Today’s aggressively confrontational stance of United States imperialism and its allies towards China is a change from the 1980s and 1990s and later. According to the propaganda of those times, (capitalist) development in China would lead to so called “democratisation” — which is a code word meaning political and economic subservience to the needs of the imperialist countries. For this reason relatively cooperative encouragement and assistance to market oriented policies in China was the order of the day. Besides imperialism’s longer term objectives, the mass of cheap Chinese labour was the immediate attraction over which the corporate owners of major Multi-National Corporations (MNCs) salivated.
However, after a long period of such a lucrative arrangement, the Chinese Communist Party has neither lost power, nor granted all of the wishes and demands that imperialist ideologues had wished and hoped for. In this context, imperialist propaganda has turned to a sustained campaign of China bashing. However, contrary to the widespread view, the Chinese state’s resistance to certain imperialist demands does not indicate that China is now positioned to replace the USA as the dominant global power. It might “threaten” to weaken the degree of US dominance, but that is all.
It has been argued over the first three articles of this series that Chinese capitalism is fundamentally subordinate to the imperialist countries within the worldwide division of labour in production. Further, it has been argued that for Marxists, China’s productive subordination to imperialism within a unified global system is the essential reason China also remains socially and economically subordinate to the rich countries. The clearest expression of China’s subordination is that, compared to the small group of rich countries, and despite contributing a huge part of all the work needed in the world economy, China remains poor. Doing so much work, but not benefiting so much from it, shows that China is exploited in the Marxist sense of that word.
However, if this is the case, if a huge benefit from Chinese development accrues to the rich, imperialist societies… and if, as argued, it is the case that Chinese capitalist development does not threaten to overturn the global dominance of the historical imperialist countries like the USA and Australia, why then have consecutive US governments adopted a newly aggressive policy of “containing” China compared with the early years of the neoliberal period?
NOT A STRUGGLE BETWEEN EQUALS
The first point in answering that question is that being poor, even very poor, or weak, does not exempt a country from imperialist aggression. Imperialism does not target states only if they are seen as potential imperial rivals. If we look at imperialist military aggression since the end of World War Two this has been directed almost exclusively at two types of countries neither of which strive to replace imperialist dominance. The first are socialist states, governments or revolutions such as in Cuba, Vietnam, Nicaragua, Grenada, North Korea or China during its earlier period of social property relations. Alternatively, imperialism has targeted poor and weak Third World capitalist regimes with military aggression such as in Panama, Haiti, Libya, Iran, Iraq, Afghanistan and Syria.
So the mere existence of military tension today between the US alliance and China does not logically or inherently indicate that a rivalry is developing were the two have similar levels of power. Escalation of conflict occurs not because two sides are well matched, but because at least one side believes they will benefit from escalation.
Unlike Cuba and Venezuela, China for some time now has ceased to pose a revolutionary challenge to imperialist interests. That is, it has ceased to represent a political alternative to capitalist imperialism that competes for the allegiance and support of working people or attempts to win them to anti-imperialist and anti-capitalist perspectives. Rather, since the early 1980s, by integrating increasing parts of the gigantic Chinese labour force into capitalist production for the world market, Chinese economic policy has been largely complimentary to imperialist economic interests. Its propaganda followed suite. The Chinese capitalist class that has emerged and enriched itself through this same policy is unable to lead mass based political and ideological struggle against global imperialism and does not attempt to do so.
The conflict between China and the US imperialist alliance has the character of a conflict between different capitalist groups. Capitalist groupings are competitive and conflictive by definition as they seek to maximise private gains to themselves. This competition results in periodic clashes of various kinds, up to and including wars.
Imperialist aggression against China therefore represents a key form of inter-capitalist competition today. However, due to China’s technological subordination to the imperialist societies this competition is not between two equal sides. Rather it takes place between imperialist monopoly capital on the one side and Chinese non-monopoly capital on the other. As a non-monopoly capitalist economy, China cannot threaten to dominate the appropriation of value either from Chinese labour or value created by the labour of workers overseas.
The imperialist-China conflict is not over which ruling class controls the appropriation of value from the other. It is over the degree to which Chinese capital and Chinese society more broadly is forced to forfeit value to imperialism – the degree of imperialist exploitation of China.
NEOLIBERAL GLOBALISATION AND THE BATTLE FOR THE ECONOMIC MIDDLE
World production became increasingly specialised during the neoliberal period. Today , every country is increasingly forced to fit in somewhere within the global division of labour that goes into producing the necessities upon which all modern societies rely. This compulsion also means fitting in somewhere within the global high-tech / low-tech polarisation that drives and characterises the world division of labour. In this context we find capital divided into two poles — First World high-tech monopoly capital and Third World, low-tech non-monopoly capital. We might expect such polarised form of co-dependence to produce relatively peaceful co-existence between the two poles as each works at contributing what are technically complimentary aspects of the overall productive labour process. In fact, this is more or less what did happen between imperialism and China from early in the neoliberal period through to 2008. There were, of course, many conflicts then too, but these were managed in relatively more co-operative ways.
In that period the massive new supply to the world market of cheap labour from China, Eastern Europe and elsewhere is what underpinned the increasingly specialised and polarised global division of labour as MNCs sought to profit from cheap labour arbitrage. Monopoly and non-monopoly capitalists, and their respective states, cooperated to bring the new supply of super-exploited labour onto the world market. This happy situation is what made possible such (relative) peace and (relative) prosperity — i.e. the relative lack of crisis and the massive expansion of capitalism and profits during the neoliberal period. In this project, imperialism could afford and was compelled to give a slice of the takings to the Third World capitalist classes whose cooperation it relied upon to get access to the new sources of cheap labour.
In this system China, the greatest of all sources of cheap labour, became the central node of the non-monopoly pole of world capital. Location, scale and other advantages stemming from its earlier socialist period made China the most successful Third World country at expanding capitalist production. This was reflected in China’s ascent from being one of the poorest of all countries in 1980 (at least as measured in GDP per capita) to the largest country among a group of large, relatively developed Third World economies. As seen in the second of this series, the rank of China within the imperialist system — as reflected in its income — is now comparable with Brazil, Mexico, Russia, Turkey, Malaysia and some other parts of Latin America — though still just a fraction of the rich countries like Australia, Japan, the UK, the USA and Western Europe.
As shown, China’s capitalist growth does not break from the general rule of polarisation between rich and poor countries. Rather, it has produced a major re-alignment within the Third World / Non-monopoly pole — a highly important development. Significantly, that realignment also brings the largest society on Earth to the top of the Third World pole. Being the largest, means the Chinese state wields a degree of economic bargaining power and global weight not enjoyed by any previous non-monopoly / Third World state.
Competition between the various capitalist groups is inherently conflictive. This is the case also for competition between weak (non-monopoly) and strong (monopoly) capital even though this particular form of competition takes on different forms to the competition among monopolies or among non-monopoly producers.
BATTLE FOR THE ECONOMIC MIDDLE GROUND
With China’s ascent to become one of the top states of Third World capitalism, it arrived at the point where many competitors immediately above it, are the imperialist country-based monopoly capitalist producers — especially the principal Multinational Corporations (MNCs). That is, the degree of technical sophistication of certain labour process now carried out in China, at least at the high-end of its economy, sits immediately below the degree of technical sophistication of the monopoly labour processes of the imperialist societies
Imperialist domination of the top echelons of the technical division of labour (and this was also the case historically and prior to China’s ascent) does not result from non-monopoly countries’ lack of desire to move to a higher position within the overall division of labour. Rather, non-monopoly’s historical inability to join (let alone overthrow) the imperialist camp is based on imperialism’s monopolisation of economic sphere immediately above the leading Third World societies within the global division of labour. Constantly repelling and defeating business rivals, whether from China, Brazil, Mexico or elsewhere, is an inherently conflictive process. Perhaps in some ways more conflict ridden (at least among the capitalists) than the even more lopsided competition that occurs between monopolistic MNCs and their very poor suppliers from places like Bangladesh, India or Indonesia.
The battle between China and other leading non-monopoly countries like Mexico and Brazil versus the monopoly / imperialist countries is the battle for the economic middle ground within the global labour division. It revolves around control over production processes that were previously the domain or exclusive domain of imperialism but have since become more common, well known and hence easier for non-monopoly producers to replicate. It is the struggle for control of technologically medium-level production processes and for products that contain a mixture of higher-tech and low-tech labour processes — where either cheap or expensive labour producers could plausibly dominate.
In terms of imperialist state policy, the more “co-operative” form of competitive is represented by policies such as the now defunct Trans-Pacific Partnership and other “free trade” agreements. A more confrontational approach is represented, by imperialist policy to China over the last few years including technological bans, sanctions and tariffs a la Trump.
As long as capitalism survives the general outcome of the conflict between monopoly and non-monopoly capital is assured — victory to imperialism. However, within that very general framework there exists a plethora of possible variations both to the degree of imperialist victory and also to its form. Leaving aside the incalculable number of political variations involved, on an economic level, these variations in the possible outcomes can be make or break individual capitalist firms and also affect the distribution of power and wealth among the various competing imperialist states. These alone are ample reason for the most intense battles to arise.
As stated, while monopoly capital retains its overall domination, struggle arises over the degree of its domination, the degree of its exploitation and the terms of these. The forms of struggle employed by each side reflect their strengths and weaknesses. As the largest Third World state, and a society where a social revolution took place historically, Chinese capitalism has considerable weapons at its disposal — at least compared with all other Third World societies both historically and today.
One such advantage is that China’s large size and strategic location have resulted in its dominance of the supply chain for many types of goods. The most complex of these goods are not completely produced in China — they use imported high-tech parts, materials, equipment and technical services, or are imported or exported unfinished. Even so, well-established Chinese factories and assembly operations, together with comprehensive networks of local suppliers built up over many years, give Chinese capital an effective monopoly over a large number of low-end and medium-level production processes.
Another advantage is the huge size of the Chinese domestic product and financial markets. To the extent that it is possible for the Chinese state to control foreign capital’s access to sections of this market, this gives China a bargaining position comparable in some ways to the imperialist states, which also use access to their markets as a major bargaining chip. For example, prior to reforms that started to be phased in from 2018, the various imperialist based automotive companies which dominate the Chinese domestic market to this day — such as Volkswagen and Honda — were forced to operate as joint ventures with local Chinese capitalists and could not own more than a 50% percent stake in the joint ventures they formed. Other sectors where foreign ownership restrictions are being eased or removed are financial services, insurance, infrastructure, smelting and parts of agriculture. Greater openness to investment in financial services has been a key demand of US imperialism for many years.
Another advantage for Chinese capital is the especially high level of domestic inequality by international standards. The low-level of income for Chinese workers and farmers means that more of the surplus value created by their labour (besides that portion appropriated by imperialism) is available for increasing the competitive position and profits of Chinese corporations. This occurs both directly and via state subsidies in forms such as cheap credit and cheap land.
THE LEGACY OF CHINA’S SOCIALIST REVOLUTION
The other principal factor in China’s success relative to other Third World societies is that an anti-imperialist, social revolution was victorious in China in the early 1950s. The social revolution transformed property relations in China from private ownership by the landlords and capitalists to social ownership of the means of production. The social revolution was subsequently defeated — i.e. social ownership of property that it established has been massively re-converted back to private ownership — capitalist property. However, the legacy of such a decisive event cannot be easily or completely erased from the social fabric of China.
The Chinese Revolution, which achieved state power in 1949, was able to expel imperialist political power from the country and establish an independent state over the entire Chinese territory (except Taiwan and Hong Kong). It overthrew the capitalist and landlord ruling class and wiped out capitalist and pre-capitalist property relations. In this context, general conditions for social development were more favourable and received a greater impetus than in comparable capitalist-ruled countries such as India or Indonesia.
According to one sympathetic account:
“At the time of the victory of the Chinese socialist revolution… over 1 million people each year were dying from starvation. The Chinese people suffered from illiteracy, an epidemic of opium addiction, brutal oppression stemming from semi-feudal relations in the countryside, the severe all-sided oppression of women and the carving up of China into spheres of influence by the various European and Japanese imperialist powers.
“Between 1949 and 1955, the Chinese people — with the leadership of the Communist Party of China — eradicated mass starvation, opium addiction and prostitution while making huge advances in wiping out illiteracy, providing health care for the people and stable employment for the urban working class, eliminating landlordism in the countryside … By 1955, core industries had been nationalised and the beginnings of a planned economy began to take shape. The economic model was based on the overturning of capitalist property relations in the commanding heights of the economy.”
Notably the current US policy is hardly original at least in its essence. “Containment” of China — either through conformation or co-option – has been the policy of US imperialism since the Communist victory.
The still incomplete restoration of capitalist property from the 1980s, especially as this has been done in a controlled manner by the CCP, has not erased all the gains of the revolutionary victory and nor can it. Chinese working people and the environment have certainly paid a high price for capitalist restoration. However, the continued political power of the Communist Party — which imperialism everyday seeks to undermine — has meant that certain gains of the revolution, such as increased education of workers and increased state capacity, rather than being squandered or reversed, have been, to some extent, preserved by the CCP and enlisted as so many assets for Chinese capital to exploit. The relatively high degree of social development achieved in the socialist period became an important factor in the competitive position of Chinese non-monopoly capital on the world market and partially explains its success.
Policies giving preferential access to China’s market to certain domestic producers, state subsidies, skilled and educated workers and China’s scale, has meant that the most competitive Chinese corporations have captured markets from imperialist based capital beyond what would have been possible on the basis of cheap labour and basic industrialisation alone. The result, for imperialist economies, is the death of a greater number of marginal or declining businesses, and the loss of a greater variety of types of labour processes to China. This relative loss of imperialist dominance over the middle ground will either continue, expand or be rolled back in the future depending, among other factors, on how successful imperialism’s attacks on China turn out to be.
WHAT IS US IMPERIALISM’S ECONOMIC POLICY TOWARDS CHINA?
US Imperialism does not seek principally to divest from China or cut it out of the world market. Such a policy, even if it were feasible, would limit the benefits imperialism can obtain from the ongoing exploitation of Chinese labour. Chinese labour remains, and will remain, a large part of the social base of imperialist super-profits.
United States, European and Japanese capital cannot afford to take over – using their own workers’ far more expensive labour – the mostly labour-intensive and relatively low-technology processes that are already dominated by non-monopoly capitalist producers in China and other parts of the Third World. To attempt to do so is not profitable unless such production can be further mechanised or otherwise improved through some other type of technological “disruption”. The re-shoring movement — bringing production back to the USA or other imperialist countries from China and elsewhere in the Third World — does not seek to move identical labour process to high wage countries. Rather, capitalists attempt to replace labour intensive factory production with newer, more mechanised factories run by a small number of skilled technical workers.
At the same time, Imperialist policy is also working to move more non-monopoly production from China to alternative Third World locations where they have better political alliances such as Vietnam, Mexico and India. However, for a large volume of production neither “re-shoring”, nor moving to an allied Third World state is feasible in the short term.
At the heart of the struggle therefore lies imperialist attempts not only to replace Chinese workers with machines or with non-Chinese workers, but also to develop new ways to incorporate Chinese cheap labour into global production processes on the best possible terms for imperialism, while also ensuring the monopoly position is retained. As argued in this series, the principal method of control is located in the labour process itself: imperialist control of the highest technical aspects of the overall labour division.
Trade tariffs on Chinese goods, technology restrictions and other economic sanctions — as well as the hypocritical propaganda campaign over human rights — have become key bargaining chips to win US demands on the Chinese state. These aim to sustain and deepen a subordinate form of integration — not broad-based exclusion — of Chinese labour from the world market.
Disciplining China, the strongest Third World society, seems to also be about disciplining the Third World in general. If China is prevented from retaining a bigger part of the value that now contributes to imperialist super-profits, then it is more likely the rest of the Third World can also be excluded from an increased share. If on the other hand Chinese development were able to partially undermine the present astronomical level of imperialist super-profits (noting that it cannot over-turn these), that could potentially precipitate further crises.
Importantly, such a development would necessarily reduce enormous financial resources presently available in all the imperialist countries to negate the effects of crises as they arise – such as the state bailouts of capital in 2008-9 and of capital and workers in 2020-1. The financial and fiscal leeway that all imperialist states have enjoyed in facing these economic crises has been huge. They have twice been able to prevent far more devastating economic collapse through gigantic state bailouts to businesses and workers. This has only been possible due to the imperialist super-profits and the revenues these generates for imperialist states. Yet these super-profits are not created by the labour of workers in the imperialist countries alone. There are based also in the labour of workers in China and across the Third World.
As the largest single contributor, China cannot be excluded or marginalised from world trade. Hence the imperialist policy towards China is only to sabotage or exclude China from certain economic spheres considered strategic, or to use sanctions as a weapon or threat to obtain better terms from when these are lifted. All imperialist states are protectionist when that suits them, so trade disputes will be ongoing (just as they are between the US and EU, or with other Third World states). But this is a fundamentally different scenario from an inexorable drive towards the next “super-power” (i.e. inter-imperialist) war that some on the left imagine.
Real competition and real losses in the economic middle ground have clearly had serious political implications within imperialist states, not least within the USA. These losses are blamed on China — in various ways — by Trump, Biden, Obama, Sanders and other capitalist politicians. However, at root, they are not caused by Chinese strength so much as by the general process of technical advance in the production process. US capitalists wanting to disinvest from areas with falling profits — such as textiles — would have outsourced their production to foreign suppliers regardless. Had China not been available as a major labour source, they would have outsourced more of this production elsewhere, as they are increasingly doing now.
However the political advantages to imperialism in presenting off-shoring as being forced upon it by unbeatable Chinese competition have been substantial. One advantage is that this propaganda line helps to justify increasing military spending and aggression against China. It also helps to breed national chauvinist ideas among the working class in the US, Australia and other imperialist countries. The rampant anti-Chinese racism that this fuels divides and weakens the working class at home and abroad. Presenting marginalisation of workers and communities or regions that have suffered from so-called ‘de-industrialisation” as being victims of China’s development distracts from the real issue — their abandonment by their own ruling class and the need for a new organisation of the imperialist societies based on working class power.
Domestic US politics clearly also plays a major role in setting its China policy. By drumming up anti-China sentiment successive US governments and mass media have, for years, succeeded in generating widespread anti-Chinese hostility among working people in the US and globally. Clearly political factors were central for Trump, who campaigned for president on an anti-China platform.
Domestic politics appears to be central for Biden too. He is on record twice, arguing to his supporters that China does not represent an economic threat to the United States. In January 2020, Biden still argued: “We talk about China as our competitor. We should be helping and benefiting ourselves by doing that. But the idea that China is going to eat our lunch — I remember the debates in the late ’90s, remember, Japan was going to own us? Give me a break.”
Biden’s rhetorical reversal, which occurred on the campaign trail and has continued in office, looks less like a sudden change in outlook and more like a political manoeuvre to neutralise Trump (and Sanders) highly popular protectionist anti-China stance. Domestic politics is one factor. The very real desire of US imperialism to crush any type of foreign resistance to its power, is the other factor that explains Biden’s stance policy thus far.