The western imperialist media continues to spread alarm globally about the economic challenge China presents to ‘the world’. At the same time, it attacks Chairman Xi’s Jinping’s domestic policy of re-asserting state management over market mechanisms, which threatens western investments in China. The overall purpose is to create, in any way, anti-Chinese government sentiment among the populations of the imperialist states, so as to legitimise assaults against the Chinese state.
Western imperialism’s preparations for military intervention have again been built up from the turn of the century. The creation of the Indo-Pacific Quadrilateral Dialogue in 2007, accelerated by AUKUS in September 2021 and the new NATO ‘Strategic Concept’, in June 2022, makes this clear. The confrontation with China over the status of Taiwan from June has further highlighted this policy.
The current strong anti-China sentiment expressed in the British and US media has grown in intensity year by year, but especially from 2013. This was when the ruling Communist Party of China (CPC) sought to contain a myriad of self-interested forces that it had freed to accumulate capital. We have reported on the stark contradiction between the centralised Chinese political system, with a commitment by Xi to maintaining and developing a state ‘based on Marxism Leninism and Deng Xiaoping theory’, and the outbreak of an inevitable crisis of accumulation of capital on which it stands, illustrated in the recent construction industry crisis.1 The ongoing class struggle over the future of capitalist ‘growth’ in China, a struggle that is reflected in the CPC itself, has profound implications for all workers in the world.
The CPC’s ‘capitalist road’ programme of 1978 was very radical in comparison to the market experiments that had been used within the USSR, and which led to its collapse. Xi has decried the failure of Soviet leadership which led to this disaster, and has said he has no intention of permitting similar reactionary political trends to take firm root in China.
Chairman Deng Xiaoping’s 1978 ‘Four Modernisations’ (science and technology, agriculture, industry and national defence) aimed to make China a leading industrial nation by the year 2000. Throwing open the economy to foreign investment, anxious to exploit Chinese labour through extensive subcontracting and licensing, created sudden and massive sums of surplus value as Chinese products flooded onto global markets. In 2001, Chairman Jiang Zemin welcomed leading Chinese citizens, including entrepreneurs, into the party’s ranks. This policy succeeded materially: today private firms produce 60% of China’s GDP, provide some 70% of its innovation, constitute 80% of urban employment and create 90% of new jobs.
However, this success relies on extracting the Chinese working classes’ surplus labour time, and distributing much of the surplus value thus created as tribute to imperialist buyers and investors, all creating some of the world’s worst pollution, and severe environmental damage – including the world’s worst chemical poisoning suffered by the masses and nature. This Pandora’s box saw the creation of new bourgeois and petty bourgeois classes, cheered on by western establishments, which clearly threatened social stability and national unity as wealth and income polarised. Many and various demonstrations took place in China after 1989. All manner of ‘rights’ were demanded by poor peasants, workers, and a new petty bourgeois and bourgeois class, as capitalism expanded. These eventually forced a reaction by the CPC against the worst social abuses. The impact of the 2007-8 global financial crisis significantly hastened these changes.
Given the political danger that the emerging bourgeoisie presented both to the CPC and the interests of the Chinese people as a whole, the CPC is now tightening its relation to private capital. In 2019 state-owned businesses invested more than $20bn in private Chinese companies, double 2012’s amount. This economic intervention goes along with the need to develop the west of the country, and stimulate internal markets as its international markets are threatened.
The dual attack by western media
The imperialist media presents two versions of Chinese domestic affairs. One argues that China is facing economic stagnation, exhibited by the crisis in the economically dominant construction industry, which will supposedly blunt its international ambitions. This provides relief for naïve pro-imperialists: petty bourgeois radicals, pacifists and smug stick-in-the-muds. For them, China is running out of resources, it is suffering a demographic tipping point (with an aging population, its labour supply, the source of surplus value, is not growing), it faces severe water shortages, is increasingly dependent on imported foodstuffs, suffers outward migration of the middle classes and the rich (600,000 since 2012) and so on, all of which will supposedly hold back China’s capacity to challenge the western imperialist status quo. All this is the result of ‘poor decisions by Chinese leadership’ (New York Times, 18 January 2023). On the other hand, the war-mongering pro-imperialist propagandists point to China’s ‘indigenous’ material capacities, its quantum computing, its massive lead in electric vehicles, its space programme, its intelligence networks, the strengthened armed forces and similar trends.2
This split in narratives reflects the paradox that Western imperialism, with vast investments in China, has for 40 years enthusiastically shared in the loot extracted from the Chinese working class, whilst unceasingly attacking the system of government there. It wants its ‘rent’ to keep flowing, and sees that divorcing itself from this ‘logistical chain’ involves a very high cost. Thus, US Treasury Secretary Janet Yellen’s conciliatory exchanges with Chinese diplomats in January at the annual World Economic Forum summit in Davos, and Chinese Vice-Premier Liu He’s pro-market responses. Yet the background reality is that the competitive global accumulation of capital constantly promotes inter-imperialist rivalries, including their competitive efforts to pillage all other weaker states. It is no surprise then that whereas at past CPC national congresses the keyword had been ‘economic growth’, at the 20th Congress, in October 2022, the emphasis was on ‘struggle’ domestically and internationally.
Xi’s reform programme
In September 1989 we wrote in FRFI
‘Unless revolutionary communists in the CPC win back the confidence of the working class and mobilise its democratic demands for power, education, health care and higher living standards against the beneficiaries of Deng’s policies then the barrier against imperialism, that the socialist state served as, is in great peril’.3
The central political question is: how will Xi’s new government be able to resuscitate Chinese Socialism? How will it ‘rebalance’ income and wealth distribution, removing the ‘get rich first’ strap line and transform its capitalistic nature? How can this be done in the face of a US economic and financial offensive, evolving since the 2007-8 Financial Crash, accelerated by Donald Trump in 2018, and now intensified by Joe Biden?
Since 2013 Xi has conducted a campaign against corruption. Adventurist demands to experiment with elections of individuals aiming to build new parties, or opposition to the current ‘mixed’ economy model – now guided by the present 14th Five Year plan – are rejected. From 2018, significant individuals proclaiming anti-party policy activities, or wealthy corrupt capitalists have been arrested or forced to resign. High-profile e-commerce tycoon Jack Ma was pressed to ‘step down’ after openly criticising government policy.
In 2021 Xi tightened regulations governing firms. Now all companies must have Communist Party committees, which can have significant input in their direction, forcing HSBC to announce one in January 2023.
We had already observed in 2017 that,
‘Xi Jinping pointed to the “unbalanced and inadequate development and the people’s ever-growing needs for a better life”. He said that China intended to increase investment in health, education, public services, pensions and family allowances. These contradict the invitation to imperialist finance to play a greater role in China’. However, we noted that the contradictions imminent in Chinese society have to be confronted.4
So, what developments can we observe in the current class struggle in China?
Control of finance is essential to prevent political movements that undermine the CPC’s control. Today finance is digital, requiring close supervision. The Chinese renminbi is now an international currency, the yuan is its unit. The central government is thus promoting joint ventures, with state regulators and data managers working with private investors, using blockchain to build an integrated digital yuan economy. Given the global network capacity of corporations like Alibaba (Ali-Pay) and Tencent (WeChat Pay), China has the basis for a global presence for its digital currency.
In China the re-establishment of capitalism has hugely developed the working class, putting it in a much better position to achieve its historic goal of controlling society for itself, and is presently advantaged by the control of state power by a Communist Party, in spite of its ideological compromises.
Education
Ideas are central to this struggle, and from June 2022 all private schools across China were being nationalised. For example, New Oriental, a US-listed firm with a billion-dollar valuation, was a leading player in a booming industry. All academic tutoring companies had to exit the sector or transform into non-profit companies before 1 January 2023. Fees are being set by the government. All educational institutions in China are now brought under the direct control of the CPC, in order to reform the sector and align it with the Party’s goal of ‘common prosperity’. However, the school admissions system, both to the three types of middle schools (15+) and universities, is competitive, and as long as this remains, a black market in tutoring for children of the rich will continue.
The ‘dictatorship of the working class’, as conceived of by the CPC, is clearly being reorganised. How successful this will be depends on the central committee, and now the section centred on Xi, but specifically on the capacity of the Party to solve the key theoretical problems. Central is the conceptual challenge presented by the contradictory tasks of maintaining sincere communist intentions whilst managing a market in privately operated means of production and its output. What is necessary for communists is a strategy for the dissolution of the rule of capital, free-market exchanges based on property rights, divorced from popular control. The solution has a basis in the now much higher and growing productivity of labour. The question is – what new forms of social control? How will entrepreneurial self-interest be replaced by socialist producers’ initiatives? How the Party organises within workplaces, beyond its current formal quiescent existence, has to be completely re-thought in meeting this challenge.
Two ways forward for China
In a comprehensive review of China’s economic policy in October 2018 we said of China’s expansive global trade and investment,
‘These developments do not confirm that China has become an imperialist power, but foreign bases, buffer zones, military intervention abroad and spheres of influence are typical of imperialism’.5
Trade and investment alone do not automatically signify imperialism, nor do defensive measures, as long as a tight and genuinely socialist political constraint is placed upon their purposes. The challenge to the Chinese people is how to prevent its domestic capitalist base from completely subordinating the state, ending all restraint and thrusting China into open conflict with the imperialist powers. Constant US provocation of China, as is the case with Russia, deliberately encourages such a reactionary turn.
We should now ask: will the nature of the class struggle, and so the political developments in China, allow a defeat of China’s new political line, one evolving for some 10 years now? This would then lead China to become part of the incompatible global imperialist ‘bloc’, i.e. those militarised wealthy states, deeply intertwined economically, but driven consciously to struggle against one another globally, ultimately using force, to sustain their individual economic momentum. If this were to be the case then the drive to inter-imperialist wars would accelerate.
Alvaro Michaels
- See FRFI 290, ‘US Imperialism provokes China’.
- See Trevor Rayne, ‘US and China: danger ahead’, FRFI 285 https://tinyurl.com/kcfnbt6b
- Trevor Rayne, ‘Crisis of Socialism in China’, FRFI 88 https://tinyurl.com/ycan467f
- Trevor Rayne, ‘China: no Shangri-la for capitalism’, FRFI 261 https://tinyurl.com/msff62nx
- Trevor Rayne, ‘China: on top of the World’, FRFI 266 https://tinyurl.com/4veecptv
