Why China is an imperialist Country
2017/10/2018 by socialistfight
Discussion article by Dov Winter.
Comments are welcome
It is hard to let go of defending a country that Trotskyists deem progressive after it transformed and become reactionary. This is true in particular in regard to the degenerated/deformed workers state. After the successful capitalist restoration in Russia and the Eastern European countries, it took most of those who called themselves Trotskyists years to concede that capitalism has been restored in these countries. A similar process is taking place in regard to China. Some Trotskyists still consider China to be at best a semi-colony, while in reality, China has been imperialist for some time. The transformation of China into an imperialist country is illustrated by China spending 83.9 percent or $734 billion on construction across the globe: “From 2005 to 2017, low and middle-income economies received 83.9 percent of the $734 billion spent by China on construction projects across the globe.” [1]
What kind of a semi-colony can spend $734 billion on construction alone? There is no doubt that the ENTIRE capitalist class in the US considers China to be its main imperialist competitor. It is reflected in the politicians’ speeches and every single article on China in the main capitalist press. Are they all wrong or lying, and China is just a semi-colony suffering under the weight of the mighty imperialist US?
If we consider Lenin’s criteria of imperialism, we can see, after analyzing the data on China, that China belongs to the imperialist camp. Here is Lenin’s criteria for what is an imperialist country:
“As long as capitalism remains what it is, surplus capital will be utilized not for the purpose of raising the standard of living of the masses in a given country, for this would mean a decline in profits for the capitalists, but for the purpose of increasing profits by exporting capital abroad to the backward countries. In these backward country’s profits are usually high, for capital is scarce, the price of land is relatively low, wages are low, raw materials are cheap. The export of capital is made possible by a number of backward countries having already been drawn into world capitalist intercourse.
“the concentration of production and capital has developed to such a high stage that it has created monopolies which play a decisive role in economic life; (2) the merging of bank capital with industrial capital, and the creation, on the basis of this “finance capital”, of a financial oligarchy; (3) the export of capital as distinguished from the export of commodities acquires exceptional importance; (4) the formation of international monopolist capitalist associations which share the world among themselves, and (5) the territorial division of the whole world among the biggest capitalist powers is completed. Imperialism is capitalism at that stage of development at which the dominance of monopolies and finance capital is established; IN WHICH THE EXPORT OF CAPITAL HAS ACQUIRED PRONOUNCED IMPORTANCE; in which the division of the world among the international trusts has begun, in which the division of all territories of the globe among the biggest capitalist powers has been completed.” my emphasis) [2]
The key criteria to be an imperialist country, according to Lenin, is to have a large surplus of capital; and to be able to export it to the colonies and semi-colonies; and to use the surplus capital to generate maximum profit via the super-exploitation of the masses in these countries. Few countries fit these criteria as well as the US and China.
Another fixture of imperialism is its ability to extract minerals and other precious materials from the semi-colonies that imperialism needs for its industries.
China fits all the above criteria for imperialism. To begin with, China ability to export a large amount of capital exists because the ruling class in China was able to 1. Amass massive amount of capital after the capitalist restoration in China, by using state capitalist measures such as the concentration of Chinese capital in central banks controlled by the ex-Stalinist bureaucracy that has become the new capitalist class in China. 2. The new ruling class could super-exploit the Chinese working class. This ability to exploit the masses in China, and use China as an “internal” colony, has become critical for the ability of the new capitalist class to amass a huge amount of surplus capital that could be used to invest abroad. This, of course, could not take place, without the defeat of the masses in 1989.
Capital export has been rising steadily from China, as China experienced the fastest economic growth in the last 20 years; an economic growth that is greater than any other country in the world. China’s capital export grew from $22 Billion in 2007 to $65 Billion in 2011 (UNCTAD: World Investment Report 2012, pp. 169-172.). China global output rose from 4.1% in 1991. to 14.3% by 2011. [3] By this time China became the world second largest economy, while the US’s share of global output declined from 24.1% to 19.1%. [4]This is expressed by China expansion of its foreign exchange reserves. These reserves rose from $165 billion in 2000 to the staggering number of $3305 billion in March 2012, an unprecedented rise. [5]
China’s Annual outgoing FDI rose from $2.7 Billion in 2002 to $67.6 Billion in 2011. [6] It is interesting to compare China export of capital with the old imperialist countries. In 2007 France exported $2198 billion. But in 2011 its capital export fell to $1694 billion. Germany exported $164 billion in 2007. But its export of capital fell to $90 billion. Britain export of capital fell from $272 to $107 billion. US capital export rose from $393 billion to $396 billion, a very meager rise for the biggest imperialist country. On the other hand, China export of Capital rose from $2.7 Billion in 2002 to $67.6 billion in 2011. China export of capital rose dramatically while European capital clearly declined. The rise of China’s capital export is also clearly reflected in the rise of the Chinese super-rich. China is still behind the US in its share of the fortune 500 companies. The US has 132 companies, China 73, Japan 68, France and Germany 32 and Britain 26 (Fortune Magazine top 500 companies list in 2012). The fact that China has a bigger share of the fortune 500 companies than the European imperialist countries is not a minor point. It shows the clear transformation of China into an imperialist country.
China also has become the second most powerful military power after the US. But China has a more sophisticated approach to military subjection of semi-colonies than the obvious blatant approach of US imperialism. China builds roads and helps the semi-colonies with big loans, thus creating the best conditions for China to make the semi-colonies depended on Chinese imperialism.
Chinese imperialism in Africa
Chinese imperialism uses a smarter method to dominate the semi-colonies than the US. It employs a delicate approach that is more beneficial for it in the long run, than the outright vile method of the US, that give loans with a high-interest rate that forced countries to be depended on the US (IMF and the World Bank are US’s tools). But like any other imperialist country, one of China main objectives in Africa is to steal the precious resources of a given country:
“Chinese development finance, combined with the aid, aims at not only benefiting the local recipient countries but also China itself. For example, China’s ‘tied aid’ for infrastructure usually favors Chinese companies (especially state-owned enterprises), while its loans are in many cases backed by African natural resources, my emphasis. [7]
Here are a few examples to illustrate what Chinese imperialism does in Africa:
“In Angola in 2006, USD 4 billion in such loans probably helped Chinese oil companies win the exploitation rights to multiple oil blocks. In 2010, Sinopec’s acquisition of a 50 percent stake in Block 18 coincided with the disbursement of the first tranche of Eximbank funding, and in 2005, Sinopec’s acquisition of rights to Block 3/80 coincided with the announcement of a new USD 2 billion loan from China Eximbank to the Angolan government. In 2008, the China Railway Group used the same model to secure the mining rights to the Democratic Republic of Congo’s copper and cobalt mines.
“According to Debra Brautigam, a top expert on China-Africa relations, between 2004 and 2011, China reached similar unprecedented deals with at least seven resource-rich African countries, with a total volume of nearly USD 14 billion.
“the inclination is to allocate the aid budget to countries that offer China the greatest number of commercial opportunities and benefits. Since China’s top economic interest is Africa’s natural resources, aid decisions are inevitably skewed toward resource-rich countries while others receive less favorable consideration.” [8]
The picture that emerges is classic imperialist plundering of the semi-colonies’ natural resources, with a “soft” Chinese style. But ultimately, building roads and better infrastructure is a good strategy for effectively extracting the natural resources needed for Chinese factories. Good infrastructure is indeed very important for imperialism. It is a necessary tool for the exploitation of the semi-colonies.
The Graph above illustrated that China investment in Africa has been steadily rising (with the exception of the 2008 recession) while US investment has been fluctuating wildly. The data confirm without a doubt that the amount of Chinese investment in Africa has grown significantly, and it only can only take place because China is major imperialist power:
“Chinese FDI annual flows to Africa, also known as OFDI (‘Overseas Foreign Direct Investment’) in Chinese official reports, have fluctuated throughout the past decade. The most recent white paper on China-Africa Trade and Economic Cooperation [9] noted that between 2009 and 2012, China’s direct investment in Africa grew at an annual rate of 20.5%. Flows peaked in 2008 at US$5.5 billion (although this was a function of the purchase of 20% of the shares of Standard Bank in South Africa). As noted in the chart above, 2008 was also the only year in the past decade where Chinese FDI flows to Africa exceeded those from the U.S”, my emphasis). [10]
“Over the 2003-2014 period, flows of Chinese FDI into Africa increased significantly, peaking in 2008 and stabilizing over the 2011-2014 period (Figure 1). During this time, China’s FDI stock in Africa rose from $491 million to $32.4 billion[!]. [11]
An astonishing rise! China is in the process of overtaking the US as the main imperialist country in Africa. Figures about it do not lie. Those comrades who cannot stomach the reality in which a former workers’ state can become an imperialist country, need to seriously study the objective data. Marxism is not a rigid system. Changes and twists in the world dominated by imperialism are constant, and they do not always follow scripts written by the great Marxists of the 19th and the 20th centuries. No Marxist could understand or predict, right after the 1917 revolution, that the USSR would become a degenerated workers state, followed by China and Eastern Europe. But the complex objective reality always evolves in contradictory ways in which subjective wishes and nostalgia (for the time in which the workers’ states occupied a good chunk of the world) distort comrades’ comprehension of it. Trotsky wrote a number of times that the objective reality is always ahead of the subjective understanding of it. This is why it took most Trotskyists a long time to concede that China evolved (or more accurately devolved) from a workers’ state into a capitalist state, and now it takes them a long time to concede that China became an imperialist country.
Chinese imperialism entry into Latin America and the Caribbean
The story of Chinese FDI in Africa repeats in the rest of the Semi-colonies. Latin America has become a big hub for Chinese investment. So, Chinese investment in Latin American jump from $.8 billion in 2004 to $13.5 in 2016. It peaked 2014 when it was $24 billion! [12]
And according to China Daily:
“China’s foreign direct investment in Latin America has not only grown fast, but diversified dramatically in the past years, according to the latest research report released on Monday.
“Cumulative Chinese FDI in Latin America since 2003 has reached over $110 billion, mostly made in the last five years [2012-2017], according to the report Chinese FDI in Latin America, which was jointly produced by the Atlantic Council and OECD Development Center. [13]
This over $110 Billion level of investment, which is only a fraction of Chinese investment worldwide cannot be made by an oppressed semi-colony. Only a major imperialist power can make this kind of investment. But China does not just invest money in Latin America, it is increasingly controlling Latin American industries. Imperialism needs energy, and Chinese imperialism gets it from Latin America and Brazil in particular. It already has total control on Brazilian electricity and increasing control of transport, information, and communication technology:
“China’s involvement in Latin America has been rapidly increasing in the past two decades with Chinese companies investing over $110 billion since 2003, but primarily in the last five years. The nature of these investments has been changing as well. In the past, extraction was the main focus of Chinese investment. In recent years, there has been has been a shift towards the service sector including transport, finance, electricity, information and communication technology, and alternative energy. These areas now make up half of all Chinese investment in the region.
“One area of Chinese increase control is in Latin American electricity generation and distribution. Not only are an increasing number of business transactions going through Chinese banks, but electric power is increasingly being produced through renewable energy sources built by the Chinese. The state-owned China State Grid Corp. which is the world’s largest power company has invested more than $7 billion in Brazilian electricity market since 2012. China is seeking energy security and independence. From 2000 to 2013, Chinese generating stations have increased from 20 to 529.” [14]
Here are some more interesting figures on China investment in Latin America:
“Annual Chinese FDI into Latin America and the Caribbean (LAC) was valued at less than $5 billion prior to 2010, when it jumped to $25.3 billion. Over the past seven years, investment outflows have totaled $72.5 billion. While the United States and other European countries have historically been the main sources of FDI, China leads in the world in mergers and acquisitions in region.
“According to the Economic Commission for LAC (ECLAC), the US and European countries together accounted [15] for more than 65 percent of total inflows in 2017, with the US responsible for 28.1 percent of the investments [in Latin America]. In terms of mergers and acquisitions completed in 2017, however, China was the biggest investor in LAC with deals totaling $18 billion (42 percent of the total).
“Abundant natural resources make LAC a highly desirable investment destination [16] for China, with around 57.6 percent ($62.7 billion) of China’s FDI into LAC since 2005 flowing into the energy sector. While totaling just $1.85 billion between 2005 and 2009, Chinese energy investment into South America surged to $18.97 billion in 2010, with 57 percent of the increase flowing into Brazil. Major acquisitions, such as Sinopec’s $7.1 billion stake purchase [17] of Repsol’s Brazilian arm, constitute a significant portion of this inflow.
| China FDI Top Destinations in Latin America and the Caribbean (2005 – 2017) | |||
| Country | Volume in $ billions | Global Ranking | Economic Development Level |
| Brazil | 54.56 | 5 | Upper middle-income |
| Peru | 19.95 | 12 | Upper middle-income |
| Argentina | 11.14 | 19 | Upper middle-income |
| Ecuador | 7.72 | 29 | Upper middle-income |
| Venezuela | 4.37 | 47 | Upper middle-income |
So, China invested over $200 Billion in Latin America and the Caribbean. Only a very major imperialist country can make this kind of investments.
China Investment in Asia vs. the Decline of US Investment
China spent about a trillion dollars in Asia. On the other hand, the US combined investments reach only $173 Billion. One should not be surprised to learn that China have huge investments in Asia. But one may be surprised to learn that China investments in Asia are much bigger than the US’ investments. This worries the US:
“In terms of size, Washington still remains unable to match Beijing’s war chest. Even combined, the IDFC’s proposed $60 billion portfolio and the $113 million fund announced in July pale in comparison to the trillion-dollar Belt and Road [China investment in Asia]” [18]
“The effort is part of Washington’s strategy to counter rising Chinese influence abroad, especially within Asia. In July, the White House announced $113 million in infrastructure spending for the Indo-Pacific region amid widespread worries of Beijing using investments as a way to achieve geopolitical objectives.” [19]
China investment in Asia is indeed much bigger than the US investment in Asia, the biggest and most populous part of the semi-colonies:
“. . .as it stands, the $113 million American fund pales in comparison to China’s trillion-dollar Belt and Road [meaning, China invests a trillion Dollars in Asia]. In Pakistan alone, the world’s second-largest economy [China] has $62 billion worth of infrastructure projects.” my emphasis ) [20]
So, China invests a trillion dollars in Asia. I would think that with such figures the idea that China is still a semi-colony is a joke. The fact that China invest more than the US in Asia, the continent with the biggest semi-colonies in the world, speaks volumes about the rise of Chinese imperialism.
China Investment Abroad Compared to European Imperialism
China clearly joined the big imperialists’ club when it comes to direct foreign investment abroad. As we recall the key criteria for imperialism is its ability to have massive investment abroad. In 2017, only the US and Japan invested more abroad than China. China invested more than the UK, Germany, and France, the biggest European countries. So how can China still be a semi-colony?
If we combine China and Hong Kong outgoing investments, it is clear that only the US invests more abroad than China. China invests abroad more than Germany, the UK, France, and Canada. Although the graph and statistic are behind a paywall it is clear that the order in the graph is; USA, Japan, China, UK, Germany, and France. Here are the figures for 2017 outgoing investments abroad:
Leading countries worldwide in 201, by Foreign Direct Investment (FDI) outflows (in billion U.S. dollars) DESCRIPTION, The statistic shows the leading countries worldwide in 2017, by Foreign Direct Investment (FDI) outflows. The direct investments from Japan amounted to approximately 160.45 billion U.S. dollars in 2017 (paywall!).[21]
The political Questions about Chinese imperialism
The obvious question arises: Only the US invest abroad more than China in most areas, while China invests more than the US in Asia. So, how can China be a semi-colony if it invests abroad more than any European imperialist country? The notion that a semi-colony invest abroad more than the European imperialist countries stands in total contradiction to Lenin definition of what is imperialism. China not only invests abroad more than European imperialist countries. It also behaves politically and militarily as the second strongest imperialist country. That is why, when the US thinks about beating its main competition, only China comes to its mind. Trump singled out China in his tariff war because China is the main competitor of the US. Here is what The New York Time, the mouthpiece of US imperialism has to say about it:
“President Trump says he wants American companies to have a level playing field with their Chinese counterparts, which he has long said have an unfair advantage. China wants to build its industries into sophisticated global competitors. Both sides have shown a willingness to escalate tensions to get what they want — and a capacity to diffuse situations to win over the other side.
“President Trump approves a 30 percent tariff [against China] on solar panels and a 20 percent tariff on washing machines. The move has a heavy impact on China, where most of the world’s solar panels are made, and South Korea, a major exporter of appliances.
“The United States approves 25 percent tariffs [against China] on steel and 10 percent on aluminum. Mexico and Canada are granted initial exemptions.
“President suggests broader tariffs on China may come. Mr. Trump announces a plan to impose annual tariffs on $50 billion worth in Chinese imports.
“China issues threat of its own. The Chinese government says it will impose tariffs on $3 billion worth of goods from the United States. The move is a response to the Trump administration’s earlier decision to impose steel and aluminum tariffs, but the announcement comes just hours after Mr.
Trump discloses his $50 billion tariff plan.“China targets wine, pork and pipes from the United States China adds tariffs of up to 25 percent on 128 American products in response to the steel and aluminum tariffs.
“U.S. targets electronics. The United States formally proposes tariffs on $50 billion worth of Chinese products, including flat-screen televisions, medical devices, aircraft parts and batteries.
“China puts squeeze on soybeans, cars and chemicals. China proposes $50 billion in tariffs
on additional American products“China puts squeeze on soybeans, cars and chemicals. China proposes $50 billion in tariffs
on additional American products. [22]
The question is why does the US impose steep tariffs against China, unheard of, since the Second World War? And why does China impose steep tariffs against the US? This could not take place unless the US considers China to be the main competitor; nor would this be possible unless China also considers the US to be its main competitor for world hegemony. In fact, this by itself stand in total contradiction to the idea that China is still a semi-colony. The US will not put so much energy into tariff wars against a poor semi-colony that it can beat at ease by other means. Nor would China threaten the US with a major tariff war if it was a subordinated semi-colony.
The Increasing Military Tension Between the US and China
There is a growing military tension between China and the US. China is indeed challenging the US domination of the Pacific Ocean in Asia. Such challenges are totally out of the question for a semi-colony (India, for example). As the tension has risen, there were close encounters between American warships and Chinese warships:
“’China’s first homegrown aircraft carrier just moved a bit, and the United States, Japan and India squirmed,’ a military news website crowed, referring to the three nations China views as its main rivals.
“Not long ago, such boasts would have been dismissed as the bravado of a second-string military. No longer.
“A modernization program [by China] focused on naval and missile forces has shifted the balance of power in the Pacific in ways the United States and its allies are only beginning to digest.
“While China lags in projecting firepower on a global scale, it can now challenge American military supremacy in the places that matter most to it: the waters around Taiwan and in the disputed South China Sea.
“That means a growing section of the Pacific Ocean — where the United States has operated unchallenged since the naval battles of World War II — is once again contested territory, with Chinese warships and aircraft regularly bumping up against those of the United States and its allies.
“To prevail in these waters, according to officials and analysts who scrutinize Chinese military developments, China does not need a military that can defeat the United States outright but merely one that can make intervention in the region too costly for Washington to contemplate. Many analysts say Beijing has already achieved that goal.
“To do so, it has developed ‘anti-access’ capabilities that use radar, satellites and missiles to neutralize the decisive edge that America’s powerful aircraft carrier strike groups have enjoyed. It is also rapidly expanding its naval forces with the goal of deploying a ‘blue water’ navy that would allow it to defend its growing interests beyond its coastal waters.
“‘China is now capable of controlling the South China Sea in all scenarios short of war with the United States,’” the new commander of the United States Indo-Pacific Command, Adm. Philip S. Davidson, acknowledged in written remarks submitted during his Senate confirmation process in March.
“He described China as a ‘peer competitor’ gaining on the United States not by matching its forces weapon by weapon but by building critical ‘asymmetrical capabilities,’ including with anti-ship missiles and in submarine warfare. ‘There is no guarantee that the United States would win a future conflict with China,’ he concluded.
“Last year, the Chinese Navy became the world’s largest, with more warships and submarines than the United States, and it continues to build new ships at a stunning rate. Though the American fleet remains superior qualitatively, it is spread much thinner.” [23]
I do not have a lot of technical details to add to this. Let me just repeat that “Chinese Navy became the world’s largest”. Again, the question cries out for an answer: how can a semi-colony have the largest Navy in the world? An oppressed semi-colony cannot have the largest Navy in the world. China is so occupied with having the upper hand in the Pacific, that it has built artificial Islands in the Pacific for its warships that cost it billions of dollars! But none of this could be even remotely possible if China was a subordinated semi-colony.
I am beginning to think that instead of debating whether China is an imperialist country, the Trotskyist movement should start to warn the masses about a possible war between China and US in the future. This is so, because of the mighty military’s rise of Chinese imperialism contradicts the need of US imperialism to maintain its undisputed dominance, both economically and militarily. There are no open hostile military actions between the two countries yet. But this could change as world capitalism will certainly be engulphed with new world economic crisis, aggravated by an inevitable dramatic Climate Change.
In Conclusion
It is understandable that comrades want to defend what is progressive, and thus, it is difficult for them to concede that what was progressive in the past, is no longer progressive at the present. It took Socialist Fight a long time to admit that China was no longer a workers’ state. After studying the data about China, Socialist Fight and the LRCI should consider seriously whether China is an imperialist country. The objective world operates dialectically; not in stages, but in leaps and zigzags, forward and backward. That is why a degenerated or deformed workers’ state can leap backward and become capitalist. In fact, Trotsky clearly suggested in the book The Revolution Betrayed, that capitalism could be restored in the USSR because the Stalinist bureaucracy could become the capitalist class after capitalism was restored. This was confirmed by the counterrevolutions of 1989-1991 in Eastern Europe and the USSR.
Under favorable conditions, which are the exception, not the rule, China became imperialist. China is a huge country with huge industries. This allowed the new bourgeoisie to amass a very large capital for investment. In an ironic way, the Chinese bourgeoisie was able to use the cheap and oppressed labor in China to amass billions of dollars, steal a lot of trade secrets and technical secrets from the Western imperialists in China, and ultimately build a mighty imperialist country of its own. Only the Chinese working class can stop the process by overthrowing Chinese capitalism and triggering the Socialist Revolution worldwide.
Notes
[1] China Power, US, 2017, (ChinaPower is made possible by a generous contribution from Carnegie Corporation of New York), https://chinapower.csis.org/china-foreign-direct-investment/
[2] Lenin, Imperialism, the Highest Stage of capitalism, 1916, https://www.marxists.org/archive/lenin/works/1916/imp-hsc/ch07.htm
[3] China’s Economic Conditions, Wayne M. Morrison, Specialist in Asian Trade and Finance, June 26, 2012, https://www.everycrsreport.com/files/20120626_RL33534_4ef748bc9d2c2d8e04439017f6eb8e22523facf0.pdf
[4] http://www.valeofinancial.com/2012/06/u-s-share-of-global-economic-output-shrinking/
[5] The People’s Bank of China http://www.pbc.gov.cn/publish/html/2012s09.htm
[6] https://www.everycrsreport.com/files/20120626_RL33534_4ef748bc9d2c2d8e04439017f6eb8e22523facf0.pdf
[7] OP-ED, China’s Aid to Africa: Monster or Messiah?, Yun SunFriday, February 7, 2014, https://www.brookings.edu/opinions/chinas-aid-to-africa-monster-or-messiah/
[8] Ibid.
[9] China in Africa: The Real Story, September 23, 2013, China Africa Ec. and Trade Coop. White Paper 2013, www.chinaafricarealstory.com/2013/09/china-africa-economic-and-trade.html
[10] http://www.sais-cari.org/chinese-investment-in-africa/
[11] https://www.brookings.edu/blog/africa-in-focus/2018/07/25/figures-of-the-week-trends-and-determinants-in-chinese-fdi-in-africa/
[12] https://www.statista.com/statistics/733319/china-fdi-latin-america/
[13] http://usa.chinadaily.com.cn/world/2017-06/27/content_29909489.htm
[14] https://www.panoramas.pitt.edu/news-and-politics/chinese-fdi-latin-america
[15] Foreign Direct Investment in Latin America and the Caribbean Falls for the Third Straight Year in 2017, Totaling $161.673 Billion Dollars, https://www.cepal.org/en/pressreleases/foreign-direct-investment-latin-america-and-caribbean-falls-third-straight-year-2017 5 JULY 2018|PRESS RELEASE
[16] Barbara Kotschwar, Theodore H. Moran, and Julia Muir, Chinese Investment in Latin American Resources: The Good, the Bad, and the Ugly, https://piie.com/publications/wp/wp12-3.pdf
[17] BUSINESS NEWS OCTOBER 1, 2010, China’s Sinopec buys Repsol Brazil stake for $7.1 billion, Sonya Dowsett, Chen Aizhu, https://www.reuters.com/article/us-repsol-sinopec/chinas-sinopec-buys-repsol-brazil-stake-for-7-1-billion-idUSTRE6900YZ20101001
[18] https://www.cnbc.com/2018/09/07/us-proposal-aims-to-be-alternative-to-china-investment-in-asia.html
[19] https://www.cnbc.com/2018/09/07/us-proposal-aims-to-be-alternative-to-china-investment-in-asia.html
[20] $62 billion worth of infrastructure projects, https://www.cnbc.com/2018/07/31/new-us-spending-in-asia-wont-match-china-but-its-significant.html
[21] Leading countries worldwide in 2017, by Foreign Direct Investment (FDI) outflows (in billion U.S. dollars), https://www.statista.com/statistics/273931/largest-direct-investors-worldwide/
[22] https://www.nytimes.com/interactive/2018/04/05/business/china-us-trade-conflict.html
[23] https://www.nytimes.com/2018/08/29/world/asia/china-navy-aircraft-carrier-pacific.html?rref=collection%2Fspotlightcollection%2Fchina-reach
Socialist Fight 
In an otherwise excellent recent article about China’s military rise, the New York Times dramatized the fact that the Chinese navy now possesses more ships than America’s. Others, including the U.S. Navy, have been issuing the same clarion call of late. Attaining the status of the world’s biggest naval force—to go along with its position as the world’s top manufacturer and, by some measures, already the world’s largest economy—would seem to cement the inevitability of China achieving hegemony in the near future, at least in the broader Asia-Pacific region. Or so one might be led to believe.
In fact, nothing of the sort is true. Leave aside the facts that the United States has some 60 allies and other close security partners to China’s one (which is North Korea, by the way). Or that by standard market exchange rates, U.S. GDP of some $19 trillion compares very favorably with China’s $13 trillion. Or that the annual U.S. defense budget of $700 billion still dwarves China’s $200 billion. Indeed, as one of us argued with Jim Steinberg in our 2014 book, Strategic Reassurance and Resolve, the fact that America’s military budget has been so much larger than China’s for so many years translates into what is still almost a 10:1 U.S. advantage in our cumulative stock of modern weaponry.
Authors, Ian Livingston, Senior Research Assistant – Center on 21st Century Security and Intelligence, Brookings Institution
Michael E. O’Hanlon, Senior Fellow – Foreign Policy, Center for 21st Century Security and Intelligence Director of Research – Foreign Policy The Sydney Stein, Jr. Chair
ORDER FROM CHAOS, Why China isn’t ahead of the US Navy, even with more ships, Ian Livingston and Michael E. O’HanlonMonday, September 10, 2018,
https://www.brookings.edu/blog/order-from-chaos/2018/09/10/why-china-isnt-ahead-of-the-us-navy-even-with-more-ships/
China in Africa: The Real Story, September 23, 2013, China Africa Ec. and Trade Coop. White Paper 2013, http://www.chinaafricarealstory.com/2013/09/china-africa-economic-and-trade.html
2 comments:
AnonymousOctober 10, 2013 at 4:03 AM
This is a paper with a lot of interesting numbers especially on trade.
One of the often cited reasons for the level of interest by China in Africa is that it is a key export market. However, if Africa only accounts for 4% of Chinese exports then the market seems like a minor one.
China also doesn’t seem to import a large share of resources from Africa. The continent doesn’t have much of the world oil reserves and it seems mineral prices have entered into a long period of stagnation after reaching heights in 2007.
So that leaves a head-scratching question: Why is Africa China’s first international priority? What is the return that China expects?
Reply
AnonymousDecember 16, 2013 at 10:17 AM
Balancing the hegemonic power of the United States and its allies. It is a pity that the report does not show exactly the figures in regards to exports to China per product category (I would imagine oil should be the biggest export product).
Sino-African trade in US$ billions
Year Africa to China[34]
(year increase) China to Africa[35]
(year increase) Sum
(year increase)
2004 15.65 13.82 29.47
2005 21.12 18.69 39.81 (+35)
2006 28.77 26.70 55.47 (+39.3)
2007 36.33 (+25.9%) 37.31 (+39.7%) 73.644 (+32,7%)
Chinese trade in US$ billions[31]
Year World[32]
Africa[33]
%
2002 620.8 12 1.9%
2003[24]
851.2 18.48 2.17%
2005 1422 39 2.74%
2006 1760.6 55 3.12%
2007 2173.8 73.6 3.38%
2010 ? 100? ?
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I hate it when people throw in figures without citing where they got the figures. But even if ” U.S. GDP of some $19 trillion compares very favorably with China’s $13 trillion”, it is only demonstrates that China is biggest imperialist country after the US. Here are the real important figures regarding the imperialist countries GDP (percentage of total GDP): US 24.32%, China 14.84%, Japan 5.91%, Germany 4.54%, France 3.26%, UK 3.85 %, Italy 2.46% (https://www.valuewalk.com/2017/02/us-gdp-crush-china/). As one can see China GDP is getting close the combined GDP of the major European imperialist countries. So how can China be a subordinated semi-colony?
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The ranking of countries by Gross Domestic Product (2016, I think): (Millions of $US): United States $19,417.144, China $11,795.297, Japan $4,841.221, Germany $3,423.287, Russia $1,560.706. If we take the more meaningful GDP per capita we get an entirely different picture. That is headed by tax havens and petro-states; Liechtenstein, Qatar, Monaco and Luxembourg. The US comes in at 20, Germany at 31, the UK at 38, France at 39, Russia at 48, Italy at 51, China at 106, South Africa at 117 and India at 160.
You do not look at GDP per capita at all.
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In my article I did not claim that China at this historical conjuncture is a match to US military. China does not plan at the present to challenge the US military. It is, however, becoming a regional imperialist power. Yet, China military has increased significantly to the point that it worries the US.
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You do not bother to cite where you got the figure that “Africa only accounts for 4% of Chinese exports” To begin with the main feature of imperialism is about plundering the semi-colonies, not exporting commodities to them. But the 4% figure is totally wrong. China export to Africa rose from almost nothing in 2002 to $150 billion in 2015 (http://www.sais-cari.org/data-china-africa-trade/). So if we want to have an objective discussion on whether China is imperialist, we have to have objective data.
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Here is more important info about China: “CCPIT Academy, the research arm of the organization, said China’s FDI has grown at an average annual rate of 27.2 percent in the past 10 years to rank it among the largest foreign investment countries.
“In 2017, the country’s FDI reached $124.63 billion, the third-highest in the world, as the global influence of Chinese capital grows stronger.
“From a historical view, China’s FDI in 2016 – when GDP per capita reached $8,123 – was 9.28 times, 2.41 times, 9.45 times and 19.26 times higher than the United States, Britain, Germany and Japan when GDP per capita in those countries was $8,000.” (http://www.ecns.cn/news/cns-wire/2018-08-30/detail-ifyxpqun1869283.shtml).
If China FDI was $124 billion in 2017, which is a the third-highests in the world, and from a historical view its GDP is bigger than the US , how can China not be an imperialist country?
Dov
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Socialist Fight (SF) claims that “U.S. GDP of some $19 trillion compares very favorably with China’s $13 trillion”. I have no idea from where SF took these figures. But I don’t believe that they are accurate. Here is percentage of the major imperialist countries GDP, which is a percentage of the total world GDP: US 24.32%, China 14.32%,Japan 5.91%, Germany 4.54%, France 3.26%, UK 3.85%. Italy 2.46% (https://www.valuewalk.com/2017/02/us-gdp-crush-china/). That shows the after the US, China have the biggest GDP, significantly bigger than any European imperialist country. These figures not only illustrate that China is imperialist, but a bigger imperialist country than the European countries.
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On the Navy. The Chinese navy is “not as large” as the US navy. China has an inordinate number of smaller boats, corvettes, “PT” boats, etc, most displacing well under 10,000 tons and the overwhelming majority under 8,000 tons. The US outnumbers China in plus-10,000 ton ships about 20 to 1. The US has dozens and dozens of nuclear powered air craft carriers (China has none the US 11) and submarines (China has around 6 to the US’s 150!).
China’s navy isn’t organized to project Imperialist power (regardless of how one comes down the political economy of the nation). It has exactly 1 foreign base (sitting next to a US one in Djibouti in Africa. The US has *hundreds* of such bases in Africa). It doesn’t have what is called a “blue ocean navy”. It is primarily organized along defensive lines, which, admittedly, has expanded given the ongoing dispute over the S. China Sea. Their navy is not designed to take on the US outside of it’s immediate area of influence, namely East and SE Asia.
But the article makes a good point about it’s professionalism. Long ago the PLA (People’s Liberation Army of which their navy is a section, as opposed to a distinct branch) did away with the retrograde “human wave” assault strategy and reduced the total PLA size by about 50%. This strengthens, not weakens, the PLA. It is highly professionalized and organized along very modern, post-Cold War era paradigms. It is high tech, heavily armored, highly motivated and professionally lead, as far as anyone can tell.
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Your argument is a straw argument David. I did not claim the China is about to take the US as a military power. China’s main tactic in becoming a major imperialist power is through massive investment abroad. However, China is becoming a regional imperialist power, For example, it harasses and sometime arrested other nations and people in fishing boats. It recently even had some conflicts with US ships. These are not actions of a subordinated semi-colony.
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Dov,
I was responding to the NYT quote you used:
“Last year, the Chinese Navy became the world’s largest, with more warships and submarines than the United States, and it continues to build new ships at a stunning rate. Though the American fleet remains superior qualitatively, it is spread much thinner.”
That is totally inaccurate. It’s a blatant falsehood which you missed. I would of just ended the quote at the paragraph before it.
Secondly, there is a problem with assuming China is becoming a regional Imperialist power simply by virtue of seizing islands it has long historically claimed (I think the claims are BS, BTW, and have no validity since these claims date back to a KMT sponsored map that was a rehash of previously Imperial Chinese claims). Territorial claims doesn’t make any country imperialist necessarily. The arrest of fishermen and others in PRC claimed waters goes back to 1949. Nothing new here. China’s outlook on the South China Sea is basically status quo. They do not prevent any commercial craft from sailing it it’s water. If they did they would be at war with Vietnam, Philippines, S. Korea and Japan constantly.
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David, You make a lot of fuss about how minor is China’s military. Yea, we all get our info from different websites these days. I can probably can get 5-10 websites that undermines your position. I will check out the info and get back to you. But you said nothing whether you consider China to an imperialist country. I found it somewhat distrubing that someone who considers himself a Marxist do not write anything about the main topic at hand and concentrate on the military question alone. Are you trying to say that China is not imperialist because it does not have advanced military? What is your political point?
Dov
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First, Dov, no, I don’t think you can find “5-10 web sites that undermine” my position. I have access to material you can’t have access too because it’s not web based or it’s behind secure servers. ’nuff said on that. I’ve made a particular study of military paradigms since the early 1990s where I naively thought Saddam Hussein’s army would actually put up a fight against the United States. I actually study military strategy, albeit from an armchair position. One doesn’t read the NYT for information on China’s defense, you read The National Interest, Defense News and other public accessible resources that are *industry based*. Just say’n….
I think to start this discussion, the most important place to start is whether China is *capitalist* or not. A country can be capitalist and not Imperialist. Imperialism *primarily* is a form of capitalist political-economy in the later epoch of that political economy. You barely touch on China’s political economy at all and I think that is a mistake. I concluded, especially after visiting China in 2003, that it is indeed capitalist, but capitalist of a very different sort. It is not based on the classic “m-m-m” economy of Imperialism that Lenin talked about or we see today with the total domination of finance capital. It’s quite different and not enough attention is paid to this. Price for most commodities (including though highly regulated, Labor) is market driven though like in many countries, there are some stringent price controls. For the average worker, they work for a boss who treats them absolutely no different than one in a “capitalist” country. Most of what made the PRC a workers state has been corrupted or commodified (like health care and education). There is very little unemployment though there still exists a migrant issue it has been ‘reigned in’ as the local party boss told me when I visited (he lied, of course, but they did end much of the migrant labor problems in the big cities). Additionally, all SOE (State Owned Enterprises) are run *as* capitalist entities, as joint stock companies, boards of directors (with MBAs often enough at the bigger companies educated in the US). These are not our father’s nationalized industries. SOEs actually bill each other, are legally required to pay these bills for services and products! There is almost no difference anymore between the SOEs and the large and small private industries. SOEs actually like under capitalism. Especially for the working class.
I’ve come around to the view for the PRC (and only the PRC, no other former workers state) that China is exactly what Cliff talked about in his State Capitalism. It is a highly state owned economy (and, more importantly actually, state *regulated* economy) where building the national state and “nation” is priority…not profits and, certainly not speculation in the m-m-m phase (though, that does exist, supported by state industries and plans, in things like in real-estate). But it is not dominant at all. I argue this because there is no “Finance Capital” in China. It is only state run (4 banks to be specific) Banking. And that Banking is subordinate to both private and state Manufacturing capital. All capitalist relations, and all economic relations are subordinated to the state plan, which is to build up China in all spheres of science, engineering, consumer commodity production, etc. So actual short term profits we know in the US is based totally subordinated to the State’s *plan* for national expansion (long term investments…basically unheard of in any real Imperialist country). So this is an important consideration.
If it’s “Imperialist” you’d see ONLY foreign investment based on extraction of raw materials. We don’t see that. That does occur but both the SOE (the majority of foreign investment) and private Chinese companies invest a lot more in non-export only of raw materials sectors. The invest in schools, non-export oriented roads and services and so on. On the other hand, the investments are always joint partnerships where if the debt isn’t paid, Chinese SOEs assume full control of the physical economic investments and thus national sovereignty in economic infrastructure gets owned…by China. This is a big issue. But overall the fact that SOEs (and not private industries necessarily) invest in non-export oriented economic development actually runs counter to the Imperialist story.
So, is it “Imperialist”? I don’t know. If it is it is a new type of Imperialism not guided by what Lenin talked about…at all…and is more a form of “State Imperialism”.
David Walters
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Pour commencer je dois avouer que je n’ai pas les éléments pour déterminer si les chiffres avancés correspondent véritablement à des investissements chinois à l’étranger, leur nature, etc. ou ils sont imputables en grande partie à des entreprises étrangères travaillant en Chine.
Ensuite, il y a les questions politiques qui sont primordiales car toute la situation change si la Chine est un pays impérialiste.
En cas de conflit aigue, de guerre, (le rapport entre ces deux puissances est manifestement inégal, totalement défavorable à la Chine) il faudrait travailler pour la défaite des deux.
En fait, tous les pays « exportent des capitaux », même des pays à caractère semi-coloniaux, exportent des capitaux qui, du fait de l’étroitesse de leur marché interne, sortent trouver des meilleures opportunités ailleurs.
Cette exportation des capitaux, fait d’eux des ‘pays impérialistes’ car le phénomène d’exportation de capitaux est une des caractéristiques du capitalisme d’aujourd’hui ?
Je ne pense pas que certains pays d’Amérique Latine soient des « impérialismes » malgré leur exportation bien réelle des capitaux.
Bien sûr, il y a le volume.
Mais il y a aussi la hiérarchie, l’importance relative.
Il y a peu d’études sérieux sur l’économie chinoise, sur son développement « inégal et combiné », sur leur dépendance ou pas du capital étranger, sur leur dépendance technologique, (j’ai connu personnellement des chinois incapables de gérer une entreprise récemment achetée de tracteurs et des boites de vitesse. Les techniciens français qui sont allés là-bas, on trouve des technologies des années 50… et les gérants chinois ont été incapables de faire marcher l’usine achetée en France).
D’un autre côté ils lancent des fusées et se forment à toute vitesse mais le handicap certain de leur écriture est un frein réel… En Chine on assiste à un développement inégal très poussé.
Bien sûr, cela n’entrave que peu la caractérisation centrale de Lénine pour l’impérialisme, mais étant donné qu’elle a été faite en 1916, il est temps de l’ajourner car le capitalisme s’est développé depuis.
La caractérisation de la Chine comme « puissance impérialiste » va pousser inévitablement une série des personnes à considérer s’il faut soutenir un impérialisme ou un autre. Les facteurs culturels, de retard, des libertés publiques et autres vont jouer à plein.
Le danger de faire l’apologie de l’impérialisme US apparait cristallin.
D’ailleurs, un impérialisme chinois pose la Russie dans une drôle de posture, car son alliance défensive ne serait qu’une subordination déguisée et le conflit syrien, une avancée de la Chine par la Russie interposée. On s’approche dangereusement des thèses de …Washington.
Encore poser la Chine en tant qu’impérialiste c’est faire de la guerre une question d’un avenir proche. Les US ne peuvent accepter qu’une puissance rivale telle que décrite surgisse sans la contrer par tous les moyens. Ou c’est concevoir que l’impérialisme US soit dans un tel état de pourriture qu’il abandonne le camp sans présenter combat.
Bref, la question n’est pas purement économique mais essentiellement politique.
Que reste donc-t-il si la Chine est définitivement et véritablement impérialiste ?
Un monde qui s’avance vers une guerre terrible et un chaos des pays qui subissent ou subiront ou le diktat d’un vieux impérialisme décadent qui penche de plus en plus vers la dictature et la répression ou la brutalité d’un nouveau impérialisme avec des traditions semi-féodales très récentes et un système interne sans aucune liberté démocratique bourgeoise.
Pour aller encore plus loin, toute la politique du Front Uni Anti Impérialiste (dirigée en ce moment contre l’impérialisme US, « ennemi principal de l’humanité »), n’a été qu’un jeu de dupes car, on a combattu l’impérialisme US et donc favorisé l’impérialisme chinois…
On est en plein gauchisme, ou il ne reste qu’à suivre toutes les sectes gauchistes qui depuis des années assimilent la Chine à une puissance impérialiste.
Donc, la définition de Lénine doit être ajournée.
Il faut une étude plus poussée, fait par des économistes marxistes sur la Chine, son marché interne, son développement incomplet et inégal, la nature de ses exportations et sa réalité véritable.
Finalement, SF publie exactement le contraire de ce qu’elle soutenait jadis « La Chine n’est pas un pays impérialiste ».
Il faudrait expliquer.
To begin with, I must admit that I do not have the information to determine whether the figures provided really correspond to Chinese investments abroad, their nature, etc. or are largely attributable to foreign companies working in China.
Then there are the political issues that are crucial because the whole situation changes if China is an imperialist country.
In the event of an acute conflict, a war between the US and China, (the relationship between these two powers is clearly unequal, totally unfavourable to China) it would be necessary to work for the defeat of both.
In fact, all countries “export capital”, even semi-colonial countries, export capital which, because of the narrowness of their internal markets, finds better opportunities elsewhere.
This export of capital makes them “imperialist countries” because the phenomenon of exporting capital is one of the characteristics of capitalism today?
I do not think that some Latin American countries are “imperialists” despite their very real export of capital.
Of course, there is the volume.
But there is also the hierarchy, the relative importance.
There are few serious studies on the Chinese economy, on its “uneven and combined” development, on their dependence or not on foreign capital, on their technological dependence, (I have personally known Chinese people who are unable to manage a company recently purchased with tractors and gearboxes. The French technicians who went there, there are technologies from the 1950s… and the Chinese managers were unable to operate the factory bought in France) from their cultural backwardness.
On the other hand they launch rockets and form at full speed but the certain handicap of their writing is a real brake… In China, we are witnessing very strong uneven development.
Of course, this only slightly hinders Lenin’s central characterization for imperialism, but since it was made in 1916, it is time to make an “aggiornamento” because capitalism has since developed.
The characterization of China as an “imperialist power” will inevitably lead a series of people to consider whether to support one imperialism or another. Cultural factors, backwardness, civil liberties and other factors will play a major role.
The danger of promoting US imperialism seems crystalline.
Moreover, Chinese imperialism puts Russia in a strange position, because its defensive alliance would only be a disguised subordination and the Syrian conflict, an advance of China by Russia through its intermediary. We’re getting dangerously close to Washington’s theses.
To stablish China as an imperialist power is to say that China is expanding and will continue to expand and to make war a matter of the near future. The US cannot accept that a rival power as described should emerge without countering it by every means. Or it is to conceive that US imperialism is in such a rotten state that it abandons the camp without presenting a fight.
In short, the issue is not purely economic but essentially political.
So what is left if China is definitely and truly imperialist?
A world that is moving towards a terrible war and chaos of the countries that are or will be suffering or the diktat of an old decadent imperialism that is leaning more and more towards dictatorship and repression or the brutality of a new imperialism with very recent semi-feudal traditions and an internal system without any bourgeois democratic freedom.
To go even further, the entire policy of the Anti-Imperialist United Front (currently directed against US imperialism, “the main enemy of humanity”), has been a fool’s game because, we fought US imperialism and therefore favored Chinese imperialism…
We are in the midst of leftism, or all that remains is to follow all the leftist sects that for years have assimilated China to an imperialist power.
Therefore, the definition of Lenin must be actualized, completed by today’s développements.
Further study by Marxist economists is needed on China, its internal market, its incomplete and uneven development, the nature of its exports and its true reality.
Finally, SF publishes exactly the opposite of what it once argued: “China is not an imperialist country”.
You should explain.
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Viriato, it was interesting to read your stuff. But I am not clear what is your position on the main question. Do you think that China is an imperialist country?
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Here in France, we have a discussion on the matter with some comrades over the question.
I support SF position but I understand that China is developping very fast (or I have this impression) and this is a process that goes in the direction that has taken every big capitalist country; becomming an imperialist country. I am not an intellectual and I have not followed the question thoroughly, then I have not all the data in hand.
That’s why I am asking for more studies (accessibles if possible to working people) and trying to grasp the fondamental, that for me are politics (of course we cannot separate politics from economics but there is a priority).
As I see this question, China is a sort of mix between a very underdevelopped country with some very developped regions (I know not if this developpement is ‘a lot’, ‘average’ or ‘little’ dependent on foreign capital and technologie.
Which is the independence of their banks and financial institutions, what can they do if there is a full economic attack against them or a full retreat of foreign investments, what could happend if the “Route de la Soie” is cut by military means,
I have the impression that they cannot avoid beeing touch very strongly and they can’t do whatsoever to counter that. The recent “sanctions” for 200 billions by US imperialism has have as answer an ‘only’ 60 billions retaliation, because they can’t do more.
Then, on one side you have US imperialism that leads and controls the agression and the chinesse that know not how to deal evenly with the matter.
If China is imperialist (or in my opinion, it export capital because she has a lot of money she can’t do nothing else with) then it is a very little or a “dependent imperialism of the one big imperialism, the US” ( a sort of formula of my own).
In fact I stand with the majority till the other thèsis be demonstrated fully.
Because I think that China (the capitalists class in China) are longing to be the biggest imperialist power in the world. “Bourgeois in China are quite fascists in mind”, some comrades that lived in Chine in times of Chiang Ching and the “four”, tell us so.
Sorry for the ‘english’.
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We should explain indeed. Comrade Dov is now a supporter of Socialist Fight in the United States. The majority position of Socialist Fight and the LCFI is that China is NOT an imperialist country, but a powerful semi-colony that should be defended against imperialism.
Comrade Dov’s view is a minority position. But it is a practice of our tendency, following Bolshevik practice, that we do allow minority positions to be expressed publicly provided they do not disrupt some collectively agreed action of the organisation. Minorities can be right.
Thus there is material from me earlier on this site that put forward a Daumite state-capitalist analysis of Stalinism, albeit in an article centrally about Zionism. There was also a debate involving myself and Gerry on what position to take on the EU referendum in 2016, where I argued a ‘spoil your ballot’ position. I no longer hold these positions but it was absolutely right to debate them openly. It makes for a stronger revolutionary organisation in the long run.
This conflicts somewhat with post-1917 Comintern practice, and by inheritance that of the Fourth International, but we do consider some errors were made after 1917, at odds with successful pre-1917 Bolshevik practice.
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Looking into the question under discussion, I found this excerpt on a French centrist website https://mensuel.lutte-ouvriere.org//2018/09/16/trump-et-sa-guerre-commerciale_113296.html. I would like to share it in order to contribute to the debate.
Even if the question of an “imperialist China” is not directly addressed, it underlines China’s subordinate and minor role in front of US imperialism.
For me, the most important is what the CEO’s Total (biggest petroleum company in France) say: the US dominates capital and finances of the world and therefore can impose it’
“The power of American imperialism
Trump’s election slogan, “Make America Great Again”, does not mean that American capitalists have lost their supremacy. Trump has made the reduction of the trade deficit, a deficit of about $570 billion a year, two-thirds of which is against China, his main focus.
But if the United States imports more than it exports, it is not necessarily a sign of economic weakness for the American bourgeoisie.
A part of these imports is made by American companies located abroad. When Apple sells its iPhones made in China, the profits go to Apple shareholders. In a globalized economy, a country’s trade balance masks much more complex relationships. Michelin, Daimler, BMW and many others own dozens of factories in the United States, from which they export throughout the American continent.
These exports are “made in USA”. In contrast, Ford, General Electric or Carrier have built or bought plants in Europe. The products they sell are not recorded in US exports but the profits go to the US shareholders of these companies. Components used in American factories are manufactured by subcontractors in a multitude of countries. They cross seas and borders several times before being assembled.
The dollar being the currency of world trade, the United States can finance its trade deficit by lending dollars to the world. They live on credit by issuing treasury bills that capital owners around the world are fighting for, including the Chinese state itself, part of whose trade surplus is invested in US treasury bills. The central role of the dollar in world trade is a major political weapon for the United States.
This weapon currently forces major European groups to leave Iran after Trump’s decision to denounce the Iranian nuclear agreement and restore the embargo, under penalty of sanctions or a ban on access to the American market.
As Patrick Pouyanné, Total’s CEO, explained in Le Monde newspaper on August 30, 2018: “Most of the world’s capital and financial system is in the hands of American investors and bankers: it is the strength of American capitalism. A global group like Total cannot take the risk of being denied access to these financial resources. It is regrettable that the United States is using the strength of its system to impose its law, but this is the reality of our global world. “In other words, Pouyanné acknowledges that the strongest make the law and that he must comply with it.
While American hegemony remains indisputable, in all areas, economic, political and military, it must be constantly defended and reaffirmed by showing its muscles. This is what Trump is doing, in the current economic context, with his brutal personal style but also the political vision of a real estate tycoon who is not unanimously accepted by the American bourgeoisie itself.
China’s unequal relations with the United States
Trump’s first target was China, accused of unfair competition and exporting goods produced at low cost, with Chinese state subsidies, without respecting WTO rules, by practising forced technology transfers or by restricting access to the Chinese market for foreign companies. In fact, since its entry into the WTO in 2001, China has been subject to taxes on a multitude of exported products, particularly steel, which was heavily taxed well before Trump, in both the United States and Europe.
The majority of anti-dumping taxes against Chinese steel were introduced in 2015-2016, under Obama. As a result of these old taxes, Chinese steel exports to the United States are already almost nil.
It was in a subordinate position that China was reintegrated into international trade at the end of the 20th century. Due to its history and the Maoist regime’s struggle to regain the country’s independence for the benefit of the Chinese bourgeoisie, the state has played a major role in the development of large companies.
This central role has enabled them to carve out a place for themselves in the global market. While often confined to the role of subcontractors, while being excluded from certain markets, they have become real competitors of their Western counterparts in various sectors.
The Chinese leaders, in a plan called “made in China 2025”, have announced their ambition to take the lead in several technological sectors.
Year after year, Chinese exports to the United States are growing faster than US exports to China. According to World Bank figures, from $80 billion in 2000, the US trade deficit with China had risen to $202 billion in 2005 and $367 billion in 2016.
China is the world’s largest exporter with a 14% market share, well ahead of the United States (9%) and Germany (8%). Behind this deficit lies China’s role as a world workshop. It exports shoes, furniture, toys produced at low cost but also a lot of machinery or electronic equipment.
Among the latter products, some are manufactured as subcontractors or as joint ventures with American companies, which above all do not want to change anything about this unequal trade. Others are Chinese products that compete directly with American products. Hence Trump’s wrath and his declaration of war… commercial.
By unilaterally imposing tariffs on solar panels and washing machines in January 2018, and on steel and aluminum in March, Trump is seeking to impose forced trade negotiations with Chinese leaders and other US trading partners.
Week after week, the list of Chinese products taxed or restricted in the United States increases. At the end of August, the American administration announced the 25% taxation of $50 billion worth of Chinese products and threatened to increase the amount of taxed products to $200 billion by September.
According to Trump Trade Representative Robert Lighthizer, the list “refers to products that contribute to China’s industrial objectives while minimizing the impact on the US economy. At the same time, the US Congress passed a law in August prohibiting the use by federal administrations of telecommunications equipment produced by the Chinese firms ZTE and Huawai. Mergers or takeovers of companies in the electronics sector have been banned on the grounds that they are favourable to China.
Not surprisingly, Chinese officials retaliated by imposing tariffs on US products. They targeted agricultural products, fruits, pork and especially soybeans, which American farmers sell massively to China.
By targeting American agricultural states, which are favourable electoral lands for Trump, Chinese leaders are exerting political pressure. Because they import less from the United States than they export to it, because their domestic market, which is too insolvent, cannot absorb the products taxed by the United States, their room for manouver is more limited than that of Trump.
Through blackmail and fait accompli, Trump is seeking to renegotiate the terms of trade with China, where his predecessors had gone through the long rounds of WTO negotiations.
But the goal is the same: to defend the interests of American capitalists. However, the latter are far from unanimous and close ranks behind Trump. During the first protectionist announcements in March, multiple companies intervened in Washington to request exemptions or to challenge this policy.
According to the American press, groups such as IBM and General Electric have opposed the limitation of joint ventures, and banks such as Goldman Sachs and Carlyle have expressed concern about investment restrictions in China. While it has delighted steelmakers in the United States, the taxation of steel and aluminium, whether from China or not, has led to an increase in prices (aluminium prices rose by 30% between March and June), to the great displeasure of American car manufacturers.”
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David Walter,
You wrote that you were in China in 2003. This was 15 years ago. A lot has changed in China since then. I don’t think China was imperialist in 2003. But I believe this is the case now. I agree that China is not a typical imperialist country because it was a workers state for a long time. So, yes China has a “mix” economy with a large state sector. Although the state’s share of the economy has been diminishing as the years go by. I disagree that one need access to special info centers to understand China economy and its exports. There is plenty of info in the so-called regular websites that display in details China’s export of capital to Africa, Latin America and Asia. I agree that because of China history, its imperialism is not the same as Western imperialism, because the export of private capital is mixed with state capital. This is so, because China was a workers state only few decades ago. But a significant state intervention in the economy is not that unusual in the imperialist countries– particularly in Europe. France, for example, has many state own factories. But this does not change the fact that France is an imperialist country. It is the same case in Britain. The state influx of capital to “mix” projects in the semi-colonies (a mix of state and private capital) helps China to be a better imperialist competitor. But it does not change the imperialist nature of China.
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Few Points on Why China is Imperialist
The continued position of some Trotskyists (Socialist Fight, for example) that China is merely a semi-colony is bordering on absurdity. How big the elephant in the room has to be before they see it? When one cannot see the elephant, new eye glasses do not help, because these comrades are in denial of what stands in front of their eyes.
I already wrote a long article explaining why China is imperialist (https://socialistfight.com/2018/10/17/why-china-is-an-imperialist-country/?fbclid=IwAR2AOoCxbiVAEsbU19OQKxemD6I166U1eFVc5bSlIxZNCA2z0dbEX6KV3ks ).
Here I will just touch few points about the obvious.
There is a big trade and Tariff war is going on between China and the US. Here is the latest about it:
“At the moment, the [Trump] administration plans to raise existing tariffs on $250 billion worth of Chinese goods, to 25 percent from 10 percent, on Jan. 1. Mr. Trump has also threatened to impose tariffs on an additional $267 billion of Chinese goods — a step many fear would plunge the two giants into a full-fledged economic Cold War.” (https://www.nytimes.com/2018/11/27/us/politics/trump-xi-trade-g-20.html?action=click&module=Top%20Stories&pgtype=Homepage )
The American capitalist press consider these Tariffs to be part of a Cold War for a good reason. The US is imposing tariffs of $250 billion on China and plan an additional $267 billion tariff on Chinese goods. These are astronomical figures. The US certainly did not impose such huge tariffs on any other competitor in the past. If China was just another Semi-Colony, it would be cheaper for the US just to invade China than engaging with China in a tariff war. But one does not have to be a great Marxist to understand that such tariff war that involve astronomical figures can NEVER take place between an imperialist country and a subordinated semi-colony. It can take place only between imperialist countries.
The Chinese are building a military base in Djibouti, Africa. If you think that this is the only place they plan to build their military might in Africa, you are sorely mistaken:
“China’s Africa policy looks to build strong defense networks. China’s bilateral relations with many African states already include sending military attaches and holding joint drills and live-fire military exercises. This forum — which ran for two full weeks — is a further sign of China’s growing military ties and efforts to deepen professional networks between Chinese officers and their African counterparts.” (Ibid)
“For China, the Trump administration’s “America First” platform may have opened up new opportunities to take on a deeper global role. The bigger picture here is that China under Xi is clearly moving ahead to take on that greater global leadership role — across many arenas. African state leaders are drawing closer ties with Beijing not only in the realm of trade and economic relations but increasingly in defense and military matters, too.” (Ibid)
I can already hear the comrades, who insist that China is only a semi-colony, say that US investment in Africa is bigger. But they are wrong. China investment in Africa is so big that is beginning to surpass US investment. But these comrades are right that on global scale, US investment is still quite bigger than China investment. Of course, formal logic is sufficient to explain that this does not mean that China is not imperialist. After all, China investment abroad is bigger than any European country investment.
All bourgeois American economists, with no exceptions, concede that China is the second biggest economy in the world. And why would they lie about it? They need to tell their capitalist masters the truth if the US is to fight against the economic rise of China effectively. One needs only formal logic to understand that being a second biggest economy in the world mean that China is imperialist.
Let’s clarify the rise of China as an imperialist country with the dialectic. China is a rising imperialist country. That does not mean that China overtook the US as the main imperialist country. It only means that it is beginning to challenge the hegemony of US imperialism.
Yet, if we use the dialectics instead of just formal logic, we can see the bigger picture better. For over 20 years China concentrated on building its economic might around the world. China used mainly the carrot for its huge investments in the semi-colonies, by collecting allies in the semi-colonies through huge economic investments. Now China is starting to use the stick by building serious military posts and by bringing the Chinese army to Africa, for example.
There is a fundamental law in dialectics that can easily explains the delay between China’s economic entry into the semi-colonies and its military deployment there. It is called the uneven and combined development. It explains the normal delay between the economic rise of a new imperialist power and its military might to protect its imperialist interests.
As we saw from the quotations above that 1. China is rapidly increasing investments in Africa (see my main article on China for its investments in the rest of the semi-colonies). 2. Recently, China has started to dramatically increase its military presence in Africa. At some point, those comrades who live in the past, will have to wake up from the delusion that China is only a semi-colony. But as long as they retain a flawed method, similar mistakes will remain.
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