The False Chinese Myth

The "Chinese myth" refers to the simplistic and polarised narratives that dominate the global debate on the Asian giant: either it is a "triumphant capitalism" that betrayed communism, or it is a "pure socialism" that proves the superiority of the Marxist-Leninist model. Both visions are false or, at the very least, incomplete. China does not fit into the binary categories of the 20th century; it is a unique authoritarian-mercantilist hybrid, where economic success stems from pragmatic hyper-capitalism, while the lack of genuine equality arises from a rigid political system of state communism. The real "false myth" is believing that China is either purely capitalist or purely communist: it is both at once, in constant tension.

1. The myth of "purely communist China"

This view has been erroneous since Deng Xiaoping’s reforms in 1978. Maoist communism—characterised by total central planning and forced collectivisation—generated stagnation and crisis. Today, the Chinese Communist Party (CCP) maintains a Leninist political monopoly—without multi-party politics, and with strict censorship and ideological control—but on the economic front, it has abandoned classical communism. The official term is socialism with Chinese characteristics: a "primary stage of socialism" where private capital is encouraged to develop productive forces under state guidance. There is no abolition of classes or the state; it is Leninism adapted to the market, not a Marxist utopia.

2. The myth of "purely capitalist China"

This is false in both structural and political terms. Although there are billionaires, mass consumption, stock markets, and private companies that contribute between 60% and 70% of GDP and 80% of urban employment, the CCP dominates strategic sectors: banking, energy, telecommunications, defence, and key technology (such as Huawei or SMIC). State-owned enterprises (SOEs) control around 30% to 40% of GDP and enjoy massive subsidies. Furthermore, the Party intervenes in the private sector whenever it deems necessary (such as the tech crackdowns under Xi or the "common prosperity" policy). It is not liberal capitalism: there is no full freedom of capital nor an independent rule of law; it is a state capitalism where the market serves national power and the stability of the Party.

3. Economic success: Directed hyper-capitalism

China’s explosive growth—from a poor economy to the world’s second power—was not born of rigid planning, but of aggressive hyper-capitalist mechanisms:

 * Special Economic Zones (SEZs): Massive foreign investment and subsidised exports.

 * Fierce competition: Overcapacity in sectors such as electric vehicles (EVs), solar panels, and steel, alongside controlled dumping.

 * Accelerated accumulation: Leadership in manufacturing and technology that has produced more billionaires than almost any other country.

It is hyper-capitalism because it outpaces the Western liberal model in speed, thanks to the state’s firm hand. Analysts and think tanks call it "market Leninism". China has shown that this model can reduce extreme poverty on a massive scale (800 million people since 1980, according to the World Bank), prioritising national development over the purity of the free market.

4. The failure of equality: Political state communism

The communist promise of equality (a society without classes or exploitation) has failed under the CCP monopoly:

 * Structural inequality: With a Gini coefficient around 0.36 (official) and higher independent estimates, China exhibits inequality levels exceeding those of many developed nations. The income gap between urban and rural areas is twofold to threefold, with Party-linked elites accumulating extreme wealth.

 * Limited "common prosperity": Xi Jinping’s policies (reinforced in the 15th Five-Year Plan 2026–2030) attempt to correct excesses by reining in oligarchs, but they do not permit independent trade unions or Nordic-style redistribution.

 * Control as a priority: The system accepts inequality as "temporary" (Deng’s premise of "letting some get rich first"), but decades later, severe precariousness remains in rural pensions (~200–250 yuan/month) alongside high youth unemployment. This is a tolerated poverty in pursuit of political control.

5. Why does the false myth persist?

The misunderstanding endures because each observer chooses to see only one side:

 * The West sees skyscrapers and consumerism, concluding that communism is dead.

 * The pro-China Left sees state enterprises and CCP rhetoric, celebrating a "successful socialism".

 * Critics simply see "capitalist restoration" or "crony capitalism".

In reality, we are witnessing a new hybrid system: capitalism without liberal democracy plus Leninism without utopian socialism. China has challenged the dogma that capitalism inevitably leads to freedom, but in exchange, it has generated structural tensions regarding debt, demographics, and social control. The future will depend on whether current reforms achieve genuine shared prosperity or remain mere rhetoric to maintain power. The false myth is not that China is a perfect or failed model; it is the error of trying to pigeonhole it into obsolete Western labels.