One might reasonably wonder what a Communist Party is still doing presiding over an economy with private fortunes, competing businesses and employers hiring workers for profit. Has capitalism made the Communist Party of China (CPC) an anachronism? If so, should we expect the Party to be shown the door sometime soon?
The question is tempting, particularly for those of us accustomed to thinking of capitalism and communism as sworn historical enemies. Here, apparently, they have settled into the same household. The arrangement ought to require an explanation.
My own view is that the CPC is more likely to remain in power over the next five to ten years than to be eased out or overthrown. Its economic arrangements may offend an orthodox Marxist. That does not mean they have deprived it of the means to govern. Political institutions do not submit their resignations upon being informed that they have become theoretically inconsistent.
We therefore have to separate two questions. Has the Party departed substantially from its original economic program? Certainly. Has that departure made its removal inevitable, or even imminent? That is a much harder proposition to establish.
Prosperity Does Not Guarantee Democracy
For a long time, a familiar argument seemed to offer a reassuring answer. Economic development would produce an educated and prosperous middle class. Private enterprise would create interests independent of the state. Eventually, these groups would demand a greater voice in government. Capitalism would prepare the ground; democracy would arrive in due course.
There is something to this argument. But “in due course” conceals a good deal of uncertainty. In their study “Income and Democracy,” Daron Acemoglu and his colleagues challenged the inference that rising income itself causes democratization. Their findings do not close the debate. They do give us reason to be suspicious of a political itinerary in which prosperity automatically includes a stop at democracy. (Acemoglu et al., 2008)
Consider the businessman who wants protection from an arbitrary official. He may prefer a helpful connection to a change of regime. Consider, too, the family that has acquired a comfortable home and opportunities its grandparents could scarcely have imagined. Its members may resent censorship and still fear political upheaval. People can want more freedom without being prepared to risk everything they have gained to obtain it. Whether prosperity encourages resistance or accommodation depends on the circumstances.
Capitalism Under Party Supervision
We should also be precise about the economy we are discussing. China has embraced markets and private enterprise, but it has not simply handed the country over to private capital. Its constitution protects lawful private property while assigning a leading role to the state sector. Urban land is state-owned; rural land is generally collectively owned, subject to specified exceptions. These are substantial qualifications to any description of China as merely capitalist. (People’s Republic of China, 2018, Articles 7, 10, 11 and 13)
Margaret Pearson, Meg Rithmire and Kellee Tsai use the term “party-state capitalism” to describe the evolving arrangement. The Party’s influence reaches beyond the enterprises the state owns. It extends into corporate governance and the political conditions under which business is conducted. Ownership matters, of course. So does the question of who can tell the owner what to do. (Pearson et al., 2023)
A privately owned company is not necessarily a politically independent company. Nor does state ownership tell us everything about how an enterprise conducts its daily business. Counting private firms and announcing the retreat of communism may make for a satisfying argument. It does not adequately explain where authority resides.
Private Wealth and Political Dependence
Rithmire’s 2025 essay makes a particularly interesting point: markets have sometimes strengthened the Party’s position. Entrepreneurs have been drawn into the political system, including through Party membership, while remaining exposed to political reprisal. Cooperation, in this arrangement, need not imply affection. Or even trust. (Rithmire, 2025)
This helps explain why a wealthy business class does not necessarily become an opposition. Its members may find access to officials more rewarding than organizing against them. Wealth brings influence, but dependence on political favor encourages discretion. A business licence, after all, is not a permit to establish an opposition party.
The Private Sector Promotion Law adopted in April 2025 captures the relationship rather neatly. It promises support, fair competition and protection for private enterprise. Article 5 also requires private economic organizations and their operators to support CPC leadership and uphold the socialist system with Chinese characteristics. The encouragement to do business and the reminder of who is in charge appear in the same law. (Standing Committee of the National People’s Congress, 2025)
That does not mean every company is governed in precisely the same way. Kjeld Erik Brødsgaard and Kasper Ingeman Beck’s 2026 study examines policy documents and four company cases in Guangdong. It finds substantial efforts to integrate Party organizations into private firms, but considerable variation in their actual influence. Four cases cannot speak for the whole of China. They do warn us against treating the relationship as uniform. (Brødsgaard & Beck, 2026)
We should therefore avoid imagining either a Party official dictating every commercial decision or an entrepreneur operating beyond the Party’s reach. Between those extremes lies a complicated set of accommodations. The capacity to make such accommodations is part of what has allowed the system to endure.
Leninism and the Organization of Power
But is a party that accommodates so much private capital still Marxist-Leninist? Or has the description become a historical courtesy, retained because changing the stationery would be embarrassing?
I would still place the CPC within that tradition, although the two halves of the label need to be examined separately. Its Leninist organization is much easier to recognize than its fidelity to orthodox Marxist economic expectations.
Marxism offers an explanation of historical development, class relations and capitalist exploitation, together with the prospect of overcoming capitalism. Leninism gives a central role to the disciplined vanguard party that leads the revolutionary process. The two are connected, but economic policy and political organization need not change at the same speed. Nor should Leninism be reduced to a collection of tricks for remaining in office; it carries its own conception of political leadership and historical purpose.
The CPC’s constitution retains that conception quite explicitly. It describes a vanguard party organized through democratic centralism. Article 10 requires lower organizations to defer to higher ones and the entire Party to defer to the central leadership. The constitution also asserts absolute Party leadership over the armed forces. Whatever else has changed in China, this is recognizably Leninist ground. (Communist Party of China, 2022)
Marxism and the Justification for Markets
The economic side is more awkward. A movement committed to overcoming capitalist exploitation now presides over private accumulation and an employing class. The difficulty does not disappear because an official document calls the arrangement socialist. Still, we should be careful here: markets and capitalism are related, but they are not identical. The mere presence of markets cannot settle the whole argument.
The Party’s explanation is that China remains in the primary stage of socialism. It must develop its productive forces before further socialist advances become possible. Private enterprise is permitted within that long process, while communism remains the declared ultimate destination. The journey, we are asked to understand, requires considerable patience. (Communist Party of China, 2022)
There is a historical precedent, and it comes from Lenin himself. In The Tax in Kind, written in 1921 as the New Economic Policy was taking shape, Lenin defended concessions to trade and forms of state capitalism in a predominantly peasant economy. He acknowledged that capitalist activity would revive. His argument was that the Soviet government could use it to advance its own objectives. (Lenin, 1921)
This is inconvenient for anyone who believes that permitting private business automatically expels a party from the Marxist-Leninist tradition. But it is hardly a certificate of socialist authenticity for contemporary China. The scale and duration of China’s market economy, and its place in global production, cannot be explained away by pointing to a policy Lenin defended in 1921.
The real question is where all this is leading. Is private capital still a means toward a socialist transformation that will eventually supersede it? Or has the Party become the permanent political manager of an economy that continues to reproduce capitalist relations?
An orthodox Marxist has every reason to press the second question. “Developing the productive forces” cannot indefinitely substitute for examining who controls production, who benefits from it and how much authority workers possess. Party control does not, by itself, establish workers’ control. That distinction is rather important in a system claiming to govern in their name.
Why Marxism Still Matters for the CPC
I would nevertheless hesitate to dismiss the Party’s Marxism as so much ceremonial decoration. In his speech on common prosperity, published in English by Qiushi in 2022, Xi Jinping presents the narrowing of disparities as a socialist obligation. Yet he also supports the development of public and non-public sectors and rejects rigid egalitarianism. Private wealth is accommodated, while the Party claims authority to determine its wider social consequences. (Xi, 2022)
We need not accept the claim at face value to take it seriously. A statement of purpose is not proof of achievement. But an ideology can shape decisions and justify power at the same time. Assuming that every official believes every word is credulous; assuming that none believes anything is hardly more analytical.
My working description, then, is a Leninist ruling party with an extensively adapted Marxist ideology, governing an economy with substantial capitalist relations. It is a less tidy formulation than simply declaring China communist or capitalist. Unfortunately for tidy formulations, the subject is complicated. The socialist character of its economic direction remains open to serious dispute.
Where the Party Remains Vulnerable
None of this means the CPC has discovered the secret of political immortality. Adaptation solves some problems and creates others. A system can survive for a long time without resolving the contradictions on which it rests.
The IMF’s 2026 assessment identifies persistent problems associated with the property downturn, indebted local governments and weak domestic demand. It also points to longer-term pressures from a declining labour force and weaker productivity growth, and recommends stronger social protection and reforms to competition and resource allocation. These are serious economic findings. They are not an obituary for the Party. (International Monetary Fund, 2026)
Their possible political consequences require a further argument. If opportunities for advancement diminish, or people conclude that they are bearing an unfair share of the burdens, the Party’s record of development may become less convincing. Prolonged disappointment could make divisions within the leadership more dangerous. Much would depend on the government’s response and on whether grievances remain scattered or become organized.
There is also a familiar problem with concentrated authority: the person at the top needs accurate information, while the people below may find it safer to supply agreeable information. Officials who fear punishment for bad news learn to improve the report rather than the situation. Entrepreneurs who cannot anticipate the rules hesitate to commit their resources. A government that can move quickly can also move quickly in the wrong direction.
Democratic governments, as we Filipinos hardly need reminding, have no monopoly on wisdom or competence. But the ability to secure obedience is not the same as the ability to recognize and correct a mistake. An institution may become an obstacle to economic progress while remaining perfectly capable of protecting its own position.
Neither should we assume that fear alone explains continued CPC rule. People may value order, credit the government with material improvements or worry that a transition would leave them worse off. These attitudes can coexist with considerable dissatisfaction. Public conformity does not establish unanimous support, just as grievances do not establish that a revolution is around the corner.
I would take the prospect of a fundamental rupture more seriously if prolonged economic failure were accompanied by a severe split among ruling elites, sustained public mobilization and weakening loyalty within the security apparatus. Even then, we would be examining warning signs, not applying a formula. Outsiders looking into an opaque political system should be especially cautious about mistaking confidence for knowledge.
Leadership Change and Regime Change
Finally, a change at the top is not necessarily a change of regime. A future leadership might revise Xi’s policies, reassure private business or restore more collective decision-making while keeping CPC supremacy intact. Even a substantial economic reversal would not automatically bring competitive elections. The Party can change its policies without agreeing to make itself removable.
For that reason, I regard further adjustment within the Party as more plausible over the next five to ten years than the disappearance of the Party itself. This is a judgment, subject to revision as the evidence changes. It is certainly not a prediction of eternal one-party rule.
The original question remains worth asking. Capitalism has complicated the CPC’s claim to be communist. It has not, by that fact alone, dismantled the organization through which the Party exercises power. To understand its survival, we have to look beyond the contradiction in its name and examine the arrangements that allow wealth and political obedience to coexist.
The Party has made room for private capital. It has not made room for an electorate that can dismiss it.
Conclusion
My conclusion, therefore, is that the CPC’s accommodation of capitalism has neither erased its Leninist character nor established that China is moving steadily toward its declared communist destination. It remains a ruling party that invokes Marxism, permits substantial private accumulation and reserves ultimate political authority for itself. Make no mistake: it is still a dictatorship.
This arrangement helps explain its resilience, but it leaves unresolved the question of whose interests its power ultimately serves. Neither the growth of a capitalist class nor the persistence of economic difficulties guarantees a democratic transition; both can produce further adjustments within one-party rule.
The more revealing test is whether the Party can correct its failures, distribute the gains of development more fairly and give workers meaningful influence over the economy their labour sustains. Its ability to supervise capitalism is evident. Whether that supervision advances socialism, rather than indefinitely postponing it, remains the question it must answer.
References
Acemoglu, D., Johnson, S., Robinson, J. A., & Yared, P. (2008). Income and democracy. American Economic Review, 98(3), 808-842. DOI: 10.1257/aer.98.3.808.
Brødsgaard, K. E., & Beck, K. I. (2026). The Party in Chinese private business. Journal of Current Chinese Affairs. First published online May 4, 2026. DOI: 10.1177/18681026261445459.
Communist Party of China. (2022). Constitution of the Communist Party of China. Revised and adopted October 22, 2022. See the General Program and Article 10.
International Monetary Fund. (2026). People's Republic of China: 2025 Article IV consultation. IMF Country Report No. 26/044, published February 18, 2026.
Lenin, V. I. (1921). The tax in kind. In Collected Works, Vol. 32, pp. 329-365. English edition, Progress Publishers, 1965. Marxists Internet Archive.
Pearson, M. M., Rithmire, M., & Tsai, K. (2023). The state and capitalism in China. Cambridge University Press. DOI: 10.1017/9781009356732.
People's Republic of China. (2018). Constitution of the People's Republic of China. Text incorporating the amendments adopted March 11, 2018. See Articles 7, 10, 11 and 13.
Rithmire, M. (2025, June 9). The CCP and capitalism: Accommodation, reprisal, and rule by market. In The life of the Party: Past and present constraints on the future of the Chinese Communist Party. Carnegie Endowment for International Peace.
Standing Committee of the National People's Congress. (2025, April 30). Private Sector Promotion Law of the People's Republic of China. Official Chinese text. See Articles 2-5.
Xi, J. (2022, January 18). Making solid progress toward common prosperity. Qiushi, English edition. Excerpt from the speech delivered August 17, 2021.
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