China is not an imperialist state

4

30/10/2018 by socialistfight

By Gerry Downing

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Introduction

Our comrade Dov Winter recently produced two articles, Why China is an imperialist Country, published in the Socialist Fight website on 17 October and, On the Military Aspects of Chinese Imperialism, published on 21 October. Meanwhile, the International Bolshevik Tendency announced its split on 19 October 2018 with A Note on the World Situation, Recent Departures & Line Change on Russia. Here we learned that the majority, led by Tom Riley, had split from the group and the remaining minority, led by Bill Logan, were left in charge and could now announce that whilst China remained a deformed workers’ state (DWS) Russia had been an imperialist power for some ten years.

Socialist Fight has outlined its position in a number of articles, many as joint statements with our international comrades in the Liaison Committee for the Fourth International. The Hegemonic Domination of US Imperialism Why neither Russia nor China are imperialist powers and, [1] Russia and China are NOT Imperialist states. [2]

On Russia we will extend our own past efforts outlined above by a critical endorsement of The Myth of “Russian Imperialism”: in defence of Lenin’s analyses, by Renfrey Clarke and Roger Annis,[3] We also substantially agree with the theoretical work done by Roger Annis alone on this question in a number of articles, especially the 2014 debate between him and Barry Shephard, of the USFI, in A Socialist In Canada, Writings by Roger Annis. [4]

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Roger Annis crosses swords with 81-year-old Barry Shephard, stalwart of the old US SWP and historian of its decline and fall. He also takes on many others polemically below and acquits himself very well in these exchanges. We republished because it came in the wake of the Maidan Coup in Ukraine in February 2014 when whole swaths of the left were finding excuses why they had to support this fascist-led and US-directed and funded coup against the elected government, which was balancing between Russia and the west.

This wide range of difference necessitates discussion internationally because these positions hide more programmatic differences on the United Front, the Anti Imperialist United Front and what are proxy imperialist forces and do we oppose them when the attempt coups and wage war on behalf of imperialism itself.

We will defend the line that both Russia and China are advanced semi-colonial countries and not imperialist.

Why neither Russia nor China are imperialist powers

Here is an edited and expanded version of our article in December 2017, [5] which was an updated version of a 2013 article. It deals with the political, economic and military domination to demonstrate that neither Russia nor China can become imperialist until the hegemonic grip US finance capital has over all aspects of the world economy is broken.

1. The US Dollar is by far the world’s leading reserve and trading currency for oil and almost every other commodity in the world (although Russia and China are challenging that now). It gives the US an enormous economic and political advantage over its rivals. Wars against Iraq, Libya, and Ukraine today are at least partially launched to protect this privileged position which enables it to rob every other nation. In the aftermath of the 2008 financial crisis, the dollar’s share in the world’s foreign-exchange trades rose slightly from 85% in 2010 to 87% in 2013. The dollar’s role as the undisputed reserve currency of the world allows the United States to impose unilateral sanctions against actions performed between other countries.

Image result for John Bolton imagesJohn Bolton, President Trump’s national security advisor, doubles down on Trump’s all-caps tweet threat sent to the Iranian regime.

When Trump unilaterally withdrew from Iran’s nuclear agreement he not only imposed sanctions on Iran but threatened the rest of the world, including the EU, with sanctions if they didn’t comply with the US sanctions. John Bolton, Trump’s national security adviser, predicted that “the Europeans will see that it’s in their interests to come along with us” rather than continue with the 2015 deal, under which major European corporations have signed billions of dollars of contracts in Iran. The weapon that the US have against all others is they can bar foreign firms that do business with Iran from accessing the entire US banking and financial system. And that dominates the planet. Even China promised not to increase its oil imports from Iran, to appease Trump.

On 1 May 2015 U.S. District Judge Lorna Schofield in Manhattan formally ordered the French bank BNP Paribas to forfeit $8.83 billion and pay a $140 million fine as part of a sentence that also called for BNP Paribas to enhance its compliance procedures and policies over claims that it violated sanctions against Sudan, Cuba, and Iran. These violations of U.S. sanctions were not laws in France or the other countries involved in the transactions. In 2014 Beijing and Moscow signed a 150-billion-yuan central bank liquidity swap line agreement to get around American sanctions.

2. Today London continues to top the list of the world’s leading financial centres, with New York close behind in second-place, according to the latest edition of The Global Financial Centres Index. Sometimes referred to as Ny-Lon, these two cities have dominated global finance for the past couple of centuries. However, political uncertainty from Brexit and the US election has had a “significant impact” on the state of affairs, as London and second place New York fell 13 and 14 points respectively compared to the last Global Financial Centres Index by Z/Yen. Those were the steepest declines, bar Calgary, amongst the world’s top 50 financial centres. The top five financial centres remained unchanged with London followed by New York, Singapore, Hong Kong and Tokyo. But Singapore is fast closing in on the two cities ahead, rising eight points to be 20 points behind New York, having been 42 points behind in the last report. London was still comfortably ahead of other European cities – Luxembourg was 18th, Frankfurt 23rd and Paris 29th in the rankings.

3. Top 2,000 multi-nationals: We have abstracted these details from Forbes 2,000 top companies which gives a good indication of the balance of global economic forces: Of the top 2,000 firms in the world in 2017 U.S. companies account for the most members of the list, 565, followed by China and Hong Kong, which is home to 263 Global 2000 companies. The world’s biggest companies have gotten bigger, more profitable and more valuable in the past year. 58 countries were represented, down from last year’s 62. The 2017 list features public companies from 58 countries that together account for $35.3 trillion in revenue, $2.5 trillion in profit, $169.1 trillion of assets, and have a combined market value of $48.8 trillion. Of the top ten companies in the world, China has 4, including numbers 1 and 3, the US has 5 and the tenth is Japanese.

Note here that in 2004 when the list first appeared the US had almost 1,000 in the top 2,000. The decline since then is largely due to US transnationals locating their HQs abroad for tax avoidance purposes. In 2013 Ireland’s 17 companies apparently placed it in the same league as South Africa, Mexico and Saudi Arabia, a ridiculous comparison. In reality up to half of those ‘Irish’ companies are not really Irish at all except in name. Take its top company, Accenture plc, which is “engaged in providing management consulting, technology and outsourcing services”. It is 318th on the list with a market capitalisation of $53.34 Billion. A Fortune Global 500 company, it moved its HQ from Bermuda and has been incorporated in Dublin, Ireland, since 1 September 2009. In 2017, the company reported net revenues of $34.9 billion, with more than 425,000 employees serving clients in more than 200 cities in 120 countries.

In 2015, the company had about 130,000 employees in India, about 48,000 in the US, and about 50,000 in the Philippines and only about 1,000 in Ireland. It is a US transnational, of course. And not only does the US have all these companies located abroad but the US dominate many others by its stock holdings. Some statistics on this would reveal the true nature of US imperialism’s domination of almost every aspect of the trade, commerce, and lives of most of the population the planet. And where it does not fully dominate it demonise and makes plans to bomb and invade.

Finance capital is interlinked in a global web of dominance spreading out from Wall Street and the City of London. If we take, for example, the role of Swiss banking is not a secret of the strong links it has with the City of London. Equally important are the so-called ‘tax havens’ such as Luxembourg in Europe for example. Also finance capital plays a major role in the Spanish banking sector – there is the curious phenomenon of its relations to the Basque and Catalan banks, which are not really Spanish and behind much of the separatist agitation. Financial capital of British origin plays a big role in maintaining Gibraltar as a ‘tax haven’.

4. Top Stock Exchanges: Here are the statistic for the top 11 stock exchanges ($US billions), NYSE Euronext, United States, $21,377, NASDAQ OMX Group, United States, $9,585, Hong Kong Stock Exchange, $4,135, Shenzhen Stock Exchange, $3,688. The two US stock exchanges are almost as big as the next 9 combined; with its allies, it is absolutely dominant.

5. The ranking of countries by Gross Domestic Product (2016): (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.

Dov Winter does not look at GDP per capita at all.

6. Biggest military Expenditure in 2016 and percentage of global total: The top 15 for military expenditure, ($US billions): United States $611.0 ($700 in 2017), 36%, China $215.0, 13%, Russia $69.2, 4.1%. The US expenditure is almost equal to the combined total of all the other 14 on the list, all NATO or other close US allies apart from Russia and China.

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7. Fleets, aircraft carriers, warships and submarines. The US has five battleship fleets, the Second Fleet in the Atlantic, the Third Fleet in the Eastern Pacific, the Fifth Fleet in the Arabian Gulf and Indian Ocean, the Sixth Fleet in the Mediterranean and the Seventh Fleet in the Western Pacific. No other nation gets a look in here. This is a list of the aircraft carriers in service in 2013: United States 10, Italy 2, United Kingdom, 1, France 1, Russia 1, Spain 1, India 1, Brazil 1, China 1 and Thailand 1. Some other nations have added or planned one or two more carriers since then.

Ten of those American aircraft carriers are supercarriers, huge nuclear-powered war machines that can run for twenty years nonstop without needing to refuel. Each of them can hold up to 90 fighter planes. In fact, just one of these supercarriers holds more firepower than 70% of the world’s militaries. The only other nation besides the United States that operates nuclear-powered aircraft carriers is France, but it only has one. Russia and China have one each, 60% of the size and primitive compared to the supercarriers, two generations behind in technology. Both have another nuclear carrier in construction, which will obviously be technologically far more advanced.

In addition to its 10 aircraft carriers, the U.S. Navy has nine amphibious assault ships, 22 cruisers, 62 destroyers, 17 frigates and 72 submarines. In addition to ships, the U.S. Navy has 3,700 aircraft, making it the second largest air force in the world – second to the US Air Force, that is. The USA has 14,612 military aircraft in total, Russia 4,827, China 3,000, France 223 and Britain 192.

Dov Winter quoted the New York Times article which pointed out that the Chinese navy had more ships than the US navy. But what kind of ships? Academics Ian Livingston and Michael E. O’Hanlon, wrote in a letter to dispute the conclusions being drawn from this fact, concluding that the advantage to the US was 10:1, without adding in the US allies:

“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.” [6]

8. Despite recently closing hundreds of bases in Iraq and Afghanistan, the United States still maintains nearly 800 military bases in more than 70 countries and territories abroad. It has 38 “named bases” having active-duty, national guard, reserve, or civilian personnel as of September 30, 2014. Its largest, in terms of personnel, was Ramstein AB, in Germany, with almost 9,200 personnel. In addition, other NATO countries, such as France and the UK, have a further 200 such military locations within the network of global military control. The biggest “host” countries are those that once lost a major war in which the US was involved. Germany, Italy, Japan, and Korea are the four biggest ‘hosts’. At the end of the Balkan wars the US seized Camp Bondsteel in Kosovo, a massive, 995-acre base under the pretence that it is securing the peace of Kosovo on behalf of NATO. European imperialists are outraged at this but can do nothing about it; Kosovo is a US military colony, led by Tachi, an actual Mafia gangster, in the heart of Europe which threatens not only Russia but Europe itself.

Roger Annis writes:

“For all the trend to describe Russia as ‘imperialist’, little substantive analysis has been written to try and prove the claim. All the more welcome, then, is a new essay by U.S. Marxist economist Sam Williams. He has recently published a 30-page essay on his website blog, ‘A Critique of Crisis Theory’. The headline of the essay asks, ‘Is Russia imperialist?’ The answer Williams provides is a resounding ‘no’. Here are some excerpts:

“Williams goes on to explain that a defining feature of imperialism in today’s world is its military alliances. The four, big, imperialist military alliances are NATO (North Atlantic Treaty Organization), ANZUS (Australia-New Zealand-United States Security Treaty–1951), SEATO (South East Asia Treaty Organization–1954), NORAD (North American Aerospace Defense Command). To this can be added the ‘Five Eyes’ spying alliance of the U.S., UK, Canada, Australia and New Zealand. Where are the comparable alliances of Russia and China? They do not exist.”  [7]

France and the UK mainly have bases in the remains of their colonial empires. The UK is strong in the South Atlantic and around the Mediterranean; France is strong in the South Pacific and in Africa. The US is military deployed in more than 150 countries around the world, with over 300,000 of its active-duty personnel serving outside the United States and its territories. US personnel are engaged in active combat in Afghanistan, Iraq, and Syria openly and covertly elsewhere as was revealed when four US troops were killed on the Niger-Mali border in October 2016. The UK has 17 full overseas military bases and France 11.

Russia currently has 7 military facilities in former Soviet republics, Tartus in Syria and the use of the Cam Ranh Base in Vietnam. The Crimean base is now part of Russia itself. India and Turkey have 6 each and China has a massive base in Djibouti, in the Horn of Africa, next to a US base overlooking the Red Sea, guarding the access to the Suez Canal, vital for China’s oil imports from the Middle East. France, Italy, and Japan also have bases in Djibouti. This is China’s only US/British/French type base abroad although it has facilities in Sri Lanka and Pakistan, but these are not owned and controlled bases. These are all defensive bases against threatening imperialist attacks, not bases to secure and maintain economic and military domination of the planet like imperialist bases.

There is one more set of data that need to be examined and that is Foreign Direct Investment (FDI) of both Russia and China and comparison with imperialist countries. Dov Winter made great play of these figures, but we think not only did he not examine the whole, or the most of picture, as we have done above but he did not examine the source and targets of these movements sufficiently.  We will deal with this in a later article.

We will also do another article on why China is not a deformed Workers state, noting along the way that Dov’s article at least showed it definitively was not that.

Notes

[1] The Hegemonic Domination of US Imperialism Why neither Russia nor China are imperialist powers, by Gerry Downing 29-12-2017 https://tinyurl.com/y9mkw4s8

[2] Russia and China are NOT Imperialist states, Statement by the Liaison Committee for the Fourth International on the US/EU/Nato attack on Ukraine, 19-06-14 https://tinyurl.com/je4ugum

[3] The Myth of “Russian Imperialism”: in defence of Lenin’s analyses, By Renfrey Clarke and Roger Annis, February 29, 2016, http://links.org.au/node/4629.

[4] A Socialist In Canada, Writings by Roger Annis; https://socialistfight.com/2018/10/27/discussion-on-21st-century-imperialism-are-russia-and-china-imperialist/

[5] The Hegemonic Domination of US Imperialism,  29-12-17, https://socialistfight.com/2017/12/30/the-hegemonic-domination-of-us-imperialism/

[6] ORDER FROM CHAOS, Why China isn’t ahead of the US Navy, even with more ships, Ian Livingston and Michael E. O’Hanlon, 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/

[7] https://socialistfight.com/2018/10/27/discussion-on-21st-century-imperialism-are-russia-and-china-imperialist/http://rogerannis.com/the-russia-as-imperialist-thesis-is-wrong-and-a-barrier-to-solidarity-with-the-ukrainian-and-russian-people/

4 thoughts on “China is not an imperialist state

  1. davidwalters66 says:

    I generally agree with this article. But I think it in large part misses the point. When Lenin wrote “Imperialism: The Highest Stage of Capitalism” he didn’t focus on the military (comparative or otherwise) nor the size of companies. He was examining the *formation* of Finance capital, the merger of banking and manufacturing capital (I actually think Lenin was way ahead of his time since the process he described was only partially underway in both German and the United States but that is an academic debate). That is, a new political economy. While I agree with some that China and Russia (hugely different economies now) are essentially State Capitalist societies neither has shown the merger of independent banking capital with manufacturing. Thus even China’s “export” of capital, which is huge, is not based on profit and loss, conversion of raw materials into surplus value in the Metropolis and sold back to the colonies or neo-colonies for further wealth extraction. At least it doesn’t seem to follow any Imperialist model I’ve ever studied.

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  2. Engin Dincer says:

    China not a capitalist state let alone imperialist power ,China is a DWS full stop .Russia is a capitalist state but not imperialist power .Russia and China are the subject to be divided by the imperialist powers !

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  3. davidwalters66 says:

    Engin, respectfully disagree that China is a workers state. You ought to go there and see for yourself. The defense of China being a DWS is based on “defending the gains of the Chinese revolution”. By and large it would be very hard to specify what those gains are. Most, it seems, point to the large % of state owned enterprises (which, as it happens, is less than it was under Nasser in Egypt or Assad in Syria). But SOE are not “nationalized” industry as the result of the Revolution, but joint stock companies that issue stock, return dividends to stock holders, are run by (often) US educated MBAs with Boards of Directors and not even a hint that these enterprises are “for the people”. The thousands of millionaires and billionaires make money and *extract surplus value* from hundreds of millions of Chinese. The State is organized to defend these property relations ergo, the State is state capitalist.

    Chinese bourgeois economic relations are subordinated to the national 5 year plans with intensive planning. Large and medium capitalist enterprises in order to make profits have to support and contribute to these plans. The building of the Chinese nation is paramount. Sun Yat-sen would be pleased.

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  4. stephenrdiamond says:

    By and large it would be very hard to specify what those gains are. Most, it seems, point to the large % of state owned enterprises (which, as it happens, is less than it was under Nasser in Egypt or Assad in Syria). But SOE are not “nationalized” industry as the result of the Revolution, but joint stock companies

    The question you’re asking amounts to what’s the difference between a bourgeois nationalist regime where property is widely statized and a workers state. The answer, as you probably know, is that in countries like Nasser’s Egypt, nationalization was a means of developing the national bourgeoisie, and has in fact been abandoned wherever it has served that function. It’s not a static question but whether the state dynamically subordinates private property to state property or vice versa.

    The joint stock companies are dominated by majority state interests. Laws prohibit foreign capitalists ever assuming control of a an enterprise. These are, therefore, state-controlled and predominantly state owned enterprises.

    How do you tell whether China is state capitalist in the sense that Nasser’s Egypt was or is historically committed to collectivized property? I don’t think visiting the country tells much unless you know what to look for. Ideally, one studies the organization of the Chinese economy, which Marxist economist Michael Roberts (who writes for the Weekly Worker, which usually sports a capitalist analysis of Russia) has done, deciding it is not capitalist or state capitalist. But are there less analytic ways of making the distinction? My thought is that a country like Nasser’s Egypt can be seen to differ from China in the fact that the Chinese bourgeoisie is atomized: prohibited from organized independently. A conjunctural state capitalist regime allows, in fact requires, an independently politicized bourgeoisie

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