I share the view of the IBT that China remains a deformed workers state, albeit one in which the ruling Stalinist bureaucracy contains many elements with numerous ties to capitalist interests and in which, consequently, the danger of capitalist counterrevolution is very real and perhaps immanent. The recent global capitalist slump, which is already having a huge impact on China, could accelerate the day of reckoning ... or, more likely I think, it could have the effect of strengthening more traditional Stalinist elements looking to strengthen the state's control over the economy and to placate a restive proletariat in the face of rising unemployment.
The 1989 movement among Chinese students was a very heterogeneous and inchoate one, but I believe that it also served as a catalyst for an incipient workers movement that Deng et al. saw as a grave threat to bureaucratic rule. The suppression of the Tienamen protests was much more about spiking a workers' uprising than it was about stopping the spread of Western "ideals of democracy" among students and the urban petty bourgeoisie.