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Christopher Marquis is Sinyi Professor of Management at the Cambridge Judge School of Business, and a fellow of Jesus College at the University of Cambridge. In his recently published book, Mao and the Markets: The Communist Roots of Chinese Enterprise — written together with Kunyuan Qiao from Georgetown University — he analyzes the lingering impact of Mao Zedong on China’s political economy using detailed research into Chinese corporate sources and interviews with the country’s business leaders. The following is a lightly edited transcript of a recent interview. 

Q: You argue in your book that although the post-1976 era in China is often seen as a break from the Mao period, after his death, in fact his influence was fundamental to the way that China’s economy then developed, and how it works today. Can you explain the main themes in your own words? 

A: Our research over the past decade has focused on understanding how the ideology and institutions of Maoist times, and the CCP more generally, continue to influence present day China, including business, politics and society. With Xi Jinping, this idea has come to the fore a bit more because he has taken a more hardline tack than Deng Xiaoping, Jiang Zemin or Hu Jintao. In the West, Xi’s approach came as a surprise to many because we were very used to China globalizing, and being a much more open economy following Deng Xiaoping’s reform and opening policy. But based on our research it was not so much of a surprise and actually in many ways, the Deng period was the aberration. 

In the West, we believe that as a country’s markets open up that its politics will open up. This idea resulted in allowing China to enter the WTO in 2001 and decades of engagement policy by Western countries. But China’s experience has shown that this received theory of economic development is fundamentally wrong, at least in the context of China, and it has correspondingly led to decades of errors in policy-making.

And so I think that trying to come up with a new way of thinking about China that is much more rooted in understanding the CCP from foundational principles is what is needed today and what we’re trying to provide. If we will engage with the country, we have to try to understand it and its governance norms and institutions, not follow “wishful thinking” that it is becoming more like us.

What do you see as the main features of Maoism? 

We look at three different aspects of Maoism as it affects people, organizations and institutions in China. One is Mao’s ideas and ideology: this also includes his military strategies. We also look at campaigns, something that is really unique to Mao: he governed very much through campaigns, from the Yan’an rectification [from 1942 to 1945] when he sidelined all of his political enemies to the Great Leap Forward, and to the Cultural Revolution. And then a third aspect is looking at the institutions: On those there’s a bit more overlap with the traditional Marxist-Leninist, communist idea of state ownership and strong central control by one party of the economy, society and politics. 

On ideology, Mao was a creative thinker, and he tried to adapt communism to fit the reality of China at the time. He was very focused on nationalism, China had been through its century of humiliation since the Opium War, when it was divided up by a bunch of foreign powers, and he wanted China to stand up. Also, with military strategies: traditional Marxist-Leninist revolutionary strategy is about industrial workers seizing the cities, but Mao recognized that China didn’t actually have a lot of industrial workers in cities, but did have a lot of peasants in the countryside, and so there was this need to focus first on the countryside. 

While Maoism has some overlap with traditional communism, it also has some key differences as well. 

What do you see as being communist, or Maoist about China today?

When I take students to China, frequently they say in a surprised tone, ‘Wow, you know, China’s not really communist. I mean, look at these gleaming buildings, amazing infrastructure and its markets.’ Part of what I take from this is that how China and “communism” is portrayed in the West is different from the reality on the ground.

But there is clearly strong state control and intervention in the economy. There are state-owned enterprises, which are in key industries like telecommunications, finance, energy and others. Even in the private economy there has been increasing state encroachment, through so-called ‘golden shares’ where the CCP or the government buys into firms and can have some sort of board seat and veto power, and also party branches in firms. So one element where you can say China is still very communist is around state control of the economy. And that has been increasing under Xi Jinping.

I also think that in politics and social life as well, the one-party control and propaganda, the control of history, is all part and parcel of what one would consider under a Communist regime; although, of course, China has marketized tremendously and has had a successful, vibrant economy, particularly for the last 40 years.

Can you explain how you use social sciences in your work, and how you see that as being able to help us inform our understanding of how China works? 

It’s a delicate balance because in some ways we’re criticizing the general economic development theory that argues that with marketization comes democratization. That is a social science theory that history has proven to be wrong in the context of China. Having historically and culturally informed insights, from more behavioral types of social sciences that consider ideology, culture, norms, and institutions is essential.

There’s very influential work in cross-cultural and cognitive psychology, on the differences between societies that are more relational and those that are more individualistic, with the latter being the West and the former, the more relational, being the East. I don’t want to overly simplify this, but basically the idea is that in the West, there’s much more of a cognitive focus on separating things and categorizing things: So, for example, the state and markets are viewed as separate entities. Whereas in the East, having contradictions is much more natural. When you think about the management of an economy and a society, Deng Xiaoping’s insight reflects this – having a little bit of state, and a little bit of the market, it doesn’t matter, both are just tools. 

And the important thing is it’s the party at the top making these decisions.

Exactly, the party really is the umbrella and glue that connects everything, state, market and even the military reports into the party, not the state.

Another social science area we draw on, which is more macro and sociological, is about how early institutions, particularly from founders, can have a lasting effect. We draw on these insights to understand how Mao’s influence can last. There’s literature looking at the U.S. and Jefferson and Hamilton, or France and King Louis XIV, on how early leaders, by setting down some of the early institutions and shaping a country’s culture, have an influence on a society way past their death. 

China is such a vast and complex country, that basically you can see most anything that “confirms” an existing set of assumptions or point of view. Rigorous quantitative research can help correct this bias and provide insight into what the general trends are. 

And so I think these general insights from psychology and sociology are useful to try to help complement the understanding of Chinese history and culture that other research shows — because clearly, you can’t just apply theories, without some sensitivity to history and culture. We think that both types of approaches, used in a complementary manner, are really important. 

How did you measure the lingering influence of Mao, in terms of shaping the thought world of Chinese people?

Let me say a little bit about the general methodology that we took in the book. Our goal was not to be political, or say things are bad or good, but to try to develop an understanding of how China’s economy and politics work. Our research is based on a number of peer reviewed studies, where we use large-scale databases to understand entrepreneurs and corporate leaders. These databases provide systematic data on thousands of organizations and individuals; we also did a bunch of coding of politicians resumes to see their history and backgrounds — did they live through the Great Leap Forward or Cultural Revolution, were their parents party members, where they grew up, and things like that. 

A lot of that statistical work, we hold in the background — people can read the academic papers if they want for those details, and we also present them in endnotes, and we have a methodological appendix. For this project specifically, we also interviewed over 30 entrepreneurs — in fact I’ve interviewed 100s of entrepreneurs, business leaders and politicians over the years — and we try to use those stories to bring many of the statistical relationships to life in a way that can resonate with people, as opposed to just seeing a regression coefficient, because I know that’s not as engaging. 

We did systematic content coding of annual reports of companies, again looking for connections or Maoist language, [we did] analysis of Chinese newspapers going back to 1949, we really tried to gather a lot of diverse data that can provide insight into our research questions. Our background is as quantitative social science researchers, and we try to use those methods to try to understand some fundamental relationships, which we then can illustrate with a lot of the qualitative and story-based materials we have also gathered. 

All kinds of research about China are important: I’m not saying one kind is better than the other. But I think there needs to be more quantitative type research like that, to address what I see as a significant “confirmation bias” that pervades work on China. China is such a vast and complex country, that basically you can see most anything that “confirms” an existing set of assumptions or point of view. Rigorous quantitative research can help correct this bias and provide insight into what the general trends are. 

For instance, right now as we talk, there’s many stories about entrepreneurs leaving China, going to Singapore or wherever. Clearly, there are entrepreneurs leaving China. But our findings, and the interviews we’ve had, suggest that there is still a very deep commitment to the CCP and Mao, and China as a country and system, among many entrepreneurs in China. There are over 15 million entrepreneurs in China; I am not sure if those stories that dominate the press these days are representative of the whole or are a select set of individuals that journalists or other researchers are more likely to talk to, and write stories about as those stories resonate with western audiences. 

A cynic might say that when you read company reports, they may refer to Mao or the Communist Party, or particular campaigns — but they’re paying lip service to these ideas. 

This is a good point, and clearly, there is some of that. Social science is messy, it’s not like math, where one plus one is two. 

But, again, we think this follows the logic of the standard argument in the West, that China is marketizing, their business leaders are becoming more like us, ‘wink wink, they don’t actually believe this communist stuff. They’re just doing it, because that’s the system.’ This is actually what motivated our interest in studying this topic. Is what they say for economic reasons, or is there something deeper? 

Just because someone says, I don’t believe this stuff, that doesn’t necessarily mean that that is true, and it is why trying to study the topic with large-scale data is important. 

I’m not discounting the fact that there is some economic rationale, but our findings suggest that there is still a very deep commitment to the CCP, and to Mao and his ideas. What we try to examine with large scale data is not just what people say, but how their prior experiences and activities, such as socialization into the CCP, particularly during the Mao era affects their later behaviors, as compared to people who don’t have those experiences. 

One of the things we do in the book as well is to describe the processes by which these ideas are transmitted. So if you think about entering the CCP, at a very influential stage in a person’s life, they spend multiple years going to classes, watching documentaries, reading and writing reports, being mentored. A lot of research in psychology shows how effects of such socialization last. 

One of the things that got me interested in examining ideological control in China is when I was on an admissions panel a number of years ago, I saw that all Chinese students actually take undergraduate courses in Maoism. And that’s through their entire schooling, up through college. I’ve mentioned this to some Chinese who have been through this system and they say, ‘Well, sure I took all those classes, but I don’t believe in any of that.’ But I think that is a bit naive about how socialization works. For instance, if you are raised in a religion, let’s say in the West, many of the ideas will stay with you even if you don’t actively practice that religion later in life.

And there is a significant general cultural influence too — you think about, during the CCP centenary that just happened, there was a lot of reporting on the different red movies that were created and played on TV and and movie theaters, red tourism being promoted. So there is a huge set of cultural and socialization processes that reinforce and maintain ideas. Just because someone says, I don’t believe this stuff, that doesn’t necessarily mean that that is true, and it is why trying to study the topic with large-scale data is important. 

One of the examples you choose in the book is Ren Zhengfei, the founder and boss of Huawei. Can you talk about why you see him as embodying so much of what you’re trying to explain. 

Ren Zhengfei is a really interesting case. He is very vocal in his commitment to Maoism. He uses a variety of Mao’s ideas in managing Huawei: for instance, circulating different leaders through the CEO spot — this was something that Mao used to do early on, so that no one got their own basis of power in the CCP military. A famous example where he used Mao’s military ideas from his early days, is when competing against larger international firms, he focused on rural areas first, and then taking the cities. He explicitly says it was the ‘surround the cities from the countryside’ strategy that helped Huawei to succeed.

U.S. politicians talk about how the CCP or the Chinese government owns or controls Huawei. From what I understand, that’s not the case as far as strict ownership ties go. But its leader is saying they’re committed to the CCP: if I was a politician in the U.S. or the U.K. that would be all I need to hear to say okay, I don’t want this company’s products in my network and critical infrastructure. Full stop. Let’s stop debating these side points about ownership per se and get realistic about understanding the deep and controlling influence of the CCP on business in China. The same applies to Tiktok – as long as it is owned by Bytedance in Beijing there is no way we can fully trust how it handles data, no matter what policies it puts in place or its CEO says. 

I do strongly think that we need to coexist, and engage, but we also need to be realistic about China and especially the CCP.

That’s interesting, because one of the points you make is that using the ideas and frameworks that you put forward in the book can help us to understand where China and Chinese companies are coming from. And ultimately, that can help us in the task ahead of trying to coexist with China. But what you’re saying about Ren could lead quite easily to another conclusion, which is that understanding China better should lead us to be more fearful.

I do strongly think that we need to coexist, and engage, but we also need to be realistic about China and especially the CCP. Without that we’re just going to hurt ourselves, because China is going to be a powerful and competitive country, and the more we cut ourselves off from them, the less we know, and the harder it will be to effectively compete. And also, some sort of negative spiral could happen that could even result in some sort of conflict. 

For instance, the recent balloon incident is indicative of this. Clearly Chinese spy balloons flying over the United States should not be tolerated and we can’t accept that. But also, I think all of the hype and controversy has gone a bit far, and my guess is the U.S. is also spying on China in a variety of ways. We need to focus on being clear about our stance, but not allow all the posturing on being “tough on China” make this spiral out of control. 

While I do think engagement in many different ways — through education, business and so on — is really, really important, there are some national security areas where we should be very careful, and I think telecommunication infrastructure is one of those. I think that the work being done by the US in protecting semiconductor technology is also a very appropriate and reasonable set of work. It’s not as if the Chinese are allowing us, as the West, into those sectors either. 

Outside China, Mao’s rule is associated with two enormous disasters, the Great Leap Forward in the 1950s, and the Cultural Revolution from the mid-1960s onwards. Can you explain how you see those two events as having helped to shape the mindset of Chinese corporate leaders in subsequent years?

Those periods are certainly controversial and tricky to address in our research. We do try to be very careful in how we deal with them, just through respect for the fact that tens of millions of people tragically passed away as a result of Mao’s decisions. We in no way want to minimize the widespread death and suffering in those periods. 

Our book’s title is ‘Mao and the Markets’ — so one of the things we’re very interested in is how Mao’s campaigns continue to influence business and economic activity. On the Great Leap Forward, we look at how living through it shaped individuals’ mindsets and the business strategy of their firms. There’s a number of papers in economics and finance about how living through things like the Great Depression, affected the mindsets of Western leaders and made them less risk averse and more frugal, etc. So there’s a precedent for looking at significantly negative childhood experiences and the effect on people growing up, in later life. 

We also discuss what some entrepreneurs have said, that actually living through that period has given them tremendous amounts of grit, and even creativity. One well known example is Cao Dewang, the founder of Fuyao Glass, who is in the ‘American Factory’ movie, he has said similar things. We tried to analyze this: there’s a variety of ways to look at how entrepreneurs who lived through that period are more frugal in their operations, which we find very strong evidence for through these databases that I mentioned. And secondly, we also find evidence for the entrepreneurs and their firms being more creative and innovative. In some ways, it’s a case of what doesn’t kill you makes you stronger, the Nietzsche quote. 

On the Cultural Revolution, there’s also work in economics and political science on how living through that period led to a generalized lack of trust, and a lack of respect for institutions. What we look at there is whether these entrepreneurs who came up through that period are not following the norms and the laws in China, which we also find evidence for. 

I’ll just add that Xi Jinping himself lived through this period, and spent seven years as a laborer in the countryside, and we do discuss how his living through that period may have resulted in some really negative psychological effects that are showing up in spades. For example, Xi has not followed established norms and rules that were set up by post-Mao leaders to prevent a second coming of Mao. This connection is speculation, of course, but I think it’s certainly based on social science research on effects of the Cultural Revolution, and is consistent with others’ commentary too. 

Many of Mao’s policies were pretty destructive to economic and business life in China. I wondered why you don’t see a leader like Jiang Zemin as being more significant in terms of bringing business into the mainstream in China? 

Sure, Mao’s legacy is very, very mixed. But we’re not trying to say whether it’s good or bad, clearly the Mao period was a huge disaster for the Chinese economy and the way of life of hundreds of millions of Chinese. But it happened, and now understanding how these early cultural processes and institutions ended up shaping Chinese leaders — and still influence China — is the point of our research.

In regards to Jiang Zemin, his ‘three represents’ policy is really interesting, along the lines you mention of mainstreaming business in the CCP. For a long time while I was in China I would hear about the ‘three represents’ and it just sounded like communist gobbledygook. But actually, I’ve come to appreciate that it’s pretty brilliant. The CCP clearly wants China to continue growing economically, this is key to the legitimacy and power of the party. To do that, you need to find a way to incorporate business leaders and elements of business, because you don’t want business to be separate from the party, you want it to be co-opted by the party. So I think the idea of the three represents, bringing entrepreneurs and other productive elements into the party, was hugely influential and smart. 

Yet in thinking about today’s China, it’s interesting that a number of corporate leaders, like Baidu’s Robin Li, are not on the lists of attendees at this year’s ‘Two Meetings’ of China’s highest political bodies. Maybe the party is pulling back a bit from incorporating these business leaders. Or maybe they’ve just discovered other ways of effectively co-opting those individuals through golden shares and through party branches. I do think this shift in business engagement in the ‘Two Meetings’ may signal a change in the CCP approach to co-opting business and technology sectors, but I am not sure yet what underlying trend it represents. 

You have examples of entrepreneurs who are strongly loyal to the Communist Party. But you could say that really, many entrepreneurs in China are simply good at following the political winds, rather than actually having internalized faith in the party or faith in Mao?

Certainly, I don’t want to discount or downplay the economic value of being a CCP member and being close to the government. For all the things you just said, I think that without a doubt there is an economic rationale. But that is the standard story — entrepreneurs have connections, they sit on these councils because they want to get preferential land deals, bank loans, sense general political trends or whatever. 

But what we try to do is say, okay, this story about economic benefits exists, and in the West it makes sense to us, because communist ideas are very foreign to us to begin with. But actually, is this something where individuals have internalized the ideas in a way that makes them engage in business behaviors that they may not have if they did not have those beliefs and ideas? 

The reason why I think this is important, is because if it’s just about sniffing the wind, if some other powerful actor came along, if it was just about following one’s interests, then entrepreneurs would likely follow a new path. But given what we show about internalization of these ideas, our guess is they wouldn’t. Trying to understand these deeper ideological commitments is where we try to contribute to understanding China.

You have an interesting passage towards the end of the book about the party cells inside Chinese companies. And you see that as an area that is quite misunderstood, certainly outside of China. Can you just explain a bit about why that may not be quite as threatening as people from the outside might think.

So we actually don’t use the term cell, we use the term branch, communist cell has sort of a negative tinge to it. We don’t want to discount the potential detrimental effects of shadow lines of authority or undermining of corporate management, particularly for multinationals. 

But what is not understood is these are almost more like unions. They provide a bunch of HR and other benefits, onboarding benefits for employees. So I think, again, not to discount the potential undermining of authority, but in addition to problems with wishful thinking, the West has suffered from knee jerk condemnation of anything labeled communist or socialist. 

Our point is that instead of immediately discounting them, let’s actually try to understand the system from first principles, how it works, not take our ideologically tinged idea of a communist cell in our organization, and immediately just demonize it. Let’s actually try to understand the system and how the different parts of it work.

Let’s bring this up to the present day: To what extent do you see Xi Jinping’s rule as reasserting some of the themes that you talk about that are inherited from the Mao era? And to what extent do you see that as a problem for China? 

There are a lot of very superficial comparisons between Xi and Mao. But I do think that there are a variety of Mao-influenced levers and ideas that are top of mind for Xi, given his history, and the situation in China. I think that the focus on nationalism, China standing up again, the centrality of the CCP to everything in China — there’s this saying that east, west, north, south, the CCP is in charge of everything. I think the control of history and propaganda, this standard view of history that needs to be followed — all of those are emblematic of Xi following the paths of Mao. 

Campaign logic is another area where you can see Mao’s influence. You think about the semiconductor campaign. Xi has a saying, I forget the Chinese, but it’s something like concentrating efforts to do big things. It’s basically a campaign logic that he’s following. 

I think Xi Jinping has proven himself as a hardline control freak, valuing ideology more than economic growth. And his disastrous Covid policies and slapdash reversal shows he truly has no respect or concern for the Chinese people either.

I think Xi’s ideas and approach bode very poorly for China’s economic future. Mao’s period was a disaster for China’s economy, Chinese society. And I think the last three years have been pretty negative for China, and it doesn’t seem to be getting any better. I think that Xi has a lot of ambitions around various industries, but I think he is mostly focused on the wrong strategies. Semiconductors are an example — this is truly a globally distributed industry, with human capital, physical capital, machine tools, all over the globe. And the fact that he is very interested in building China’s own industry is doomed to failure, basically. He also seems to be a ‘red over expert’ leader, prioritizing ideology and loyalty over knowledge and skill, for instance the Standing Committee he recently formed at the CCP 20th Party Congress. 

One fear is as China continues to fail more and more economically Xi will become more desperate to assert his authority. Aside from delivering economically, another classic authoritarian strategy to show governance effectiveness is making or defending territorial claims. And I think that as China’s economy gets worse and worse, the threat to Taiwan is greater and greater.

I think that Xi’s perspective, economically, is very limited. Recently he gave a speech to party insiders doubling down on “Chinese style” modernization that centers on the CCP and state control. All of those who got excited about Liu He’s comments at Davos about China being open for business, should maybe take that with a grain of salt and listen to what Xi himself is saying to other CCP members. 

Do you see the possibility of a course correction at all, either under Xi or maybe down the line under someone else? 

I think Xi Jinping has proven himself as a hardline control freak, valuing ideology more than economic growth. And his disastrous Covid policies and slapdash reversal shows he truly has no respect or concern for the Chinese people either. And so I just can’t see a course correction as long as Xi is in power.

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