{"id":18323,"date":"2018-08-09T23:07:28","date_gmt":"2018-08-09T15:07:28","guid":{"rendered":"http:\/\/chinaworker.info\/?p=18323"},"modified":"2018-08-10T03:52:44","modified_gmt":"2018-08-09T19:52:44","slug":"china-deepening-crisis-and-mass-resistance","status":"publish","type":"post","link":"https:\/\/chinaworker.info\/en\/2018\/08\/09\/18323\/","title":{"rendered":"China: Deepening crisis and mass resistance"},"content":{"rendered":"

Introduction to the Commission on China at the CWI School 2018 by Pasha of Socialist Action (CWI in Hong Kong)<\/strong><\/p>\n

The past one year can be described as a year of big changes in China \u2013 showing a deepening crisis of the one-party dictatorship and China’s special form of state capitalism. There has been a historic change\u00a0in\u00a0the\u00a0‘Communist Party’ (CCP)\u00a0regime’s structure\u00a0with the coronation of Xi Jinping as ‘ruler for life’ in March.<\/p>\n

In the class struggle, since April, we have seen a series of daring strikes that\u00a0have\u00a0spread across many provinces. And in world relations the US-China conflict has sharpened dramatically. This is the most important global power conflict between the two biggest economic powers.<\/p>\n

China’s trade ministry\u00a0described\u00a0President Trump’s tariffs imposed on\u00a0July 6<\/span>\u00a0as\u00a0\u201cthe largest trade war in economic history\u201d.\u00a0It is not yet the \u201cbiggest ever\u201d but\u00a0further escalation is possible.\u00a0The\u00a0US-China conflict is not a passing phenomenon; it is now a permanent reality, with ups and downs, that forms a crucial part of the CWI’s\u00a0perspectives\u00a0for world capitalism.<\/p>\n

And we also have a new phase of China’s economic\u00a0malaise. The regime’s crackdown on debt and shadow banking has led to a new\u00a0economic\u00a0slowdown and once again\u00a0at least a partial\u00a0shift back to stimulus policies i.e. more debt.\u00a0This shift can become bigger\u00a0in the months ahead.\u00a0China’s debt problem is a problem for the entire global capitalist system. No country in history has built up so much debt.<\/p>\n

\"\"<\/p>\n

Reversal of Deng<\/strong><\/p>\n

The\u00a0March meeting of the\u00a0National\u00a0People’s\u00a0Congress\u00a0\u2013 China’s\u00a0pseudo\u00a0parliament \u2013 was dubbed the coronation of Xi Jinping. It removed the term limits\u00a0on\u00a0the presidency\u00a0so Xi can rule for life.<\/p>\n

Since the late\u00a01970s, China\u00a0has been\u00a0ruled by a form of \u2018collective leadership\u2019, a system set up by Deng Xiaoping, the architect of China’s return to capitalism. Deng’s power sharing model, and other political rules, were designed to safeguard \u2018stability\u2019 and prevent power struggles\u00a0within\u00a0the state from going too far and threatening the existence of the dictatorship.<\/p>\n

Since the 2007-08 global crisis of capitalism the CCP ruling elite need a “strongman”, with unprecedented centralised power, to rescue it from its own crises \u2013 mounting debt and growing mass unrest.<\/p>\n

In six years since he came to power, Xi has waged an extensive anti-corruption drive, which is partly about corruption and gaining public support, but mainly has been used to consolidate Xi’s position\u00a0and defeat any opposition. But rather than overcoming the tensions within the Chinese state and ruling elite, Xi\u2019s consolidation of power has raised tensions to a potentially higher level.<\/p>\n

Despite massive censorship of the internet,\u00a0netizens in China were quick to express their cynicism\u00a0and opposition\u00a0online towards Xi\u2019s coronation with satirical metaphors.\u00a0The internet censors had to quickly ban a whole list of words such as \u201ctwo-term limit\u201d, \u201cconstitutional amendment\u201d, \u201cI disagree\u201d, \u201cNorth Korea\u201d,\u00a0and\u00a0even \u201cWinnie the Pooh\u201d.<\/p>\n

This exposed the true level of support\u00a0for\u00a0Xi among the masses. Some commentators described Xi as the strongest leader since Mao, but Mao was a\u00a0Bonapartist\u00a0ruler at the head of a movement that\u00a0overthrew capitalism in China;\u00a0the\u00a0gigantic\u00a0cult of personality that the regime built around Mao was only possible because of\u00a0his role in the revolution.<\/p>\n

Xi Jinping presides over a state capitalist system and\u00a0his real support base among the masses is exaggerated.\u00a0His power rests mainly\u00a0on repression, nationalism, massive media ‘brainwashing’, and that some sections of\u00a0the\u00a0population still experience improvements. But this is more and more precarious.\u00a0The foundations of Xi’s rule \u2013 unprecedented levels of debt,\u00a0increased repression and nationalism \u2013 constitute a succession of crises waiting to happen.<\/p>\n

Repression and backlash<\/strong><\/p>\n

Now state repression is the worst since 1989. The government\u00a0budget\u00a0for internal security\u00a0was 193 billion USD last year \u2013\u00a0it has tripled since 2007.\u00a0This\u00a0is\u00a019\u00a0percent\u00a0higher than\u00a0China\u2019s military budget.<\/p>\n

In the Muslim region of Xinjiang, which is half the size of India, China has built “the perfect police state” says the Guardian newspaper. Between 500,000 and 1 million Muslim Uighurs have been detained in military-style prison camps \u2013 up\u00a0to one in ten of the\u00a0population.\u00a0The CCP\u00a0now rules\u00a0Xinjiang through an openly racist apartheid-style system with more repressive laws for Muslims.<\/p>\n

Despite having arguably the most sophisticated repressive state machinery in the world,\u00a0mass resistance and protests are growing.\u00a0Since late 2017, the masses in China have boldly\u00a0taken part in\u00a0large-scale online protests, and\u00a0multi-province workers\u2019 strikes, representing a dramatic turn.<\/p>\n

In April, crane drivers went on strike in at least 13 provinces demanding better pay and conditions. They then called for a nationwide strike on May Day. Given the state repression and censorship, this is a feat in itself.\u00a0These struggles are\u00a0organised through closed online chat groups and instant messaging apps.<\/p>\n

Multi-province strikes<\/strong><\/p>\n

The crane drivers\u2019 strike was historic in the sense that was the most impressive, coordinated and daring action to date.\u00a0Previously almost all strikes in China\u00a0were in one factory\u00a0or\u00a0one district.\u00a0A nationwide strike is a very big change. The April struggle seemed to open the floodgates for nation-wide struggles.<\/p>\n

In June, it was the truck drivers turn. Truck drivers struck in more than 12 provinces protested against rising fuel costs, high road tolls, police harassment and\u00a0increased\u00a0exploitation by an Uber-style\u00a0hiring\u00a0app. The truck drivers’ action\u00a0was in cities\u00a0from Chongqing\u00a0in the West\u00a0to Shanghai\u00a0in the East. That\u00a0is\u00a0similar to\u00a0the distance from Madrid to London. To do this under the world’s most powerful dictatorship is impressive.<\/p>\n

And since April, army veterans in multiple provinces had been staging protests demanding\u00a0payment of\u00a0pensions and retirement benefits. Some veterans\u00a0were\u00a0beaten up by gangsters\u00a0paid by the local CCP governments. Through links and networks in the army, tens of thousands of veterans\u00a0were\u00a0mobilised to protests in solidarity from across the country.<\/p>\n

The\u00a0army veterans\u00a0struggle is important because for one it undermines\u00a0Xi Jinping\u2019s nationalist propaganda. There are 57 million retired soldiers in China.\u00a0This issue may\u00a0also impact on\u00a0serving soldiers. How can the state defend the “Chinese nation” if it lets its old veterans starve and beats them up when they protest?<\/p>\n

Earlier this year the government set up a new Ministry of Veterans Affairs because it was so worried about the veterans’ protests. But the fact that protests erupted anyway shows the limits of the state to deal with these problems.<\/p>\n

\"\"<\/p>\n

#Metoo in China<\/strong><\/p>\n

Amongst other important movements in China are the feminist and LGBT movements. The #Metoo movement that swept the world also affected China deeply.\u00a0In January, a Chinese academic working in\u00a0the\u00a0USA revealed online that she was sexually assaulted by her professor\u00a0twelve\u00a0years ago. Her tweet went viral and got huge support online among women in China<\/p>\n

This triggered a movement online especially in schools and colleges. This even forced the state to pay lip service and condemn sexual violence. At the same time, the\u00a0CCP\u00a0feared the movement would get out of control and\u00a0so\u00a0quickly banned any attempts to organise protests on the streets. A prominent feminist\u00a0blog\u00a0was banned.<\/p>\n

The state censors then moved to ban LGBT topics. Weibo, the main blogging platform in China, announced it would remove \u201cillegal content\u201d including \u201chomosexuality\u201d. This triggered a massive backlash. The #IamGay campaign called for a boycott of Weibo. With over 500 million shares, it was probably the largest online movement in the world. It forced the\u00a0company and the authorities\u00a0to reverse the ban on homosexual content.<\/p>\n

From the recent wave of struggles there are several features we can observe. Mass struggles in China are getting more organised despite state repression and censorship, capable of staging and coordinating struggles across the whole country. Workers are clearly learning from the past, they are realising that the problems cannot\u00a0be solved locally.<\/p>\n

Radicalisation of mass consciousness is also a feature, although\u00a0it is uneven. Workers generally confine their demands to economics, and avoid challenging the CCP regime directly, partly to avoid state repression and partly due to lingering illusions in the CCP.<\/p>\n

If the regime resorts\u00a0to repression and crackdown, which is definitely the pattern under Xi Jinping, it is\u00a0only\u00a0a matter of time before workers draw conclusions that the dictatorship is a barrier to any real change and\u00a0this will\u00a0turn their struggles\u00a0in a more\u00a0clearly political\u00a0direction.<\/p>\n

Economic slowdown<\/strong><\/p>\n

The Chinese economy is facing crises on multiple fronts. The economy is in a slowdown\u00a0after a short period of slight recovery\u00a0in 2017.\u00a0Since the start of 2018 the stock market has lost US$2 trillion, compared to\u00a0US$5 trillion in the big stock market crash of 2015.<\/p>\n

Economic data in the 2nd quarter is likely to be much weaker than the 1st quarter.\u00a0The retail figures in May were the worst\u00a0in 15 years<\/span>. The investment growth rate is the weakest for 20 years. Debt as a share of GDP has risen from 141 percent in 2008 to 256 percent last year. This figure rises to 304 percent of GDP if shadow banking is included. Actually, the real level of debt is much higher. This is because most of the shadow banking debt is not recorded. Even the government doesn’t\u00a0know\u00a0the full picture.<\/p>\n

The latest slowdown\u00a0forces the CCP to\u00a0revive\u00a0the stimulus strategy again. For ten years we have seen the same zig zag in economic policy \u2013 from stimulus to credit squeeze and back to stimulus i.e. more debt. The debt problem is particularly dire at the local government\u00a0level\u00a0(local governments in China refers to towns, cities and also provinces, so some are bigger than most national governments in Europe or globally).<\/p>\n

This was partly the\u00a0cause of\u00a0the protests of army veterans. In fact, the local governments\u00a0in at least 32 cities of\u00a0six\u00a0provinces\u00a0now finance their\u00a0social security and pension expenditure\u00a0with loans from banks or shadow banks. This\u00a0problem\u00a0will only get worse with the\u00a0rapidly ageing population of China.<\/p>\n

A city in Hunan province was unable to pay its\u00a0civil servants\u00a0on time\u00a0in May. Such wage arrears \u2013\u00a0for civil servants \u2013\u00a0were\u00a0the first in modern China\u2019s history. We are already seeing the debt crisis turning into a social crisis, and we are going to see more in the future.<\/p>\n

Trade war and imperialist conflict<\/strong><\/p>\n

The escalation\u00a0of the\u00a0US-China trade war is another blow to the already\u00a0vulnerable\u00a0Chinese economy. On\u00a06 July<\/span>,\u00a0tariffs imposed by the Trump administration on\u00a034 billion\u00a0USD\u00a0worth of imports\u00a0from China represented\u00a0the first shot after a long\u00a0period\u00a0of threats.\u00a0This has since been followed with tariffs on a further 16 billion USD of imports and Trump’s threat to\u00a0widen this to a further 200 billion USD of Chinese goods by September.<\/p>\n

The Chinese regime are forced to retaliate “dollar for dollar” with their own tariffs\u00a0against US goods, but actually they offered concessions to Trump and desperately\u00a0wanted\u00a0to avoid the trade war.\u00a0Within the wider trade conflict there is a \u201ctech war\u201d. The main focus now of US imperialism and Trump is to stop\u00a0“Made in China 2025” \u2013 the CCP’s plan to become a technological superpower.<\/p>\n

The US government sanctions which banned the 3rd largest telecom infrastructure company\u00a0ZTE\u00a0from\u00a0buying\u00a0anything from\u00a0US\u00a0companies, basically forced the closure of the company for 70 days\u00a0in April-May.\u00a0The ZTE crisis exposed China\u2019s dependence on the West for technology. ZTE gets 90\u00a0percent\u00a0of its semi-conductors from US companies.<\/p>\n

Trump agreed to remove the ban on ZTE, but the subsequent deal is\u00a0still\u00a0humiliating for the company and the Chinese state. They have to pay a fine worth\u00a0two\u00a0years’ profits. But worse, they had to dismiss the whole board\u00a0of directors\u00a0and accept US “compliance officers” inside the company. This is\u00a0a bit similar to\u00a0what the ‘Troika’ of IMF and EU did to Greece \u2013 putting\u00a0EU\u00a0bureaucrats in to check the Greeks weren’t “cheating”.<\/p>\n

The situation is complicated by the fact that even Trump has\u00a0partly\u00a0lost control over the trade war \u2013 the US Congress, Republicans and Democrats,\u00a0now\u00a0demands\u00a0even tougher measures against China.<\/p>\n

\"\"<\/p>\n

Devaluation?<\/strong><\/p>\n

As part of its retaliation, China has allowed\u00a0its currency,\u00a0the\u00a0yuan,\u00a0to\u00a0fall\u00a0against the dollar. However, this\u00a0is a dangerous move as it could trigger mass capital flight\u00a0from China, like what happened in 2015. The regime would then have to impose more capital controls.<\/p>\n

But with more capital controls it can say goodbye to the dream of “internationalising the\u00a0yuan”, to make it a global reserve currency.\u00a0In fact, the\u00a0yuan’s internationalisation\u00a0has gone backwards in the past three years. Fewer countries want to use theChinese currency\u00a0in international payments. The Swiss\u00a0franc and Canadian dollar now have a bigger global share than the\u00a0yuan. This matters because the domination of the US dollar\u00a0in the global capitalist economy\u00a0restricts the policies the Chinese regime can follow.<\/p>\n

The\u00a0US and China, the two largest imperialist powers, are contending for economic and geopolitical dominance. The confrontation between them\u00a0has been sharpened\u00a0by the global crisis since 2008.<\/p>\n

While a \u201chot war\u201d\u00a0or direct military clash\u00a0is not an immediate perspective, trade wars\u00a0and other economic conflicts\u00a0can become a proxy for military action.\u00a0Any deals they reach in the\u00a0current\u00a0trade war may only be short lived and\u00a0precarious. Their conflicts can further hit the world economy, which has not recovered from the severe crisis of ten years ago.<\/p>\n

The Taiwan conflict can be reignited as part of the sharpening US-China rivalry. This can potentially lead to war or serious military crisis in the future. The capitalist crisis has also rapidly exposed Taiwan’s “pro-independence” DPP government, elected in 2016, as a neo-liberal capitalist party that also stands for increased arms\u00a0spending and more deals with US\u00a0imperialism, while imposing austerity on workers. None of the ruling elites, the US, China or Taiwan, have a solution and only make the situation potentially more dangerous.<\/p>\n

The Belt and Road<\/strong><\/p>\n

Xi Jinping launched the Belt and Road Initiative\u00a0(BRI)\u00a0in 2013 to gain new overseas markets\u00a0for Chinese capitalism’s\u00a0excess capacity. Also this was to prepare for\u00a0future\u00a0trade wars\u00a0and increased protectionism globally.\u00a0The BRI was added into\u00a0the\u00a0CCP\u2019s constitution last year \u2013 the first time a foreign policy was enshrined in the constitution \u2013 to\u00a0signal \u201cno reversal\u201d of this policy.<\/p>\n

Now the Belt and Road Initiative contains over 70 countries. It\u2019s ambition is to especially link the underdeveloped world into a China-led economic sphere\u00a0through the construction of fuel pipelines, highways, ports, railways, electric grids.<\/p>\n

We describe the BRI as\u00a0\u201cImperialism with Chinese characteristics\u201d. These characteristics are state-financed loans to build infrastructure and exporting some elements of\u00a0China’s\u00a0authoritarian rule.\u00a0There is also a military component with some BRI projects \u2013 for ports and some railways especially \u2013 mainly driven by strategic military considerations.<\/p>\n

China\u2019s strategy to grab land and assets in smaller, less-developed countries is simple: it gives them loans for infrastructure projects, gets\u00a0control over the\u00a0projects, and when the country is unable to repay the loans,\u00a0Chinese companies and the state\u00a0get ownership\u00a0of the project.<\/p>\n

However, China\u2019s imperialist aspirations are already facing setbacks.\u00a0Mass protests erupted in Vietnam\u00a0in June\u00a0against foreign capital, mainly Chinese companies. These companies bought land\u00a0from the Vietnamese government\u00a0on 99-year leases, arrangements reminiscent of the old treaties of colonialism. The political tsunami of the Malaysian election in May saw the new government scrap the Chinese-led Kuala Lumpur-Singapore high\u00a0speed\u00a0rail project.<\/p>\n

Worldwide investment in the Belt and Road Initiative is now slowing down. In the first five months of this year, contracts signed by Chinese companies are down six\u00a0percent\u00a0from a year ago.\u00a0The growing number of BRI\u00a0debt defaults will directly impact Chinese companies, which are heavily indebted. So, the Belt and Road Initiative, originally launched\u00a0by the CCP\u00a0to export excess capacity and ease debt,\u00a0is\u00a0now part of the problem.<\/p>\n

Crackdown in Hong Kong<\/strong><\/p>\n

The developments in China have also had significant implications in Hong Kong where the CCP is trying to decapitate the democratic struggle. The Carrie Lam government represents a further\u00a0sharp escalation of\u00a0repression.<\/p>\n

Over the past year, we have had\u00a0six\u00a0democratically elected opposition legislators disqualified, over 40 youth and\u00a0other\u00a0activists being imprisoned for participating in\u00a0anti-government\u00a0protests, and six\u00a0candidates banned from standing in elections on the grounds of support for\u00a0\u201cindependence\u201d or \u201cself-determination\u201d.<\/p>\n

New draconian laws are being introduced including the\u00a0national\u00a0anthem\u00a0law. Anyone in Hong Kong found guilty of \u201cdisrespecting\u201d the Chinese national anthem is liable to up to\u00a0three\u00a0years of imprisonment.<\/p>\n

The main bourgeois pro-democracy parties have been in full-scale political retreat. They have failed to put forward any new strategy of struggle against the authoritarian government. These ‘pan-democrats’ have\u00a0in reality\u00a0been a brake on the democracy struggle for decades,\u00a0with\u00a0similarities to\u00a0the role of\u00a0social democratic leaders and bourgeois nationalist leaders in other parts of the world:<\/p>\n

    \n
  1. They don’t believe in mass struggle and always try to reach a compromise with the regime, which in China’s case doesn’t have any chance.<\/li>\n
  2. They fear that mass movements, once they break out, will get out of control and become radicalised.<\/li>\n
  3. They defend capitalism and therefore do not want to push the struggle against the Chinese dictatorship “too far” because this would also endanger capitalism.<\/li>\n<\/ol>\n

    The CWI is\u00a0alone in calling for a fighting democratic movement based on\u00a0a\u00a0socialist programme, with a mass workers’ party as its core. We also explain that democracy\u00a0including\u00a0self-determination\u00a0in\u00a0Hong Kong\u00a0can only be won by linking up with the mass struggles in China\u00a0and internationally\u00a0and overthrowing the CCP dictatorship.<\/p>\n

    \"\"<\/p>\n","protected":false},"excerpt":{"rendered":"

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