoist. While Baidya roots for a "people's republic", Prachanda is for a "democratic republic."

Baidya's proposal carries some weight. The party CC couldn't defeat it. Neither did it endorse Prachanda's paper, which remains committed to the current democratic republic for now. Prachanda's proposal sees a people's republic as a long-term goal, with a "pro-people" constitution as a transition toward that end. In contrast, Baidya stresses that the party must opt for a people's republic with immediate effect.

Baidya's proposal, backed by senior leaders CP Gajurel, Ram Bahadur Thapa and Matrika Yadav among others, advocates state-controlled political and economic systems and says that the state must have strong control over all economic resources. A party CC leader says the state cannot provide justice to all marginalised classes like farmers, labourers, the dalit and the janajati until it has full control over all economic resources.

Further elaborating on the Baidya proposal, the CC leader said the proposal argues that all economic activities, such as industries, must function under direct regulation by the state. "This is how the state can be socialist and dispense justice to all sections of society," he said.

Stressing that the party fought the decade-long war for a people's republic, Baidya argues that the party cannot undervalue the loss of hundreds of party cadres for the cause.

On the political front, Baidya's proposal states that there will be a multi-party democracy but it will not be a parliamentary one. The proposal says various political parties will be free to compete among themselves but they will function only within the norms and guidelines set by the state.

"The underlying meaning of the proposal is that there will be a single major political party in the centre and all other political parties will compete under norms set by the major political party," the CC leader said. "But we are still open to discussing the structure of the political system."

He said the high number of political parties in developing countries poses a hurdle in the development process. "If there is only one major political party in a developing country like ours, we will be free from horse-trading and all other types of political malaise."

Members of all the party's 11 state committees are currently studying both proposals. Some 800 members of the committees are expected to choose either one of the proposals during the party national cadres' conference, scheduled for the second week of November.

"I am sure the cadres will choose Baidya's proposal as it reflects the true aspiration of our decade-long struggle," the CC leader said.

Although he declined to say exactly how many members in the party's 35-member central committee are in favour of the Baidya proposal, he said the party leadership cannot just brush it off, considering its long-term implication for a party with a revolutionary history.

"We hope the party leadership will incorporate the dissenting proposal before presenting a final political paper during the national cadres' conference," he said. "If it fails to do so, major change in the party organisation including its leadership cannot be avoided as a majority of party cadres do not want to give up their long-cherished dream of a people's republic."

The Baidya faction, also known as the hard-line faction, has opposed Chairman Prachanda's recent remark that the party is not in favour of a people's republic, and Prachanda's is desperately trying to consolidate his base, party insiders say.

Prachanda's nervousness can be judged by his frantic efforts to unify his party with the CPN-Unity Centre (Masal). General Secretary of Unity Centre (Masal) Narayan Kaji Shrestha, who played a key role in the past in forging an alliance between the seven political parties and the Maoist, is known to be close to Prachandal. Party insiders say Shrestha has set the condition that after unification the Maoist leadership must be ready to remove all adjectives from the name of the party and rename it the Communist Party of Nepal.

Prachanda and another powerful party leader, Dr Baburam Bhattarai, have agreed to Shrestha's demand. But Baidya, sensing Prachanda's intentions, is strongly opposed to it, according to this story.