Can China’s Transition to Capitalism Be Reversed?

Capitalist relations of production have been established in China. In recent years, the neoliberal wing of the Chinese Communist Party has dominated the economic policy-making. However, economic realities have forced the Chinese leadership to rely upon state-sector investment to stabilize the economy and the privatization of state-owned enterprises has largely stalled since 2015. In the future, China is likely to face declining population and decelerating growth of per-capita real GDP. The Chinese economy may suffer from long-term negative growth after the mid-21st century. As private capitalist investment collapses, China may be forced to rely upon a larger state sector to stabilize the economy. A state capitalist development model may provide favorable conditions for China’s future transition to socialism.