China and the Global Economy


Ever since the collapse of Stalinism and the disintegration of the Soviet Union, the capitalist world has been in a euphoric state. But like everything in this world, appearances are often deceiving.

It is beginning to dawn on American and world imperialism that rather than expanding its world markets, the Stalinist bureaucracies’ attempt to reintroduce market-driven economic systems have, on balance, contributed- directly and indirectly-to the intrinsic tendency of the capitalist world market to shrink.

First, the collapse of the Soviet Union and the Cold War unleashed pent-up sharpened competition among the world’s capitalists for a shrinking world market.

Second, the transformation from a planned economy to a market-driven economic system has been running into increasing resistance from the remaining institutions of the degenerating workers states, as well as the resistance of the industrial and agricultural working class.

While the recent sharp crisis in Russia has receded from the headlines, its economy continues to stagnate and threatens to go into free fall. And while China’s trend toward capitalist restoration has been proceeding apace and (unlike Russia) its economy has been undergoing expansion, its development is highly distorted and subject to sudden contraction — such as is happening in Southeast Asia and Japan.

Industrial superstructure is strangled

Moreover, like the countries of the former Soviet bloc, China’s development is chiefly in commerce and commercial construction, development of up-to-date systems of communication, the extraction and export of raw materials and energy, the expansion of light industrial production, and the construction of supermarkets, boutiques, and luxury shopping malls for the old and new elite and the newly created middle classes.

But in exchange for China’s dubious opening to capitalist penetration, its basic industrial infrastructure — such as steel, electrical, auto, truck, tractor, and metal fabrication plants — is being strangled and starved for capital needed to merely maintain its obsolete industrial foundation.

Modernization of these industries is out of the question. That would only further glut the world marketplace, and therefore world capitalism won’t allow its capital to be used for that purpose.

Without such an industrial foundation, China and the other degenerating workers’ states can only become semi-colonial societies economically subordinate to the imperialist world.

Meanwhile, scores of millions of China’s workers formerly employed in massive state-owned industries and many more millions of rural farm workers and peasants are being dumped from factories into the streets, and from the countryside into the cities, to vainly search for jobs that are not there and which are not about to be created.

But in all these degenerating workers states, the state-owned industrial infrastructure, although steadily being eroded away, remains as a stubborn obstacle to capitalist development of the productive forces in these countries — a development, which at this moment in the evolution of world capialist imperialism, is impossible!

Clinton and U.S. corporations make demands

President Clinton went to China at the end of June to lay down his conditions for China’s entry into the World Trade Organization. The Clinton administration has been demanding that China more speedily remove any and all barriers to American capitalist investment in the Chinese economy.

Current American imperialist demands boil down to two: (1) A more rapid dismantling of its state-owned basic industry. (2) China must end its still largely intact central state control over domestic trade relations as well as over American and world imperialist investment inside China.

While the Stalinist government is prepared to gradually meet these demands, Clinton desperately wants it to go a whole lot faster — and, to be sure, with first place in line reserved for corporate America in the projected imperialist takeover of the lion’s share of the Chinese economy.

That’s what all the hypocritical baloney in the capitalist media monopoly about America’s demands for “an end to human rights violations in China” is all about. American imperialism, is only too well known to be a violator of human rights in Vietnam and Cuba, to name only two countries, for any serious person to take seriously.

American capitalism is also well known as the chief defender of the world’s worst and bloodiest violators of human rights — from Israel, to Africa, to Asia, to Latin America, and finally to the homeland of the American corporate beast as well.

To top off the precarious position of the Chinese ruling group, they are observing the course of the collapsing economies of Asia with great trepidation. They see falling currency values and cheaper exports from Japan and the Pacific rim countries destabilizing the entire world marketplace and undercutting their own exports.

(China’s threat to devalue its own currency forced the United States and Japan to support the yen, at least until after Clinton’s trip to China.)

Moreover, China’s government views with grave forebodings how imperialism through its international trade and lending institutions imposes “austerity” on the world’s dependent countries. It saw how the International Monetary Fund recklessly forced Indonesia to impose draconian austerity measures on the great majority of the country’s workers, peasants, and lower middle classes. It saw how this led to a degree of “social unrest” that forced the abdication of the murderously repressive Suharto dictatorship.

And finally, China’s ruling group knows that the “social unrest” of Indonesia’s masses, having gained a measure of freedom, has merely paused to appraise the new situation. Another, more massive uprising is sure to come when it becomes clear that the “new” government cannot and will not end their suffering.

Thus, much as it would like to come to terms, the Chinese Stalinist capitalist-restorationist regime is deathly afraid of casting too many more millions out from their jobs too soon. They are fully aware that what the capitalist media prefers to call “social unrest” is simmering and is building up pressure under the lid of their own brutally repressive regime.

The New York Times: China is not ready

The June 21 edition of The New York Times lays out the thinking of America’s ruling class:

“China is not ready to make the economic changes necessary to join the World Trade Organization. …

though membership in the global trade body has been a political goal of China’s leaders.

Some ministries and industries in what remains a largely state-run, bureaucratic economy have worried about the rapid exposure of ailing domestic industries to foreign competition, and an end to the monopoly positions of state-run commodity traders as well as banks, insurance companies and other service sectors.”

An earlier report in that newspaper’s June 17 edition covering the impact of Japan’s falling currency — which makes Japan’s exports cheaper, thus hurting Chinese exports — reports that “slowing growth [of China’s economy], means mushrooming unemployment, and with it, the possibility of social unrest.”

This voice of American capitalism complains that a “key difference between China and most other Asian countries is that its currency is not fully convertible and is therefore not vulnerable to speculative attacks.” Thus, whether or not China’s currency is devalued does not depend on speculators, but on a decision by its government.

This represents a remaining conquest of China’s anti-capitalist revolution. Therefore, China has leverage on its side as well, and Clinton must make concessions too.

Consequently, it was reported that Clinton must try to convince China during his visit to “resist temptations to devalue its currency.”

The June 24 Times quotes C. Fred Bergsten, president of the Institute for International Economics, as warning: “China’s got to hold the fort, if not, if the strong center [holding back global monetary chaos] buckles, all hell breaks loose.”

China’s remaining control over its currency, as well as its economy as a whole — and ultimately its political control of all its internal affairs — will either give way to the demands of imperialism, or to the revolutionary demands of Chinese workers and farmers.

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