## I. INTRODUCTION The question of whether China remains socialist or not is frequently posed. Nonetheless, few pay attention to the own Marxist and Chinese perspective towards the political and economic system of socialism. Given this, is it correct to define China as socialist? Relying on the Marxist definitions of socialism and capitalism, this paper analyzes the consistency of the socialism proclaimed by the Communist Party of China and the inherent capitalist contradictions within the Chinese regime, such as the increasing prevalence of market relations. ## II. METHODOLOGY AND STRUCTURE OF THE PAPER The methodology adopted is the case study approach. In simple words, it is a qualitative method whose investigation focuses on the case's context by gathering empirical data over a variety of sources (BAXTER; JACK, 2008, p.544). George and Bennett (2005) argue that case studies are appealing to explore causality because it unfolds the dynamics of particular cases, its mechanisms and the variables that caused a certain political outcome. In this case, "what causes a country to be socialist?" Likewise, case studies may uncover or refine a theory about a particular causal mechanism (GEORGE; BENNETT, 2005, p.31). Initially, this paper will establish the definitions of socialism and capitalism through a literature review of Marx, Engels, and Lenin. Subsequently, drawing upon the work of authors such as Domenico Losurdo, Elias Jabbour, Isabella Weber, Jin Huiming, Chen Yun and Xue Muqiao, the concept of socialist market economy will be investigated. Finally, this paper will consider some declarations of Chinese leaders and the Chinese constitution. The theoretical framework employed here is dialectical materialism. ## III. THEORETICAL FRAMEWORK Dialectical materialism is the basis of Marxist thought and its application to understand the conditions of change in social reality is referred to as historical materialism. It is an ontology that defines the essence of both nature and human society as matter. Furthermore, matter does not exist as a static entity but rather as a dynamic process. Its existence is determined by its concatenations and manifests exclusively through movement, that is, through dialectics (ENGELS, 1975, pp.57-58). Both nature and society are governed by the same dialectical laws. And dialectics (movement) operates through three principles: a) The law of conversion of quantity into quality and vice versa; b) the law of the interpenetration of opposites; c) the law of the negation of the negation (the contradiction/conflict/ apparent resumption of the old in a higher existence). These laws were first described by Hegel in his idealist mode as a simple law of thought (logic) and not of being (matter), using the concept of Aufhebung: sublation, that is, to negate, affirm, and elevate to a new existence at the same time (ENGELS, 2020, p.111). This perspective stands in contrast to the metaphysical approach, which conceives the phenomena and their conceptual representations as discrete, static, and immutable entities. These are considered individually, one by one, and as inherently given and unchanging. In essence, metaphysical thought understands reality as devoid of dynamism and its concepts are akin to a photo frozen in time, isolated from everything else, and assumed to possess universal validity (ENGELS, 1975, p.57). And how should one proceed? Any analysis should consider that each thing (being) possesses qualitative and quantitative characteristics that impact and transform each other, where quantitative changes lead to qualitative changes, gradually, step by step, until a specific point where the contradictions lead to a qualitative leap, that is, the negation of the negation. Therefore, the transition from capitalism to socialism is not conceived as a sudden break but rather as a dialectical process, that is, it would start from the negation of the negation of capitalism, where socialism would inherit the high points of the preceding political-social order that was negated and overthrown (LOSURDO, 2019, p. 43), and would be an apparent return to the old, with the repetition at a higher stage of certain traits and properties of a lower stage (LENIN, 2017, p. 234). Thus, the new society does not develop through its own foundations, but, on the contrary, brings from birth the economic, moral, and spiritual marks of the old society from whose womb it emerged (MARX, 2023, p.29). This explains the seemingly paradoxical coexistence of capitalist elements with novel and distinctive characteristics within the Chinese experience. ## IV. WHAT IS CAPITALISM AND SOCIALISM The mode of production is a category that allows us to understand the specific form of interaction between the productive forces and the social relations that hegemonize and shape the material basis of the reproduction of society, for long periods (JABBOUR; GABRIELE, 2021, p.68). In other words, there is a qualitatively specific, consistent, and stable core, a general and dynamic determination that characterizes a mode of production of a society. It is obvious that for each country there is a certain type of capitalism, but this does not mean that these types are fundamentally distinct: there is the same process that manifests itself in different ways according to the historical and geographical context, but whose content is the same. What is this content that would define capitalism as one thing, despite its distinct manifestations and apparent differences? Drawing upon key texts such as The Communist Manifesto, A Contribution to the Critique of Political Economy, Capital, Volume I: The Process of Production of Capital, and the Critique of the Gotha Programme, the core characteristics of capitalism include: (a) the pervasive generalization of the commodity form across all aspects of human life, supplanting alternative modes of social relations; (b) the private ownership of the means of production and the labor exploitation by the owner class; (c) the anarchic nature of production, driven by market mechanisms as currency, price, supply, and demand; (d) the control of the state apparatus by the bourgeoisie; and (e) the imperative for the ceaseless expansion and realization of capital (MARX, 2008; 2015; 2017; 2023). These characteristics are necessarily present across various manifestations of capitalism, including neoliberal, Keynesian, economic nationalist/mercantilist regimes, dependent peripheral capitalism and welfare states. On the other hand, the concept of socialism presents a greater complexity in definition. This is due, in part, to its pre-Marxist origins, where the term encompassed a diverse range of social movements, including some with reactionary or religious tendencies (MARX, 2008, pp.41-50). Marx and Engels, for instance, identified themselves as proponents of scientific socialism, or communism, and did not delineate a distinct intermediate mode of production during the period in which a communist society would become consolidated. According to their view, socialism constitutes a process initiated by a proletariat revolution and the subsequent seizure of state power. This process entails the socialization of the means of production and the development of social production to a point where social classes become anachronistic. Simultaneously, the consolidation of socialism/communism occurs when: [...] the anarchy of social production vanishes, the political authority of the state dies away. Men, at last masters of their own mode of social organization, consequently become at the same time masters of nature, masters of themselves -- free (ENGELS, 1975, p.85). This intermediate period they define as the first phase of the communist society, a moment when the inequalities persist and one cannot make justice and equality. What changes in this period is the graduate abolition of the right of private property of the means of production (LENIN, 2017, p.118; MARX, 2023, p.31). From this, the higher phase of the communist society emerges: [...] after the enslaving subordination of the individual to the division of labor, and therewith also the antithesis between mental and physical labor, has vanished; after labor has become not only a means of life but life's prime want; after the productive forces have also increased with the all-around development of the individual, and all the springs of co-operative wealth flow more abundantly — only then can the narrow horizon of bourgeois right be crossed in its entirety and society inscribe on its banners: From each according to his ability, to each according to his needs! (LENIN, 2017, pp.120-121; MARX, 2023, pp.31-32). Finally, Engels posits that the consolidation of communism is concurrent with the withering away of the state and its oppressive nature (LENIN, 2017, p.121; ENGELS, 2023, pp.159-160). For its turn, the one who has made the distinction between socialism and communism is Lenin, more for rhetorical and political intrigues against anarchists than for theoretical issues (LENIN, 2017, pp.84-88). He characterized socialism as the "first phase" of communist society, as envisioned by Marx and Engels (LENIN, 2017, p.119). But Lenin's definition allows us for the delineation of the materialist-dialectical process involved in the transition from the capitalist mode of production to the communist mode of production. Thus, there would not be a socialist mode of production per se. Instead, the transition involves a process of qualitative and quantitative transformation (rule 1), characterized by the presence of contradictory elements (rule 2), constituting the negation of the negation of capitalism (sublation/aufhebung - rule 3), wherein socialism inherits and builds upon the advanced elements of the preceding political and social order, while simultaneously superseding it. This dynamic involves an apparent return to certain aspects of the old order, with the re-emergence, at a higher stage of development, of specific traits and properties from a previous stage. Thus, it is to be expected that some of these characteristics would be present: a) private property coexisting with other forms of property; b) the commodity form, being gradually replaced by other forms that prioritize the free universalization of the conditions of existence; c) the continuity of the law of value despite the planned economy, in contrast to the anarchy of production; d) the control of the State by the proletariat class organized in the communist party; e) the need for the increasingly profound development of the productive forces to overcome those of capitalism. Since socialism is not a static concept and it has not yet fully developed its own content, not even the Soviet-style central planning of the economy can define it once for all. Furthermore, prices and the law of value still constitute the predominant form of systemic regulation in the short term, since it is what regulates the relationship between productive and unproductive labor (JABBOUR; GABRIELE, 2021, pp.111-112). Even so, socialism is distinct from capitalism, since there is a legal structure of property that intervenes in the dynamics of the law of value which also undergoes an important role of state economic planning, carried out through state-owned enterprises and indirectly through public finances and other monetary instruments, qualitatively and quantitatively superior to those of capitalist countries, in what Elias Jabbour (2021) called the new economy of projection (nova economia do projetamento) and which adapts to a global scenario dominated by the capitalist mode of production. And here there is an additional crucial point that must be addressed: the consolidation of the communist mode of production cannot be achieved within a single nation: it is impossible to consolidate the communist mode of production only in one country: it is imperative that the new mode of production turns global in order to substitute capitalism. ## V. HOW THE CHINESE DEFINE THEIR GOALS? According to Losurdo (2019), Engels, shortly before his death, recognized that large-scale industry, a product of capitalist development, was essential for the defense of the revolution against external threats and for the prosecution of war. This realization created a political imperative for nations seeking to avoid domination to develop their own industrial capacity, even if that meant adopting capitalist methods. This predicament highlights the challenge faced by socialists who, upon gaining power, must industrialize their nations to close the gap with more advanced countries. This necessity can lead to a slowing of the socialization of the means of production and an increase in the inequalities and exploitative practices inherent in capitalism (LOSURDO, 2019, p. 59). Confronted with the precarious circumstances surrounding the victory of the Chinese Revolution, which simultaneously faced both Japanese imperialism and the nationalist forces, Mao Zedong asserted that liberation against colonialism and neocolonialism would only happen with the modernization of the country (LOSURDO, 2019, p. 60). In response to the dilemma, Mao Zedong developed Mao Zedong Thought (Maoism), positing that a phase of "new democracy" was a necessary precursor to socialist transformation. Due to its international character, in the first phase the revolution of a colony or semi-colony is fundamentally a bourgeois-democratic revolution, and in practice its objective is to clear the ground for the development of capitalism; however, this revolution is no longer the revolution of the old type led by the bourgeoisie and which aims at the construction of a capitalist society and a State of bourgeois dictatorship, but the revolution of a new type, led by the proletariat and which aims at the construction, in a first moment, of a society of new democracy and a State of joint dictatorship of the various revolutionary classes (LOSURDO, 2019, p.61). While the Marxian conception of socialism defines it as a transitional phase, Mao Zedong posited a "transition of the transition," wherein socialism, rather than being abandoned or superseded, became a long-term objective due to the specific geopolitical, economic, and social realities confronting the CPC government. This is so essential for Mao that even during the Great Leap Forward and the drive to establish people's communes, a period marked by a prevailing idealist leftist tendency, he acknowledged the continued utility of commodity-based production as a means of enhancing productivity and promoting economic development (HUIMING, 2017, p86). Given the fragility of the new system proposed by the revolution, it was not possible for the CPC to implement exclusively socialist ownership, and commodity relations had to exist in certain fields. Based on a realistic view of the very low level of productivity of his time, Mao Zedong emphasized that: [...] the idea of abolishing commodity-based production and mercantile exchange prematurely, and denying the positive effects of commodity, value, money and price, would be detrimental to the development and consolidation of socialism (HUIMING, 2017, p.86). Echoing his predecessor's emphasis on development, and capitalizing on the opening created by Nixon's administration to break China's isolation, Deng Xiaoping maintained that genuine political independence required, first and foremost, liberation from poverty. Furthermore, it necessitated bridging the technological gap that separated China from other major powers. In essence, the policy of market opening and reform was essential to gain access to advanced technologies and techniques, integrate into the global economy, and ultimately diminish the power differential between China and core nations, thereby safeguarding its independence and sovereignty against Western influence (HUIMING, 2017, p.87). Asked about the question of what socialism is and how to build it, Deng Xiaoping replied that the essence of socialism is the predominance of public ownership and the common prosperity of all people. For this, socialism has two requirements: that the economy be controlled by public power and that there be no political polarization. With this in mind, it is fundamental to have the development of the productive forces, the expansion of socialist public property and the increase of people's income (HUIMING, 2017, p.87). ## VI. JUSTIFICATION FOR A SOCIALIST MARKET ECONOMY In the late 1970s and throughout the 1980s, with the ideological and political decline of the Soviet Union, which faced the beginning of its collapse, the question of market-based economic development became paramount for China, largely to avoid isolation within the increasingly neoliberal globalized system. This change was consciously decided by the party's own leadership, not only due the international impositions, but also because of the unsolved problems within the centralized planned economy of the Soviet Union and its delay compared to western economies: 'the gradual creation of China's dual-track reform relied in part on the experience in market creation by the old revolutionaries and local authorities' (WEBER, 2021, p.71). In turn, long before the Soviet collapse, still in the revolutionary period, Chen Yun (1995), one of the most important figures of CPC, reveals that the priority of the revolution was never to achieve an ideal of socialism incompatible with the pragmatism necessary in extreme conditions. Not even the destruction of a historical category like the market, which has been present in the history of human civilization since its beginnings, was an inexorable requirement for the emergence of the new mode of production. For him, the justifications for adopting market socialism and acceptance of a bourgeois class were rational and can be summarized in four points: 1. This policy will contribute to the rehabilitation of the national economy. Most capitalist enterprises were dedicated to light industry in the production of basic necessities; if we have manufactured items suitable for daily use to exchange for agricultural products with peasants, the worker-peasant alliance will be strengthened;[...] 2. It is necessary and in the interest of the State and the people to pay the national capitalists a fixed annual interest of 5 percent on their total capital valued for a period of time after the conversion of industrial and commercial capitalist enterprises into joint state-private enterprises. The national capitalists passed the test of the struggle against the imperialists and the Kuomintang reactionaries and did not oppose the agrarian reform. They joined our efforts in the war to resist US aggression and aid Korea and in economic rehabilitation. They passed the test of socialist transformation, that is, the conversion of industrial and commercial capitalist enterprises into joint state-private enterprises, on a trade-to-trade basis, last January. [...] 3. Most capitalists and their representatives possess production technology and management knowledge. [...] We are building socialism in a vast nation of 600 million people, which requires us to work correctly and prudently. [...] Any error in this work will lead to chaos in the socialist transformation. [...] The cooperative transformation of agriculture and handicrafts and the socialist transformation of capitalist industrial and commercial enterprises are an extremely complicated and fierce struggle involving the entire Chinese people. [...] The four reasons mentioned above show that the redemption policy is beneficial to the State, to the people and also to the working class.' (CHEN, 1995, pp.48-53). For Chen Yun, the capitalists served their purpose in the Chinese revolution, but not entirely in relation to the Chinese socialist project. A very clear vision was needed of how the revitalization of the capitalist special zones would be carried out and the relationship with the people of those who were "allowed" to profit because, otherwise, there was a very great chance of losing control of the CPC over the Chinese economy and politics. It is easy to fall into a false equivalence with a counter-revolution when it comes to Chinese reforms, as if relying on the market meant only one thing: bourgeoisie in power. Many times the debates and abstractions of concepts lead to understanding that it was simply a resumption of capitalism, an assault on the communist project, led by a dominant bourgeois class. However, as extensively documented by Isabella Weber, the reality is that the Chinese Communist Party leadership, well-versed in Marxist theory, were the primary proponents of utilizing market mechanisms to advance the productive forces. They conceived this as a necessary step towards socialist consolidation, a perspective that informed the debates and formulations of economic reforms from the inception of the revolution (WEBER, 2021, p.71). Another important leader, Xue Muqiao, described the stage in which the Chinese found themselves in 1980 as being too immature and imperfect for the consolidation of socialism, industrialization, and the collectivization of the countryside, since peasants still represented more than $80\%$ of the population. There was still "a long way to go before reaching the first phase of communism envisioned by Marx in his Critique of the Gotha Programme. (MUQIAO, 1986, p.25). The Author then Develops the Following Reflection: Today, there are still more than two million private farms in the United States, an indication that even in highly developed capitalist countries, the situation after the victory of the socialist revolution will be far more complicated than described in the passages about the first phase of communism in the Critique of the Gotha Programme. China used to be a country dominated by small producers who engaged in partially self-sufficient production through manual labor. To develop China's socialist economy, we must take this context into account and skillfully combine principle with flexibility, rather than dogmatically adhering to the conclusions of Marx, Engels, Lenin, and Stalin; mechanically copying their models would lead to the ossification of China's socialist economy. (MUQIAO, 1986, p.25). Although the trajectory of the Chinese project diverged from the anticipated path outlined by Marx, Engels, and Lenin, the Chinese revolutionary experience has nonetheless generated both qualitative and quantitative transformations. Consistent with Marxist theoretical projections, China has, from its inception, prioritized the quantitative advancement of productive forces as a means to achieve a qualitative leap (Aufhebung). This pursuit has involved the strategic implementation of a degree of private enterprise and alliances with capitalist groups, resulting in a hybrid ownership structure blending private and public forms. This approach facilitated the creation of markets, employment opportunities, and, significantly, improvements in the material well-being of the population. Given these outcomes, it is pertinent to consider the qualitative advancements accruing to the working class as a result of these reforms. After all, China has transitioned from a semi-feudal state marked by severe rural challenges to one that, by 2020, had eradicated extreme poverty. In terms of economic growth in the country, I cite data presented by Elias Jabbour and Alberto Gabriele in China: Socialism in the 21st Century: China's economic growth from 1980 to 2019 was exceptional: the average real GDP growth rate in this period was $9.2\%$ per year. For more than four decades, the country has grown above the international average, almost uninterrupted [...] For more than 35 years, the average per capita GDP growth rate in China reached an average of $9\%$ per year. Per capita income (by Purchasing Power Parity) went from just US $250.00 in 1980 to US$ 8,827.00 in 2018, that is, it grew 36 times! This process was accompanied by a high investment rate, averaging $36.9\%$ of GDP between 1982 and 2011 and above $40\%$ from 2004 onwards (JABBOUR; GABRIELE, 2021, p.143). ## VII. CHINESE SOCIALISM VIEWD BY ITS LEGAL SYSTEM For Marx, legal relations cannot be explained by themselves, since these relations originate in the material conditions of existence, that is, in Political Economy: [...] the real basis on which a legal and political superstructure arises and to which correspond determined forms of social consciousness (MARX, 2008, p.47). A disjunction arises when legal relations fail to adapt to evolving productive structures, thereby impeding development and potentially necessitating revolutionary action to realign the legal framework with economic realities. In the Chinese context, the revolution demonstrably transformed the legal system prior to the full maturation of the economic structure, resulting in a disparity between material conditions and the objectives of the revolutionary project. Consequently, Deng Xiaoping's reforms, including the 1982 constitution, entailed a regression of socializing legal provisions to facilitate the re-establishment of capitalist relations and establish the material preconditions for the initial phase of socialism. According to the constitution, the People's Republic of China defines itself politically as a socialist state under the people's democratic dictatorship, led by the proletariat class and founded on the alliance between workers and peasants. For this document, the defining trait of socialism with Chinese characteristics is the leadership of the Chinese Communist Party (article 1) which applies the principle of democratic centralism, which is also applied in all organs of the State (article 3). In the economy, China defines the foundation of socialism as being the public ownership of the means of production. According to article 6, socialist public property replaces the system of exploitation of man by man, applying the principle: "from each according to his abilities, to each according to his work". However, in the same article, it is understood that China is still far from the first stage of socialism, in which public property is not the only one, but the dominant one. This means that diverse forms of property develop, side by side, including capitalist property. According to Article 7 of the Constitution of the People's Republic of China, the state-owned sector of the economy is the leading force in the national economy, and the State is charged with ensuring the growth of the state-owned sector and strengthening the public ownership of the means of production. Furthermore, socialist public property is sacred and inviolable, and any appropriation or damage to State and collectively owned property by any organization or individual is prohibited (Article 12). Regarding the relationship with the private sector of the economy, Article 11 provides that the private sectors of the economy, which constitute an important component of the market socialist economy, shall operate within the limits prescribed by law. The State protects the lawful rights and interests of the nonpublic sectors, and encourages, supports and guides their development. And thus, the civil right of private property is also inviolable, but the State may, in the public interest and in accordance with the law, expropriate or requisition private property for its use and compensate for the expropriation or requisition (Article 13). The existence and protection of both properties occur because the State practices the socialist market economy (Article 15) which not only seeks to strengthen and improve the regulation and control of the macroeconomy, but also seeks to continuously raise labor productivity, economic performance and the development of productive forces, by raising the enthusiasm of the working people and their level of technical qualification, promoting science and technology, as well as improving economic management and the operations of enterprises, establishing the socialist system of responsibility to improve the organization of work (Article 14). Finally, and no less importantly, the Republic of China also allows foreign enterprises and other economic organizations and individuals to invest in China and enter into various forms of economic cooperation with Chinese enterprises (Article 18). ## VIII. CONCLUSION The basis of Marxism-Leninism is the notion that everything operates from the sublation, in the sense that changes in reality and politics only occur through the accumulation of quantitative changes that generate qualitative transformations and vice versa; from the interpenetration of opposites in the same being and in the negation of the negation, that is, the affirmation of the high points of the old being and the innovation of new characteristics that elevate it to a superior existence. Given the Chinese experience, it is not absurd that there are certain contradictory characteristics of capitalism in its socialism. Correctly, it is almost a necessity that the new being is born from the old and still maintains certain old qualities, despite a new and distinct existence, even more so if we take into account the political events after the fall of the Soviet bloc. There is a concrete objective that guides the Chinese Communist Party, this objective is reaffirmed by the Chinese people, on a path starting from the immediate to future projections aiming to reach the primary phase of socialism towards a more advanced phase; where public ownership is the basis that supports other forms of ownership together with a distribution that primarily aims at labor. It is possible to argue that China today is not a socialist country or does not fulfill all the historical tasks of a so-called socialist country for a number of reasons in its development. However, this debate has been repeatedly stuck in readings without real historical movement, they fail to consider that such historical tasks of socialism are transitory and their characteristics change according to the needs of a specific era. So, returning to the initial question, China is not socialist, first because even if we use Lenin's differentiation between socialism and communism, socialism is not a proper mode of production, but the process of transforming capitalist relations of production into communism, a process that are yet to occur in China. Second, if we use the concept of Marx and Engels, the Chinese leaders themselves confess that the country has not yet reached the prerequisites for the first stage of socialism. This is because there have been no quantitative and qualitative changes within the material conditions to make the qualitative leap towards socialism. This does not mean that we can say that China has abandoned this objective. Given what has been proposed by the Chinese Communist Party, the declarations of its main proponents and its current constitution, from the victory of the revolution until today, socialism with Chinese characteristics is a coherent socialist project. There is indeed a commitment to socialism, even if in the future there may be political changes in the country that deviate from this path.

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