The so-called “trade war” unleashed
by Trump against China opens a whole series of questions and debates. What is
the real magnitude of this conflict? Is it essentially a “war” over
technology? Or is it a kind of “cold war” of the United States to prevent China
from becoming the dominant capitalist power in the world in a few years? Could
China be being “attacked” by imperialism?
By Miguel Sorans
Some leftist authors go so far as to say that Trump and the United States could only impose themselves on China using military force. Also from certain sectors of the reformist left (former Stalinists, Castroism, or Chavismo), they consider there would be something “progressive” in this clash, in favour of China which supposedly would seek “a multipolar world” weakening Yankee imperialism.
socialist current we discard any apocalyptic vision as if it could be an irreconcilable
clash that could even bring us closer to a third world war. Nor do we consider
that there could be something progressive from China. We believe the so-called
“trade war” between the United States
and China to be a part, logically the most prominent, of all
inter-bourgeois friction and clashes that have worsened in the world as a
result of the continuation of the capitalist world economic crisis opened in
2007/2008. In this case, it is a strong clash between the economic interests of
the dominant imperialist power (United States) and the second and growing
capitalist power (China).
Trump and his “trade
capitalist crisis is global and is the background of these economic or trade shocks.
That is why there is not only an “economic war” with China, but Trump
has launched several “trade wars.” He began, in 2018, with the
European Union (EU) and Canada imposing strong tariffs on the importation of
steel and aluminium as well as other industrial products from those countries,
to comply with his “America first” electoral slogan. Then he went against
Mexico to force it to establish a new free trade agreement. In July, he
launched another “war” threatening French President Emmanuel Macron with
applying sanctions to French wine, if he did not go back with the so-called
“Google tax”, a tax on American multinational companies (Amazon, Google, Apple,
and Facebook) that invoice in France above € 750 million per year. Trump takes on
the defence of his multinationals’ profits in France and in the world. Additionally,
he also endorses the conservative Boris Jonhson, premier of the United Kingdom,
who wants to move forward with Brexit, i.e., with the break with the EU,
another of the ongoing “trade wars”.
developing a fight for the defence of the interests of Yankee imperialism amid
a brutal crisis of the capitalist-imperialist system. He seeks to defend his
multinationals and tries to balance their weaknesses in the world market. He threatens
with the club to end with the negotiation carrot.
non-recovery from the crisis is even ratified by the data and preventions of
the International Monetary Fund (IMF). In its report World Economic
Outlook it says: “Against this backdrop, global growth is forecast
at 3.2 percent in 2019, picking up to 3.5 percent in 2020 (…). The projected
growth pickup in 2020 is precarious…” (IMF, World Economic Outlook,
23 July 2019). China has ceased to grow in double digits for years: its annual
growth is between 6 and 6.2 per cent.
underlying causes of the non-recovery of the acute crisis of the capitalist
economy are because of the failure of imperialism and the multinationals and
the IMF to impose the quotas they would need for exploitation and looting on
the masses and countries. The other pole of the world situation is the advance
of popular rebellions and mass movements against austerity plans, against
governments and regimes. This is the main obstacle that Trump, the capitalist
dictatorship of the Communist Party in China, and the multinationals across the
globe have to overcome the chronic crisis in which they are plunged.
What does Trump get out of
his conflict with China?
There are those
who say that the background of Trump’s goal in his “economic war”
with China would be to prevent it from becoming the dominant capitalist power
in a few years, displacing the US. There are many analysts who agree with this
We rule out
that this is Trump’s goal. Because, for now, there is no condition in which, in
the coming years, China could become a superior power to the United States and,
in turn, the dominant power of the world.
States, despite its crisis, remains by far the first world power. It is
hegemonic and the dominant imperialism. It is real that China has been
progressing in recent years and is occupying the second place, behind the
United States, in GDP (Gross Domestic Product, the total of what is produced in
a country) worldwide. It is also real that China in recent years displaced
Japan and Germany from second and third place, respectively. In 2008 we pointed
out that China was the seventh world economic power, today it is the second
(see article on Correspondencia
Internacional No. 25, February 2008, www.uit-ci.org). And it cannot
be ruled out that, in the coming decades, China can overcome the US in GDP. But
you cannot measure a dominant power in the world just by GDP.
GDP, we must consider the peculiarity of what China is. It is the country with
the largest population on the planet, with 1.4 billion inhabitants. The United
States has 327 million. The population of China is 20 per cent of the world
total. That gives it exceptional productive potential. But, in the other areas,
it is clear the United States is comfortably above China and the rest of the
countries of the world. Just compare, for example, per capita income in 2018:
while in the United States was US$ 62,850, in China, it was US$ 9,470. It was even lower than that
of more backward countries like Argentina, which stood at US$ 12,370. Also if we compare military
might, the difference is abysmal. In the ranking of the 100 largest
multinational companies in the world, 53 are from the United States and 11 from
China. And so we could continue with other numbers.
reflecting the crisis and decline of US imperialism, Trump is really looking to
stifle China to favour his multinationals and his financial capital. Therefore,
he also launched an offensive against the large multinationals of European
imperialism and Canada, to reach agreements in favour of his companies.
peculiar case of China, Trump presses to achieve greater openness for US
multinationals and financial capital than what has existed for many years in
that country. And to condition China’s renowned technological advances in the
field of mobile phones. But this is always based on limiting the competition of
Chinese multinationals with Yankee multinationals. Because of the inheritance
of the expropriation of the bourgeoisie in the 1949 revolution, state-owned
companies and banks still have great weight. The Chinese financial system still
has a high state and mixed dominance. Under current regulations, a bank, for example,
cannot have a foreign shareholding majority. “Today, foreign firms have less
than 2 per cent of the assets of the Chinese banking sector” (La Nación, 11 July 2019). Trump and European imperialism,
want to change this. In addition, “China has about 150,000 state-owned
companies. It is a very small amount compared to the total number of companies
that exist in the country, but their weight is overwhelming” (El País, Business section, 28 May 2019).
this, imperialism has made progress. China, on several occasions, has been
retreating and agreeing to Yankee pressures. President Xi Jinping, for example,
in April 2018, in the middle of the so-called “economic war”, made an
announcement of a greater opening to foreign investments. Among its most outstanding
points, it states that there will be “an immediate majority of foreign capital
in Chinese stock companies, and all kinds of restrictions on foreign investment
are eliminated in three years” (article by analyst Jorge Castro, Clarín, Argentina, 15 April 2018), which would start in
manufacturing. Jinping also announced an opening of regulations in
telecommunications and that there would no longer be any restrictions for
foreign investment in private health. The same in education, on the grounds
that there are already 14 private universities, including a Harvard branch, in
the things that imperialism seeks. This is the essence of the supposed
“economic war” and not a background confrontation or a total break
with the Chinese dictatorship.
enemy of the United States or strategic capitalist ally?
show that China is not an irreconcilable enemy of the United States but that,
first, it has grown as a capitalist power thanks to a large injection of
foreign direct investment and especially from the American multinationals.
dictatorship of the Communist Party of China is essentially an ally of the
United States at a key point: the need to continue exploiting the world working
class. And in particular the Chinese proletariat and people, to get the highest
exploitation quotas that guarantee the super-profits of multinationals and
international banks. Therefore, also, in countries where China makes
investments in infrastructure or mining works, they move this
super-exploitation regime; regime which is endorsed by the capitalist
governments of Latin America, Africa, and Asia.
States, the EU, China, and Japan are, in fact, part of a counterrevolutionary
front against the masses of the world to super exploit them. This is also
reflected in the institutional superstructure, in events such as the G7, the
G20, in the general assembly of the United Nations, in the IMF, in the World
Trade Organization (which China has been part of for decades, confirming they
are already a capitalist economy). In these events, the plans for exploitation
and looting of the peoples are settled and agreed in an attempt to get out of
the crisis the great powers have.
major point of agreement between the United States and China, also with the
European Union, the Vatican, and Japan is the unrestricted support for the
dictatorship of the Chinese Communist Party. For them, it is a guarantee of
stability to continue with their super-exploitation plans for their
multinationals as well as for any capitalist company installed in China.
does not mean that, as a great capitalist country and holder of a Chinese
bourgeoisie, it does not have its friction or clashes and economic disputes
within the framework of a global crisis of capitalism. Undoubtedly, the regime
headed by Xi Jinping defends the interests of a great Chinese bourgeoisie that
has been forming in the process of capitalist restoration of recent decades.
Among them, private multinational groups such as Alibaba, Lenovo, Huawei or
Trump and his
contradictions with the “economic war”
comings and goings in his “economic wars” show the weakness of imperialism.
In the case of China, it led to a division in the great bourgeoisie of the
United States itself and the large economic groups linked to foreign trade and
responded to Trump’s tariffs with heavy import tariffs on US soybeans. Because
of them, the claims to Trump by the large soy producers grew. This resulted in
the Trump administration having to grant an aid package to the agricultural
sector of “US$ 16 billion in order to mitigate the effects of the trade dispute with
China” (Clarín, 28 April 2019). Something
similar happened with other Yankee multinationals that produce in China and
export to the US.
example, “over 170 companies, including the multinationals Nike and
Adidas, asked Trump to remove footwear from the list of Chinese products, whose
imports into the country could be affected with 25 per cent tariffs” (Clarín, ibid.).
In much of
2019, the centre of the conflict unleashed by Trump was linked to cell phone
company Huawei, China’s number one company in cell phones. Huawei is the second-largest
mobile phone company in the world, after South Korean Samsung. This conflict
also shows the contradictions in which Trump and China itself are immersed.
those who say it is a war for “the mastery of technology”. And that China
could jeopardise US technological supremacy. We consider that, also in this,
there are exaggerations. Even used by Trump himself, who went so far as to
accuse Huawei of “endangering national security”, “spying”, and so
deny the technological advances of capitalist China. And that in some specific
aspects it has approached or surpassed the United States. One of those aspects
is the issue of mobile phones and 5G. But it is not real that China is close to
surpassing the United States in the global technological issue. Nor is it true
that Huawei is the only one that dominates the 5G technology. There are five
companies that develop 5G, including the Chinese Huawei and ZTE. But the South
Korean Samsung, the Swedish Ericson, and the Finnish Nokia are also advanced.
it must be acknowledged that China has progressed in recent years in
technological development, but it is an uneven development since it cannot
reach the same level as the United States. It has also taken steps in
cyberspace or robotics but as a whole it is far behind the United States.
analyst Jorge Castro, an admirer of Trump and the Chinese regime, recognises
the abysmal inequality in technology between the United States and China.
Castro points out that “[The United States surpasses China 10 to 1] in
basic artificial intelligence research and its pool of talents it reaches
850,000 researchers while there are 50,000 on the People’s Republic” (Clarín, 21 March 2019).
example of Huawei, and beyond its worldwide recognised potential, shows that it
has no technological independence from the United States. On the contrary,
China relies heavily on American components to assemble its cell phones. For
example, “American chips and software feed the central Chinese servers. In
fact, China has been a huge driver of revenue for Apple, Oracle, Intel,
Qualcomm, and other big technology names. And to a large extent, China had no
choice since it did not have the capacity to produce these components” (La Nación, Argentina, 21 May 2019).
There is an
interrelation, since these American multinationals have Huawei, ZTE, and other
Chinese companies as a major buyer for their cell phone components. So, there
is a productive integration, a unity between the United States and China, not independence.
Huawei depends on the United States and in turn,, American Apple depends on its
factory in China. For example, US company Broadcomm, which makes chips, forecasts
a fall of US$ 2 billion in its 2019 revenue from Trump’s policy. Hence, in June, over
500 companies in the United States asked through a letter to Trump to stop the
so-called “trade war”. Among those companies that signed are Walmart,
Levi, GAP, and another 650 American entities (data from Clarín,
15 June 2019). That’s why at the G20 meeting in late June in Japan, Trump had
to sit down with Xi Jinping and set a truce for the Huawei conflict, which may
be called the “Osaka truce”.
there will continue to be new clashes and friction between the United States
and China and their companies, but the real framework for both Trump and Xi
Jinping is the search for agreements between the United States and the Chinese
dictatorship, to balance common business.
The future of China as a
and the result of the economic development that China may have in the coming
years is closely linked not only to economic issues and pacts with
multinationals and the United States, but also to the class struggle in China
and the world.
this factor is denied by most international analysts. The “Chinese
miracle” has always been talked about as a demonstration of the progress
that capitalism can give. There was a factor that was the unprecedented
invasion of foreign investments in the last 20–30 years. But the “Chinese
miracle” is based on the over-exploitation of millions of workers with
salaries in dollars 30 or 40 times lower than those in the metropolises. This
has allowed a capitalist accumulation, enrichment, and a spectacular profit of
the multinationals and the new Chinese bourgeoisie itself that was emerging in
the heat of openness to capitalism.
of China shows that capitalism as a great “progress” and modernity is
limited to a high and middle class, a sector of 300 or 400 million. A strip
that includes not only the new oligarchs and Chinese businessmen but the entire
bureaucracy of the political and military apparatus of the Chinese CP. But
China is a country of 1.4 billion inhabitants, so there is an inequality as is
not known in other countries. There are over a billion people who have
tremendous salary inequality. In rural areas, half of the population has total
poverty wages. There are 82 million who live below the poverty line (World Bank
2018 data), hundreds of millions suffer from the decline in the level of health
care and education and, fundamentally, hundreds of millions receive hunger
China is a
great capitalist power, a sub-imperialism led by a bourgeois Stalinist
dictatorship. It has been built as a great power on those bases of super-exploitation.
So, its future is linked to the result of the class struggle. Precisely the
slowdown or economic stagnation that China is experiencing has to do not only with
the problem of the global crisis, but there has been a wage change in the
interior of China because of the development of strikes for years.
In the big
industrial centres of the coastal cities, the “offensive” strikes for wage
increases have grown since 2010. As the protests grew, wages have increased
because the dictatorship and the bourgeoisie had to give concessions to avoid a
social destabilization that they fear. The victory of the strike by Honda
workers in Guangdong, who achieved a 50 per cent increase, was an example that
was repeated in industrial areas. The minimum industrial wage in Guangdong is
estimated at US$ 287 (2018 data), still very low compared to the salary of a worker in
the big metropolises. But higher than the US$ 60 or US$ 70 they received since the
1980s–1990s. This led to some smaller multinationals moving to other countries
where labour costs are lower such as Vietnam, Cambodia or Bangladesh.
future is closely linked to the result of this social confrontation. Strikes,
that continue to develop each year (in 2018 they increased by 400 protests
compared to 2017), combined with the rebellion of hundreds of thousands in Hong
Kong for democratic rights, are putting a yellow light of alert. Not only for
the Chinese dictatorship but for their own multinationals and imperialism
because a social destabilization would cause fundamental changes in the country
and in the world situation. The “Chinese miracle” could stumble or
cease to be because it is clear that the dictatorial regime is mounted on a
pressure cooker, which at some point may end up bursting.
We, as revolutionary socialists, are committed to supporting the struggles of the working class and the youth of China. We rely on this mobilization to end the capitalist dictatorship and achieve a government of the workers and the people. And that the revolutionary traditions of the socialist revolution begun in 1949 with the expropriation of the bourgeoisie can be retaken by the Chinese mass movement in the 21st century, to reverse the capitalist restoration.
Miguel Sorans is a leader of Izquierda Socialista (Socialist Left) of Argentina and the IWL. This article was originally published in International Correspondence 43, August–November 2019.