By June 3, 1989, the stage was set for a showdown between the Stalinist regime and the working class. The CCP ordered the PLA troops, who had been brought from the provinces and primed for action, to clear Tiananmen Square of protestors using whatever means necessary. A series of bloody clashes ensued, as unarmed workers and their supporters tried to defend barricades erected on the major roads into the city centre against soldiers armed with automatic rifles and backed by tanks.
The PLA’s offensive was officially documented. A briefing by the Martial Law Command recorded one of the bloodiest scenes in the Muxidi district of Beijing during the evening of June 3, 1989.
“At 9:30 p.m. these troops began advancing eastward toward the Square and encountered their first obstacle at Gongzhufen, where students and citizens had set up a blockade. An anti-riot squad fired tear gas canisters and rubber bullets into the crowd. At first the people retreated, but then they stopped. The anti-riot squad pressed forward, firing more tear gas and more rubber bullets. Again the crowd retreated but soon stopped. The troops kept firing warning shots into the air, but the people displayed no signs of fear. The stretch from Gongzhufen to the Military Museum, Beifengwo Street, and Muxidi is less than two kilometers, but the troops’ advance was slow because of the citizens’ interference...
“Believing the troops would not use live ammunition, the citizens grew increasingly bold. At 10:10 p.m. tens of thousands formed a human wall at Beifengwo Street to block the troops; the two sides faced each other over a distance of twenty to thirty meters. Some of the citizens continued throwing rocks and other objects. Using an electric bullhorn, the commanding officer exhorted the citizens and students to disperse and let the troops pass. Then when the measure failed, he decided to use force to assure his soldiers could reach their position on time. Infantrymen led the way, firing into the air. Then the soldiers—with the first two rows in a kneeling position and those in the back standing—pointed their weapons at the crowd. At approximately 10:30 p.m., under a barrage of rocks, the troops opened fire.” When the protestors realised that live ammunition was being used, they rapidly retreated to the Muxidi Bridge for another round of the battle. 
Another report by the State Security Ministry continued: “At Muxidi Bridge the troops were stopped once again as citizens and students threw the broken bricks they prepared in advance. A few dozen baton-wielding members of the troops’ anti-riot brigade stormed onto the bridge, where they were met with a barrage of broken bricks as thick as rain. The brigade was driven back. Then regular troops, row by row, came rushing to the bridge... and turning their weapons on the crowd. The soldiers then alternated between shooting into the air and firing onto the crowd. People began crumpling to the ground. Each time shots rang out, the citizens hunkered down; but with each lull in the fire they stood up again. Slowly driven back by the troops, they stood their ground, from time to time shouting ‘Fascists!’ ‘Hooligan government!’ and ‘Murderers!’” 
After crossing the bridge, the troops continued to encounter resistance. “The soldiers pushed the electric buses and other roadblocks out of the way, then turned their weapons on the protestors again. Some soldiers who were hit by rocks lost their self-control and began firing wildly at anyone who shouted ‘Fascists’ or threw rocks or bricks. At least a hundred citizens and students fell to the ground in pools of blood; most were rushed to nearby Fuxing Hospital by other students and citizens.
“The sound of helicopters overhead and gunfire in the streets brought citizens who lived on Fuxingmenwei Boulevard to their windows, where they cursed and threw objects at the soldiers, who therefore shot back. Bullets ricocheted off buildings up and down the five hundred meters between Muxidi and the headquarters of the All-China Federation of Trade Unions.” 
After the infantry cleared away the road blocks, army trucks and armoured personnel carriers carrying more soldiers moved toward Tiananmen Square. Troops continued to fire at protestors, who were attempting to set up new road barriers. “To the end of the bridge, near the subway station, lay twelve lumps of flesh, blood, and debris. The bodies of dead and wounded were being delivered continually to the door of Fuxing Hospital... Virtually everyone at Fuxing Hospital was cursing ‘Fascists!’ ‘Animals!’ and ‘Bloody massacre!’” 
The army had finally cleared Tiananmen Square by 5:40 a.m. on June 4, forcing out thousands of resisting protestors. A special force unit targetted the headquarters of the Workers Autonomous Federation, killing 20-30 people there. Then tanks ran over protestors who were not fast enough to escape, crushing them to death.
Outraged by the bloody repression, workers and students in 63 cities immediately responded with spontaneous protests. In the following five days, the demonstrations expanded to 181 cities, with workers setting up roadblocks to counter an expected military crackdown. On June 5, Shanghai’s traffic was brought to a standstill as 1,200 buses and vehicles blocked 122 major intersections. “In the suburbs fewer than a third of workers showed up at factories. Railroad operations were interrupted at five blocked crossings,” a fax from the Shanghai government to Beijing noted. Shanghai authorities had to publicly pacify workers by promising that the military would not be allowed into the city. 
So tense was the situation that the regime initially denied that any civilians had been killed. The official toll still stands at just 241 deaths, including soldiers, but the figure is not credible. Independent analysts estimate that up to 7,000 people died, although the actual toll may never be known. The massacre was followed by a nationwide crackdown, directed especially against workers and their leaders. An estimated 40,000 activists were rounded up in June and July alone. Dozens were executed. Some are still imprisoned to this day. Moreover, all citizens of Beijing were required to participate a campaign of “self-criticism”, forcing them to reflect their “mistakes” of supporting the political unrest.
The defeat had far-reaching consequences for the working class in China and around the world. China was transformed into the world’s premier cheap labour platform, and the remaining social gains of the 1949 revolution were liquidated. Most state enterprises were sold off or shut down and access to public housing, medical care and education was replaced by the principle of the market—“user pays”. Today China is one of the world’s most unequal societies.
The impact went far beyond the borders of China. Working class resistance to the pro-market agenda of the Stalinist leaderships in the Soviet Union and Eastern Europe was already developing at the time of the massacre. In July 1989, a wave of strikes by Soviet miners erupted over falling living standards produced by the policies of perestroika. Gorbachev concluded from the events in China that capitalist restoration had to be dramatically accelerated before the Soviet bureaucracy faced its own working class rebellion. Later in 1989, the Berlin Wall collapsed, initiating a process that led to the fall of the Stalinist regimes throughout Eastern Europe, the break-up of the Soviet Union itself in 1991 and the restoration of capitalism.
Throughout the advanced capitalist countries, the free-market agenda championed by Margaret Thatcher in Britain and Ronald Reagan in the US in the early 1980s was provoking working class opposition. The open embrace of the “free market” by the Stalinist leaderships was a political shot in the arm for Western governments facing a growing wave of strikes and protests. Bourgeois commentators across the political spectrum triumphantly proclaimed the end of socialism and of any alternative to the capitalist market.
The International Committee of the Fourth International was alone in explaining that the processes of globalised production that had undermined the shut-in, autarkic economies of the Soviet Union, Eastern Europe and China, spelled the end of all nationally-based reformist programs and foreshadowed a profound crisis of the entire nation-state system in which capitalism was rooted.
After the Tiananmen Square massacre, Western political leaders and the media shed a few crocodile tears for the protestors and endlessly repeated the line that the Chinese “communists” has suppressed the “democracy” movement. The false identification of the Stalinist regime in Beijing with socialism and communism became increasingly ludicrous as global capitalism embraced “communist” China as a vital source of cheap labour and profits.
In fact, the huge US and other transnational corporations could barely conceal their delight at the bloodbath in Tiananmen Square, recognising it as a guarantee that the same ruthless police-state measures would be used to protect their investments. Foreign capital flooded into China during the 1990s to the tune of tens of billions of dollars annually, transforming the country into the world’s main cheap labour production centre. The opening up of China, as well as India, Eastern Europe and the former Soviet Union, doubled the size of the available global workforce to four billion, and provided vast new sources of surplus value to world imperialism. At the same time, these abundant sources of cheap, disciplined labour enabled corporations to batter down the conditions of workers in the West.
For a short time China’s market reforms stagnated after 1989, but only due to an initial period of political instability. Deng intervened decisively in 1992—following the collapse of the Soviet Union—and toured the booming Special Economic Zones in the south, indicating the regime’s full commitment to capitalism. The economic figures speak for themselves. In 1992, China’s GDP skyrocketed by 12 percent, followed by 14 percent in 1993, and 12 percent in 1994. In 1994, China received $US34 billion in foreign direct investment (FDI)—more than for the entire first decade after market reform began in 1978. Since 1996, China has received more FDI than any developing country in the world.
In 2002, China became the world’s largest recipient of FDI, and only slipped to second place behind the US as Wall Street became a magnet for huge inflows of finance capital. By 1997, China was the world’s seventh largest economy. A decade later, it had overtaken Germany to become the third largest, fuelled mainly by the debt-driven demand in the US for Chinese exports. The price paid by the Chinese working class for this staggering expansion was underscored by a 13.7 percent decline in the share of GDP going to wages between 1997 and 2007. Over the same period, the share going to corporate profits rose by 10.1 percent.
Commenting on the Tiananmen Square massacre, the Wall Street Journal noted on May 29, 2009: “In fact, 1989 marked the beginning of China’s supercharged path to economic reform. The results have been tremendous: China is now the second pillar of the global economy and is increasingly vital given the vulnerability of the United States.” The newspaper explained that the American and Chinese economies were now intimately intertwined, demonstrated by China’s emergence as America’s largest creditor and China’s dependence on manufacturing exports to the vast American market.
Cheap exports from China helped to suppress global inflation and allowed the US Federal Reserve to continue its low-interest rate policy. At the same time, China’s massive trade surpluses were recycled back into the US financial markets as a means of maintaining the existing dollar-yuan exchange rate. China now holds $1.5 trillion worth of US assets, including about $760 billion in US treasury bonds and $490 billion in the bonds of government-backed mortgage lenders. These processes combined to help fuel an unprecedented expansion of financial speculation on Wall Street, which imploded in 2008, creating the worst global economic crisis since the 1930s.
Far from being immune, China is being engulfed by this economic tidal wave as markets for its exports dry up. All the “advantages” of China’s vast supply of cheap labour have suddenly become a nightmare for the regime. More than 20 million migrant workers, mainly in the export industries, have already lost their jobs. Some academics have warned that job losses among migrant workers could hit 50 million by the end of 2009. One million college graduates from last year are yet to find a job, even as 6 million more graduates will soon join the labour market and demand for skilled labour is disappearing.
Western corporations exploited Chinese workers not only to suppress wages at home, but to break-up the large concentrations of workers in factories and other workplaces, who had been able to use their industrial muscle to challenge both management and government. Their agenda, however, has created a massive working class in China, assembled in countless plants employing thousands of employees and, in some cases, hundreds of thousands. The CCP now confronts the world’s largest and most concentrated working class, whose objective social strength is far greater than the regime’s police-state apparatus.
All the social contradictions that led to the 1989 explosion have been reproduced today on a far higher level. At one end of the social scale, 400 million workers labour in oppressive conditions on poverty-level wages, facing constant financial insecurity, compounded by the rising cost of privatised health care, education and housing. In the countryside, market relations have created a vast pool of hundreds of millions of rural poor, many of whom depend on income from family members working in the cities. At the other end of the scale, unparalleled wealth has been accumulated in the hands of a tiny elite that is closely connected with the CCP bureaucracy. Apart from the US, China has the largest number of dollar billionaires in the world, many of whom are either CCP members or related to them.
A new explosion of the working class in China and internationally is inevitable, as world capitalism plunges into a historic breakdown. The global processes of production have integrated Chinese workers with their counterparts around the world as never before. Very often they are exploited by the same American, Japanese and European transnational corporations. At the same time, Chinese workers have at their disposal the powerful and revolutionary tools of the Internet and electronic communications, directly cutting across the decades-long efforts of the Stalinist regime to isolate them from their international class brothers and sisters.
These objective processes, however, will not automatically resolve the critical political issues confronting the Chinese working class. That can only be done through an assimilation of the lessons of all the strategic experiences of the international working class throughout the twentieth century, including the terrible defeat of 1989. To do that, workers, youth and intellectuals must turn to the international socialist perspective and program of the International Committee of the Fourth International (ICFI) and participate in the fight to build a section of the ICFI within the Chinese working class.
13. The Tiananmen Papers, p.373
14. ibid, p.374
15. ibid, p.374
16. ibid, p.375
17. ibid, p.398