It's 83 pages long! And I read all of it, not because I had to, but because it really is fascinating. It is chock full of facts and statistics about the Chinese economy, along with interesting figures and maps. Comrade Keith is a good writer, and--at least if you like statistics--it's an enjoyable read. It is exhaustively researched, and while I can't vouch for total accuracy, what data I did double-check survived the experience. Comrade Keith definitely knows his China!
Were he an academic, this is a monograph that could earn him tenure. It's a pity that he writes for such a small, insignificant audience. (Like I should talk--what with my obsession over small, Trotskyist grouplets!)
While the piece can and should be profitably read just to learn about China, Comrade Keith has a larger agenda. He wants to demonstrate to his comrades that China is an "imperialist" power. For me this raises two problems. First, I don't think the word "imperialism" actually means anything. And second, if it does mean what you might think it means, then it's obvious that China is "imperialist," and no 83 page argument is necessary.
To define imperialism, Keith goes back to the original source, namely Lenin's 1916 work, Imperialism: the Highest Stage of Capitalism. It's a five-point test: 1) monopolies play a decisive role in economic life; 2) the creation of "finance capital" and a financial oligarchy; 3) the export of of capital, in addition to the export of commodities; 4) the formation of international monopolist capitalist associations; and 5) the territorial division of the world into capitalist spheres of influence.
By this definition not even the United States is imperialist, failing to one degree or another on all five counts, most notably on the formation of monopolies. There is no major industry in the US that is dominated by a monopolist.
By this definition not even the United States is imperialist, failing to one degree or another on all five counts, most notably on the formation of monopolies. There is no major industry in the US that is dominated by a monopolist.
Consider, for example, Amazon, which is certainly a big company (on some days the world's biggest company by market cap). But it isn't a monopoly in any of its businesses. The retail trade is so competitive that Amazon can barely break even--basically no profit at all. Its cloud computing service, AWS, is profitable, but has to compete aggressively against Microsoft, IBM, Google, and recently, Apple. Amazon Prime is in entertainment, competing against Netflix, Hulu, HBO, Disney, and now Apple wants to enter that market, too. Whatever else Amazon is, it's not a monopoly.
Comrade Keith conflates "monopoly" with "big." He writes,
One useful measurement for determining the presence of monopoly companies is the Fortune 500 Global list, which lists the 500 largest companies in the world by revenue. How then, do China and other leading imperial powers compare on this metric?After which he presents data in Figure 3 (p. 19) showing that China had 109 companies in the global Fortune 500 in 2017. Which only proves that China has big companies (like Amazon), not that they're monopolies. "Big" and "monopoly" are not the same thing. (China may have monopolies. I don't know, and Keith never makes the case.)
Similarly, the US has no "financial oligarchy." I assume that means a group of people who could, for example, set interest rates above the market rate. But it's obvious that no US financial institution can set interest rates--probably not even the Federal Reserve. The fluidity of the system is surely one reason why interest rates remain near all time lows (much to the chagrin of any incipient "oligarchy").
If not even the US is "imperialist," then why does Comrade Keith spend 83 pages trying to convince us that "imperialist" is something more than an epithet? The reason lies deep in the DNA of Marxism--Trotskyists need to explain why successful revolutions in the USSR, China, and elsewhere backslid to restore capitalist social relations. And further, this happened gradually without any violent counter-revolution. Now--only 28 years after the collapse of the Soviet Union--Socialist Action and Socialist Resurgence have finally come to terms with this course of events that wasn't supposed to happen.
Per Lenin, an "imperialist" country has to export capital, and China has been doing that at scale. China has accumulated, as of 2016, nearly $1.4 trillion in foreign direct investment, i.e., direct investment by China into businesses in other countries, ranking the country fifth in the world. (See Figure 8 on p. 25.)
China has been investing heavily in African ports, railroads and mining ventures, which makes sense since China is a natural-resource-poor country. In return for importing raw materials, China exported high-end manufactured products. Accordingly, China had a $38 billion trade surplus with Sub-Saharan Africa in 2015 (Figure 12 on p. 38).
They don't treat their African workers well. Comrade Keith quotes one of his sources (p. 32) at length, including this excerpt.
Chinese employers tend to be amongst the lowest paying in Africa when compared with other companies in the same sector. In Zambia, for example, the Chinese copper mine paid its workers 30% less than other copper mines in the country. In general, Chinese companies do not grant African workers any meaningful benefits and in some instances ignore even those that are prescribed by law. Wages above the national average were only found at those Chinese companies with a strong trade union presence. Chinese staff members enjoy significantly higher wages and more benefits than their African counterparts.So here is my question--and I don't know the answer. What fraction of Chinese loans to a country like Zambia are denominated in RMB (the Chinese currency)? Obviously a lot of it is: Chinese employees on African work sites are likely paid in RMB, as are the costs of materials imported from China. The cost of consumer products sent to Africa are also probably denominated in RMB. On the other hand, salaries, rents and bribes paid to African employees, landlords and politicians must be paid in a hard currency. Which is surely one reason why China is so chintzy on the wages and working conditions.
The point is that RMB debt is funny-money. There is no transparency: China can simply write off RMB debts, or print money to pay for them, or just shoot people who complain about not getting paid back. As a mercantilist economy they don't care about making a profit. They only care about earning hard currency (USD) from the export of manufactured products, net of hard currency expenses spent in Africa acquiring the raw materials. Spending funny-money for those resources is not a problem (though there is a cost in Chinese living standards).
So Tanzania and Zambia, etc., may not be getting such a raw deal. Their actual dollar debt is probably much smaller than what the headline number suggests. The funny-money default will only count against them with respect to China--the rest of the world will ignore it and their credit rating will be unaffected.
Comrade Keith devotes considerable attention to the size and state of the Chinese military, detailing technical advances in the land, air and sea forces. China's annual defense spending is approximately one fourth that of the US--still a hefty sum. The country built its first foreign military base in Djibouti, along with a chain of ports (in Burma, Pakistan and Tanzania, among others) that could easily become military bases. Collectively these are part of the One Belt, One Road system.
Keith suggests that military force could be used to enforce debt repayment from countries like Zambia. This is not likely--not even the US would try to use military force just to enforce debts. The problem with roads, power plants, and mining infrastructure is they can't be repossessed. If Zambia can't repay, then China is plum out of luck. Unlike the US, they have no control over the international banking system.
I think Keith exaggerates China's current military strength. Yes--they are a force to be reckoned with in the South China Sea. But they do not have a blue water navy, and are nowhere close to acquiring one. Their geography--a continental country separated from the larger ocean by island archipelagos, mitigates against it. In the Indian Ocean they are no match for the Indian navy, and they have no power necessary to keep the Straits of Hormuz open should the US decide not to do that for them. I base my opinion on Peter Zeihan's books.
As mentioned, Comrade Keith describes at great length the miserable way that Chinese companies treat their African workforce. I have no cause to disbelieve him--and this alone is reason to read his article. China's foul behavior is attributed to "imperialism" (my emphasis).
The analysis of Tanzania, Namibia, and Ethiopia, as well as several integrated pieces of broader, continental-level analysis, attempt to show the broad trends, categories of interest, and serve as representative examples of Chinese imperialism in Africa. Broadly, it might be said that these primary interests fall into natural resource extraction, exporting of manufactured goods, capital export through infrastructure construction, offshoring of labor-intensive manufacturing, and utilizing Africa’s strategic position both in facilitating trade to and from Europe and in controlling the Indian Ocean. (p. 43)I think the word "imperialism" adds nothing to this paragraph. The problem isn't "Chinese imperialism," but instead it's just China. China is a big country, humiliated in the 19th Century, that views itself as the Middle Kingdom, and as the world's leading and most important society. It's a very inward-looking, xenophobic culture, and no wonder they treat Africans with complete disrespect, if not contempt.
So the first couple of pages of Comrade Keith's opus are all about "imperialism." But after that you can just ignore the word. Then it's a rollicking good read, You will learn a whole lot about China. Highly recommended!
Further Reading:
No comments:
Post a Comment