Do Nothing, Lose

From the liberals in the Élysée Palace to the Stalinists in Zhongnanhai, a temporary united front of outrage against Trump has converged. Against the Tariff Man, Xi Jinping’s regime has howled that they will “fight to the end.” But for the Communist Party of China (CPC), this is about defending their whole growth model, which was dependent on and subservient to the U.S.-ruled global economic system. As Martin Wolf put it in the Financial Times (1 April), “In today’s world, the US is a revolutionary—more precisely, a reactionary—power, while supposedly communist China is a status quo power.” Indeed, China’s swift counter-tariffs have been aimed at defending the dying global liberal order.

After so-called Liberation Day, the fantasy land that the CPC lives in was on full display: Trump’s chaos is supposedly going to gradually and peacefully push other countries into China’s arms. Temporarily there will be diplomatic noise and perhaps some countries may come closer to China’s orbit. But Trump’s imperialist clampdown will force the vast majority of U.S.-dominated states to kowtow to his demands for an anti-China alliance.

The left believes either that the People’s Republic of China (PRC) is a rising imperialist power or that it is the tip of the anti-imperialist spear. Both characterizations are fundamentally mistaken in assuming that the CPC is looking to upend the American order. At heart, what characterizes the rulers of China is their conservative bureaucratism. Pressure from the imperialists pushes the CPC to defend the workers state in its own, disfigured way. Yet its overarching goal is not to break up and replace the American world order but to stay number two.

To paraphrase Gramsci, as the old world dies and a new one struggles to be born, now is the time of monsters. Today this applies precisely because the unraveling of the American world order is creating a power vacuum that the septuagenarian Stalinist bureaucrats of the CPC are unwilling to fill. Their refusal to fight for a global socialist order exacerbates the conditions for crisis in China and the whole Global South. No country today apart from China can supplant the U.S. empire. This is why, despite the rotting out of American industry, the rest of the world continues to bow to Washington and Wall Street’s dictates.

For China, the old model of integration into U.S.-led globalization cannot continue when Trump & Co. are blowing it apart. No matter how many billionaires Xi Jinping summons to Beijing, the imperialists are now determined to strangle the People’s Republic, even if this means they cannot take advantage of cheap Chinese labor anymore. But what is the CPC doing? Continuing on the same old model of exports, which has led to workers and youth facing wage cuts and ballooning unemployment. The PRC continues to depend primarily on the dollar to trade, keeping the economy hostage to Wall Street and the Fed. As a result of bureaucratic infighting for petty privileges, huge imbalances in the economy are left unresolved, leaving factory workers unpaid for months. To satisfy the imperialists, domestic capitalists are allowed to make gigantic profits in necessities such as healthcare, education and housing.

Wang Yi, China’s foreign minister, recently restated the CPC’s dictum that “economic globalization is irreversible” (Xinhua, 24 February). This is an objectivist view of history, one in which the global division of labor and production will simply grow with the passage of time. Prosperity and peace are supposed to follow from this rational configuration. What the CPC denies is that U.S. hegemony was the essential condition for the expanding global economy, with American ships commanding the world’s oceans. The CPC’s view covers up the decay of imperialism as an obstacle to the internationalization of the productive forces and thus rejects the struggle against imperialism.

This refusal to recognize the reality of globalization as U.S.-led has serious strategic consequences for China. For example, the CPC clings to the illusion that the EU can become a geopolitically autonomous pole. China’s economic woes from U.S. tariff pressure are supposed to be resolved by trade with the European continent—as if Europe were not dependent on and aligned with the U.S. The continent’s “great” powers depend on the U.S. for bailouts when recessions hit, and their armies cannot fight for more than a couple of weeks without American aid. Furthermore, the European imperialists don’t want to see a workers state become the architect of an alternative order (nor do the national capitalists of the Global South, for that matter).

The CPC’s pacifist illusions in the world order stem directly from its nature as a bureaucratic caste. Xi Jinping and his gang aim to protect their parasitic rule on top of the People’s Republic and its state-controlled economy. Without class struggle as the compass guiding their actions, and espousing “socialism in one country,” the bureaucracy can only seek accommodation with world imperialism. Even when the bureaucracy is pushed into confrontation, its narrow national outlook leads toward seeking deals with the imperialists at the expense of the global anti-imperialist struggle. Ultimately, with international socialism not in their sights, they can only hold on to the illusion of “peaceful coexistence.” The crux of the problem is that the capitalists do not see peaceful coexistence as possible with a workers state.

There is no doubt that the Chinese Stalinists are being pushed into a more confrontational stance against the U.S. imperialists. But what drives them is the defense of their own privileges. A swing to the left will be conducted in a repressive, bureaucratic manner that undermines the defense of the workers state. Rather than seeing the workers and peasants of China as potential enemies to be surveilled and controlled, genuine communists would aim to unleash the potential of the masses in the struggle against imperialism.

Without a perspective of global socialism, China can be isolated. The nationalistic Maoists argue that this would not be a problem because China today is not the technologically backward China of the Great Leap Forward. But even the Soviet Union under Brezhnev, which was on a par with the U.S. militarily, couldn’t break the imperialist encirclement. From Brezhnev’s USSR to Xi’s China, without a plan elaborated by soviet democracy, bureaucratic command stifles advancements in technology and in the masses’ living standards. Even now the CPC’s plans to automate production are putting millions of manufacturing jobs on the line.

The status quo is not tenable. Moving against the imperialists would also entail clamping down on the Chinese capitalists. This could be explosive within the bureaucracy itself, as many have material ties to that class. To radically change course would also cause shocks that would invite the specter of mass upheaval. Ultimately, the Stalinists cannot provide a road forward for China, no matter which face they present. A revolutionary internationalist program is the only way out for a workers state under siege. This is the lesson to be learned from the destruction of the Soviet Union. The ultimate choice for China is either political revolution or social counterrevolution. Stalinist autarky will only delay the inevitable.

World Conflicts

Today, China is the world’s pre-eminent industrial power. Its shipbuilding capacity is 232 times that of the U.S. Yet compared to its hard economic and military strength, China’s actual influence on global events is small. The People’s Liberation Army (PLA) is seen nowhere in the world’s major conflicts.

NATO accuses China of aiding Russia’s war in Ukraine with “dual use” technology. The reality is that China has not sent a single round or shell. It has economically propped up Russia by exploiting the sanctions to get cheap gas (and flooding Moscow with cars). But trade is not the same thing as direct military assistance, which the Americans have given Zelensky’s Ukraine in heaps. As China’s representative to the United Nations Security Council put it in referring to the length of the war: “If China had really provided military supplies to Russia, the situation on the battleground would not have been where it is now” (un.china-mission.gov.cn, 16 January).

Similar can be said of Israel’s genocide in Gaza. Unlike Soviet military aid to the Palestinians, PLA missiles are not in the hands of Hamas or Hezbollah. Instead, there are only calls to return to “international law.” China’s lack of engagement in the Palestinian conflict disproves both the claims that China is an imperialist power and that the CPC is an anti-imperialist force. If either of these claims were true, China would be heavily intervening to deal a blow to the Americans. Under revolutionary internationalist leadership, the People’s Republic would aim to forge an anti-imperialist alliance with the workers and oppressed of the Global South. Palestinian fighters with Dongfeng missiles and drone swarms dealing a blow to the imperialists in the Middle East would not only advance their own liberation but also restrict the imperialists’ ability to strangle China through a military buildup in the first island chain.

Taiwan

Then there is Taiwan. The imperialists have drawn countless projections of when and how a war could take place. For the U.S., Taiwan is a chess piece too precious to simply give up. Militarily, it is an unsinkable aircraft carrier right off the mainland. Economically, this is where the majority of advanced semiconductors are made. And importantly, there is Taiwan’s political use: both as an example of Chinese “liberal democracy” to lambast the Stalinists with and as a trap for a PLA invasion that could shatter the brittle bureaucracy and open the road to counterrevolution.

As for the CPC, it does not want to cross any red lines over Taiwan, insofar as it wants to grow the Chinese economy within the U.S. order. But if Beijing is kicked out of the U.S. order (despite the CPC’s wishes), then the prospect of war over Taiwan could increase. A serious economic downturn could also make war an attractive option for the regime. However, armed reunification under its “One Country, Two Systems” scheme would mean trying to conquer Taiwan with a program that alienates the proletariat and retains capitalism, thereby maximizing opposition to the PRC. Instead, Trotskyists would aim for revolutionary reunification by extending a social revolution to Taiwan, with an expansion of democratic liberties for the working class, and political revolution in the mainland, with workers taking the reins of power.

In line with Trump’s belligerence, the quisling bourgeoisie in Taiwan is upping the ante by deporting pro-unification influencers. It has also agreed to build multiple TSMC chip factories in the U.S. Workers in Taiwan clearly fear war and therefore wish to keep the status quo. However, this status quo is being ripped apart by the island’s imperial masters. This makes the struggle against U.S. imperialism the burning task, which can be led by neither Taiwan’s capitalist parties nor the Stalinists, who want to retain capitalism and thus seek alliances with the island’s bourgeoisie. Only a proletarian revolutionary struggle against American domination could mobilize the working masses. This would also be the most effective safeguard of peace in the Taiwan Strait—if you kick the Americans out, there would be less cause for the PLA to invade.

Global Trade

The CPC’s whole development strategy has been based on exports, whether those be Nike shoes in the 1990s or homegrown electric cars today. This has meant integration and participation in global trade via the dollar. For many decades, dollars gained by Chinese exporters have been recycled back into the U.S. Treasury, financing America’s debt-fueled expansion by extorting the Chinese working class. Simultaneously, this allowed U.S. capitalists to gut industry and weaken the American proletariat—without a corresponding collapse of living standards.

Unlike what Xi Jinping claims, China’s trade with the U.S. has not been “mutually beneficial and win-win.” In China, massive economic resources have been devoted to exports rather than consumption, keeping 900 million people living on less than 3,000 yuan per month (approx. $412 USD). The doubling down on this model, even with high-tech products, means that the Chinese economy is more vulnerable to tariffs than that of U.S. imperialism.

Since 2013, the bureaucracy under Xi Jinping has consciously tried to shift away from this dependency on the U.S. dollar. In came the “Belt and Road Initiative” (BRI) and “renminbi internationalization.” Instead of buying more U.S. Treasuries, China would use dollars to build infrastructure abroad and push others to trade with the yuan. The problem is that without a political and economic break with the imperialists, this simply amounts to dollar exchanges with extra steps.

State control of the yuan, while an important tool for China to protect its economy, also means that trading abroad with it is essentially bilateral bartering. The yuan is still largely pegged to the dollar in order to keep exports flowing and ensure China is a stabilizing factor in the American order. In fact, while the BRICS blow hot air about “de-dollarization,” all their currencies rely on the dollar. Instead, the People’s Republic should establish a convertible currency backed by real value, such as gold, giving it global circulation. To prevent potential capital flight from China, the domestic capitalists should see their wealth expropriated under workers control. Creating the basis for an alternative world trading system, one based on the interests of the international proletariat and where global exchanges occur outside of the dollar, would directly undercut U.S. imperialism.

Such a break with U.S. hegemony requires defeating the CPC bureaucracy’s program of “socialism in one country.” What is posed is not a return to the autarkic poverty of the Maoist period but a struggle for the international extension of social revolution. By this, we do not mean that China must militarily export revolution but that its trade and foreign policy should act in the interests of the international proletariat—the best way to safeguard the People’s Republic.

In contrast, many of the Belt and Road projects were built with imported Chinese workers, often to the detriment of the local working class. Where those workers are not excluded, BRI operations abroad suppress union organizing. This inflames nationalist tensions in the Global South against China and makes it much harder to show workers that they have an interest in its defense.

Development plans should be drawn up in the interests of the global working class. Right now, China’s torrent of exports is causing deindustrialization across the Global South. Thousands of South African steel workers are threatened with layoffs not only because of U.S. tariff threats but also due to overcapacity in China. Instead, production quotas should be determined under the joint control of the two countries’ workers. Rather than excluding local workers, Chinese manufacturers moving abroad should be under PRC control, with local workers hired under unionized conditions. Paying these workers a living wage would completely undercut the imperialists, whose whole m.o. is to pay starvation wages, and gain for the People’s Republic millions of staunch defenders.

If genuine Bolsheviks were in charge, workers in China’s factories abroad would receive political training with the aim of fostering proletarian anti-imperialist struggle. As the imperialists try to squeeze China out of the Global South, the People’s Republic should rely on workers instead of the fickle and weak local bourgeoisies to defend its factories. Moreover, industrializing the Global South would lift billions out of poverty while also boosting consumption and living standards in China.

Economic Stagnation

The acute sense of crisis in China comes as the regime doubles down on the old economic model while the Americans drive it off a cliff. This explains the increasingly rapid musical chairs within the Central Committee, with ministers for Defense, Agriculture and Technology being “disciplined.” Furthermore, a global economic slump would give the U.S. imperialists a chance to massively increase sanctions on China. Cutting off cheap Chinese imports goes hand in hand with the imperialists’ attempt at reindustrialization in the West.

A major slowdown for the world economy would mean a huge economic shock to China. But the bureaucracy cannot afford millions of unemployed workers, who could threaten another 1989 Tiananmen. The economy would likely be left in a zombie-like condition, with nonproductive factories kept running for the sake of keeping people employed. As the old Soviet joke goes, “they pretend to pay us, and we pretend to work” (although in China this is for 72 hours a week). Even now, state industries producing low-quality steel have been kept running despite the construction slump. Such a Brezhnev-like stagnation would push China far back in the technological race against the West. Already this is the case in the sluggish property sector, where prices are stabilized by state-owned real estate companies buying up land from…state-sponsored land auctions. Young people already speak of the regime as having entered “garbage time.”

More and more of the economy is reliant on the state sector. Foreign investment has dropped sharply while gigantic amounts of state credit are directed toward solar panel and electric vehicle factories. Obviously, this has a hugely progressive element. Mass electrification and automation could mean a significant rise in living standards and a rapid reduction in working hours. Resources could be poured into social needs to conquer the “mountains” of healthcare, education and, increasingly, elderly care.

But the rule of the CPC parasites distorts economic planning and prevents workers from enjoying the fruits of their labor. Solar farms were left disconnected from the electricity grid for years while petty provincial bureaucrats preferred to build plants burning local coal. Twenty million electric cars can be produced each year, yet the average worker can barely afford one. The state economy must be put under the control of workers rule, acting in the interests of the masses and not those of the bureaucrats.

The bureaucratic caste cripples its own ability to plan by eliminating or obscuring economic data. This pogrom against statistics is committed so that careerists can fake figures, get promoted and hide how much production is being siphoned off for their private interest. Meanwhile, Beijing continues to demand an ultra-high tempo of growth, which gives the bureaucrats prestige and legitimacy. This means continuing the obscene overcapacity and wasteful production, all to meet a GDP target. The tempo of investment in exports must be lowered. Excess capacity should be retooled toward other social necessities as well as to drastically reduce prices and allow workers to live better.

For the People’s Republic to weather the unraveling of the American world order, the CPC’s “socialism with Chinese characteristics” must be swept out. For the last 40 years, this deal with the devil appeared to have brought immense success to the Chinese economy. The reality is that it buttressed the decaying American order, allowing the imperialists to spend above their means by enslaving the world proletariat. Now the devils in Washington are rejecting this deal. But the bureaucrats in Beijing are so thickheaded as to believe that their strategy of essentially doing nothing is winning(!!). No. The Chinese economy is far more vulnerable to imperialist strangulation than the other way around. The task of revolutionaries is to ensure that the People’s Republic minimize its vulnerability in the coming crises by extending the forces of socialism on the world arena. There is little time to lose.