With China’s popularity rising, there has to come a point where a country’s population decides to say:
“We need to follow a Marxist-Leninist model pronto if we want to remain a functioning society, because capitalism isn’t working anymore.”
Which country is gonna say it first?
China’s recent development doesn’t really hinge on Marxist-Leninist models. It went heavy into state capitalism to produce a massive improvement in the economy. I feel like China’s main innovation was to create an investment model that was company agnostic; private companies competed to operate state owned factories rather than the state owning the companies. Corporate governance is more “third way” with loose control over semi-private entities.
Marxist-Leninist model has everything to do with China’s development. You can read this book on the subject which explains how China’s rise is a direct product of Marxist central planning.
The whole idea of state capitalism is a bit of a misnomer. It basically says that even though USSR had state owned enterprise, the internal capitalist relations within it remain largely the same. While that’s true, there is a fundamental difference here. Capitalism is a system where people who own capital hire workers to exploit there labor with the purpose of increasing their capital. The goal of capitalist enterprise is to create wealth for the owners with any social benefits being strictly incidental. On the other hand, the purpose of state enterprise is to provide social value. Workers in state owned companies are producing things that the society needs. They are working for their own benefit and those of others around them. Therefore, the nature of work itself is fundamentally different from actual capitalism.
And this is precisely what socialism is. It’s a transitional stage between a capitalist society and a future communist society where the working class has seized the control of the state, but existing material relations have not yet been abolished.
Also worth noting that the state in China is firmly in control of the commanding heights of the economy.
The actual innovation in China is in combining high level central planning with dynamic allocation. The problem with Soviet economy was that any large system will produce a lot of noise as information travels through it. So, when you do central planning the way USSR was, it becomes very difficult to balance things. You make a plan, the directives travel down to the factories and farms where production happens, there’s delay in the information arriving, mistakes in transcription, and so on. Then the same thing happens on the way back up, so the picture at the top is divergent from the situation on the ground. And that leads to things like overcorrections, and plans based on false data, so the system becomes unbalanced over time. And that’s what we saw happen in USSR. I can highly recommend reading Thinking in Systems for a deeper explanation of the problem.
Now, that doesn’t mean that the idea of central planning itself is wrong. The problem is with trying to do micromanagement at high level which just doesn’t work. And this is the problem China figure out how to solve by using markets as allocators within the centrally planned system. The planners still set five year plans, they still control the commanding heights of the economy, and give overall direction on what types of things should be produced, but the details are left to market mechanisms to work out dynamically at the appropriate level. And this type of a hybrid system is proving to be highly effective.