By John Pickard
One of the most important features of the world situation, perhaps the most important, is the relative decline of US economic power and influence and the corresponding growth of China. The Trump administration has begun to impose import tariffs on goods made in China and his administration is looking very carefully at the acquisition by Chinese firms of US companies, particularly those in the communications and technology sectors.
China is now seen by the US as a “strategic competitor”. US Defence Secretary, Jim Mattis, used the unveiling of a new national defence strategy recently to complain about the growth of Chinese economic power. “Great Power competition – not terrorism,” he said, “is now the primary focus of US national security.” He accused China of “using predatory economics to intimidate its neighbours while militarising features of the South China Sea.”
Texas Republican John Cornyn has expressed US alarm even more bluntly. “China has weaponised investment”, he said, “in an attempt to vacuum up our advanced technologies and simultaneously undermine our defence industrial base.”
The Chinese economy has indeed forged ahead in the last two decades. While the rest of the capitalist world has crawled along at rates of increase barely above zero, particularly since 2008, China has posted regular increases in GDP of between 6 and 9 per cent. Its GDP increased from $864bn in 1996, to $2.75tr in 2006 and again to $11.2tr in 2016, an increase over 20 years of nearly 1200 per cent. In the same period, the population only grew by 13 per cent. China exports nearly $2tr in goods every year and runs a trade surplus of around $500bn annually. Since 2009, China has been the world’s largest exporter of goods and since 2013, China has also become the largest trading nation in the world – a position previously held by the United States. From the USA economy to the smallest Pacific island state, there are 130 countries and regions where China is the largest trading partner.
Most modern industries
The might of the modern Chinese economy is reflected particularly in the most modern industries. China has been a major importer of semi-conductors to build computers and IT equipment but is quickly moving to create its own indigenous semi-conductor industries. It already exports 45 per cent of the world’s electric cars and this is expected to rise to 60 per cent by 2030. For the manufacture of car batteries, Chinese manufacturers have established control of between 50% and 77% of the market for four key components: cathode and anode materials, electrolyte solutions and separators. Big, long-term deals have been signed with Lithium mines in Australia and elsewhere, to secure the raw materials for this growing industry. China is now also the world’s greatest producer and installer of solar-power, adding a record-breaking amount of capacity in 2017.
Much to the chagrin of the Trump administration, China has a massive trade surplus with the US. Moreover, in order to secure its strategic position in microchip manufacture, the Chinese state has pushed companies into a buying spree of chip-makers in last five years that has been worth $116bn. Now, although a bit late in the day, the Trump administration is waking up to the fact that China is stealing a march on US industry and he has blocked the most recent attempts at take-overs. The United States economy has a continental character and taking into account its huge internal market, the overall economy of the USA is still larger than that of China. But this is changing and in 12-15 years, the Chinese economy will be the bigger.
Militarily, the USA is still far ahead of any of its rivals. The fire-power of the US navy, its air-force and its dozens of military bases around the world make it far stronger than any other power. The US military is still as strong as the next four military powers put together. But this mammoth preponderance in military muscle disguises what has been a dramatic decline in strategic, economic and political influence in many parts of the world.
The Congressional Research Service calculated that the wars in Afghanistan and Iraq cost U.S. taxpayers $1.6 trillion, although that does not include the medical and social costs or military replenishment, factors that would easily double the cost. Then there are the 7,000 US service deaths, not to mention the tens of thousands of injuries and the hundreds of thousands of deaths of Iraqi and Afghanistan nationals. And yet the net result in both cases has been a decline in US influence, in the case of Iraq, being supplanted by Iranian influence and in Afghanistan by a return of the Taliban. In Eastern Europe, for all its huffing and puffing, the US was not able to prevent Russian military intervention in eastern Ukraine and its annexation of Crimea. It has played a relatively insignificant role in Syria, compared to Russia, even supporting two sides – Turkey and Kurdish militias – against each other in this bloody complex of proxy-wars.
The Chinese Government has up to now not attempted to compete with the USA militarily and although it will do so eventually, it is in no hurry. Instead, it has been setting the pace in the economic sphere. Its so-called ‘Belt and Road Initiative’ is a means of enhancing its strategic influence around the world, beginning in East Asia, and extending to Central Asia, Africa and South America.
Increased influence world-wide
As the US presence in Africa has been fading, China’s star is on the rise. Of the five UN Security Council members, China has the most peace-keepers in Africa, notably in Mali and Sudan. In the latter case, Beijing has already invested heavily in oil-fields and is planning to build a railway line. According to Mo Ibrahim, a Sudanese billionaire, the USA “has lost its authority as the leader of the liberal world order and the backbone of the international order”. (Financial Times, February 8, 2018). Across Africa, Chinese influence is ubiquitous, in railway-building, port construction, and in infrastructure generally. Djibouti at the head of the Gulf of Aden, provides China with a naval base. It was notable that when Zimbabwe’s generals were contemplating quietly removing Mugabe from power, it was to Beijing they flew for consultation, not to Washington.
In South America, too, China is gaining significant influence. Rex Tillerson, US secretary of state complained that “China is getting a foothold in Latin America…the question is, at what price?”. China is already the region’s biggest trading partner and now it is a leading investor in the commodity sector and in modern technology industries.
Likewise, in the Middle East. For more than five years, China has quietly held talks with Pakistani tribal separatists to protect its $60bn-worth of investments in the China-Pakistan economic corridor. The Islamic Development Bank – the largest development vehicle in the Muslim world – is now to form a partnership with the China-led Asian Infrastructure Investment Bank to create a body with total capitalisation of $250bn. Even Britain is participating in the AIIB, but neither the US nor Japan. Among other things, the two bodies will co-finance more infrastructural investment in Africa
In one of his first acts in office as US President, Donald Trump pulled out of the Trans Pacific partnership which had originally aimed to exclude China. As a result of Trump’s stupidity, China’s influence has only grown even more. A new trading partnership has now been agreed with all the major players on the Pacific rim, but this time including China. Sixteen countries, including India, Japan, South Korea and the Philippines are now part of this new Comprehensive Economic Partnership which is effectively led by China.
The current US military hegemony in the Pacific and globally is set to be slowly whittled away by China in the coming years. China has one only overseas base in Djibouti, whereas the USA has dozens of overseas bases of various kinds. But the limitations of even America’s current power can be seen in relation to North Korea.
Kim Jong Un is developing nuclear weapons for one reason and one reason only – to consolidate his position in North Korea. He has seen how ‘regime change’ in Libya and Iraq led to their erstwhile dictators not only losing power but losing their lives and he is not prepared to contemplate even the mildest of concessions in the direction of reforms. The Chinese state might see Kim as something of an irritant, but neither is it prepared so see him fall or be overthrown. China is not prepared to see the re-unification of Korea on western terms, with the threat of American weaponry brought right up to the Chinese border. China, too, has studied recent history and has seen how the former states of the USSR, like the Baltic states, have not only fallen away from Russian influence, but have even joined NATO and allowed NATO forces right up to the Russian border.
US will have to accept nuclear North Korea
Given the intransigence of Kim and the tactic support of China, the US will be obliged to accept North Korea as a nuclear power. Despite all the US fire-power that is so frequently on show in military ‘exercises’ with South Korea, it is highly unlikely that the US would in the foreseeable future launch a pre-emptive strike against the North. All of Trump’s posturing about North Korea and his infantile comments about who has the ‘biggest nuclear button’ mean nothing in the hard world of concrete strategic power.
China is militarily far weaker than the USA. But that will not always be the case. As Xi Jinping consolidates his personal stranglehold over the Chinese state and Communist Party, he has also exerted his authority within the armed forces. Xi is looking to boost his country’s military might abroad, at least over a period of time. He has expressed his wish to overhaul China’s military, the Peoples’ Liberation Army (PLA) and this, in time, will pose a direct challenge to US supremacy in the Indo-Pacific. In recent years China has stepped up efforts to challenge US military presence in its own backyard, in the South China Sea. It has developed anti-ship missiles to deter American vessels and it has effectively built military bases on land reclaimed on the disputed Spratly Islands.
In the next few years, China aims to build six new state-of-the-art aircraft carriers and their deployment in the Pacific and around the world will be a visible token of China’s growing power. Xi still has a problem of providing bases for his planned naval growth, but there is no doubt that he will be able to use Chinese influence – and a lot of money – to get facilities like Djibouti in other parts of the world.
In the past a clash of great powers, with one in decline and the other in the ascendancy, would have led to war. The underlying causes the First and Second World Wars were the great clashes in the economic and strategic interests of the great imperialist powers. Between these wars, the USA military planners even conducted ‘war games’ that included mock invasions of Britain, but the ‘practice’ proved unnecessary, with Britain’s acceptance of its secondary position in relation to the USA. Nowadays, the existence of nuclear weapons makes an outbreak of world war far less likely, because in a nuclear war there are no winners. For the foreseeable future, therefore, there will be only an economic war of attrition, one in which China grows ever stronger and the USA weaker.
A very interesting article appeared in the Financial Times recently (February 26, 2018), written by Zhou Bo, an honorary fellow at the PLA Academy of Military Science in China. Given the credentials of its author, therefore, we can be sure that this article directly reflects the policy of Xi Jinping and the Chinese state. In effect, it sounds a warning to the makers of US trade policy. Zhou writes that the “USA risks making a strategic blunder over China.” An all-out trade war with China, he argues, “will only invite retaliation. And faced with a common threat, China might opt to become closer to Russia…Today the world faces two important questions: has the US gone into decline, and can a stronger China make the world a better place?…The world’s centre of gravity is undoubtedly moving east.” Referring to the new security strategy of the US government, Zhou asks if it is even a “serious policy document”. If it is, he adds, it has the “whiff of a new cold war” about it and “it may well prove to be a watershed in America’s irreversible decline.”
Largest working class in the world
In developing a perspective for world economic and political developments, one of the key factors is the inevitable entry onto the political stage of the Chinese working class. China has the biggest working class of any nation in the world and a high proportion is concentrated in the biggest workplaces and the biggest and newest cities on the planet. In a single generation, several hundred million former peasants have become urban workers. Shenzhen is typical of modern China, growing from a tiny population of some 30,000 people to over eight million in under twenty-five years.
The particular character of these new industries, in relatively new cities, means that the workforce is made up of mainly young people, about a third of them women, though because jobs are heavily gendered, in some cities as many as 70 percent of migrants are women. Only about a third of migrant workers actually work in manufacturing, with the rest working mainly in construction, transport, as street traders and in services.
Although little is reported in the western media about labour unrest in China, there is a permanent and on-going ferment among Chinese workers as they learn to organise and flex their muscles. China’s 770 million workers are effectively without an independent workplace union. The official union sanctioned by the state is the All-China Federation of Trade Unions, which boasts nearly 240 million members, but this organisation is more a means of controlling workers on behalf of the state, than representing them. Nevertheless, through independent action, workers are increasingly fighting for in their own interests, and when there are strikes, given the mass availability of smart phones, computers and social media, news of these actions are quickly circulated to other groups of workers.
There have been many instances of big strikes in recent years, many of them successful in winning wages rises and better conditions. One researcher, Eli Frieman, (writing in the Jacobin magazine in 2012) even argues that China “is undeniably the epi-centre of global labour unrest”. China, he argues, “has probably been the largest source of social unrest in recent years, and in some cases has led to mass confrontations”. (https://www.jacobinmag.com/2014/10/the-urbanization-of-the-chinese-working-class)
The urbanisation of the Chinese population is set to continue apace. The Government’s New Urbanisation Plan for 2014-20 has another 100 million moving to the cities, making China’s urban population 60 per cent of the total. Without adequate housing, social provision, health and education services, and crammed into massive and often unsafe factories, this will only exacerbate the likelihood of strikes and unrest.
The state bureaucracy does its best to keep the lid on discontent by jailing workers’ leaders, harassing and jailing their representatives and lawyers and using its grip on social media to restrict – as far as it is possible – the dissemination of news about strikes. But they cannot hold back the growing tide forever.
China the global epi-centre of labour unrest
According to the Hong Kong-based China Labour Bulletin (CLB), the Chinese working class is already the most strike-prone in the world, although to read the western news media, one wouldn’t think it possible. According to the CLB, between 2014 and 2015, Chinese workers were involved in more than 4000 public protests, of which nearly a thousand were strikes. More than a hundred of these involved more than a thousand workers. The HLB actually publishes a strike map on its website (http://maps.clb.org.hk/strikes/en) and a glance at this shows how widespread labour unrest really is. Strikes have spread from factory workers to teachers, transport workers, street cleaners, and retail and white-collar workers, and from “traditional hotbeds” like the Pearl River Delta north of Hong Kong to interior provinces. As factories have moved west seeking cheaper labour, they write, “worker resistance has followed.”
For the last six-month period – from September 1 2017 to March 1 this year – the CLB website lists over 900 industrial disputes of one kind or another, in construction, mining, transport, manufacturing, services, education and retail, among others. Most of them are strikes, but they include sit-ins, blockades of workplaces and demonstrations. In the overwhelming number of cases they report, the disputes were over wage arrears or non-payment of wages, showing the completely corrupt character of Chinese bosses. Two of the protests in the past six months involved workplaces of between 1000 and 10,000 workers and nearly fifty were for employers with 100-1000 employees.
On each occasion when there has been a big movement of workers – whether it be general strikes in Greece or France, or the mass movement of millions against the old regime in Egypt – the news of that event has spread quickly around the world and had an effect on workers elsewhere. It was no accident that during the ‘occupy’ protests on Wall Street that there was a banner that read, “walk like and Egyptian”.
It will come to a point eventually that the scattered strikes and protests of Chinese workers will blend into a vast flood, a tidal wave of political protest. When that happens, it will not only be a historic watershed for Chinese politics, it will have a titanic effect on the consciousness of workers across the globe. In the struggle for socialism, it will be a ‘game-changer’. Moreover, with the progressive decline of US capitalism and the relentless squeeze in living standards in that country, the American labour movement too will be transformed out of all recognition. In the struggle of humanity towards a better future, towards a socialist future, both the Chinese and the American working class will play central roles. That may not be obvious at the moment, but it will become clear in the coming years.
March 7, 2018.
