Apologists for capitalism argue that the economic progress of China is a proof of the preeminence of the market system when it comes to potential world-wide economic growth. Capitalism, in this conception, will just go on and on developing the world. Others, including Chinese scholars, comprehensively rejected this abstraction and instead argued that an immense weakness of western Imperialism at the end of the 20th century had combined with a huge Chinese state effort to create national infrastructure and transport, to mean that the relatively well educated and very cheap labour force of China could be accessed by international capital, but without foreign powers being able to dictate terms, or push over the Chinese leadership and carve up Chinese political and social organisation and create a structural dependency in China on the Imperialist centres. The strength of the 1948 Chinese revolution - with its successful twenty year war against Imperialists led by the Japanese invasion and their domestic allies - was sufficient to allow the emergence of the biggest market in the world in China without it liquidating key domestic political and social priorities. At the same time, western Imperialism, the strongest force on the planet, was already coming to the end of its unquestioned international dominance. (For example after the Vietnam defeat in 1974, local ruling classes in the Middle East created their own investment capital by means of their ransom of the west over oil prices. Since the outset of the catastrophic 'war on terror' parts of Latin America have partially or completely broken with US hegemony.) Moreover, Imperialism even found itself no longer able to routinely export its own internal conflicts and the various crises that they produced, to its various empires.
In this rather different perspective, rapid Chinese economic development was not 'organic' to capitalism, but rather it emerged as a result of a particular political and economic conjuncture where, on the one hand, the 1917 revolutionary wave had been definitively defeated but, on the other, where that same global struggle over the legacy of 1917, and its world wide consequences, had exhausted Western Imperialism, its main enemy. The West found it had no alternative but to mount vast new internal offensives against its own labouring classes to shift the accumulated balance of forces at home while simultaneously making concessions to key, previously colonial or under developed countries, which included having to accept the terms of the Chinese leadership, in order to open up Western profits from China.
A new and different capitalist future?
Is China to become the equivalent of Britain, the first capitalist world power that built its vast reserves of capital through a century of domination of the slave trade which then powered the industrial revolution and helped it dominate one fifth of the globe for a century? Or is China to be a 'new' US which, through the industrial exploitation of its own continental market and its policing of the world, reorganised global capitalism, created new technologies and launched the new electronic revolution? In other words will China now begin to usher in a new period of growth of the world's productive forces in the way that previous leading nations and their empires did? And if so, will this new form of dynamic capitalism cast off the political trappings of western democracy with the rest of western dominated history?
US and other western thinkers talk and write of a new leadership of the capitalist world now emerging. They shake their wise old heads and despair that the new power in the world wide capitalist system will not be led by the benign democracies of the west as previously. Instead the autocratic and centralised Communist Party of China and its vast machine will be the world's ultimate capitalist political 'model.' It is interesting that both the main party idealogues in China and the intellectuals in various western agencies and think tanks, like Chatham House and the 'Foriegn Affairs' journal, basically share the same view. Abandoning relatively recent assertions (eg GW Bush) that it is capitalism that produces democracy, the more pessimistic oracles of the 21st century seem to have a different take on the relationship between succesful capitalism and democracy it seems. As do their counterparts in the CCP.
But this line of reasoning is a cul de sac. In fact, historically speaking capitalism has had little to do with democracy. Those democratic gains forced open in the West in the first part of the twentieth century by workers and the women's movements have been effectively marginalised for decades. G.W. Bush may think that it matters which millionaire wins the US presidency. The poor in the US and the rest of the world have little regard for the impact on them of this sort of 'democratic' exercise. No. The key question for understanding the growth of China and its impact on the rest of the world is nothing to do with idle speculation about the integral links, or otherwise, between democracy and the market system; it is rather the question can China lead the world out of the capitalist crisis, opening the world to a new period of development? Is capitalism, albeit unevenly and brutally, creating, via China and the rest of the BRIC economies, a new epoch for itself and therefore for the rest of us?
Where are we now?
China's per capita GDP in 2013 was $6807. (GDP per capita is the worth of goods and services produced per year, per head of the population.) The US's was $53143. China's per capita GDP rose by nearly half since 2009. In the US it rose by $6000 approx. As Chinese Communist Party leaders often say, China, from the point of view of the overwhelming majority of its population, is still a developing country. It is the sheer size of China's population that means that China's overall GDP will outstrip that of the US's in the next decade or so.
It turns out that China is far from opening a new epoch for capitalism. China has been brutally effected by the current capitalist crisis and deep contradictions are emerging from beneath the surface of every day Chinese life.
It has been the case for a decade that UN figures show social upheaval in China competing with that of South Africa as the most prononounced in the world. Now government debts in China have balooned to 240% of GDP as more and more social measures are required to 'flatten' social unrest and deal with the estimated extra 30 million thrown out of work by the collapse of the US import market. As government debt has expanded so quickly debt interest is high. This year China is set to pay an interest bill of about $1.7 Trillion (an amount that is larger than the total economies of South Korea, Mexico and Indonesia.) The Chinese population have, in the meantime, been exhorted to 'work hard and live plainly; do not wallow in luxuries and pleasures' by President Xi Jinping. At the end of October this year Chinese officials announced the lowest quarterly growth rate in the economy for five years (7.3%) and warned the Chinese people that they should prepare for 'a new normal' of slower economic expansion. But when an estimated 32% of new credit received by companies and agencies is used for paying off interest in loans and $1290 of China's per capita GDP (see above) is debt servicing, then productive expansion is undermined.
These trends show how modern China, with one leap, is moving from the productive expansion of its economic life, initially stimulated by the market ushered in by Deng Xiaoping in the late 1980s, directly to the economic 'debt model' followed by the decaying West for the last forty years. There is not a new model of capitalism here; there is no great rennaissance of the market system with a new vision of a dramatically reorganised world premised on its emergence. Rather the slow, painful history of vigour and victory followed by decline and decay witnessed over a century in Britain, rather less in the case of the US is now repeating itself, this time not accompanied by great new technological breakthroughs, over a period of a few decades, in the case of a barely developing China. The historical cycle of capitalism is repeating itself, in compressed ways, less creatively, with less hope for the future.
The leadership of the CCP is of course responding to these realities but in the classic way of those bureacratic castes that have emerged, increasingly distantly from some great social tumult which remains the entirely theoretical grounds of their own legitimacy. In fact they respond in all the colours of the political rainbow, levened only by self interest. As the market grows in its power and influence in Chinese society so the bureaucracy defends its role in meeting society's needs by being the managers of that market. Moral and judicial campaigns are carried out against corruption in the state machine as greater demands are made on the people encouraging the virtues of thrift. The reality is, as the sea of corruption bubbles over, that the market is remaking the political leadership in China and not the otherway around. Indeed some of the main targets of the CCP's anti-corruption campaign have been seen as political critics of the leading CCP faction rather than the source of greedy malpractice. The growing political corruption of the CCP echoes the growing day to day dynamics of the relations between the people and their state, the state with enterprises, the enterprises with the state, and on it goes. The political crisis in China is supressed only by the governement's perceived role in the massive expansion of living standards. It is no longer seen as a moral force. The vast majority of ordinary Chinese people will therefore not willingly 'prepare for the new normal.' And capitalism has not embarked on a new stage of history; a new global adventure. It turns out that project will be of an entirely different character and be in entirely other peoples' hands.
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