Nov 1, 2020
The following article is the translation of one appearing in Lutte de Classe (Class Struggle), issue #211, November 2020, published by Lutte Ouvrière (Workers Struggle), the revolutionary workers group active in France.
Military maneuvers in the South China Sea in early July and late August, as well as those near Taiwan in mid-September; closing of the Chinese consulate in Houston after espionage accusations; closing of the U.S. consulate in Chengdu in retaliation in mid-July; sparring over Hong Kong; U.S. travel ban on leaders of the Chinese Communist Party from the Xinjiang Uyghur Autonomous Region; extra restrictions imposed on Huawei and its subsidiaries on August 17.... There is a long list of events since this summer that led the media and political commentators to call the relationship between China and the United States, “a new Cold War,” and to raise the question of whether Trump was reversing the policy of his predecessors.
In reality, relations between the United States and China have been complicated for a long time. Since China opened its economy to Western capital at the end of the 1980s, the United States has had a policy which aimed at preventing China from doing whatever it wanted, even while not directly opposing its development. The U.S. tried to control and channel this development, since it makes substantial profit there and because it wanted to keep its hands on the region. China is not an underdeveloped country like the others, a country which the U.S. can pillage at will like it does so often elsewhere. On the contrary, the Chinese state is a powerful state due to its size and its population, a state that has inherited a certain cohesion and centralization from the nationalist revolution of 1949. The imperialist countries had to comply with certain demands of the Chinese state in order to gain access to the low-cost workforce and infrastructure which it offered them at the end of the 1980s, and in order to profit from the market which would develop in tandem with the introduction of Western capital. The best example of this is the joint venture, or an association which any Western company that wants to establish itself in China must form with a local firm, at the cost of ceding it a share of its profits and opening up its expertise.
Chinese leaders, protesting against Trump’s attitude, offered this view of the situation: “China’s rapid development over the decades, which benefitted from interactions and cooperation with countries around the world, has in turn provided a constant impetus to the economies of the U.S. and other countries, as well as important opportunities for sustained growth. The volume of trade between China and the U.S. has increased more than 200 times since the early days of diplomatic ties, and two-way investment has taken off from scratch to reach nearly 240 billion U.S. dollars. Made-in-China goods, inexpensive and high quality, have brought tangible benefits to American consumers. China’s vast market and sound business environment offer a source of tremendous profits for U.S. firms.”1
While U.S. companies have profited from the Chinese workforce and market since the end of the 1980s, so have the Chinese bourgeoisie and the upper layers of the bureaucracy, all those millionaires and billionaires who are members of the Central Committee of the Chinese Communist Party (CCP). Through the Chinese state, they have been able to get their hands on the country’s companies, labor power, and markets. As for the population, Prime Minister Li Keqiang recognized, at a press conference in late May, that 600 million Chinese citizens have an annual income of $150 or less, which is not even enough to rent a room in a medium Chinese city.2 Those who have grown rich from the exploitation of the Chinese working class are doing everything they can to allow this to continue.
The idyllic vision of an equal cooperation between the United States and China, presented by the leaders of the CCP, is nothing but fiction and propaganda. Imperialism is not content with investing capital while submitting to Chinese terms. From the beginning, in order to keep control of the situation, the United States has worked to channel Chinese development, making it conform to U.S. needs. During the 1990s, United States policy consisted of integrating China into international institutions and U.S. norms. This was the goal of the years of negotiations that led China to join the World Trade Organization (WTO) in 2001. George W. Bush codified U.S. policy toward China as “congagement,” a strategy combining containment and engagement. Obama reinforced this double aim under the name of a “strategic pivot to Asia,” notably through the Trans-Pacific Partnership (TPP). This “pivot” continued to recognize China as a relatively powerful state, all the while reinforcing the United States’ weight in the region through trade and military partnerships with China’s neighbors, including Japan, Vietnam, India, etc. Once again, it was not a question of preventing China’s development, from which U.S. companies were the first to profit, but to set boundaries for it.
Imperialism, in its quest for profits and new markets, has had to come to terms with the emergence in China of an economy which has become a serious competitor in multiple arenas. And with the crisis and general slowdown of the economy since 2008 this competition has hardened. In the high-tech sector, Huawei represents one of these serious competitors. But it is also a client. The U.S. microchip company Qualcomm, which is trying to get an exemption from the U.S. government in order to continue to supply Huawei, has estimated its potential losses on the Chinese market at eight billion dollars if the sanctions against Huawei remain in effect. Apple, Intel, and Nvidia also risk substantial losses from the sanctions on Huawei and Chinese apps like WeChat. The U.S. restrictions of last August essentially forbid any foreign company from selling U.S. products or services to Huawei and its subsidiaries, even indirectly. This might prevent Huawei from manufacturing its own Kirin processors, as it had previously done through TSMC, a Taiwanese firm which is also trying to negotiate exemptions from the U.S. government. In any case, this shows the dependence of Chinese companies in this sector, their technological lag, but it also demonstrates the fact that both countries’ capitalists are like bandits tied together with the same chain.
Was the U.S., under Trump, so intent on keeping Chinese companies from closing this gap, that it was ready to damage the interests of some U.S. corporations? Was Trump trying to impose a new division of markets? Was it both at the same time?
It’s not possible to understand this summer’s escalation of sanctions and counter-sanctions, without considering the role of the approaching U.S. presidential election on November 3. Against the backdrop of the medical, social, and economic crisis, Trump was using China in his electoral fight. This is certainly the sense given by U.S. Secretary of State Mike Pompeo when he closed the Chinese consulate in Houston, using Cold War language to call for a triumph over the new tyranny incarnated by the Chinese Communist Party.
A certain number of measures and sanctions will without a doubt not survive the U.S. presidential election, and this would have been true if Trump had won. But what, if anything, beyond that has changed?
In effect, the Chinese economy and the global economy are profoundly intertwined. Despite a few relocations to Vietnam and India (most factories of the South Korean company Samsung, some factories of the Taiwanese Foxconn, and those of Chinese footwear manufacturers like Pou Chen and Stella), where workers’ wages are even lower, China remains the workshop of the world, a well-integrated, productive, and profit-generating workshop employing tens of millions of workers, which no other country is currently able to offer. In addition, China is a vast market which Western companies cannot ignore. Furthermore, the United States has regularly been able to force the Chinese government to concede when it exerts pressure. In 2018, the Chinese government announced that it was lifting five years of restrictions on foreign auto manufacturers which had required them to enter into a joint venture, a relaxation which the United States had long called for and which also extended to naval and aerospace manufacturing. In 2020, China also opened its financial markets to foreign companies. Finally, more recently, the trade war, far from freezing up commerce, allowed the United States to reap several tens of billions of dollars more. Accordingly, Trump congratulated himself for the so-called “Phase One” trade deal signed between the United States and China in January, before the COVID-19 crisis, which stipulated that China would buy 200 billion dollars more worth of mostly agricultural U.S. goods over the next two years. Certainly, in the midst of the crisis six months later, China had fulfilled only half of this requirement, and the review of the agreement scheduled for mid-August was postponed. While this was the pretext for more inflammatory declarations from Trump and his advisors looking toward the presidential election, it didn’t change the trajectory of U.S.-China relations.
Even the relations between imperialist countries are fundamentally marked by a constant power struggle. Rivalries, trade wars, and protectionist measures do not exclude alliances and agreements. Against the backdrop of crisis and worsening of international competition, U.S. imperialism may have hardened its policy of containment and demanded more from China. It knows that China, has little choice but to comply. Even if China does this somewhat reluctantly, it is conscious of the real balance of forces and of its long-term interests. It still remains an underdeveloped country. Its integration into the global economy—half of its industry produces for export in one form or another—hardly allows it much room to maneuver.
Another area where tensions have increased in recent years is in the South China Sea, but this has happened for longer than Trump was in office.
In Southeast Asia, the appearance of China as the key regional power has changed the balance of forces. The South China Sea is a major strategic crossroads for the powers of the region. At its westernmost edge, one-third of global trade passes through the Strait of Malacca, or half of worldwide maritime tonnage, five times more than through the Suez Canal. It is the shortest route between Europe, the Middle East, and East Asia. Two-thirds of the oil consumed in the region and 90% of Chinese export trade passes through this route.
The South China Sea is bordered by nine countries: China, Taiwan, Vietnam, Thailand, Malaysia, Singapore, Indonesia, the Philippines, and the tiny state of Brunei. This sea is scattered with a few islands, but above all with a multitude of simple reefs, shelves, and partially submerged sandbars. Two archipelagos stand out: the Paracel Islands to the north and the Spratley Islands to the south. The largest island in the Paracels has an area of about one square mile, while the largest one in the Spratleys is only about one-fifth as large as that.
Today, these tiny specks of land are a great political and military prize, because possessing them gives a country claim over the surrounding waters. Before that, they had never been permanently inhabited. It was the intervention of imperialism at the end of the 19th century that made them more than just pebbles in the sea. France, which was then the colonial power in Indochina, claimed sovereignty over them at the end of the 1930s. It even planted a lighthouse, a meteorological station, and radio station there in order to mark its territory. After the defeat of French imperialism and its withdrawal from Indochina in 1956, South Vietnam occupied the western part of the islands, while China, which had become the People’s Republic of China under Mao, occupied the eastern portion. The Philippines and Taiwan disputed over claims to the Spratley Islands.
In the 1970s, during the oil crisis and the search for deposits, all of the surrounding countries started to formulate claims to these bits of land. China got a foothold in the Paracels by kicking out the Vietnamese troops and occupying still-unclaimed reefs and sandbars in the Spratleys. In 1992, a Chinese law included the Paracels and the Spratleys within its territorial waters. These disputed archipelagos have since become part of the “national interest,” just like Taiwan and Tibet. The situation intensified a little more when, in 2009, Vietnam and the Philippines wanted to extend their economic zones into maritime zones occupied by China. In response, China began draining some of the islands it controlled in order to expand their land mass enough so it could build air and naval bases on them.
The United States has reinforced its presence in the region in recent years. It supported its local allies, using them as a means to challenge Chinese ambitions. There, like elsewhere, the United States plays its role as the world’s policeman and the dominant imperialist power.
Although China has 11,000 miles of coastline, it opens out everywhere onto seas which are at least partially closed off by its neighbors and rivals: Vietnam, Malaysia, and the Philippines to the south; Taiwan farther north; Japan and South Korea even farther north. Most of these governments have long been allies of the United States. Even Vietnam has drawn closer to the U.S., recently welcoming one of its aircraft carriers and receiving several patrol planes in exchange. And although the Philippines has sought closer relations with China since 2016, it also maintains its alliance with the United States and Japan. U.S. strategy has long consisted of using these allies to control every possible route China could use to join the rest of the world. Effectively, the U.S. state can interrupt Chinese commerce any time it wants. It has not yet done it, but it could. Through its allies, it prevents the Chinese navy from accessing the Pacific and Indian Oceans. It is incidentally one of China’s demands to be able to navigate its ships and submarines beyond Japan and the Philippines.
Since 2015, U.S. pressure in the South China Sea has taken the form of naval patrols which claim to act in the name of international law by verifying that the shipping lane is free and open to everyone. But each time, they are clearly just demonstrations of force. These operations, called Freedom of Navigation Operations, or FONOPs, have been carried out in contested zones around the world, with extensive media coverage in order to underscore U.S. striking power. In the South China Sea, such operations consist of maneuvering naval vessels within the 12 nautical miles that surround the artificial islands in China’s possession, treating them as international waters rather than as Chinese territory. The Chinese respond to these provocations in turn by sending navy and air forces into the zone, or by firing missiles dubbed “aircraft-carrier killers.” Until now, the maneuvers have been meticulously calibrated on both sides in order to prevent anything getting out of hand. But in 2018, a Chinese destroyer came within 40 meters of a U.S. destroyer in the course of one of these operations. And since then, their frequency has increased to almost one per month, raising the danger of sparks flaring.
Tensions also increased this summer over the issue of Taiwan, this island of 23 million people which has been separated from China since 1949, when Chiang Kai-shek found refuge there after his defeat. Last July 1, China deployed a whole fleet of air and naval forces near Taiwan, announcing the integration of some contested reefs into two new administrative provinces. The United States replied by sending one of its own fleets there. Then, in August, it sent a U.S. diplomatic delegation to Taiwan, the first since it broke off formal relations with the island in 1979 in order to draw closer to China. In the course of this visit, Taiwan confirmed a massive purchase of F-16 fighter jets. The United States increased the pressure by sending an under-secretary of state to Taiwan on Thursday, September 17, essentially recognizing Taiwan as a sovereign state, something which it had refrained from doing for decades. China responded with major military maneuvers, which Beijing referred to as a “drill” in preparation for the invasion of the island.
Finally, there must be added to the list the disputed region of Ladakh, on the border between India and China. After fighting that resulted in several deaths in mid-June, India stationed two Rafale fighter jets there and received the support of the European Union.
The presence of an Australian vessel among the U.S. fleet deployed in July was not a coincidence. In effect, U.S. power has been doubled in the region in recent years through reinforcement by the military potential of its richest allies in the region, particularly Australia and Japan. Australia has armed itself with submarines, built by the French contractor Naval Group, with the goal of obtaining a military capacity which is technologically superior to that of the rapidly expanding Chinese navy. Japan has been buying dozens of ultramodern U.S. fighter jets and battleships. Japanese military leaders argue that this is necessary to defend the Senkaku Islands, which are claimed by China. The Japanese navy also cruises the South China Sea, with or without the United States, and intends to project its range as far as the Indian Ocean. It does all this even though, since 1945, Japan theoretically only has the right to an army of “self-defense.”
The peasant uprising that brought Mao to power, and the state apparatus that came out of it, have provided China with the means of avoiding the direct political grip of imperialism. On the basis of the exploitation of the working class and the peasantry, this state was able to develop basic industry: steel, mining, and energy. This earlier primitive accumulation carried out by the Chinese state is the basis upon which it opened its economy to Western capital in the 1980s. For over 30 years now, the same state apparatus has become the vector through which the capital of the imperialist powers has returned. This capital can invest once again, exploiting the Chinese working class and supplying the wealthiest with goods. The Chinese bourgeoisie, returning from Hong Kong and Taiwan but also issuing from the bureaucracy that has carved up state enterprises, has unrestrainedly enriched itself as an intermediary between the local workforce, the Chinese market, and the global market. All of this could only multiply China’s internal contradictions: between workers, new capitalists and capitalist bureaucrats; between the tiny wealthy minority and the hundreds of millions of workers and poor peasants; between the central bureaucrats and those of the provinces; between the cities and the countryside; and within cities between migrant workers and the others. The increased importance of local administrations and provincial governments can be measured by their own levels of debt, as well as that of the state enterprises under their control. The nationalism which Xi Jinping has exacerbated since he came to power is an attempt to contain all of these contradictions within the general framework of the Chinese state.
The contradictions have worsened with the country’s increasing economic difficulties. The crisis of 2008, which slowed the development of the global capitalist economy, including U.S. and European markets, impacted Chinese industry, which depends on these markets. The policy of trying to compensate for this slowdown by developing domestic consumption has not really worked, even if it the Chinese regime had tried to do anything beyond the realm of propaganda. A domestic market does not develop in the space of a few years. Such a market is the product of a whole history, of reciprocal dependence between the different layers of society and of a certain level of income for the wide masses. This is in contradiction with what China is today, mainly as a supplier of a low-wage workforce, with public spending intended to support the corporations, not the poor peasants and workers. All of these difficulties have pushed the regime toward the “New Silk Roads,” exporting capital and driving countries poorer than China into debt in order to supply labor and revenue to Chinese companies and banks. But this has also failed to prevent Chinese growth from lagging. The policy called the “New Silk Roads”—the name is a whole program in itself—was coupled with a lot of propaganda about the restoration of China’s historic greatness and about China’s return as a first-rate power in the global arena after a century of being bullied. The government defends this investment abroad as a sign of the strength of Chinese diplomacy.
This demagogy referring to China’s past grandeur is accompanied by major military spending. The Chinese military budget is the second-largest in the world. It may be far behind that of the United States, but it creates fruitful markets for local capitalists and many possibilities for political and military maneuvers, both abroad and domestically. Since the early 2000s, the government has been developing the navy at a forced march. Between 2014 and 2019, just the increase in Chinese tonnage was equal to the total tonnage of the British and Japanese navies combined. Despite all this, China remains militarily dwarfed by the United States and its allies. It possesses only one foreign naval base, in Djibouti, and its technological lag remains significant. Its power rests on the force of numbers. It is in an essentially defensive position facing imperialism.
Chinese nationalism, which is mostly verbal with respect to the imperialist powers, takes the form of a policy of oppressing national minorities, whether Uyghur, Tibetan, or Mongol, peoples whom it classifies as backwards. The Chinese state tolerates no dissent, neither in the region inhabited by the national minorities nor in Hong Kong. And the regime is closing ranks everywhere by increasing its campaigns of fidelity to the original ideas of Maoism and by denouncing corruption.
The CCP claims to defend the path of “socialism with Chinese characteristics.” Nationalist intellectuals in Africa and Europe see this as an alternative to imperialism, a force to counter its domination. But treating the relations between the United States and China as a “new Cold War” contributes to this illusion. Chinese-style capitalism, one of the most savage forms of capitalism, relying largely on the state, will not be a counterbalance against imperialism. The Chinese bourgeoisie and the heads of the Chinese state need imperialism. They are even a cog within it, with its own particularities, but a cog nevertheless, integrated within the global chains of production. Effectively, the express this dependency when they write: “History and current reality show that China and the U.S. stand to gain from cooperation and lose from confrontation.”3 The partnership which they extol is first of all between they themselves, the wealthy class, and the Western capitalists. The only progressive force in China is the Chinese proletariat, hundreds of millions of workers gathered together in factories and giant cities. For their part, they have nothing to lose but their chains.
1 “Respect history, look to the future and firmly safeguard and stabilize China-US relations,” Yang Jiechi, member of the Political Bureau of the Communist Party of China (CPC) Central Committee and director of the Office of the Foreign Affairs Commission of the CPC Central Committee, August 7, 2020. https://www.chinadaily.com.cn/a/202008/07/WS5f2d3932a31083481725f02f.html
2 “Premier Li Keqiang Meets the Press: Full Transcript of Questions and Answers,” China Daily, May 29, 2020. http://english.www.gov.cn/premier/news/202005/29/content_WS5ed058d2c6d0b3f0e9498f21.html
3 Yang Jiechi, cf. note 1.