“We are here at the starting point of the Long March to remember the time when the Red Army began its journey. We are now embarking on a New Long March, and we must start all over again.” – Xi Jinping, May 2019.
Few people on the left or the socialist movement in the imperial core have been paying attention to the historic breakup of the US-China relationship. Since Deng Xiaoping, the US-China relationship has been contingent on what I call “The Bargain” between US capital and the rising Chinese socialist state.
The United States ruling class now understands that it got the losing end of The Bargain. With China’s growing vertical production and technological capacity, its desire to develop neighboring countries and upend the post-WWII order led by Washington through the BRI, that deal is unwinding quickly. Market reforms of the Chinese system did not do what they did in the Soviet Union – on the contrary, the leadership of the Communist Party of China has strengthened as the state adeptly captured the technological, organizational and productive capacities of US capital.
As a result, a steady process of political and economic “decoupling” has been underway and accelerated by the Trump regime. We are now in the era of hybrid warfare between the US and China.
This article will outline the historical progression of this new era.
1. US Imperialism’s Strategy in Eurasia – The Brzezinski Plan
2. “The Bargain” Between US Capital and China
3. The Single Largest Threat to US Empire – The Belt and Road Initiative
4. The Breakdown of the Bargain – Hybrid Warfare on China
Part 1. US Imperialism’s Strategy in Eurasia – The Brzezinski Plan
Zbigniew Brzezinski died on May 26th, 2017 almost exactly three years ago. Very few on the left understand this person or his significance as a US empire planner. Brzezinski was National Security Advisor under Carter, a role he took in 1977 after serving as his chief foreign policy adviser. As a Council on Foreign Relations member, a Bilderberg participant and chief founder of the Trilateral Commission, Brzezinski was as deeply embedded in the imperial core’s planning bodies as anyone else in history.
Brzezinski is best known for his support of the Mujahideen against the Soviet Union, “Operation Cyclone”. This operation – which had a cascading effect throughout the region and established firm links between the CIA and Bin Laden – reveals the extent to which Brzezinski saw it necessary to stop the USSR and intervene in Central/South Asia. But why is this region so important to US empire?
In his 1997 book “The Grand Chessboard” Brzezinski bluntly laid out the importance of the Eurasian landmass and America’s control over it. From the book description:
“The task facing the United States, he argues, is to become the sole political arbiter in Eurasian lands and to prevent the emergence of any rival power threatening our material and diplomatic interests. The Eurasian landmass, home to the greatest part of the globe’s population, natural resources, and economic activity is the “grand chessboard” on which America’s supremacy will be ratified and challenged in the years to come.”
What does this strategy look like in practice? Preventing the rise of a rival power in Eurasia means employing all manner of covert and overt subversion and attack. As we have seen in US interventions in Iran, repeat attacks on Iraq, invasion of Afghanistan and a devastating contra war in Syria, the US is keen to pick off weak links in the chain of countries stretching through Central and South Asia.
It is this region from Kazakhstan in the North, to Palestine in the West, and through India and Western China that forms a triangle shaped wedge splitting Russia’s Southern and China’s Western geopolitical expansion. This vast area is where US empire has for decades waged war against countries that don’t fall in line, while solidifying comprador alliances in places like Israel, India, Saudi Arabia and the Gulf monarchies. While a direct conflict with Russia or China is unlikely given the nuclear implications, controlling this polygon politically, militarily and economically will greatly diminish either state’s options.
Figure: US empire’s “triangle of control”, a geopolitical target area it seeks to control to prevent Russia’s southern and China’s western geopolitical advances as well as the emergence of any local power (think: Iran)
Further, the US has sought to dominate the world’s oceans as a means of controlling Eurasia. This follows from American naval theorist Alfred Mahan’s assertion that control of the sea would yield control of the world’s resources and ability to dominate any adversary. This theory rested on the notion that a naval power needed to be able to destroy the enemy’s fleet and blockade enemy ports. His thinking influenced Theodore Roosevelt and successive application of his theory resulted in the US becoming the world’s leading naval power. The US currently has 11 aircraft carriers in service, far more than any other country (China has two) and its network of bases and allies in the Pacific give it launching pads throughout Eurasia.
From China’s present position, it faces nearly complete encirclement. With a US occupation force stationed in Korea, a compliant regime in Japan hosting three air bases, Guam and other client state bases, the US has a dominating military position in the Pacific. This closes China’s Eastern flank. To the West, it faces India which has close US ties, an occupation force in Afghanistan and all the client states and interventions throughout that Triangle of Control referenced above. This closes their Western flank.
What has changed in recent years and particularly under the leadership of Xi Jinping, is China’s desire to break through this encirclement by US empire. Much like how the early Communist Party of China escaped encirclement by the KMT via the Long March, China is today faced with the prospect of a “New Long March” against US imperialism. Xi Jinping himself used that phrase in May of 2019 to describe China’s way forward in the Trump trade war. Reference to the Long March is very deliberate, and Xi Jinping through his speech commemorating the 80th anniversary of the Long March eloquently laid out the importance of the Long March to the modern Chinese nation. If he is willing to compare the present situation to such a heroic act of sacrifice and determination, we should take that seriously. But first we have to understand how we got here.
2. “The Bargain” Between US Capital and China
At the time of his official role in the US empire, Brzezinski’s main concern over “rival powers” in Eurasia was obviously the Soviet Union. China in 1979 was still a very poor country, had just exited the Cultural Revolution which had a crippling effect on its development, and was just beginning its market reforms.
1971-1979 was a pivotal period for US-China relations (Brzezinski became NSA in 1977). 1979 was the year of the “Second Communique” which established normalized diplomatic relations between the PRC and the US while ending the latter’s recognition of Taiwan as the seat of China. It followed the Shanghai Communique of 1972 in which the US and China agreed (on paper) to respect each other’s sovereignty and territorial integrity. In 1971, Nixon lifted the 21-year trade embargo on China that was in place since China backed the DPRK in the Korean War. Nixon famously visited China in 1972, the first US president do so since the revolution. These moves were controversial among different factions of the US ruling class at the time, but US empire leadership (primarily through Kissinger) saw the opportunity to drive a wedge between China and the USSR and took it. Any effort that the US could take to weaken the links between the USSR, China, the DPRK and North Vietnam would be taken. Winston Lord’s (National Security Council member at the time) account of this strategy is telling:
“Kissinger’s rationale, and Nixon’s, included the following. First, an opening to China would give us more flexibility on the world scene generally. We wouldn’t just be dealing with Moscow. We could deal with Eastern Europe, of course, and we could deal with China, because the former Communist Bloc was no longer a bloc. Kissinger wanted more flexibility, generally. Secondly, by opening relations with China we would catch Russia’s attention and get more leverage on them through playing this obvious, China card.
The idea would be to improve relations with Moscow, hoping to stir a little bit of its paranoia by dealing with China, never getting so engaged with China that we would turn Russia into a hostile enemy but enough to get the attention of the Russians. This effort, in fact, worked dramatically after Kissinger’s secret trip to China.
Thirdly, Kissinger and Nixon wanted to get help in resolving the Vietnam War. By dealing with Russia and with China we hoped to put pressure on Hanoi to negotiate seriously. At a maximum, we tried to get Russia and China to slow down the provision of aid to North Vietnam somewhat. More realistically and at a minimum, we sought to persuade Russia and China to encourage Hanoi to make a deal with the United States and give Hanoi a sense of isolation because their two, big patrons were dealing with us. Indeed, by their willingness to engage in summit meetings with us, with Nixon going to China in February, 1972, and to Moscow in May, 1972, the Russians and Chinese were beginning to place a higher priority on their bilateral relations with us than on their dealings with their friends in Hanoi…”1
It is important to understand that China’s willingness to normalize ties with the US at this time was, in part, an outcome of the Sino-Soviet split, in which China viewed the USSR as a revisionist power and threat to China on its borders. While relations with the USSR began to warm through the 80’s, each side viewed the other with suspicion. Both sides certainly continued to feel the effects of the 1969 border conflict which nearly ended in war between nuclear powers (Interesting side note: this conflict also extended to China’s western border in Xinjiang). From the US perspective, the Sino-Soviet split was a gift that severed the two most powerful communist countries from united anti-imperialist action. Upon exiting the Cultural Revolution, China was left extremely isolated and weak both politically and economically. Struggle with the US while dealing with a potentially hostile USSR was not an attractive course of action. At the same time, China’s economy was struggling relative to other capitalist Asian powers. Radical changes in strategy were needed, hence the “bargain.”
While China did see gains in GPD per capita since 1960, by the mid-1970’s signs of a crisis were emerging. Output became volatile and stagnant and by 1978 GDP per capita had fallen to its 1973 level. And this was a fall in GDP that was already far below its nearby capitalist competitors.
Figure 2: China’s GDP per capita during the lead-up to economic reform. Notice the instability between 74-78.
This is not a mere footnote. Central to understanding China’s geostrategic moves of the last 50 years is understanding the importance placed on development of the “productive forces.” Allow me here to take a brief detour into the theory (if the concept of productive forces is familiar to you, feel free to skip ahead).
A key concept in Marx and Engels’ theory of historical materialism and political economy, the productive forces are essentially how a society combines human labor with the means of labor (tools, machinery, infrastructure etc.). The level of productive forces, which can be roughly viewed as the productivity of a society, will increase up to a point where they come into conflict with that society’s mode of production. In the pre-capitalist feudal mode of production, the productive forces were at a low level given the scattered and individualistic nature of production mostly for consumption’s sake- commodity production as such only existed in embryo. In capitalism, productive forces are unleashed by concentrating human labor and means of labor into social enterprises (the modern capitalist company is in fact often hundreds or thousands of individuals cooperating, who under a different mode of production might never associate) and applying scientific methods of production. Contradiction emerges in the fact that the very social and cooperative nature of the capitalist enterprise is controlled by private capitalists who extract surplus-value from the workers and take their work product to sell in the market. The product of collective labor is seized by private capitalists for their own profit. Additional contradiction emerges as the anarchy of competition between capitalists incentives the further advancement of each capitalist’s productive forces, which in turn creates economic crises of various forms. Economic crises push capitalism towards monopoly – fewer capitalists command larger and larger enterprises, cartels and whole industries. As these crises become deeper and more frequent, they expose the unnecessary role of the capitalists themselves and the truly social and cooperative nature of the productive forces. The capitalists have at this advanced stage of monopoly capitalism rendered themselves superfluous and indeed a barrier to the advancement of the productive forces. The situation is now ripe for the state, commanded by the workers, to seize the means of production and become the masters of production.
Engels espoused this theory of the development of productive forces and the role of capitalism in his landmark work Socialism: Utopian and Scientific:
The fact that the socialized organization of production within the factory has developed so far that it has become incompatible with the anarchy of production in society, which exists side by side with and dominates it, is brought home to the capitalist themselves by the violent concentration of capital that occurs during crises, through the ruin of many large, and a still greater number of small, capitalists. The whole mechanism of the capitalist mode of production breaks down under the pressure of the productive forces, its own creations. It is no longer able to turn all this mass of means of production into capital. They lie fallow, and for that very reason the industrial reserve army must also lie fallow. Means of production, means of subsistence, available laborers, all the elements of production and of general wealth, are present in abundance.
But “abundance becomes the source of distress and want” (Fourier), because it is the very thing that prevents the transformation of the means of production and subsistence into capital. For in capitalistic society, the means of production can only function when they have undergone a preliminary transformation into capital, into the means of exploiting human labor-power. The necessity of this transformation into capital of the means of production and subsistence stands like a ghost between these and the workers. It alone prevents the coming together of the material and personal levers of production; it alone forbids the means of production to function, the workers to work and live.
On the one hand, therefore, the capitalistic mode of production stands convicted of its own incapacity to further direct these productive forces. On the other, these productive forces themselves, with increasing energy, press forward to the removal of the existing contradiction, to the abolition of their quality as capital, to the practical recognition of their character as social production forces.2
Marx, in the Poverty of Philosophy, was explicit about the central role of productive forces in the structure of a given mode of production:
Social relations are closely bound up with productive forces. In acquiring new productive forces men change their mode of production; and in changing their mode of production, in changing the way of earning their living, they change all their social relations. The hand-mill gives you society with the feudal lord; the steam-mill, society with the industrial capitalist.3
However, as history has proven, this process is not so straightforward. Capitalism has proven adept at fending off potential revolutions and the era of imperialism has provided further ways for capital to stave off crises and keep parts of the world in a backwards state with a low level of productive forces. This is the situation in which China found itself at the founding of the People’s Republic of China in 1949. As Mao made it abundantly clear in his seminal work On New Democracy, the revolution in China was firstly aimed at ending China’s long history as a semi-feudal and semi-colonial nation with the defeat of imperialism as the core objective. In fact, Mao laid out the principles of New Democracy as being the alliance of all revolutionary classes, including the national bourgeoisie, against feudal and colonial oppression. Mao further explained the unity of “the people” in his 1949 On The People’s Democratic Dictatorship:
Who are the people? At the present stage in China, they are the working class, the peasantry, the urban petty bourgeoisie and the national bourgeoisie. These classes, led by the working class and the Communist Party, unite to form their own state and elect their own government; they enforce their dictatorship over the running dogs of imperialism — the landlord class and bureaucrat-bourgeoisie, as well as the representatives of those classes, the Kuomintang reactionaries and their accomplices…4
This is reflected in the flag of the PRC itself, with its four smaller stars representing the four revolutionary classes and the big star representing the leadership of the Communist Party of China. All four stars point towards the CPC, signifying its leading role. This is the nature of China’s People’s Democratic Dictatorship. It may come as a surprise to many western communists that Mao, like Deng Xiaoping, fully understood how backwards China’s economy was at the founding of the PRC and the necessity of uniting with the national bourgeoisie while retaining the leadership of the CPC:
The national bourgeoisie at the present stage is of great importance. Imperialism, a most ferocious enemy, is still standing alongside us. China’s modern industry still forms a very small proportion of the national economy. No reliable statistics are available, but it is estimated, on the basis of certain data, that before the War of Resistance Against Japan the value of output of modern industry constituted only about 10 per cent of the total value of output of the national economy. To counter imperialist oppression and to raise her backward economy to a higher level, China must utilize all the factors of urban and rural capitalism that are beneficial and not harmful to the national economy and the people’s livelihood; and we must unite with the national bourgeoisie in common struggle. Our present policy is to regulate capitalism, not to destroy it. But the national bourgeoisie cannot be the leader of the revolution, nor should it have the chief role in state power. The reason it cannot be the leader of the revolution and should not have the chief role in state power is that the social and economic position of the national bourgeoisie determines its weakness; it lacks foresight and sufficient courage and many of its members are afraid of the masses.
Without getting too bogged down in the details of Deng Xiaoping Theory (a subject vast enough that it deserves its own article), it is important to understand that CPC leadership has consistently viewed the development of productive forces as the central objective of socialist construction (albeit with delayed implementation thanks to the Cultural Revolution). Deng Xiaoping simply expanded and made concrete this idea by implementing market-based reforms that unleashed the latent productive forces of the country, while retaining the leading role of the state and state enterprises led by the CPC. For Deng and CPC leadership, the goal is to allow the development of the productive forces through a limited, highly regulated capitalism while retaining state ownership of the “commanding heights” of the economy. Perhaps surprisingly, this idea does not originate with Deng Xiaoping but with Mao Zedong in his 1940 On New Democracy:
If such a republic is to be established in China, it must be new-democratic not only in its politics but also in its economy. It will own the big banks and the big industrial and commercial enterprises.
Enterprises, such as banks, railways and airlines, whether Chinese-owned or foreign-owned, which are either monopolistic in character or too big for private management, shall be operated and administered by the state, so that private capital cannot dominate the livelihood of the people: this is the main principle of the regulation of capital(…) In the new-democratic republic under the leadership of the proletariat, the state enterprises will be of a socialist character and will constitute the leading force in the whole national economy, but the republic will neither confiscate capitalist private property in general nor forbid the development of such capitalist production as does not “dominate the livelihood of the people”, for China’s economy is still very backward.
Socialism is not defined by the mode of distribution (a market-based or planned system), but in the leading role of the state led by workers and placing social needs above and beyond the law of value. So long as the latter is retained, the advantages of a semi-open economy and the development of productive forces via private capitalism can be leveraged to strengthen the whole material base of the country. It is important to remember that not only is China attempting to build the necessary material base for socialism, but to make it strong enough to withstanding the competing pressures of existing capitalist rivals. In his 1963 speech Be Realistic and Look to the Future5, Deng made this clear:
What is our objective to be accomplished? We want our country to be among the advanced countries in the world through our forty years of hard work. That is, we want it to become one of the few major industrial powers in the world, but not to surpass all the other countries. We are not sure whether we shall be able to surpass all the other countries, because our economic foundation is different from that of other countries and they are also advancing. Of course, it may not necessarily take forty years for China to become one of the major powers in the world.
The method by which China, a vast country with a huge population starting from an extremely low economic base, takes to this end is not going to apply to other countries with differing levels of production. Instead, a scientific approach based on “实事求是 (Seeking truth from facts)” is required- this is the essence of Socialism with Chinese Characteristics. It is Marxism as applied to the conditions of China. We can see the essence of this pragmatic approach throughout the history the Chinese revolution, especially in the treatment of the national bourgeoisie. Deng highlighted the historical importance of resisting both Left and Right opportunism during the revolution in this manner in his 1965 Build a Mature and Combat-Effective Party6:
The attitude to be adopted towards the national bourgeoisie is another highly important question in the stage of national democratic revolution. Failure to handle it properly could lead to the error of either “Left” or Right opportunism. As a vacillating class, the national bourgeoisie has a thousand and one links with imperialism and feudalism. On this question our Party made both “Left” and Right opportunistic mistakes. The former lingered longer than the latter and inflicted greater damage on us. In the early stage of the Great Revolution our Party handled the question appropriately by working together with the bourgeois revolutionaries represented by Dr. Sun Yat-sen and initiating Kuomintang-Communist co-operation to advance the revolution, and we also co-operated with Chiang Kai-shek. It would have been a mistake if, in the course of this co-operation, we had only maintained relations with the bourgeoisie. When we entered into alliance with the bourgeoisie to lead the democratic revolution, one question of supreme importance was to develop the progressive forces, the forces of workers and peasants, under this alliance. In the later stage of the Great Revolution our Party was misled by Chen Duxiu’s Right opportunistic error, when we were afraid of engaging in a political struggle with the bourgeoisie, afraid of irritating it, and not daring to arouse the masses into action. Consequently, the Great Revolution ended in defeat as soon as Chiang Kai-shek betrayed it. Then the “Left” opportunistic mistakes occurred in our Party three times which were characterized by the practice of overthrowing everything. At that time we were chiefly attacking the bourgeoisie, its intellectuals and the parties of the petty bourgeoisie, which resulted in our self-isolation. Many people in the cities, including the intellectuals and youth, were alienated from us for a long time. It was hard to launch workers’ movements; strikes were held aimlessly and, moreover, the demands were so outrageous that the movements ended in failure. Our strength in the cities kept dwindling until at last it was nearly gone. Correct policies were adopted, however, in the rural areas which were under the leadership of Comrade Mao Zedong. In those days the Red Army protected industry and commerce. Some industrial and commercial capitalists were practising feudalistic exploitation, which was all eradicated. We did not do anything with regard to their shops or factories and we did not confiscate anything from them; instead we provided protection for their property. Benefiting a great deal from policies such as these, we were able to break the economic blockade imposed by the Kuomintang against our base areas. Later, when the leaders of the “Left” opportunist line came to the Central Soviet Area, they opposed Comrade Mao Zedong’s correct policies and attacked national industry and commerce. As a result, under Chiang Kai-shek’s blockade, even salt was unavailable in the base areas. Even when Chen Duxiu’s Right opportunism was prevalent, “Left” mistakes were made in urban work. For example, the government in Wuhan at that time was led by left-wingers of the Kuomintang who were co-operating with our Party in opposition to Chiang Kai-shek. There we organized strikes and set economic demands which were more than the bourgeoisie could bear. Consequently, the market slumped, to the detriment of the economic base of the revolutionary regime. In dealing with the national bourgeoisie, our Party has made both “Left” and Right mistakes. It is essential to adopt correct policies. Without doubt, the national bourgeoisie tends to vacillate, but we should, nevertheless, make use of its positive side, uniting with it as well as struggling against it. We cannot lay down rigid rules as to the circumstances under which mainly to unite with it and circumstances under which mainly to struggle against it. This is a question that requires flexibility and solution based on concrete analysis of the national bourgeoisie in one’s own country.
In giving these two examples, I have been trying to illustrate that in order to formulate correct programmes and policies, it is necessary to obtain a thorough understanding of the actual conditions in one’s own country. This is no easy job, especially when it comes to trying to understand the peasants.
I quote this passage at length to underscore the pragmatic brilliance of the CPC in recognizing the necessity of protecting capitalist industry in order to break the economic blockade of the KMT. One can imagine how this experience weighs heavily on the strategic thinking of the CPC today given its encirclement by US imperialism. Now we can understand more fully the methods of the CPC and its willingness to embark on creating what we now call the Socialist Market Economy. A cornerstone of Deng Xiaoping Theory is the concept of the Primary Stage of Socialism. This theory states that China has entered the “primary stage” of socialism lasting roughly from 1956 until the middle 21st century in which China must overcome the backwards level of productive forces and achieve socialist modernization. This humble and realistic assessment of China’s position in the world and its weakness compared to advanced capitalist countries is an essential point needed to understand the CPC’s view of socialist development against the capitalist world. The course through which China has proceeded along this socialist modernization is complex, but important to understand to appreciate the current situation.
In 1977, China finally implemented under Deng Xiaoping the “Four Modernizations”, a theory of development first espoused by Zhou Enlai in the 1960s. This theory seeks to place primary national importance on the development of industry, agriculture, defense and science & technology. The beginning of the reform period saw major changes to agriculture, moving from a commune-based system to one of “household responsibility” or “contract” system. This change was brought about to deal with agricultural shortages, and was originally conceived of by commune members in Anhui Province. Essentially, the highly centralized agricultural system was struggling to deal with shortages and inefficiencies. The move towards more localized, unit-based agricultural production yielded significant gains in agricultural output and may have averted a serious food crisis.
The success of this reform opened the way to further market-based reform of the Chinese economy, which rolled out progressively and through many trial phases. What followed is what I am calling “The Bargain” between the PRC and foreign capital. Throughout the 1980’s and 1990’s and extending into the 2000s, the PRC opened what are known as Special Economic Zones and allowed for investment by foreign capital in the economy. This had obvious appeal to foreign capital – a large and relatively cheap labor force that could be used to produce export-oriented commodities at lower prices than competitors. This was made possible by advancements in containerization, transport and modern production methods, allowing commodities to shipped globally in record time.
However, this was not simply a concession to foreign capital. It is extremely important to remember that key demands and restrictions were placed on companies investing in China. Among these included:
- Requiring foreign investors to form Joint Ventures with Chinese firms (essentially, a partnership between a foreign firm and a Chinese one, either state or private), thus facilitating the transfer of technology and methods to Chinese entities.
- Outright restrictions on key sectors deemed “commanding heights” of the economy – including defense, infrastructure, finance, construction, telecommunication, etc. These are the industries typically dominated by State Owned Enterprises (SOEs).
- All companies are still required to adhere to PRC laws and regulations. Although some foreign firms received preferential treatment, none operated without state oversight.
This situation afforded many advantages to the construction of the socialist market economy. First, it granted China access to the most current and advanced technology and production methods of the time. This is something that would be mostly impossible under a closed economy. Second, it provided an immediate source of non-state employment, significantly easing the burden on SASAC (the central body responsible for overseeing the country’s state enterprises) to ensure employment. Third, it enabled a direct economic and diplomatic link to capitalist competitors thereby reducing the likelihood of direct conflict. Fourth, it opened huge inflows of foreign currency reserves further strengthening the country’s international financial position. And finally, the restrictions placed on foreign capital (most of which are still in place today) combined with the dominant position of CPC power in monopolized industries via the SOE system, ensured that the capitalist class in China would be defanged, monitored (keep your enemies close) and unable to assert control over the political system. The state, with control over construction, land, finance, infrastructure, education and all of the major levers of the economy is able to direct and control the development of capital in China as it pleases – this is in stark contrast to capitalist countries where capital directs the state and the people. In China, the people direct the state and the economy, not the other way around. This is aided by China’s robust internal democratic systems and extensive community-level grassroots organizations. What resulted from this bargain, as controlled by the state, is the “economic miracle” that I’m sure you are aware of- unprecedented growth in economic output and huge gains in the living standards of people with a massive reduction in poverty. While there are no doubt problems and negative consequences of such efforts, including unequal development and pollution, present leadership is focused on resolving these contradictions.
Figure: China’s explosive GDP per capita growth since the reform era, a virtually unprecedented economic feat.
Here is a brief glimpse of some of the achievements of this socialist market economy:
- Life expectancy has soared from 43.7 years in 1960 to 76.7 in 20187
- Extreme poverty has been virtually eliminated since 1990, with the $1.90/day headcount falling from 66.2% in 1990 to 0.5% in 20168 and the $3.20/day headcount falling from 47% to 1%.9 Other measures of poverty are on a steep decline.
- Adult literacy has risen from 65% in 1982 to 96% in 2018.10
- Average yearly wages have grown dramatically in the last 25 years, going from 5,348 Yuan in 1995 to 74,318 Yuan in 2017 for workers in urban state, collective and other non-private enterprises.11 For private urban employment, average wages have more than doubled between 2009 and 2017.12 Average wages in the non-private sector are about 47% higher than the private sector, indicating that the state system is to a large degree pulling the wage floor up.
- China is now, by far, the world’s leader in renewable energy with over 788,000 MW of total installed capacity in 2019. The closest competitor, the USA, has about 1/3rd of that capacity.13 Electricity production from renewables (excl hydro) has increased 9,054% from 3.1bn kWh in 2000 to 283.8bn kWh in 2015.14 The energy sector in China is dominated by SOEs.
- China has become a world leader in science and technology. By one measure, patent applications by residents in China have exploded from about 4,000 in 1985 to 1.3 million in 2018. By comparison, Japan saw just 253,630 in 2018.15 China’s Sunway TaihuLight super computer was the world’s fastest between 2016 and 2018.16 China is expected to outpace the USA in STEM, training nearly five times as many people between 2015 and 2030.17
- Gains in science and technology have translated into major military and defense achievements. In 2014, China became one of the first countries to successfully test a hypersonic glide vehicle, the DF-ZF.18 This is a crucial advancement that, combined with other advanced missile technology, could severely limit US naval options in China’s territory.
- China is now the world leader in transportation infrastructure. As of 2018, China had 17,000 miles of high speed rail or 60% of the world’s total.19
- Chinese SOEs are world leaders in their industries. These include the world’s largest, or near-largest: Telecom, energy company, bank, infrastructure company, railway, metals company, shipping company, mobile telecom and automobile company. The four largest banks in the world are Chinese SOEs.20
China’s state sector accounts for about 50% of output when accounting for sub-national SOEs, FDI round-tripping by SOEs and subsidiaries that are substantially controlled by the state.21 A conservative estimate of the state economy puts it at roughly twice the size of Russia’s entire economy (only counting central SOEs). In addition, Xi Jinping has in recent years overseen the largest and most dramatic expansion of CPC power into the private economy in the history of the country. Remember that Mao specifically called for certain enterprises, even if foreign-owned, to be “operated and administered by the state.” While the CPC has exercised a sophisticated multi-level strategy of preventing capital from forming class consciousness or exerting political control (leveraging state-sanctioned and controlled business associations22, inclusive measures, anti-corruption campaigns, etc)23, it has also pursued a direct strategy of establishing CPC committees within private companies. This effort went through several phases, and accelerated rapidly under Xi Jinping. In 2012, an opinion was released by the Central Committee that greatly expanded the call for CPC party building in private companies.24 In 2017, the number of CPC committees in private companies reached 70%, and that number is expected to have grown since.25 Not only are these committees widespread, they are beginning to take an active role in strategic decisions made by companies beyond simply surveilling them. This has sparked a flurry of concerned reporting from Western media and is likely contributing greatly to the US’ current strategic attitude towards China.
I have written before on the nature of China’s socialist system HERE and HERE. Others, such as Marxist economist Michael Roberts have written at length on the China model HERE, HERE, HERE and HERE. Roberts makes a strong case that China’s model does not fit a traditional capitalist model and points to its response during the great financial crisis. I strongly recommend reading these materials, although I have some disagreements with Roberts about the nature of China’s democratic systems, which I think are far more robust and expansive then he allows (an understandable oversight as most in the non-Chinese left have never seriously studied the Party-State political system). What is important to understand is that this bargain with capitalism, rather than upending the socialist system has actually strengthened it. Today, Chinese SOEs are among the largest and most powerful enterprises in the world. The state has unprecedented control over the economy through the financial system, its SOEs and more directly through Communist Party committees in nominally “private” enterprise. Despite the rhetoric around “opening up” which is often mischaracterized and exaggerated in the West as “liberalization”, control over the economy has tightened under the present leadership of Xi Jinping. This has sparked books like Nicholas Lardy’s 2018 The State Strikes Back: The End of Economic Reform in China? which speculates on the possible end of the market reform era.
For the capitalist powers, and especially US imperialism, the failure of market reforms to undo the CPC and socialist construction is a major issue (infamously memorialized by Gordon Chang’s 2001 book The Coming Collapse of China). Market reforms and a semi-open economy in China were supposed to not only afford huge benefits to US capitalism but also destroy the ideological base and power of the CPC. Instead, the opposite has happened. The CPC is one of the most popular ruling political parties in the world and enjoys broad-based support. CPC leadership including Xi Jinping have vigorously affirmed the importance of Mao Zedong Thought and Deng Xiaoping Theory, while expanding Marxist education across China. Meanwhile, China has proven almost impervious to global capitalist crisis, thanks to its unique economic structure and the continued control of the commanding heights and financial system by the CPC. This is in stark contrast to the US. While still a dominant economic power relative to its size, the US was sunk into a massive crisis in 2008 thanks to a secular decline in profitability and the hyper-financialized capitalism that has run the country since the 1980s.
In recent years, it has become clear to US empire planners that China’s collapse is not coming anytime soon, and that they have gotten the losing end of the bargain. In fact, China is moving to expand and export the lessons of its development model to other countries – this is the era of the Belt and Road Initiative under Xi Jinping.
3. The Single Largest Threat to US Empire – The Belt and Road Initiative
With the consolidation of the domestic economy and establishment of linkages to the outside world, the PRC now has the task of looking outward and establishing an international base of support. Most importantly, China wants to break the encirclement of US empire that I mentioned above. Only through the breakdown of US hegemony and imperialism can China continue to move forward on its path of socialist construction. The Belt and Road Initiative, first announced by Xi Jinping in 2013, is the leading edge of this effort to establish trade and political linkages throughout Eurasia with Beijing at the center.
The Belt and Road Initiative (BRI) is the most significant geoeconomic effort in history, a multi-decade $4-$8 trillion plan impacting 70% of humanity with the goal to develop productive forces throughout Eurasia and steadily erode US power in the hemisphere. The significance of this effort cannot be overstated, as Henry Kissinger warned:
“China’s Belt and Road Initiative, in seeking to connect China to Central Asia and eventually to Europe will have the practical significance of shifting the world’s center of gravity from the Atlantic to the Pacific”26
The BRI will link Asia and ultimately Europe through ports, bridges, railways, green energy and trade . It will help historically overexploited countries fill development gaps and reduce or eliminate their reliance on the US and the dollar. Perhaps most importantly, it will significantly reduce the effectiveness of one of US imperialism’s favorite tools – economic sanctions. The more that countries are able to stand on their own two feet economically and have access to their neighbors and China as a trading partner, the less power the US has to impose its political will on countries through economic coercion.
There are many elements to this plan, but essentially it involves both individual infrastructure and investment projects in other countries and the establishment of non-US international institutions. Ironically, the historically negative legacy of US-dominated institutions like the World Bank and IMF combined with US aggression against countries that don’t conform to US hegemony has encouraged even unlikely countries to participate in Chinese projects.
One very significant example of this is the Asia Infrastructure Investment Bank (AIIB), an alternative to the World Bank and IMF that is centered on Beijing. Russia was one of the first countries to join as a full member in 2015, during a period in which US-Russia relations were at a very low level and about to sink further following the 2016 election. The AIIB even includes27 many EU countries, Canada and otherwise staunch US allies like India, Saudi Arabia and Australia. China is the largest voting bloc in the bank, followed by India, Russia, Germany, South Korea and Australia. The map of AIIB members is essentially a map of Eurasia, plus many other non-regional members (Green and dark blue are full members):
Figure: AIIB Membership Map from Wikipedia28
China has in recent years moved aggressively to sign deals with countries like Pakistan and Iran on BRI projects and investment. Deals with Iran have been happening for years, totaling tens of billions of dollars in support29 – massive amounts considering the immense economic pressure Iran is under from US sanctions.
The extent to which China and Iran are being linked is visible in the various infrastructure projects taking place. These include:
- The New Silk Road freight train route which opened in 2016, linking Tehran to Urumqi in Western China’s Xinjiang Uighur Autonomous Region. The freight route also connects Kazakhstan, Kyrgyzstan, Uzbekistan and Turkmenistan. Transportation time for goods was reduced from 45-50 days by sea to 14-15 days. This rail line cuts directly through the “triangle of control” over Central and Western Asia where US imperialism is heavily active.
- 926 km railroad from Tehran to the eastern city of Mashhad. This electrified railway will be built by a Chinese SOE, China National Machinery Import and Export Corporation. It will cut the transportation time between cities in half and increase capacity.
- 415 km high speed rail line between Tehran and Isfahan via Qom, being built by SOE China Railway Engineering Corp.
- 263 km railway between Kermanshah and Khosravi, being built by SOE China Railway Construction Corp.
- Railway system connecting Tehran, Hamedan and Sanandaj being built by SOE China National Machinery Industry Corp.
Importantly, the New Silk Road freight train is not going to stop in Tehran. Plans are to have this rail system extend all the way into Europe. For the other projects, Iranians will gain greater economic connectivity between regions. All of this is happening while Iran is facing severe sanctions from the US.
Another key element of the BRI in Central Asia has been the China-Pakistan Economic Corridor or CPEC. CPEC is a cornerstone project of the BRI, with the most important element being the development of Gwadar Port in Balochistan Province. This port, made operational in 2016, is a critical element in bringing goods to and from the BRI network, potentially transforming Gwadar into a major regional economic hub. It also diversifies shipping routes from China, which is a key element in upending a potential US blockade. While beyond the scope of this article, the peeling away of Pakistan from the US is a major geopolitical victory for China. Remember that Operation Cyclone – the US-led operation of aiding the Mujahideen against the USSR – was largely funneled through Pakistan’s intelligence agency the ISI.
Perhaps equally disturbing to US empire is the willingness of otherwise close allies to participate in BRI projects. In March of 2019, Italy signed a variety deals with China as part of the BRI. Western media, especially in the US, immediately pounced on the news with CNBC declaring it will “only exacerbate tensions between Italy and its neighbors.”30 Reaction was overwhelmingly negative in US media and political spheres in the US and EU.
The US has attempted to discredit the BRI, with commentators arguing that it is placing countries into a “debt trap”. Debt trap claims are not supported by the evidence we have, and is disputed even by bourgeois scholars. China’s debt cancellations have been well documented, including frequent cancellations to Africa and a large cancellation to Cuba. China frequently renegotiates credit with terms favorable to the borrower.
4. The Breakdown of the Bargain – Hybrid Warfare on China
American anxiety over China’s rise as regional and world power, particularly as an avowed communist power, takes us right back to Brzezinski. Not only is China a rival power in Euraisa (which “must be prevented”), it is a rapidly rising power with a system that seems impervious to economic crisis or political subversion. It is a system that is now expanding its reach through one of the most ambitious geopolitical projects in human history. How does the US empire respond to this?
It’s difficult to pinpoint the exact start of the current war on China. While Obama’s infamous “Pivot to Asia” program in 2012 began to move chess pieces towards China, the US and the PRC have never been allies or even friendly (I’m omitting for the sake of this article the long history of Western colonial oppression of China pre-PRC). Even after the Three Communiques, the US continued to sell billions of dollars worth of arms to Taiwan. This is a mainstay strategy of US empire across all administrations, often referred to as the “Cross-Strait Balance of Power” which seeks to balance Taiwan against China.31 The US maintained a 21-year embargo on China after the revolution, a tactic still used against Cuba to this day.32 We now know that the CIA was actively involved in the 1989 Tiananmen Square protests via Operation Yellowbird33 and sources placed among protesters.34 Containing China has long been a key strategy of US empire, including militarily. This strategy was laid out succinctly in a 1965 draft memo from Defense Secretary McNamara to President Johnson:
There are three fronts to a long-run effort to contain China (realizing that the USSR “contains” China on the north and northwest): (a) the Japan-Korea front; (b) the India–Pakistan front; and (c) the Southeast Asia front. Decisions to make great investments today in men, money and national honor in South Vietnam makes sense only in conjunction with continuing efforts of equivalent effectiveness in the rest of South east Asia and on the other two principal fronts. The trends in Asia are running in both directions—for as well as against our interests; there is no reason to be unduly pessimistic about our ability over the next decade or two to fashion alliances and combinations (involving especially Japan and India) which will keep China from achieving her objectives until her zeal wanes. The job, however—even if we can shift some responsibilities to some Asian countries—will continue to require American attention, money, and, from time to time unfortunately, lives.
Any decision to continue the program of bombing North Vietnam and any decision to deploy Phase II forces—involving as they do substantial loss of American lives, risks of further escalation, and greater investment of US prestige—must be predicated on these premises as to our long-run interests in Asia.
This memo also lays bare the fact that US military occupation in Japan and Korea and close ties to India and Pakistan have the same objective in mind. What is remarkable is how consistent this policy has been from the US empire, despite its inability to topple the DPRK and its failure in Vietnam. Adding to the US empire’s anxiety, China has been very successful in recent years at peeling away Pakistan from US hegemony (as noted above). If McNamara believed in 1965 that China’s “zeal” would wane in 10-20 years, he would be seriously disturbed by the gains China has made since.
US strategy against China today can be categorized as having three central pillars, forming the basis of the hybrid war:
- Containment: The US is actively building alliances (India, Japan, Australia, SK) while intervening militarily and politically in neighboring countries (the “triangle of control) in order to pressure China’s geopolitical flanks.
- Balkanization: Through overt and likely covert subversion, the US has sought to support separatist movements in China, particularly in Hong Kong, Xinjiang and Tibet. Xinjiang is of crucial importance to US strategy given its central role in the Belt and Road Initiative.
- Economic Sabotage: Through restricting Chinese investment in the US, the targeting of specific firms and of course the trade war, efforts are underway to arrest the meteoric rise of China’s economy which is on track to eclipse the US on numerous fronts.
Below I will highlight some of the major flashpoints in this hybrid war. Although these situations vary across place and time, one constant has been the trend towards a nearly unanimous anti-China sentiment across Western media. Becoming an anti-China reporter (sometimes referred to as “China watchers”) is now a major career path in US journalism. There are reporters today whose entire careers have been built on presenting China in the worst possible light, frequently parroting CIA and State Department talking points as “reporting”. These “reporters” all share highly overlapping social circles, and some of the most virulent are members key US foreign policy think tanks like the CFR. I have written about the peculiar Operation Mockingbird35-like careers of Melissa Chan36 and Bethany Allen-Ebrahimian.37
- 2007 – Present: Quadrilateral Security Dialogue or “Quad” Alliance
In 2007, Japan formed an alliance between itself, Australia, India and the United States with the implied aim of containing China’s geopolitical influence. While the different parties of the alliance have denied that the target is China, Chinese officials immediately recognized the significance of the meeting and complained to each.38 In tandem with the initiation of the Quad, 2007 saw the expansion of the Malabar military exercises to include Japan, Australia and Singapore (it was originally a bilateral US-India exercise dating back to 1992). The exercise was also held, for the first time, off the coast of Okinawa instead of the Indian Ocean – a not so subtle provocation towards China.39
Since the formation of the Quad, activity has varied year-to-year. Notable, Australia had backed out of the alliance in 2008 under Kevin Rudd. However, Australia would later return to the fold and in November of 2017 all parties met again. Between 2017 and 2019, activity increased dramatically with the Quad meeting five times.40
- 2010-2012: CIA Network in China Exposed and Dismantled
The NYT reported that between 2010 and 2012, China “systematically dismantled CIA spying operations in the country” by killing or jailing at least a dozen sources. According to the report, the CIA “considers spying in China one of its top priorities.” The operation is said to have crippled CIA operations in the country for “years afterward.”41 This can be viewed as one of the major intelligence war developments between China and the US, and dovetails with the discovery of a massive CIA hacking operation in China.
- 2008-2019 (present?): Widespread CIA Hacking Operation Against Chinese Industries and Government
In March of 2020 – lost amidst the media frenzy surrounding COVID-19 – a well-known Chinese security firm Qihoo 360 announced that they uncovered a massive CIA hacking operation against China since at least 2008. In part thanks to the leak of the Vault 7 hacking tools, the security firm was able to identify CIA attacks against aviation, petroleum, and internet companies as well as scientific research institutions and government agencies.42 The security firm speculated on some potential objectives of this attack:
We speculate that in the past eleven years of infiltration attacks, CIA may have already grasped the most classified business information of China, even of many other countries in the world. It does not even rule out the possibility that now CIA is able to track down the real-time global flight status, passenger information, trade freight and other related information. If the guess is true, what unexpected things will CIA do if it has such confidential and important information? Get important figures‘ travel itinerary, and then pose political threats, or military suppression?
- 2018 – Bloomberg’s “Big Hack” Article
In one of the most bizarre and blatant Operation Mockingbird style media operations I can think of, Bloomberg ran a totally baseless article in 2018 accusing China of implanting spy chips in the hardware of servers used by many major American firms. The article was refuted by virtually everyone asked about it and it was never followed-up on, retracted or, to my knowledge, updated.43 One of the co-authors, Jordan Robertson has not tweeted since the article was published and it remains his “pinned tweet” as of 4/17/2020. It’s unclear what exactly happened with this story and it is one of the biggest mysteries in modern media and especially tech journalism. My speculation it was somehow a botched, planted hit-piece on China from the CIA or the information used to write the article was leaked by individuals without proper clearance. Either way, the fact that a major media outlet like Bloomberg was willing to publish a patently false article about China with massive implications if true is testament to the state of anti-China media operations.
- 2014 – Present: US Involvement in Hong Kong Protests
Since the 2014 “Occupy Central” protests and their return in the extremely violet outbursts of 2019, US involvement in Hong Kong separatism has been documented by Chinese media and others. In a 2014 People’s Daily article, China accused Louisa Greve, then-VP of the National Endowment for Democracy or NED (infamous CIA front org), of meeting with protest leaders.44 Greve, unsurprisingly, is today a director of the “Uyghur Human Rights Project” – another NED-funded organization based in DC that is promoting Xinjiang separatism. Radio Free Asia and Voice of America (US government propaganda outlets) openly bragged about their on-the-ground reporting on the HK protests and methods of evading censorship.45
During the 2019 outburst of protests in Hong Kong, CCTV published a photograph of US diplomat Julie Eadeh meeting with protest leaders Joshua Wong and Nathan Law.46 US interference in Hong Kong reached its peak with the 2019 passage of the so-called “Hong Kong Human Rights and Democracy Act” which was first introduced in 2014. The act requires the US to impose sanctions on officials engaged in alleged human rights abuses in HK and, among other things, reviewing favorable trade relations between the US and HK.47
- 2018 – Present: US Subversion in Xinjiang
US-based “Human Rights” organizations, the NED, US politicians and US media began a massive psychological operation targeting Xinjiang province in 2018. This operation began with claims from the World Uyghur Congress (a NED-sponsored org) that China was putting Muslims in “concentration camps.” These claims have since been thoroughly debunked, as the facilities in question were created as vocational centers and alternatives to outright imprisonment as part of China’s novel de-radicalization efforts in Xinjiang. A comprehensive document has been compiled debunking various claims made about Xinjiang HERE.
What US media of course never mentions is that Xinjiang was the target of numerous terrorist attacks from the Al-Qaeda affiliated “Turkistan Islamic Party” in the 90’s, and that terror attacks continued through 201748 until China was forced to respond with a comprehensive de-radicalization campaign. There have been no known attacks since 2017.
It’s worth noting that the World Uyghur Congress, which received NED’s “2019 Democracy Award” had one of its predecessor organizations, World Uyghur Youth Congress, designated as a terrorist organization by China in 2003.49 In other words, the US government is actively sponsoring an organization which China believes is affiliated with terrorists. As mentioned above, Xinjiang is a crucial target area for US imperialism given its importance to the BRI and the link it provides China to the rest of Central, South and Western Asia (remember the train that runs directly from Urumqi in Xinjiang to Tehran?).
- 2009 – Present: South China Sea and US Navy Incursions
While the dispute around the South China Sea has been an international issue for a very long time, the US has repeatedly inserted itself into the debate against China. The US has obvious interest in seeing that China is not able to enforce its sovereignty claims in the South China Sea, given that US Navy vessels from the West Coast and Pacific bases pass through the South China Sea to get to the Indian Ocean and Persian Gulf.50 The aggressive posture of the US in East Asia has led to numerous close calls.515253
- 2018 – Present: Technology War Against Huawei and ZTE
As part of the US strategy to arrest China’s economic growth, it is targeting some of its highest value industries including the high tech sector. In August of 2018, the annual NDAA was signed including provisions banning the federal government from purchasing equipment from Huawei and ZTE. It also placed restrictions on Dahua Technology, Hytera and Hikvision.54 The reason given was for dubious “security” concerns. The intent of this action was clear: to drive a wedge between China’s most successful high tech companies and the rest of the world. Huawei is one of the largest smart phone companies in the world and a top Chinese company in several metrics. The situation escalated dramatically in 2018 when Huawei CFO Meng Wanzhou was arrested in Canada at the behest of the US. She is charged with allegedly violating sanctions on Iran, among other charges.55
- 2018 – Present: The US Trade War on China
Perhaps the most telling sign of the breakdown of the bargain between US capital and China is the trade war initiated by Trump in 2018. For the first time since China’s economic reforms, the US government has moved to explicitly act on its complaints of China’s “unfair” systems. The important thing to know about the trade war is that what the US is really complaining about is China’s socialist system. Almost all of the complaints the US has put forward against China are mechanisms that China has used to strengthen its state sector: IP transfer, preferential treatment for SOEs, etc. This trade war is ultimately designed to pressure China into gutting their socialist system.
While a “phase one” deal has been reached between the US and China, the actual implementation of that deal and further negotiations are uncertain. The second phase is supposed to deal with “structural issues” (read: the US wants China to privatize and undo its socialist system) but so far we have not seen any movement in that direction. The COVID-19 crisis may put the brakes on the trade war and its negotiations for the foreseeable future.
The Democratic Party has done virtually nothing to oppose Trump’s trade war, and has instead merely asserted that the US should be taking a “coalition” approach to “hold China accountable” for its “unfair trade practices.” Joe Biden explicitly said this about the phase one deal: “[It] won’t actually resolve the real issues at the heart of the dispute, including industrial subsidies, support for state-owned enterprises, cybertheft, and other predatory practices in trade and technology.”56 There is a cross-party consensus on waging economic war against China.
Conclusions and Looking Ahead
I hope this article provided a useful overview of the background and current situation facing China in the world today. What is clear to me is that the US is feeling increasingly threatened by China’s rise and has concluded that the only way to slow it down is to employ the old Cold War tactics used against countries like the USSR, Cuba and the DPRK. The bargain between US capital and China appears to be coming to a definitive end, and I see no indication that this situation will be resolved anytime soon. For the non-Chinese socialist movement, I hope this information provides a better understanding of the world we live in and China’s role. I hope that more socialists – even if they do not agree with the assessment that China is socialist – will come to view China’s rise as a decisive break with US hegemony, something we have not seen since the USSR. China is the future, and the sooner we all educate ourselves on it the better we will be able to interact with China and its millions of communists. The non-Chinese left has a lot to learn from the experience of the PRC, both in its revolution and its post-revolution governance. I hope I have contributed to that understanding.
This article will be reviewed and re-visited as time goes on new developments unfold.
I would like to thank the many people who have helped me better understand China, socialism and geopolitics generally. There’s too many to list and I would feel bad leaving anyone out, but if you have ever shared materials with me or offered insight on China I’m forever in your debt. Finally of course I can only say thank you to all of the Chinese people and their comrades who have given the rest of the world hope for a better future.
2 Engels, Frederick. Socialism: Utopian and Scientific. Chapter 3. https://www.marxists.org/archive/marx/works/1880/soc-utop/ch03.htm
23 Yan, Xiaojun, and Jie Huang. “Navigating Unknown Waters: The Chinese Communist Party’s New Presence in the Private Sector.” China Review, vol. 17, no. 2, 2017, pp. 37–63. JSTOR, http://www.jstor.org/stable/44440170. Accessed 15 Apr. 2020.