We are publishing this article because of the paramount importance of gaining a deeper understanding of the rise of Chinese capitalism in the last three decades, and more specifically of the aims of its “New Silk Road” project. It should be noted that it was written some time before the current Covid-19 pandemic, which will certainly have a significant impact on the global imperialist pecking order. It also puts forward a number of elements – such as the sections on the “Mackinder Doctrine” and on the development of the “credit economy” in Stalinist regimes – which are currently under discussion in the ICC. We therefore offer it as the contribution of an individual comrade.
One of the motives of US capitalism for the economic war it has begun, under Donald Trump, against China, is that the “One Road One Belt” (OROB) Initiative of Beijing, China’s most ambitious ever imperialist project , is seen in Washington as a direct challenge to the status of the United States as the sole remaining world “super power”. The intention of this central project of the Chinese ruling class, also known as the “New Silk Road”, is to cover and link together Asia, Europe and Africa with an ultra-modern infrastructure of motorways, railways and harbour facilities. It constitutes the most ambitious infrastructure in world history, with a volume calculated at anything between one and two trillion dollars. The project is audacious, not only financially, but also technologically. It proposes, for instance, to link the Finnish capital Helsinki with its Estonian counterpart Tallinn through a railway tunnel under the Baltic Sea. Even more ambitious is the plan to link Korea and Japan through a similar tunnel. It is no surprise, therefore, that the OROB has aroused the interest, and whetted the appetites, of the so-called business community throughout the world. In a situation in which the growth of the world economy is faltering and threatening to grind to a halt, China presents the “New Silk Road” (as it is also called) as a blessing for the economic development of the world.
A project greeted with misgivings and hostility
This notwithstanding, even at the economic level, the Chinese mega-project has met with a very mixed response. On the one hand, dozens of so-called “developing” countries have already acquired elements of a modern infrastructure and even of industrialisation thanks to massive Chinese investment. Although the countries receiving such investments often have to offer key resources as security for credits (resources which risk passing over into Chinese hands in the event of repayment default), for the ruling class of such countries, the New Silk Road is often the best possibility they have at present of the developing the economic basis of their power. But there are also other, more developed countries, for example European Union members in the east and south east of Europe, but also a European heavyweight, Italy, which welcome China as an investor and as a counter-weight to German and French (but also to American) capital on the European continent.
On the other hand, however, there are a number of countries which are either wary and hesitant, or even downright hostile towards the OROB. What is striking is that this group includes a majority of the main capitalist countries other than China. One of the most important of these countries is Russia. Already for geographical reasons, a project with the goal of placing an infrastructural grid over the Eurasian double-continent will always be very incomplete unless it includes Russia (the largest country in the world). Yet at present, the north and north-west bound motorways and railway lines beginning in China mostly end at the Russian border. The Kremlin stubbornly continues not to fulfill its part of the agreed projects. In the words of its head of state, Vladimir Putin, “Mother Russia”, after successfully averting the danger of becoming what he calls an “economic colony” of the United States, must now take care not to be colonised by China instead. This is why Moscow is demanding from Beijing “equal partnership” in at least that part of the OROB which takes place on Russian soil. For the moment, China has not given Russia the guarantees it is looking for. This is why the whole Russian sector of the New Silk Road is, for the moment, more or less blocked.
To the group of wary, middle-sized powers also belong the three leading economic powers of western Europe: Germany, Britain and France. Since, unlike Russia, they are not immediate neighbours of China, the ruling class in western Europe feels less immediately in danger of being economically or otherwise “colonised” by China. Nonetheless, not unlike Russia, they demand an equal share of and an equal say in the European part of the OROB. For the moment, they have been no more successful than Moscow in obtaining this. Indeed, despite the blocking attitude of the western European powers, Beijing has, to date, been much more successful in advancing its projects in Europe than it has been in Russia. This is because China was able to get a number of eastern and southern European states on its side. The attempts of Berlin, Paris and London to forge a united negotiation position of the European Union towards Beijing have largely failed. Above all, the defection of Italy (the first G-7 state to actively adhere to the New Silk Road, in the “spirit of Marco Polo” as Rome argued) was a huge blow to this unitary endeavour.
Of the countries which more openly oppose the Chinese initiative, the most important ones are Japan, India and (most significant of all) the United States. Their hostility has a number of dimensions, as we shall see. But already at the economic level, the three forementioned powers are particularly displeased. Whereas Japan has the impression that China wants to progressively nudge it out of the continental Asian market, India feels itself not only by-passed, but also encircled by the massive Chinese investments in surrounding countries such as Pakistan, Myanmar or Sri Lanka. As for the United States, one of its concerns is that the OROB will strongly contribute to enforcing a kind of Eurasian hub as the powerhouse of the world economy. Instead of helping to “make America great again”, this could even, in the long term, render the position of the US economy, not peripheral, of course, but less central than it is now. As things stand, the USA is not only by far the leading military power, it is also, without a doubt, the economic/scientific/technological heart of the world capitalist system. Its ruling class is clearly determined to ensure that things stay like that.
To begin to understand why its main rivals are so worried about China’s “blueprint for the 21th century”, it may be helpful to take a look at the infrastructure grid with which it intends to cover Eurasia and Africa. It immediately becomes apparent that this network resembles less a grid than the spokes of a wheel, the hub of which is China. Beijing plans to finance as many of these projects as it can on its own, contracting mainly Chinese companies and employing Chinese labour. At the economic level, the intention is obviously that China assumes the role which the old capitalist powers of western Europe once used to play: the masters of Eurasia/Africa. But that is not all. In the robbers’ den of global imperialism, such things as infrastructure, trade routes, secure and reliable supplies of raw materials and labour power all have to be “safeguarded” by military might, which is the foundation of every imperialist expansion. No surprise, therefore, that the New Silk Road has an essential “security” dimension, the heart of which is the establishment of military bases along the transport and coast routes of Asia, Africa, and beyond (where possible in Oceania, Latin America and even Europe). To this must be added the striking of military agreements with governments in states along the OROB wherever possible. The full realisation of this dimension of the New Silk Road would give China a considerable degree of control over the trade routes and sources of labour and raw materials on which its main rivals, above all in east and south-east Asia and western Europe, so heavily depend. A control which at present the United States almost exclusively exercises.
The Mackinder Doctrine
To better understand the extent to which the New Silk Road represents a challenge to the existing balance of forces between the main imperialist powers, it is useful to know that, since the time of World War I, the United States has consistently adhered to the so-called Mackinder Doctrine originally developed by its predecessor as “world leader”, the United Kingdom. First formulated by the British geographer Mackinder, this doctrine poses the modern capitalist contest of imperialist powers in mythological, biblical terms as a struggle between the land-based monster Behemoth and the sea monster Leviathan. The core of this concept consists of two very simple ideas, ideas however which have the advantage of corresponding rather closely to the reality they describe. The first idea is that, in a struggle for the domination of the world between mainly land-based and mainly naval powers, the latter are likely to win out in the end. This is because capitalism (unlike any of the modes of production which preceded it) was a global “system” from the beginning. For example, the first modern capitalist mass production industry – the British cotton industry – was based on raw material grown mainly in the southern states of the USA, and cultivated through slave labour deported from Africa. Thus, by means of an effective sea blockage, mainly land-based powers can be brought to their knees. The second idea formulates the exception to the rule contained in the first one: the Eurasian continent is so large (and it even has a narrow land connection to Africa via the Sinai peninsula) and so populous that it could, if made into some kind of a unit, more or less immunise itself from any sea blockade. In other words, if ever Eurasia, or large parts of it, were to come under the domination of a single or an alliance of its main land-based powers, the ensuing power bloc would have a real chance of gaining the upper hand over its maritime rivals.
Precisely this doctrine helps to explain why, in both world wars of the 20th century, the United States took the side of Britain against Germany – and this despite the fact that London was the main rival of Washington in many parts of the world. The main concern both of the United States and the United Kingdom during both world wars was that Germany, by overrunning Russia, might gain the degree of domination in Eurasia which Mackinder had warned against. Following the same logic, the Number One enemy of the USA during the “Cold War” was always the USSR (although its main commercial rivals lay elsewhere, in western Europe and in Japan). Alongside the deadly nuclear ballistic threat Moscow represented to America, perhaps the most important single reason for this was, once again, the concern about the control of the “Eurasian Heartland”. Although its fears about this were somewhat alleviated once China began to break with the Soviet Union, this concern remained a central factor of US world policy until the Eastern Bloc fell apart in 1989. In the years which followed, the powerful economic development of China was not perceived as a serious threat to the US (or to western Europe or even Japan for that matter). To a certain extent, even the contrary was the case. China was seen as a more than welcome outlet for profitable “western” investments, attracted in particular by the unrivaled cheapness of a Chinese labour power which could be exploited to the hilt. During these years, the old capitalist powers (who were still busy celebrating themselves as the “winners of the Cold War”), underestimated the long-term consequences for themselves of the rise of China.
In a certain sense, the ruling class in the United States in particular allowed itself to be distracted from its Mackinder guidelines by another of its doctrines, one much in vogue after 1989: that of “neo-liberalism”. According to this latter concept (in its American version as formulated by Milton Friedman and the “Chicago Boys”), economic development anywhere in the world will, sooner or later, mainly benefit the kingpin of global capitalism – which is of course the US. Certainly there was an element of truth in this. Of course the Chinese boom was the single most important factor enabling crisis-ridden capitalism to continue to accumulate. Of course the USA, but also western Europe and Japan, over many years, as the leading established capitalist powers, at many levels benefited most from the momentary stabilisation of a world “system” of which they were the leading players. But they were deluding themselves in thinking that this would always and necessarily be the case. Today, under Donald Trump, it has become blatantly clear that, for US imperialism, China has become the enemy Number 1. The so-called “Asian turn” of the US bourgeoisie in fact already began under Barack Obama. The central idea of this “Asian turn” is that the first priority, in the defence of US interests, is no longer Europe or the Middle East, but Asia. To an important degree, the Asian turn is a RETURN to the Mackinder doctrine in American foreign policy. Already under Obama, and again under Trump, the Pentagon has published its global analysis according to which the main threats to American supremacy are China and Russia.
We have already seen how, during the 20th century, the main candidates for Eurasian leadership which the US (and the UK) first and foremost opposed, were Germany and Russia (in the form of the USSR). Two things in particular are striking about the present list. The first thing is that Russia is still on the list. This is partly connected to the economic strengthening of Russia since it abandoned its Stalinist model. Today we can see more clearly that the main reason for the backwardness of the USSR was not the level of qualification of its work force, its technicians and scientists, but a chronic scarcity of capital resulting from the Stalinist economic regime. In this context, Russia is again seen today as a threat to the USA because it has proven able to modernise its atomic ballistic military power, which is second only to that of the USA in its size and capacities. After the break-up of the USSR in 1991, when Russia inherited its nuclear arsenal, this appeared of lesser importance than it does today. Back in 1991, the ruling class both east and west still adhered to the doctrine that a thermonuclear war cannot be “won” - it would by literally MAD (resulting in Mutually Assured Destruction). But things have changed at this level also. Both in Washington and in Moscow, a new doctrine is gaining ground, according to which an atomic war can be limited in space and time and thus be “won”. To this end, both sides are busily producing so-called tactical atomic weaponry with more localised explosiveness and nuclear fall-out. This “evolution” of military doctrine (literally insane from any point of view other than the capitalist one) largely contributes to putting Russia back on the list of the main enemies of America. But the other main reason for this lies not in Russia itself. It is the rise of China. This has the effect of “re-charging” the importance of Russia as the geographical lynch-pin of Eurasia. Russia is the only country covering significant portions both of Europe and of Asia. In other words, if Russia were either to ally itself with, or be overrun by, any other Eurasian power, the worst-case scenario Mackinder wanted to avoid would be on the agenda.
To understand how potentially unstable the imperialist situation of Russia presently is, it is important to realise that Russia would be quite unable to defend its frontiers by conventional means alone against a direct military threat either on its western borders (NATO) or to the east (China). Russia thus sees itself reliant, to an exorbitant degree, on its nuclear arsenal. It is on this level that Russia is still far superior to China (whose own atomic apparatus is still considered to be inferior to that of France, for instance).
The second striking aspect of the present list of enemies of the US is that Germany (the main enemy throughout much of the first half of the 20th century) has been overtaken by China as the leading threat to US hegemony. Today Germany represents a threat to the US above all at the commercial level. As far as the military dimension is concerned, a possible strengthening of the (relatively still very weak) German fire power is a problem for Britain much more than for the USA. Germany’s bid for leadership in Europe would devalue the status of the United Kingdom. But as long as Germany is unable to defend itself militarily in the face of Russia, it will remain dependent on the kind of support which, as present, only the United States can supply. As long as Germany remains militarily so inferior to Russia, it is not likely to dare to make an alliance with Moscow.
Thus it is China which today is, in a sense, assuming the role played by Germany in the first half of the 20th century: the latecomer to and main challenger of the existing imperialist pecking order (this pecking order cannot be called a “balance of forces” precisely because it is out of balance). Here also lies the essential difference between the respective roles of Moscow and Beijing today. Russia, to its west, having lost eastern Europe and the Baltic states to NATO, is concentrating on preventing other former “Soviet Republics” from becoming NATO states. To the east, it has to meet the challenge of the US, and more recently, of China above all in the former “Soviet Republics” of central Asia. It is also worried about signs of a Chinese migration into southern Siberia. In other words, Russia is a power mainly on the defensive – not because it is less belligerent, but simply because it is being pushed back and is facing frictions and tensions with countries on all sides of its territory. As opposed to this, the role of China in the so-called concert of powers has become an offensive one. It was not the case under Deng, when China was concentrating on its economic “reforms”. This began to change under the successors of Deng. It is under Xi Jin Ping, however, that China has most clearly gone over onto the offensive. This offensive includes, for example, the development of “conventional” middle range missiles and the establishment of new naval bases “offshore” (on artificial islands). The heart of this offensive is the One Road One Belt initiative. More than anything else, it was this project which made the American bourgeoisie realise that China is no longer just another serious economic rival, but a challenger at the imperialist level.
And that is the decisive point. The twin goals of the ruling class under capitalism are profit and power. One of the most common misunderstandings about marxism is to assume that profit is the more important of these two goals. Many anarchists, on the other hand, are able to understand that the pursuit of power is the more important factor. But anarchism tends to explains this through some kind of intrinsic craving for power which can only be overcome through the libertarian re-education of humanity. In recognising the importance of power in the contemporary world, anarchism concludes that marxism overestimates the importance of economic factors in capitalism. But what marxism in fact realises is that, under capitalism, economy and power are inseparable. Many capitalists fail to make a profit. Their elimination through capitalist competition is not a problem for bourgeois society, but on the contrary essential to its mode of existence. Much more important than the profit of any capitalist or group of capitalists is the maintenance of capitalist class rule, the control of that class over society as a whole, the defence of the basis of its domination – bourgeois private property – by the state. This defence of its property, both against the threat from below (proletarian revolution) and against the threat from other capitalist robber states, is the precondition for everything else. All its wealth and privileges depend on this class rule. This is why almost any bourgeois class, faced with the unfortunate choice between the defence of its rate of profit and the defence of its “security interests”, will always be more likely go for the latter. This is why the main rivals of China, even in the case that they can themselves benefit economically from OROB or some of its projects, are ready to plunge the world economy into turmoil if necessary, should they feel their imperialist “vital interests” under threat.
“It was the straitjacket of the organisation of the world into two opposing imperialist blocs (permanent between 1945 and 1989) in preparation for the world war that prevented any disruption of the hierarchy between powers. China's rise began with American aid rewarding its imperialist shift to the United States in 1972. It continued decisively after the disappearance of the blocs in 1989. China appears to be the main beneficiary of ‘globalisation’ following its accession to the WTO in 1991 when it became the world's workshop and the recipient of Western relocations and investments, finally becoming the world's second largest economic power. It took the unprecedented circumstances of the historical period of decomposition to allow China to rise, without which it would not have happened.
China's power bears all the stigma of terminal capitalism: it is based on the over-exploitation of the proletarian labour force, the unbridled development of the war economy through the national program of ‘military-civil fusion’ and is accompanied by the catastrophic destruction of the environment, while ‘national cohesion’ is based on the police control of the masses subjected to the political education of the One Party and the fierce repression of the populations of Uighur Muslims and Tibet. In fact, China is only a giant metastasis of the generalized militaristic cancer of the entire capitalist system: its military production is developing at a frenetic pace, its defence budget has increased six-fold in 20 years and has been ranked second in the world since 2010”. (Resolution on the International Situation from the 23rd Congress of the ICC).
The Chinese Economic Boom Approaches Its Limits
Xi Jin Ping is the initiator, but not the cause, of the OROB. In general, phenomena tend to have more than one cause. This goes all the more so for a project of the magnitude of the New Silk Road. The stage of development reached by the Chinese economy when Xi came to power explains the use by China of its economic weight in order to take decisive steps on the geo-strategic, imperialist level.
Here it will be helpful to compare the example of China with that of Japan. Throughout the 1980’s, the growth of the Japanese economy, the success of its exports, the expansion of its finance sector, the development of its methods of production and its technology, were such that most of the “experts” at the time thought it would only be a matter of time before Japan eclipsed the United States as the world’s leading economy. But during the past thirty years, nothing of the kind has happened. Not only did the gap between the US and Japan not continue to grow smaller. On the contrary, since the beginning of the 1990’s the gap has not ceased to widen again. Whereas the USA consolidated its economic, financial and technological lead, Japan was in for three decades of economic stagnation.
Something similar has started to happen now in China. Until a few years ago, a lot of economists and statisticians were debating, not about if, but about when the Chinese would overtake the American economy. In the meantime, the doubters on this issue seem to be getting the upper hand. Not surprisingly. The recent data for China begin to resemble those for Japan from the early 1990’s on. Economic growth is beginning to fall, the rate of urbanisation starts to lose some of its dynamic, the mass production of cheap goods begins to be transferred to countries with lower wages, the average age of the population is rising, and an increasingly insane portion of investment goes into property speculation. These similarities with Japan (although the Chinese slow-down is less abrupt) are striking. And they are hardly a coincidence. Both express the same “leveling off” process after a long expansion period. Something similar happened in South Korea or in Taiwan and will happen in Vietnam or India.
As Karl Marx analysed in Capital, capitalism came into the world through the separation of the producers from their means of production and the transformation of these producers into wage labourers. Marx called this process “primitive accumulation”. According to the marxist analysis of Rosa Luxemburg in her book The Accumulation of Capital, capitalism accumulates through expanding into and gobbling up the pre-capitalist world around it. Two main phases of this process can be distinguished. The first phase is not “obligatory”: it only applies when capitalism encounters so-called natural economies: subsistence production in which money plays little to no role. In such cases, capitalism usually first endeavors to convert those who exclusively or mainly produce their own means of subsistence into producers for the market. At the heart of this transformation is the introduction and generalisation of monetary relations, for instance through the state imposing taxes only payable with money. Or it lures producers into debt. In so doing, capitalism expands a little bit each time the market it needs.
The second phase however is the decisive one: the conversion of simple commodity producers (who own their means of production, whether individually or collectively) either into proletarians who no longer sell their own products, but instead sell their labour power, or into capitalists who own the means of production but no longer work them themselves. Like the first phase, the second one opens up new markets and thus new possibilities of accumulating capital. Both phases radically change the way of life and the nature of economic activity in the countryside. But in addition, the second transformation leads above all to the industrialisation and urbanisation of society.
It is not least for this reason that the contribution of this second transformation to capital accumulation is of a much greater magnitude. Industrial society requires the construction of factories, mines, power stations, roads and railways; the new proletarians need to be housed, clothed, fed, transported to and from work, but also to be policed, distracted, ideologically manipulated and so on. As soon as this transformation has been completed, these additional proletarians and capitalists no longer represent a new or additional market for capitalism. But it would be wrong to imagine this as an overnight act, where the peasants leave their farm one day and start work in a factory the next. Whereas pre-capitalist producers often provide for much of their own means of subsistence, construct their own cottages, produce their own food etc. not only for themselves, but for their children, all of this must be provided for by capital in order that proletarisation can even take place. It is not easy to say exactly when, in each individual case, or as a whole, this transformation has been completed, so that it no longer represents an area of capitalist expansion. Theoretically it is over when a new generation is born and is brought up whose parents are already proletarians (or capitalists), so that they have become part of the existing capitalist market. It should be noted, however, that extra-capitalist areas still remain even within industrialised, urbanised capitalism.
In principle, however, once the producers outside capitalism have been transformed into proletarians or capitalists, they constitute part of the existing capitalist market, no longer providing new outlets for capitalist expansion. On each occasion, therefore, this process of absorption is a one-off event, limited in time and space, which cannot be repeated with the same persons. This is why capitalism cannot expand and accumulate eternally. At the latest when the great majority of humankind has been turned into either wage labourers or their “employers”, the system reaches its expansion limits. This is not yet completely the case today at the planetary level. But the “leveling off” of the expansion of China today is a clear sign that, although this expansion has not yet reached this limit, it is coming close enough to it to markedly slow things down. In so doing, the situation is increasingly destabilised. This phenomenon is not at all specific to China. As we have seen, it already happened in Japan, and not only there, but, in one way or another, in Europe, in North America, everywhere where there is a developed capitalism.
Another important aspect of the present slow-down in China is the following: as long as the Chinese capitalists could recruit their work force mainly from the countryside, more specifically, from societies which do not produce on the basis of wage labour and capital, they receive this influx of labour power without having to pay for its upbringing. This is almost certainly the main reason why wage levels in countries like China can be drastically lower than in the highly developed countries. But when the abundant supply of this kind of cheap labour begins to falter, and/or when capitalist competition obliges newly industrialised countries such as China to expand into high technology production (requiring a highly trained work force such as the countryside cannot provide), the likes of China progressively lose their advantage as a low wage location. This today is also contributing to the “normalisation” of Chinese growth rates.
The dynamising effects of Deng’s post-Stalinist “reforms” also approach their limit
China has this basic scenario in common with neighbouring east Asian countries like Japan, South Korea or Taiwan. But there is an additional, very important factor of the Chinese “economic miracle” which distinguishes it from the likes of Japan or South Korea. This is the fact that, between Mao’s victory over the Kuomintang at the end of World War Two and the reforms of Deng Xiaoping which began in the 1980’s, the Chinese economy was organised on the Stalinist model. Stalinism was a form of capitalism, based as it was on the exploitation of wage labour serving the accumulation of capital by the ruling class. But it was a weird kind of dysfunctional capitalism producing a chronic scarcity of capital. In fact, the development of the Stalinist form of state capitalism was a kind of freak product of history, resulting from the taking of power by the proletariat in the Russian Empire, followed by the international isolation and the destruction from within of that revolution. What was left over in the Soviet Union was capitalism without a proper capitalist class. The new Stalinist state bourgeoisie assured its power and privileges through state ownership of the means of production. This form of state ownership, while tending to be economically less efficient, is not in itself incompatible with a properly functioning capitalism. The problem was first and foremost a political one: the hostility of the Stalinist bourgeoisie towards any other forms of ownership than its own state one – which it falsely identified with socialism. For this reason, a “normal” bourgeois credit economy could not develop. Credit is based on forms of private property where debtors vouch with their property and forfeit if they cannot meet their debts. Capitalism, however, is credit economy par excellence. Before it can be used to exploit wage labour as the source of surplus value, private property is the source of credit for investment. But under the Stalinist regimes, it was forbidden to forfeit state property. The resulting shortage of credit was the most important reason for the phenomenon of scarcity of capital in these economies. This was also the case for Maoist China. The perhaps most important single economic “reform” of Deng, therefore, was the legalisation of forms of private property, which provided the conditions for an important increase of agricultural productivity and the creation of a huge amount of surplus labour power, virtually freed from the land. It was on this basis that a real capitalist credit system could develop. At this level, although the Stalinist industrial sector and state services were already based on the capitalist exploitation of wage labour, Deng’s property reform had an effect similar to that of the integration of pre-capitalist resources, to the extent that these resources (factories, machines, buildings, terrain, blueprints etc.) could now be used to create credit for capitalist accumulation. This juridical act, this modification of the way the capitalist state defines and legislates private property, was to have enormous implications for the Chinese economy. Indeed, precisely the characteristic combination of the absorption of huge pre-capitalist areas and populations (in particular hundreds of millions of peasants) within the country, with the possibility of starting up a proper credit economy, mainly accounts for the spectacular economic rise of China. In fact, in some ways at least, China has gone through a transformation over the last two decades which in the United States took one to two centuries. A comparable combination of these two factors can exist in a developing, modernising Stalinist-led country such as Vietnam. But a similar dynamic is less likely in other big “emerging” countries such as Brazil, Mexico or India.
Today, however, the Chinese expansion is approaching its limits also at the level of its credit economy. Not only have credits already been taken on the main property assets, they are also taking on an increasingly risky, speculative character. All of this helps us to understand that the present slowing down of the Chinese “powerhouse” is not a momentary problem, but a fundamental one. Its own inner logic is leading China towards the kind of “leveling off” (which will eventually lead to stagnation, or worse) which now seems to permanently afflict Japan. But if this is the case, why is the ruling class in the US and elsewhere so worried? Why can they not patiently wait for the rise of China to come to a halt of its own accord? The reason is that China is not Japan. Beijing has options which Tokyo did not have. Today, this Chinese option is embodied in particular by the New Silk Road Project.
China plans its expansion beyond its own borders
As we have seen, the most important factor of the Chinese boom has been the possibility, within the country itself, of tapping the resources of pre-capitalist zones (soil, terrain, natural resources, raw materials, labour power, markets, and everything which can be used to generate credit), exploiting them through their ongoing conversion to a capitalist, and in the last analysis, wage labour based mode of production. It is thus fairly evident that, when the Chinese bourgeoisie begins to approach its limits within its own country (limits which, as we have indicated, are elastic rather than iron), it can attempt to do something similar beyond its border. When we say “beyond its borders”, we mean neither the influx of foreign investment into China, nor the flooding of the world market with products “made in China”. Both of these things have been going on for three decades already, nor is there anything new about them. Britain was the first industrial capitalist country in the world, and every other major power which followed in its footsteps (including Germany and the United States) relied to an important extent on capital investment from abroad to fuel their own economic lift-off, and on export offensives on the world market to consolidate it. What we mean here is the presence of extra-capitalist zones in the neighbourhood of China. This was not the case for Japan, for instance, once its economic rise lost momentum in the 1990’s. It invested heavily in China, for instance, thus participating in and profiting from the absorption of its extra-capitalist zones. But in the end it was China rather than Japan which benefited most from these investments. This was because Beijing was largely able to impose on the Japanese and all the other foreign investors its own conditions: obligatory Chinese majority shares in Joint Ventures with foreign companies, limitations to the transfer of profits out of China, mandatory technology transfer to Chinese partners, strict state control of when, where and how much foreign capital is invested etc. In other words, one of the main differences was and is that Japan is under the military domination and politico-strategic tutelage of the United States. China isn’t. A second very obvious difference is that Japan is an island country, whereas China is a mainland one (moreover with the world’s biggest population). If Japan wants to not only invest on the Asian mainland, but also to politically control, or at least strongly influence, the areas where it invests, it would need to accompany its investments with an invasion army. This is actually what Japan did in the past, particularly between 1904/05 (war with Russia) and the end of World War Two. At present, however, Japan is militarily much too weak for such an option.
As opposed to this, China can indeed follow such an option. Its principal means to this end at the moment is the OROB Initiative. In a sense, its gigantic infrastructure projects represent the economic dimension of the imperialist invasion, by which “it seeks to expand its industrial, technological and, above all, military expertise and power”.
This Chinese invasion is particularly difficult to stop, not only because China is so much stronger than any of its neighbouring countries, but also because these countries themselves, in some ways, need this invasion (i.e. the infrastructure which Beijing supplies) in order to develop their own economies. It happens to be the case that many of the countries in the proximity of China still have pre-capitalist resources for exploitation. It is the case, for example, for Myanmar, Pakistan, or for the central Asian former “Soviet Republics”. On the other hand it also makes China more dependent on these countries. Being the creditor of all these huge infrastructure projects, in case of a payment default by the countries concerned, the Chinese state will have to find ways to compensate.
These resources, even if they could all be added together, would not contain a potential on a par with China’s own former internal ones. But this does not mean that they are not important. Moreover, the OROB method of infiltration via infrastructure construction allows China to spread its imperialist tentacles ever farther afield, reaching out towards potential resources of a similar kind, in western Asia or Africa (and even in Oceania and Latin America). And as we have seen, this expansion has a military dimension of paramount importance. Far from being a peaceful project (as the Chinese government of course claims) it is a preparation for future wars.
As we have seen, capitalism is not in the first instance an “economic system”. It is a form of class rule, one which, as never before, mobilises economic means in order to multiply its power, to consolidate its class rule. In other words, capitalism is, in the last analysis, more a “political” than an “economic” project. In order to hide this, it prefers to refer to capitalism in purely economic terms as a “market economy” or as an “industrial” (or even “post-industrial”) society. By the same token, it pretends (even to itself) that capitalism, historically speaking, developed spontaneously and naturally out of the division of labour and out of equivalent commodity exchange. In reality, however, the birth of capitalism was a political act: the separation of the means of production from the producers, and the transformation of the latter into wage labourers (often after initial, more or less long phases of the exploitation of different kinds of forced labour such as the workhouse system, slavery, and different forms of debt serfdom, for example the “coolie” system). At the heart of this process is always the establishment, enforcement and spreading of bourgeois private property. Its priorities are above all political. This is illustrated by the fact that, during the last third of the 19th century and large parts of the 20th century, the established capitalist countries, through the colonial and (after World War Two) the post-colonial systems largely hindered the economic development of large parts of Asia, Africa and Latin America. They did so not only because they wanted to keep for themselves the benefits of the exploitation of the labour power and the natural resources of these zones, but above all in order to prevent the rise of new and dangerous imperialist rivals. In so doing, they actually contributed to hampering the development of their “own” world capitalist economy. The priority of the military over the economic dimension is particularly well illustrated precisely by the exceptions to this rule. After World War Two, in Asia, the economic development of Japan, South Korea and Taiwan were encouraged mainly because they were “front line” states of the US-led imperialist bloc during the “Cold War”, as was Cuba for the Soviet bloc.
Similarly, the willingness of the Chinese bourgeoisie to invest in the development of countries economically neglected and even held down by the old capitalist powers is mainly directed against these latter. In so doing, Beijing itself takes great care not to inadvertently beef up any potential rival which could become a threat to it. It is striking, for instance, that the OROB does not connect much with India.
A potentially unstable social situation
As was pointed out above, the ruling class has to defend its power, its private property, not only against bourgeois rivals, but also against the proletariat, the class from whose labour it mainly lives. This is also the case in China today. Already during the economic boom of the past 30 years, China has possibly been the country which has witnessed the most widespread manifestations of workers’ protest. In this context, the perspective of the beginning of the end of the economic expansion phase threatens to exacerbate social tensions. This is all the more worrying for the Chinese bourgeoisie – still led by its Stalinist party – since it does not dispose of the more politically sophisticated instruments of the old western powers such as “democracy” or “free trade unions”. Although it tries to compensate for this through a kind of total Big Brother Plus surveillance (presently being complemented by a system of individual rewards and punishments in order to enforce social conformism), the more the economy tends to slow down, the more these mechanisms risk proving insufficient. In particular the perspective of mass lay- offs and rampant mass unemployment must be truly daunting for the ruling class. This is all the more the case since, during the past three decades, the Chinese bourgeoisie has mainly relied on economic growth in order to control the social situation.
All of this does not mean that there is any threat of a proletarian revolution in China in the foreseeable future. We also have to take into account that the working class in China lacks the historical experience of its counterparts in the old capitalist countries, and that it is cut off from the traditions of the workers’ movement and from the perspective of communism by their perversion through Stalinism. But this does not mean that the Chinese ruling class can afford to ignore or neglect the situation on the social front. This is all the more the case since the danger for Chinese capital today is not only the proletariat, but also that of the general crumbling of social cohesion. A possible loss of cohesion which also threatens the ruling class itself.
In the old capitalist countries, the relatively high degree of unity of the national bourgeoisie of the leading countries which it was possible to maintain during the second half of the 20th century (under western style ‘liberal’ state capitalism) is now partly giving way to increasing divisions within its ranks. Far from being immune to such tendencies, their Chinese counterpart is in some ways even more at risk on account of the more rigid character of political Stalinism. In addition, the present governing generation in China has certainly not forgotten the painful lessons of the past: the decades of internecine conflict between “warlords” before the Maoists came to power, or the factional clashes during the so-called Cultural Revolution which were almost on the civil war level. For all of these reasons, the social motive and component of the One Road One Belt Initiative plays in the background too. The attempt to maintain economic growth, to obtain new contracts and outlets for Chinese companies, and to find new employment for Chinese workers, all these things are part and parcel of the OROB. A project which, in relation to the social question “at home” has not only an economic, but an extremely important ideological function. During the 19th century, the dream of a new life in America was one of the main utopias which ascendant capitalism put forward. Not only deported convicts, but also millions of European emigrants, also embarked for Canada, Australia, Algeria or Argentina in the hope of escaping misery, and lured by the prospect of acquiring a more favourable social status as part of the project of reproducing one’s existing culture in a very different part of the world. A “utopia” which already, at the time, more closely resembled a dystopia, often entailing murdering one’s way through the “aboriginal” populations from one coast to the other. The infernal character of such projects under the conditions of decadent capitalism came to light in particular through the attempted colonisation of western Russia and parts of eastern Europe during World War Two, when the Nazis were promising to convert (“reconvert”) millions of Germans into land-owning farmers. The result was mass murder on an even more monstrous scale, whereas the project itself failed. Today, probably the first time in history, the population of China is being called on to “go west!” The move, not only into western China, but into central Asia (where big stretches of land are being put under cultivation), has already begun (as it has, more stealthily, into southern Siberia). The development, not only of infrastructure, mining or industry, but also of agriculture in the republics of central Asia and in parts of Africa, is also intended to ensure food supplies to a China suffering severely from desertification and generalised environmental destruction.
The opposition of the other powers
OROB thus has the potential of helping to maintain the rise of China as a great power in face of increasingly adverse circumstances. But whether or not, or to which extent, this potential can be realised depends not only on the politics of China’s ruling class, but also on a number of other factors. Of these, the most important one is probably the threat that it will be sabotaged by its rivals. Although these rivals are not, for example, the cause of the present protests in Hong Kong against the Chinese government, they are certainly doing what they can to encourage them. The United States obviously has influence in high circles, in what is one of the most important financial centers of the world. This is all the more the case for Britain with regard to its former “crown colony”. On the other hand, not only in Hong Kong, but within the Chinese community throughout south-east Asia, there are very rich and powerful Chinese clans with strong family ties to mainland China and are ready to assist Beijing against its rivals. In the first years of Deng’s economic reforms, more than half of the foreign investment in China is said to have come from this Chinese diaspora (which also probably advised Deng and Co. about how to set up a “properly” functioning capitalism). Taiwan, which Beijing considers as part of China, can be expected to become even more of a hot spot in the confrontation between China and its rivals.
More globally, we can speak of a three-pronged attack aimed at stopping, or at least at putting a break on, the rise of China. The first one is America’s economic war against China. It began as a “trade war”, but more recently has also threatened to escalate into a “currency warfare” (i.e. a devaluation contest between Yuan and Dollar). The degree to which this offensive against China is not just a caprice of Donald Trump was clearly revealed at the last G-20 summit of the world’s leading economic powers in Japan, by the reaction in Washington to the offer made by Trump to Xi Jin Ping to lift the technology embargo he had imposed on the Chinese telecommunications giant Huawei: not only the Democratic Party, but also many Republicans (the party of Trump) were furious. They made it clear that, for them, what is much more important than customs and tariffs, is the need they see to impose a technology transfer embargo on China something along the lines of that levied on the Eastern Bloc during the Cold War.
The second prong of this offensive against China is of course the military dimension. An example of this is the decision of Washington to install middle range missiles in the Asian Pacific region, aimed at China. This in turn is partly a reaction to the development and production of such missiles by China. It is an open secret that one of the reasons the United States and Russia recently scrapped their treaty agreement mutually restricting such weapons is that both Washington and Moscow want to react to developments on the Chinese side.
The third prong is the stirring up of trouble along some of the most important routes of the New Silk Road itself. This is at least one of the reasons for India rekindling its conflict with Pakistan in Kashmir, or for the USA heating up its conflict with Iran.
We must conclude, therefore, that, far from being the blessing to humanity as the OROB announces itself, this project is one of a number of additional factors exacerbating the contradictions of decomposing capitalism. A development fraught with dangers for the world. Far from being proof that world capitalism is still something progressive, the rise of China, and the conflicts this leads to, are another confirmation that, with the two World Wars of the 20th century, capitalism irreversibly entered its phase of decadence. More than anything else, the characteristic of the decadence of capitalism is that the continuation of the existence of bourgeois society puts at risk the continued existence of humankind.
Steinklopfer, 28 August 2019.
 On our website: https://en.internationalism.org/icconline/201809/16572/china-s-silk-road-imperialist-domination; “China’s Silk Road to imperialist domination”; September 2018.
 On our website: https://en.internationalism.org/internationalreview/201211/5331/deadly-string-pearls; “A deadly “string of pearls”; International Review - Special Issue - Imperialism in the Far East, past and present, Imperialism in Asia in the 21st century.
 On our website: https://en.internationalism.org/international-review/201807/16486/report-imperialist-tensions-june-2018; “Report on Imperialist Tensions (June 2018)”.