Australasian Spartacist No. 236
U.S. Escalates Trade War, Military Provocations
Hands Off China!
Down With U.S./Australia Alliance! Defend the Gains of the 1949 Chinese Revolution!
The following article is reprinted from Workers Vanguard No. 1142 (18 October), newspaper of the Spartacist League/U.S. Today’s growing U.S.-led imperialist aggression against the Chinese deformed workers state has been aided by the Australian capitalist rulers’ extensive year-long campaign against “undue” Chinese influence in the region (see “Ugly Racist Outcry Over China’s ‘Influence’” in Australasian Spartacist No. 234, Autumn 2018). Earlier in the year, this chauvinist campaign was presented to the U.S. Congress as an example of what is needed to “contain” China.
Now, in addition to the strategic U.S. spy base at Pine Gap and the U.S. marine base in Darwin, the Australian and U.S. governments are moving to develop a naval base in Australia’s PNG neo-colony. Situated on a deepwater port in Manus Island, this base will be used to push back Chinese influence and facilitate further imperialist provocations against China, including in the South China Sea.
Trump’s belligerence, combined with the Australian government’s campaign against Chinese “interference” in the region, has exacerbated divisions within the Australian bourgeoisie between the more hawkish pro-U.S. elements and those primarily worried about the potential loss of profits from any disruption to their lucrative trade with China. Thus Canberra has sought to somewhat distance itself from Trump’s trade war. Nevertheless, ever loyal to the reactionary U.S./Australia military alliance, there can be no doubt that the Australian bourgeoisie would line up behind their U.S. big brother in the advent of a shooting war.
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The Trump administration has launched a wide-ranging offensive against China centered on an aggressive trade war combined with military provocations. It escalated this summer with a series of increasingly harsh tariffs on Chinese exports. However, this reactionary campaign goes well beyond pressuring Beijing to grant trade concessions. The U.S. bourgeoisie is determined to deliver a severe blow to China. In this, President Trump is implementing policies that Democratic Party pols have championed for years.
In early July, Trump slapped a 25 percent tariff on $34 billion worth of Chinese imports. That was followed last month with a 10 percent tariff on $200 billion worth of goods (slated to increase to 25 percent at the beginning of next year so as to limit the effect on the price of holiday purchases). Trump is threatening to impose yet another round that would hit essentially all remaining $267 billion of Chinese exports to the U.S. China has retaliated with punitive tariffs on $110 billion in U.S. products, but Trump boasts in his usual blowhard fashion that the stronger American economy makes it the sure winner in the conflict.
The current campaign is part of an unrelenting counterrevolutionary offensive against the Chinese deformed workers state by the U.S. and other imperialist powers. The 1949 Chinese Revolution was a historic gain for the working class internationally. The revolution, carried out by a peasant-guerrilla army under the leadership of Mao Zedong’s Chinese Communist Party (CCP), overturned the rule of the capitalists and landlords and created a workers state, with an economy centrally based on collectivized property forms. However, the workers state was deformed from its inception by the rule of a parasitic bureaucracy fundamentally similar to the one that came to power in the Soviet Union in a political counterrevolution led by Stalin beginning in 1923-24.
The collectivized economy freed China from imperialist domination, lifted hundreds of millions of people out of dire poverty and laid the basis for significant advances in industry. Despite several decades of “market reforms,” China remains a deformed workers state. As Trotskyists, we stress that just as workers in the U.S. must defend their unions against the bosses despite the sellout labor leadership, the international working class, especially in the U.S., must stand for unconditional military defense of China against imperialism and internal counterrevolution. We are for proletarian political revolution to oust the Stalinist bureaucracy and replace it with the rule of workers and peasants councils committed to the fight for world socialism.
Dems, Union Tops Back Trump’s Trade War
From the start of this trade war, Trump has had the support of the Democrats. Senate minority leader Chuck Schumer declared: “President Trump is right on target” because “China is our real trade enemy.” Bernie Sanders, darling of the reformist left, has repeatedly declared his support for tariffs on Chinese imports.
That stance has also been embraced by the top leaders of the trade-union bureaucracy. Acknowledging that tariffs would hurt some U.S. industries and their workers, as well as consumers, AFL-CIO president Richard Trumka declared, “In the long term, if it’s good for the country it’s going to be good for everybody.” Just as during the Cold War era the AFL-CIO tops were among the most rabid supporters of American imperialism against the Soviet Union, today these labor misleaders are helping the imperialists mobilize for their ultimate objective, the restoration of capitalist rule in China.
Protectionism is poison for the U.S. workers movement. It means blaming foreign workers for the loss of jobs in the U.S. instead of fighting the capitalists at home and forging bonds of class solidarity with workers overseas. The necessary class-struggle fight has been undermined and gutted by the union bureaucrats. They have been active accomplices in the capitalists’ one-sided class war, selling multi-tier wage schemes and other givebacks to defend the profitability of U.S. capitalism against its rivals.
The union tops promote the lie that labor and capital have a common interest. A case in point is the tariff on steel imports, enthusiastically pushed by the heads of the United Steelworkers (USW). Guaranteed higher prices, the steel bosses are raking in even more billions in profit. The wretched USW tops expected that the workers would also be rewarded. On the contrary. With union contracts having expired, U.S. Steel and ArcelorMittal have hard-lined it with the USW, demanding that it accept concessions.
Trump is essentially implementing the “pivot to Asia” that Barack Obama announced but only partially implemented as U.S. forces remained bogged down in the Near East and Afghanistan. Ramping up what started under Obama, the Trump administration has been conducting aggressive military operations in the South China Sea and elsewhere near China’s east coast. U.S. destroyers have repeatedly entered territorial waters around the Spratly Islands, as have British and French warships at times. Recently, a U.S. warship came within 45 yards of colliding with a Chinese destroyer.
Meanwhile, U.S. B-52 long-range bombers have conducted overflights of the region, including joint drills with Japanese fighter jets. Japan staged a further provocation with a drill involving a submarine, two destroyers and a helicopter carrier. U.S. Navy and Marine forces have also staged “live-fire” drills in the area. Additionally, the U.S. infuriated Beijing last month by imposing sanctions on the Chinese military’s Equipment Development Department for buying Russian combat aircraft and a surface-to-air missile system.
Last month, Washington approved a $330 million arms sale to capitalist Taiwan to bolster its air and combat capabilities. The Pentagon is reportedly considering a vast military operation in November involving U.S. warships, combat aircraft and troop deployments. The proposed show of force would take place near China’s territorial waters, not only in the South China Sea but also in the Taiwan Strait. Control of the Strait would be crucial in the event of war between the People’s Republic of China and the U.S. over Taiwan, which since the late 17th century has been part of China. As a key part of our unconditional military defense of the Chinese deformed workers state, we stand for the revolutionary reunification of China, through socialist revolution in Taiwan and political revolution on the mainland.
In an October 4 tirade, Vice President Mike Pence denounced China for not only engaging in military “aggression” but also unfairly subsidizing state-owned companies and seeking dominance in the high-tech field with its “Made in China 2025” plan. Meanwhile, the U.S. has sought to line up its allies in the economic war against China. At Washington’s insistence, a clause was inserted in the new version of NAFTA—a treaty of imperialist depredation against Mexico—essentially giving the U.S. veto power over any trade accord that Mexico or Canada might negotiate with China. That clause is being touted as a model for future trade deals, with the aim of quashing attempts by Beijing to offset U.S. tariffs by shifting trade to the European Union, Japan and Canada.
The U.S. demands that Beijing reduce the role of state-owned enterprises (SOEs) in the Chinese economy and that American firms be allowed to get majority stakes in businesses in China. This is tantamount to demanding that China abandon collectivized property relations! In addition, Washington demands that Beijing end its requirement that American companies investing in China establish joint ventures that share their technological know-how with their Chinese counterparts. But even the Wall Street Journal (26 September) acknowledged: “American companies initially brought the idea of joint ventures to China as a way to get access to a market of 1.4 billion people and tap a low-cost workforce. The bargain included helping Chinese firms become more technologically advanced.” Reportedly, the arrangement was first proposed by U.S. auto bosses in the late 1970s as Chinese leader Deng Xiaoping was turning to a program of “market reforms.”
A major aim of the U.S. tariffs is to boost the cost of Chinese-made goods imported into the U.S. and thereby encourage foreign companies to start shifting investments out of China. Foreign-owned private companies and joint ventures account for all but 10 percent of exports to the U.S. It is these companies, not SOEs, that will bear the brunt of Washington’s tariffs. Since the tariffs were announced, a number of foreign companies producing hi-tech products such as electronic components or machine tools in China for export to the U.S. have announced plans to move operations to Japan, South Korea, Thailand or other locations in Asia.
China Is Not Capitalist
Contrary to the claims of most bourgeois pundits that China has become a new capitalist power—a claim repeated by the International Socialist Organization, Socialist Alternative and many other reformist leftists—the Chinese economy operates in a way that is fundamentally different from capitalism. The core of the economy is collectivized, not privately owned by capitalist exploiters. State-owned enterprises dominate strategic industrial sectors as well as the banking system. The SOEs today maintain exclusive ownership or absolute control in strategic sectors such as the defense industry, power generation and distribution, telecommunications, civil aviation, shipping, coal, petroleum and petrochemicals. In other key sectors, SOEs have been granted powers of administrative oversight, personnel appointment, etc., giving them a high degree of control.
Testifying to the superiority of a collectivized economy, China’s output continued to grow while the capitalist world was plunged into economic meltdown following the 2007-08 collapse fueled by Wall Street financial speculation. In the U.S., millions of jobs were wiped out while trillions of dollars went to bail out the banks, insurance companies and auto bosses. In contrast, China channeled massive investment into developing infrastructure and productive capacity.
Those who argue that China represents a form of state capitalism point to the growth of an extensive private sector since the market-oriented reforms initiated by Deng. Those measures were an attempt to tackle the imbalances and incompetence inherent in the administration of the planned economy by the Stalinist regime, which excludes the working class from political power. As we wrote in the 1980s:
“Within the framework of Stalinism, there is thus an inherent tendency to replace centralized planning and management with market mechanisms. Since managers and workers cannot be subject to the discipline of soviet democracy (workers councils), increasingly the bureaucracy sees subjecting the economic actors to the discipline of market competition as the only answer to economic inefficiency.”
—“For Central Planning Through Soviet Democracy” (“Market Socialism” in Eastern Europe, Spartacist pamphlet, July 1988)
The Stalinist bureaucracy opened China to imperialist investment, privatized many (non-strategic) state-owned companies and replaced the state monopoly of foreign trade with a hodgepodge of ad hoc state controls. “Market reforms” led to a more rapid and broader development of the economy relative to the earlier period under Mao, when bureaucratic commandism marked the operation of the planned economy. But inequality has vastly increased along with the strengthening of the forces of counterrevolution, particularly the newly fledged capitalist entrepreneurs on the mainland and the old, established offshore Chinese bourgeoisie in Taiwan, Hong Kong and elsewhere.
Especially since the world financial crisis of 2008, there has been a concerted push by Beijing to reinforce the SOEs and reassert state dominance over the economy. SOEs are increasingly taking over private companies or forcing them into joint ventures. More broadly, the CCP has made it clear that it expects to dictate business decisions at private companies as well as at joint ventures with foreign partners. The CCP is increasingly establishing party cells in such companies, playing a key role in management decisions.
A major factor behind these moves is the Stalinist regime’s fear of the toiling masses, who are rightly resentful of bureaucratic corruption, mounting inequality, inadequate health care and paltry pensions as well as the vicious abuse of workers, particularly in the private sector. In 2005, the Chinese government acknowledged some 87,000 “mass incidents” of protest, mainly by workers and peasants. Since that time, Beijing has simply stopped publishing the numbers. Meanwhile, wealthy Chinese seek to invest their money abroad, draining resources from the country.
A proletarian political revolution would oust the Stalinist parasitic caste and establish soviet democracy, based on workers and peasants councils. Such a government would expropriate the domestic Chinese capitalists and Hong Kong tycoons and renegotiate the terms of foreign investment in China to the benefit of the toilers. A proletarian internationalist leadership would defend the collectivized property relations in China through pursuit of world socialist revolution.
Stalinism Undermines the Workers State
Washington’s 2017 National Security Strategy document laid out that for decades U.S. policy was rooted in the belief that China’s economic development and integration into the international order would “liberalize China.” But China did not “liberalize,” that is, become a new member of the capitalist order. The document concluded that it was necessary “to rethink the policies of the past two decades.”
The U.S. imperialists have been trumpeting their position as the “world’s only superpower” since the counterrevolutionary destruction of the USSR in 1991-92. They figured that they would replicate their victory over the Soviet Union in China through the destruction of the workers state that issued from the 1949 Revolution. In the years leading up to the destruction of the USSR, the main social base of Soviet leader Mikhail Gorbachev’s perestroika (market-oriented reforms), which turned out to be the precursor of capitalist counterrevolution, was the privileged younger generation of functionaries, technocrats and intellectuals. The U.S. rulers believed that with China’s increasing economic integration into the world market, a growing “middle class” whose personal economic interests were aligned with Western and Japanese capital would pressure the CCP regime to open up political life, thereby allowing the emergence of anti-Communist oppositional currents.
However, the Chinese Stalinists, concerned above all with preserving their privileged position atop the workers state, were not blind to the events that led to the destruction of the Soviet Union. They were determined that there would be no political liberalization, even at the academic/intellectual level. While there has been a significant growth of capitalist elements in China, they remain politically atomized. At the same time, the Stalinist bureaucrats continue to vigorously repress any independent political expression by Chinese workers and peasants.
The CCP leaders falsely believe that they can turn China into the global superpower of the 21st century in the face of the imperialists’ more powerful military forces, advanced technology and labor productivity. This illusory vision is an expression of the Stalinist dogma of “socialism in one country.” For Marxists, socialism—the first stage of communism—is a classless society that stands higher in economic development than the most advanced capitalism. The precondition for this is the abolition of capitalism on a world scale through proletarian revolution and the establishment of a society of material abundance based on an international division of labor. The productive forces have long outgrown the limitations of national borders. To seek to achieve “socialism” on a national basis is the antithesis of Marxism.
Reforge the Fourth International!
Washington’s current ratcheting-up of protectionist measures and military threats demonstrates that the imperialists seek ultimately to destroy the Chinese deformed workers state. This cannot be countered by the CCP bureaucracy’s chimerical quest for “peaceful coexistence” with imperialism but only through the struggle to extend workers rule throughout the world.
U.S. trade protectionism, a mechanism to compensate for weakened competitiveness, points to the continued relative economic decline of American capitalism. The consequences of the drive by America’s rulers to reverse their declining economic weight have been manifest under the rule of both Democrats and Republicans—the decades-long war against labor; the increased immiseration of the poor and the aged; desperation in the ghettos and barrios, where there is not even a dim hope of decent industrial jobs.
By fighting for their own class interests against the U.S. imperialist predators, the U.S. proletariat also strikes a blow for the liberation of the exploited and oppressed the world over. The purpose of the International Communist League is to reforge Trotsky’s Fourth International, the world party of socialist revolution, which will bring to the fore the principle of working-class unity in the struggle for a socialist world.