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With all our enthusiasm about the Arab Spring, the most important issue in the current world situation, that is crucial to understanding where the world is headed, is what is going on in China. Assuming that you’re following conventional media, you should know that China has already passed the US as the world’s biggest economy by many indicators and, if no unexpected catastrophe will come in its way, it is well posed to be the major economic super-power within the next decade.

So this is significant in itself – never before has the balance of economic power shifted so fast and so far. But this is only the beginning of the story. The rise of China on the world stage is very different from anything that we have seen before, much like the rise of the working class to political power. Before Britain or the US became top world powers they were already members of the elite club of dominating economies, like the bourgeoisie was a top economic class before it aspired for political dominance. On the other hand, the working class should build its political power from the position of deprivation, just like China is becoming a world power while still basically a poor third world country.

The changes in the world order are very important, as they open new opportunities for all the people that were doomed by the old order. For example, 10 years ago most third world countries were subject to some type of international sanctions imposed by the imperialist masters. The world prices of raw materials, food and other export commodities of the third world were in historical lows, driving billions of people to the verge of hunger. Un-challenged imperialism twisted the whole world economy to serve the thin interests of the multinational and the Capitalist class. Now sanctions are not working any more. You can sell anything to China at a good price and buy anything from it, cheaper and better. Only since the beginning of the 3rd millennium, with the waning dominance of imperialism, most countries of the third world had the opportunity to start on the course of development.

But world conditions are not enough. The building of the local society, economic development, providing food, education and health to the people – all this should be done on the local level. The fact that China did it proves that it can be done. All people in the poor countries that have to find their own way for social and economic development now look for China and try to understand what is the winning formula.

So the most important question in order to understand where the world is going is whether China is a Capitalist or a Socialist country.

The Capitalist ideology, as expressed by the media and academy, is very ambivalent about characterizing China. On one hand, “nothing succeeds like success”, and, of course, they like to attribute everything that is going right in China to Capitalism. But China is not playing by the Capitalist rules. Main sectors of the economy (energy, communication, banking, etc.) are monopolized by few state owned companies. The state and the communist party are setting development and economic goals and set the rules of the game for state companies, local capitalist and foreign investors. So, in order to prove that real Capitalism is a superior system, pro-capitalists analysts predicts that China will hit a wall unless fully “reforming” to a Capitalist state.

Many Socialists in the West are just as ambivalent about China. Looking at the hard toil and poor conditions of China’s workers and peasants from the height of the privileged working class or petty bourgeoisie comfort in imperialist countries, they find it hard to be impressed by the progress. They forget that the biggest steps that Humanity made toward the “millennium goals” of relieving poverty were the miracle by which Socialism in China improved the lives of more than a billion people. They compare China to the promised Utopia and forget that even in the best system progress requires hard work and will always be gradual.

And China is far from an ideal system. It has plenty of its own contradictions, with corruption, oppression, thriving local and foreign Capitalism and growing inequality. All these contradictions may still halt or even destroy the achievements, but still what was achieved is spectacular and should be explained. Is it Capitalism which, a hundred years after its predicted decay, found a new vitality and for the first time in history made a poor country first class power? Or did the Chinese find the true elusive formula how to build Socialism as a superior economic system?

To try a short answer to this crucial question, I would like to return to a page in the old books of Socialism. We were taught about the struggle between Capitalism and Socialism as an example of Dialectical (Materialist) development of History. Capitalism was the thesis, full of contradictions, creating its own antithesis in the form of Socialism. In order to solve the contradictions of Capitalism, Socialism must prevail. But, in the old book, following the victory of the antithesis over the thesis, there should be a synthesis. This is not a game in Greek words. Any system has its powers that made it work and succeed for some period. In the synthesis the victors, the owners of the new system, are embracing the productive elements of the old system, mobilizing them for the success of the new system.

Fighting for Socialism we were naturally preoccupied with the conflict. We had to overcome the enemy, the Capitalist system. It was “we” or “them”. But Socialism as the victorious antithesis requires some elements of Capitalism in order to build the new economy. Market economy seems to provide one of them. Having Capitalists compete with state companies in the local market is one way to make the new Socialist economy work and serve the needs of the people better. If Socialism is superior it should win not only by the barrel of the gun but also by the explosion of Human productivity and innovation.

In September 2013 I visited Beijing – and wrote an updated post about my love for China.

And in “Free Haifa Extra” you can read some funny stuff about how Western media is distorting facts about China.