"China in the Contemporary World Dynamic

of
Accumulation and Class Struggle:

A Challenge for the Radical Left"

Loren Goldner

Everyone recognizes the growing importance of China
both for world capitalist accumulation and for the
remaking of the international working class. But the
variety of approaches to the question in the broader
“left” are as diverse as the old gamut of viewpoints
on the “Russian question”, and ultimately flow from
the same theoretical frameworks. The old Maoists and
“Marxist-Leninists” argue for a return to the pre-1978
system of Mao.

Those who see China as
state-capitalist (as I do) or scattered “bureaucratic
collectivists”, or orthodox Trotskyists, all favor the
removal of the Stalinist bureaucracy by working-class
revolution (although for the Trotskyists such a
revolution would be merely “political”, not social).
These different takes on the dynamic of China today,
and how it got there, lead to different conceptions of
the practical tasks.

All of these debates are tied up with the potential
emergence of China as a future “hegemon” of the world
capitalist system. Such debates uncannily and eerily
echo the 1980’s debates about “Japan as No. 1”, and
may well find themselves in the same dustbin down the
road. The very formulation of the problem in this way
leads to a briar-patch of further questions. Foremost
is the 80-year old Marxist debate about the
“decadence” or “decay” of capitalism as a global
system, and how that analysis can explain and
interpret the undeniable major development of the
productive forces in East Asia in the past 35 years
(in South Korea, Taiwan, and China, as well as in the
“flying geese” such as Malaysia, Thailand, etc.) and
finally in the broader “emerging economies” (e..g.
Brazil, Russia, India) that are currently growing
rapidly. Most judgements about contemporary China
stand or fall depending on how one comes down on this
question of “decadence”.China undeniably has a long way to go before it can be
a first-tier capitalist power in any sense of the
term. GDP is still ca. $500 per capita (compared to
$350 in India). Total GDP recently passed that of

Belgium. Yes, China surpassed the U.S, in 2004 as the
top national recipient of foreign direct investment
(FDI), and last year foreign capital earned
approximately $10-(15?) billion net returns on
investment. But global capital earned roughly the same
amount in
Australia. So far the post-1978 turn to the
“socialist market economy” has mainly improved the lot
of about 200 million people in the coastal regions,
and of them, approximately 50 million enjoy
“middle-class” living standards. But one overriding
social question in China today is what is going to
happen to the other 900 million people (overwhelmingly
peasants) as yet unaffected positively or affected
negatively by the market reforms. There are an
estimated 100 million people in the floating
population that migrates from city to city in search
of work. A “rust bowl” has emerged in the northeast,
particularly in Manchuria. A net 20 million industrial
jobs have been lost, as the large “SOE’s” (state-owned
enterprises) are downsized and looted by their
managers. (At the party congress of 1997 that
consecrated his replacement of Teng shao-peng, Xiang
Zemin announced 100 million layoffs for the coming 10
years.) The banking system is reportedly filled with
“non-operating loans”, and the Western capitalist
press openly worries about a deflationary bust that
would be as bad as or worse than the bursting of the
Japanese bubble in 1990.

In this context, the political and social situation
seems in serious ferment, if not yet outright
explosive. Riots of workers, the unemployed and
retirees robbed of their pensions seem to have become
commonplace, particularly in the northeast, even if
they have rarely gone beyond a local framework. A
recent New York Times article (ca. Dec. 2004)
recounted a riot of several days in a medium-size town
touched off by an incident between an arrogant yuppie
and a worker, The article went on to say that 60,000
such incidents had occurred in the past year. Any
attempt at independent labor organization (i.e.
outside the government-controlled unions) is met with
serious repression, including prison, labor camps and
outright execution of militants. (China Labour
Bulletin, coming out of Hong Kong, is a useful source
on these developments, but one must keep in mind that
it is funded by northern European Social Democracies
and the British Labour Party, undoubtedly hoping to
see a Solidarnosc-type union movement arise in China
as a battering ram against the still-entrenched
Stalinist hard-liners in the party apparatus. )
Documents recently came to light about a meeting in
2003 between top U.S. government officials and the
AFL-CIO to discuss the labor situation in China and
what to do about it.

The position and role of the Chinese “hard-liners”
(essentially, people hostile to the post-1978 market
reforms from a Maoist viewpoint) is, for different
assessments, a major focus of contention. While some
people on the far-left and ultra-left glibly assume
that the emergence of full-blown capitalism in China
is already irreversible, I think (as the above
assessment already shows) that it is highly
problematic, and that both factions of the Chinese
Communist Party (CCP) know they are riding the
whirlwind. The pro-reform faction would like to make
China into a giant Taiwan or even Singapore, but the
huge peasant question (something faced by neither
Taiwan and still less Singapore) strikes me as a
nearly-insuperable obstacle to such a dream. The
sophisticated Western capitalist think tanks and
financial press remain acutely aware that the
non-convertibility of the renminbi and the state
monopoly of foreign trade (two factors that made China
immune to the 1997-98 Asian financial meltdown) have
to be dismantled to complete the integration of China
into “globalization”. A non-convertible currency, the
state monopoly of foreign trade and nationalization
have nothing intrinsically “socialist” about them,
and all three existed in Nazi Germany (nationalization
being of course more muted but very real). The
Stalinist old guard seems to be the main constituency
for maintaining them, and currents such as orthodox
Trotskyists point to them as proof of the lingering
“socialist” character of China. Thus a
state-capitalist, bureaucratic-collectivist or
orthodox Trotskyist analysis of the nature of Chinese
society leads to different appraisals of both the
social dynamic and of the factional situation within
the party elite. And such appraisals lead us right
back to the question of capitalist “decadence”.

Many people writing about China today (and now I am
referring to a much wider gamut of opinion than the
Marxist or radical left debates) seem to take it for
granted that China will successfully become a major
pole of world capitalism by the mid-21st century, if
not the actual hegemon. As indicated above, I think
such an outcome is anything but certain. First, I
think it could only come about through a process
similar to that by which the U.S. displaced Britain,
the latter occurring through three decades of world
war, depression and social retrogression (fascism,
Stalinism). (Future historians may indeed look back on
the present era as the first phase of such a process.)
Whatever happens in China, however important China is
and will be, will happen as part of a WORLD dynamic.
My own analysis is that China occupies, relative to
world capitalism, a position quite similar to that of
Russia in the decades before 1917, namely one in which
the full constitution of a capitalist- bourgeois
society is threatened by the very real possibility of
a “permanent revolution” (an analysis applied by Marx
to Germany in 1848 and by Trotsky to Russia after
1905) whereby the completion of the bourgeois
revolution spills over into proletarian revolution.
The Chinese ruling elite is riding the whirlwind
precisely because its own necessary reforms are quite
visibly setting in motion social processes that could
completely overwhelm it, namely a working-class and
peasant insurrection which would necessarily assume a
(truly) socialist content and would have to link up
with the world working class in a similar development,
or (as in Russia) be prone to lapsing back into some
kind of closed authoritarian autarchy.

I believe the U.S. capitalists are acutely aware that
such an insurrection in China would be even more
dangerous for them for them than the “mere” emergence
of China as a new capitalist superpower challenging or
displacing the U.S. hegemon. China could also
disintegrate regionally (as it has in the past), and
tens of millions of refugees could potentially
destabilize other parts of Asia. The U.S. and Western
capitalists’ ultimate goal (one which seems to me
extremely difficult to bring about) has to be
stability and an entente with a Chinese elite willing
to “globalize”, i.e. fully open the economy, and a
Solidarnosc-type labor movement could help achieve
that. The CIA recently disclosed that the main
thinking of the Bush administration is (contrary to
the post-9/11 cooperation in the “war on terror”) that
the U.S. and China are ultimately on a collision
course. I believe this is the deep meaning of the
post-9/11 U.S. military deployment in Eurasia,
continuing the U.S. success after the 1989-1991
disintegration of the Soviet bloc. The U.S. has a
strategy all along the borders of Russia and China,
and it has taken giant steps in achieving that
strategy. Since I don’t think that the American
capitalists think (at least for now) in terms of
permanent revolution as a threat, their biggest
nightmare is the emergence of an East Asian capitalist
hegemon (perhaps an Asian version of the EU) and/or an
Asian Monetary Fund of the type that Japan floated
during the Asian meltdown of 1997-98. There are great
obstacles to the creation of such a pole, namely the
questions of Taiwan, of Korean reunification and
resurgent Japanese nationalism, all of which are
simmering pots the U.S. can stir to hinder Asian
regional integration the way it can stir the
Palestinian question in the Middle East. Nonethless
I am convinced that there are important members of
both the U.S. and Asian elites who see precisely the
emergence of such a pole as the current stakes.

I have referred several times to the framework of
“decadence” or the “epoch of capitalist decay” as
necessarily part of any assessment of where China is
headed. This theory has various expressions. But all
of them come down to an assertion that there is
something fundamentally different (and “decadent”)
about world capitalist development since 1914.
Marxists who reject the decadence theory, on the other
hand, think that capitalism today is doing what is
always did, namely developing the global productive
forces, and that China will successfully push the U.S.
aside as the U.S. pushed Great Britain aside. As the
main expression of capitalist decadence, I would cite
the billions of people, mainly in the Third World (but
not exclusively) (and hundreds of millions in China
itself) who are living in extreme precariousness
because capitalism cannot profitably employ them,
quite analogous to the “reserve army of the
unemployed” which Marx described in a mainly national
(i.e. British) context in the 1860’s. This population,
further, through world migration, above all to the
metropolis, is exercising a downward pull on
working-class wages worldwide, just as the “reserve
army” did in Marx’s day. Thus my general hunch is
that China will emerge as a superpower or as “the”
hegemon only through a bloody reshuffling of the
capitalist deck, and not through the kind of “normal”
development that achieved world hegemony for Britain
after 1815.

I think a debate on all aspects of these questions is
a top priority for the existing and future
international revolutionary left.