The Spark

“The emancipation of the working class will only be achieved by the working class itself.” — Karl Marx

Bush celebrates China’s opening to U.S. capital

Mar 4, 2002

Bush has just returned from his first trip to China – where he went to celebrate China’s recent entry into the World Trade Organization.

Bush – this representative of some of the biggest corporations in the world – had a lot to celebrate. Under the WTO, China is to throw its doors open to much more foreign investment – especially from the U.S.

The big capitalist firms from the rich countries have long cast their eyes on the Chinese market to spread their empires and their profits, of course.

Coca Cola, which already had 28 bottling plants selling half a billion cases, plans to invest another 150 billion dollars in China to build six new factories over the next five years. The big oil company British Petroleum, BP, plans to spend five billion dollars over the next five years, having already invested three and a half billion in China. EDF, the French power giant, hopes to put in its third nuclear power center in China in the next six months and it hopes to transfer its Asian headquarters there. Motorola counts on investing six billion in manufacturing there and Ericsson five billion dollars. Alcatel plans to take control of Shanghai Bell for about 30 million dollars. In a situation of general recession, the big capitalist enterprises, which are betting on the Chinese market, expect to profit from an economy which, despite the current slow-down, grows at a rate of seven% per year.

Big capitalists on the look-out

The entrance of China into the WTO will mean a lowering of trade barriers, for example, custom tariffs which China places on imported automobiles will fall from 80% to 25%. At the same time, quotas, which China up until now imposed on foreign corporations, will be ended. With the exception of salt and tobacco, every product will be able to enter the Chinese market. Wal-Mart has already received authorization to open a superstore in Beijing.

In theory the Chinese market is more than a billion consumers; but in reality, there are many fewer who have the money to spend. Perhaps only ten% of the Chinese population make up this potential market, but that is 130 million people! These are the people who have prospered since the Chinese rulers decided to “reform” their economy and open it to capitalist penetration. As a Chinese economist worried about the WTO entry explained, “One joins the WTO to preserve the wallets of the rich.”

The Chinese regime invites foreign capitalists in

China’s entry into the WTO means that it has agreed to follow the rules governing trade in the capitalist world. These rules do not establish an equal exchange, as the defenders of the imperialist world would like us to believe; they are based only on the relationship of forces. In order to be admitted in, China has to carry out so-called “economic reforms,” that is, it must continue dismantling what remains of state-owned enterprises. China must continue economic policies that have already caused the standard of living of the vast majority of the population to decline – and specifically policies which can only create more unemployment. Whatever economic development occurs as the result of opening China to foreign capital will certainly benefit the big corporations and, with them, the local ruling classes which have opened the door. But for the majority, it will be a giant leap backwards.

The damage to workers and peasants

What threatens the Chinese population is an explosion of unemployment, helped by the dismantling of the state enterprises. In such a precarious situation, the Chinese population will find itself plunged into greater misery. Currently, unemployment in Chinese cities is estimated at 15%. According to Chinese statistics, 18% of state employees are laid off. But that’s not all. Thirty% of the 900 million people who work in agriculture are threatened with the loss of all resources. One hundred twenty million peasants, according to Chinese officials, will find themselves looking for work in the cities, so far as any work exists. The peasants will not be able to compete with the massive importation of agricultural products which entry into the WTO allows.

During the last 20 years, the policy of so-called “reforms” has already resulted in a decline in the population’s standard of living, with a deteriorating school system and public health. But the entry into the WTO removes a series of barriers which had blocked the entry of world capital into the Chinese market.

In making this choice, the Chinese rulers choose to align their functioning more in tune with the ruling classes of the world economy – creating slums at the feet of skyscrapers.