The American world power and its kindred Chinese counterpart
Trump gets down to business — and so does Xi!
President Trump's “America first!” targets the whole world. But the degree to which the US is affected by the politics in other states comes down to more than the differences in numbers that the President loves to read from the figures of America’s negative bilateral trade balance. There is one rival above all others — actually just about the only one — that is ultimately incompatible with “America first!”: the People's Republic of China.
I. How Trump views China: cheating in trade, stealing intellectual property, building up its military with ill-gotten money, and threatening the security of the US
Trump knows many countries that have enriched themselves at America’s expense: Europe, Germany, South Korea, Mexico. But the greatest profiteer for him is China: the US is “losing” $500bn annually in trade — and has done so for decades! His accusations go decidedly beyond putting a figure on the trade deficit, pointing at the — alleged or real — reasons and impacts. When Trump accuses China of intellectual property theft and claims that this adds another $300bn a year to America’s damage, then his accusation is directed against the world-record productivity of capital that Chinese companies have accomplished; in other words, against the challenge they pose to the long-established lucrative technological leadership of American and other ‘Western’ capital on global markets. At the same time, he is targeting the second side of the technological lead that is established as lawful possession in the form of intellectual property: its ‘dual use,’ beyond competition on global markets, for the build-up of military power with leading-edge ‘defense’ technology that the Chinese state is undertaking, and which America wants to prevent by all means. In a similar vein, Trump accuses the Chinese state of currency manipulation, thus supposedly providing its capital with “unfair” trade advantages in its price competition with American enterprises. What looks like a denunciation of unfair competition and unjustified trade gains is essentially more: it is aimed at the progress of the Chinese currency toward world money, and at the consequent attack on the central role of the dollar as the very substance of global trade and finance.
For the American president, it is unmistakably clear what the trade deficit, theft of intellectual property, and currency manipulation effectively amount to: they are nothing but a threat to the security of the US and its allies. His discontent with China extends beyond questions of economic gains and losses; these questions are immediately regarded as issues of power competition and strategic superiority. Trump sees in China much more than the nuclear-armed Mao-era state whose deterrence capability half a century ago had wrung recognition as a nuclear power and a seat with veto rights in the UN security council from his predecessors. It is now operating in an increasingly expansive manner as a nuclear power that — based on its economic progress to technological leadership, the money earned on global markets, and the gradual establishment of its currency as world money — is pursuing its military build-up to become a rival on equal footing: with territorial claims on Taiwan and the East and South China Seas, with security interests relating to its maritime trade routes and increasing capabilities for projecting its military power, with bases in friendly countries and the construction of its now third aircraft carrier. Trump informs his nation and the rest of the world via Twitter about his unambiguous diagnosis of the state of imperialist power:
“China is not our friend. They are not our ally. They want to overtake us, and if we don’t get smart and tough soon, they will.”
II. The state of competition Trump is refering to: China has risen to become an imperialist rival claiming equal rank
1. China’s successful economic and global-political ‘opening up’ by American world power
In its past as the self-serving, leading world-order power, the US — and along with it all other Western powers — in principle welcomed the Communist Party’s sovereign turn to capitalism as a new course for the nation, and it launched a project expecting to incorporate the People’s Republic into its world order. China wasn’t asked to help shape this order. Rather, it was considered a giant sphere of growth — hitherto closed but now increasingly opening up, or to be opened up — for American capitalists. From America’s practiced standpoint of making a profit from the People’s Republic, which had converted to capitalism on its own initiative, China was to be turned into a gigantic sphere of investment for a capital that had long since reached the limits of its growth both in its domestic market and the established global markets; i.e., limits to its ever growing claims for profit on ever less profitable investment opportunities. Soft drink producers from Atlanta and car makers from Detroit tapped into the buying power of more than a billion Chinese customers as an additional giant market. At the same time, these same multinational corporations exported capital at an ever increasing scale, using the Chinese masses not only as consumers of their products and services, but also as a huge army of the cheapest labor producing goods at unbeatable prices at work places geared to maximum efficiency, and at an ever higher level of technology comparable with ‘Made in USA.’ The export of commodites from Chinese soil not only ensured ever greater corporate profits but at the same time an ever greater amount of American dollars flowing into the People’s Republic. This swelled the country’s currency reserves, which it mainly invested in American treasuries. On balance, a singular success story. The US opened up and developed the Chinese ‘economic miracle’ to serve a dual economic purpose: as a giant profit machine for its capitalists, and to continually attest to the economic validity of the dollar credit ‘created’ without bounds. This was so successful that it acted shocked each time the political command over the Chinese economy in the form of the Communist Party dared to “dictate” the conditions for capitalism in China: joint ventures in the car industry, for example, or a compulsory share in the production of electric cars. More recently, the CP’s decision to set up party cells in foreign companies in order to have a say in investment and other business decisions has aroused much indignation about this meddling with independent corporate decision-making.
From the outset, the US always tried to use the interest of the Chinese state in the capitalist development of the nation and the resulting economic dependencies as a lever for political control. Together with the other Western powers, it nudged China to find its place in the American system of global order and global markets. In allowing China to enter supranational organizations such as the IMF and the WTO, the US. recognized the People’s Republic as a new legitimate member of the global economy, thus subjecting it to the duties of the American-dominated ‘rule-based’ world order and world economic order, and securing American influence on the way the market economy in China was developing so that it would yield lasting benefits for American business. At the same time, from the beginning of the policy of ‘opening-up,’ the US world power saw itself challenged to check and control China’s rise to power. It was evident to every American president that the Communist Party had this in mind with its turn to capitalism. The U.S. confronted the People’s Republic under a dual motto: “No cold war with the new rival in Asia!,” but also “Never again allow a rival to become equal in rank.” The imperialist democracy used its accumulated ‘soft power’ for various attempts at undermining China: ‘Western values’ were propagated via economic, scientific, and cultural exchange, and via the internet, social media, and the media in general, in order to alienate the Chinese masses from their state and to bring about an inner ‘transformation’ of party rule. Financing NGOs, awarding Nobel Prizes to human rights dissidents, and courting the Dalai Lama all served the same aim: to undermine the monopoly of the Communist Party and its “socialism with Chinese characteristics.”
For more than four decades, the US as the global (economic) power pursued the dual imperialist goals of profiting from the country economically and influencing it politically in order to weaken or even break the monopoly of the Communist Party in the long run and initiate an irreversible development toward ‘real’ market economy and democracy. At the same time, the US used its military superiority to ensure that China didn’t ‘misuse’ its growing wealth and national strength to change the strategic balance of power in the Asian-Pacific region and challenge America’s global leadership. This practice failed to reach its intended objectives: not because US administrations from Nixon to Obama had made idealistic assumptions and had naive expectations of Chinese ‘opening up’ and ‘reforms’ — even if Trump is not alone in denouncing his predecessors for just that — but because of the contradiction involved in successfully utilizing China for American imperialism.
America is now faced with the result that enriching itself on China has also paid off for China; China’s integration into the world market has increased the nation’s wealth and power. Through its development and utilization by the ‘West,’ the People’s Republic has made progress, i.e., it has learned how a capitalist superpower works, and it has accumulated the means for its planned ascent.
From ‘extended workbench’ of the global market to ‘technological leadership’
The Chinese communists have learned from the capitalistically advanced and technologically superior industrial nations — which fits just fine their tired ‘Marxist’ clichés about practice being the best teacher. They learned under which conditions the world market is the perfect source of national enrichment: the nation must have the status of technological leader whose powerful companies set the standard for profitability with their ‘innovative’ products and production processes. With its introduction of capitalism, the People’s Republic has sought from the very beginning to achieve the status of an economic power that defines the criteria of success in international competition — in defiance of the established capitalist G7. And it has — using another pearl of wisdom from Marxism-Leninism-Maoism — ‘learned a lesson from history’: in the battle for capitalist advancement, the state — the political power over the capitalist economy — must leave nothing to chance. During each step of its long march to global economic power, the state must follow a plan to secure the politico-economic conditions for its state-owned and the increasing number of privately-owned companies so that they develop the size and profitability found in the leading economic powers. And it must establish, control, and even correct the competition of private capitalist interests in a systematic way so that it secures China’s advancement to the status of determining actor of global market competition.
The Communist Party has pursued the build-up of capitalism with such dogged determination that it can proudly present today what it has made of its ‘developing country’:
“China has maintained its position as the world’s second largest economy … The economy has maintained a medium-high growth rate, making China a leader among the major economies. contributed more than 30 percent of global economic growth … Emerging industries like the digital economy are thriving. … Through devoting great energy to implementing the innovation-driven development strategy, we have seen much accomplished toward making China a country of innovators, with major advances made in science and technology … This will steadily strengthen the innovation capacity and competitiveness of China’s economy. … We will move Chinese industries up to the medium-high end of the global value chain, and foster a number of world-class advanced manufacturing clusters. … China now leads the world in trade, outbound investment, and foreign exchange reserves.” (Xi Jinping, Speech delivered at the 19th National Congress of the Communist Party of China, October 18, 2017, chinadaily.com.cn)
In the world market’s ‘extended workbench’ for multinationals from the US, Europe, and Japan, products were manufactured by foreign business partners for export to the world market utilizing cheap Chinese labor working in imported production facilities for joint enterprises — first enclosed within special economic zones, then across the whole country. On this basis, China has long since turned into a global economic power that is second only to the U.S. In retrospect, the Chinese leaders have done all the right things from their standpoint. From the beginning, they used their monopoly power to make sure that the development of their own capitalism would benefit from the highly profitable business opportunities they provided for international corporations. Regulations for joint ventures and profit transfer ensured the appropriation of modern production technologies and profits on behalf of the Chinese part of the company, thus establishing a productivity of capital in China that enabled it to gain from international trade. The growing success of the export economy, increasingly encompassing the entire country, generated an influx of foreign currencies that they used to create and expand the pertinent means and conditions of success — ranging from the creation of Chinese state-owned and private companies with sufficient capital to compete successfully on the world market, to subsidies of foreign trade and the development of science, technology, and education at an international level.
The nation now sees itself on the brink of accomplishing its goal of decisively determining the criteria for successful competition on the global market. China has long since progressed from ‘mass producer’ to ‘quality producer,’ and in addition to its low-priced items that beat any competition it is now selling products on international markets that not only set new standards with their technical quality, but also through their level of manufacturing technology, i.e., through the top-notch profitability of the labor incorporated in the masses of goods produced. And the Chinese leaders have learned another lesson from the capitalist practices of their successful role models, and implemented it: if it is scientific and technological advance that determines the profits to be made from global markets, then the order of the day consists in using all the political power of command and a massive amount of state credit to systematically promote science and technology in the country, always with a clear focus on the economically most promising fields of research, i.e., the “growth sectors of the future.” In pursuing the strategic “Made in China 2025” project, the Chinese economy is to gain technological leadership in high-tech sectors such as smart manufacturing, robotics, information technology (IT) and artificial intelligence (AI), medical technology, automotive technology, aeronautics and astronautics. Complementarily, the technological dependence of the Chinese economy on foreign countries — wherever existing — is to be ended. Government support is to enable domestic enterprises themselves to manufacture an ever bigger share of the most advanced means and components of production used in Chinese industry.
China is gaining significant competitive advantages in the global market sector with the currently biggest growth rates: the internet economy. Its privately-owned online giants Alibaba and Tencent (comparable to Amazon and Facebook) have penetrated the markets previously occupied exclusively by American companies such as Apple, Google, etc., and are now among the six largest corporations worldwide. They owe their rapid growth to energetic protection by the state, which bans American companies from doing business in China mainly for reasons of its internal security, so that these domestic companies enjoy the exclusive right to exploit the world’s largest market with its 800 million users. In sealing off its domestic market, the state is creating a solid basis for its national internet monopolists “going global.” They are stirring up the world market order with equity investments in the growth markets of India and Indonesia, moving into Africa with smart phones and the corresponding network infrastructure, and winning Asian markets along the ‘digital silk road.’
The established global economic powers, the US above all, regard and treat the People’s Republic’s “Made in China” program and its fight for ‘digital supremacy’ as what these projects really are: as a planned attack on their status as dominant industrialized countries. They accuse China of a major economic crime — stealing their intellectual property and of distorting ‘fair’ competition with its state-controlled economy — and take practical measures to counter and punish China, aiming at slowing and harming its rise to the status of a powerful technological nation. This proves to the leadership in Beijing how right and important is their plan to win the battle for technological supremacy, i.e., to work with even greater determination on realizing the year 2025 target against all obstructive Western efforts.
From ‘people’s money’ to world money: the renminbi as global reserve currency and source of credit
China built up its export economy to earn foreign currency in the form of US dollars, euros, and yen, seeking access to real, globally effective capitalist wealth. This has now made a capitalist world money out of its once internationally worthless socialist ‘people’s money.’ In announcing that “China has the largest currency reserves in the world,” party and state leader Xi Jinping is in fact refering to the decisive step forward that his economically successful nation has managed to take: the rise from world export champion to global financial power. Thanks to the volume and the rate of its export-based capital accumulation, China has accumulated a vast magnitude of foreign currency reserves in order to make its own credit a source of credit for the world, its own currency a world credit-money.
The progress made by China so far can be seen in the most recent step on this path. The domestic currency has for some time now been introduced as the primary means of payment in trading with a growing number of countries. As the world’s biggest crude oil importer, China now demands from its suppliers that this indispensible lubricant of its economy be no longer paid in the “traditional petro-currency,” the US dollar. After Russia, Iran, and Venezuela, the big oil exporter Saudi Arabia is also to accept Renminbi (Yuan) in future if it doesn’t want to lose a considerable share in the Chinese market. China offers the owners of “petro-yuans” lucrative opportunities to recycle them: firstly, of course, in the form of the giant collection of goods that Chinese capitalists are offering, but now also in the form of lucrative securities and innovative speculative products that can be used for recycling billions of petro-yuans. For this purpose, the Chinese state is increasingly ‘opening up’ and ‘developing’ its financial markets to foreign business people. From now on, they will be allowed and encouraged to speculate on the Shanghai Futures Exchange with the latest derivative, oil futures denominated in renminbi, thus contributing to establishing the Chinese financial market further and further as a source for (finance-)capitalism around the world.
In this way, the state is gradually giving its credit money its true value: no longer by means of the dollar reserves earned from the export of goods but through the use that the global community of money owners — capitalist manufacturers and financial speculators, primary producing and industrialized countries — make of the renminbi. They use the Chinese currency in their businesses, and they buy, use commercially, and take profits on China’s credit creations, the fictitious capital generated by the state and its state-owned and private companies — government securities, corporate bonds, stocks and shares, and whatever other securities now being traded on the nation’s exchanges — thus attesting the People’s Republic’s national credit. Credit generated by China thus becomes investment material for the whole world, and at the same time a financial resource for businesses around the world.
The People’s Republic has managed to get the established global financial powers to formally recognize the new politico-economic status it has achieved: in 2016, the renminbi was included in the currency basket of the IMF along with the US dollar, the euro, pound sterling, and yen, thus officially recognizing its rise to the status of world money. At the same time, this recognition is a strong argument for capitalists of all countries as well as their central banks to make ever greater use of Chinese money and credit in the future as the ultimate substance of capitalist wealth. The European Central Bank has already included renminbi to the tune of half a billion euro in its currency reserves, with the German Bundesbank and other central banks to follow.
The establishment of the Chinese currency as world money basically on a par with dollar and euro changes the balance of power between the global financial powers: the systematic expansion of the volume of money and credit denominated in renminbi and traded internationally constitutes an attack on the singular position of the established world moneys, dollar and euro, in global financial business, i.e., on the freedom of the US and Europe to create credit, in other words, to accumulate debt. China, too, has now gained the power to generate immediately useable global financial solvency with its credit money. As a result, guaranteeing its own currency now depends less on its gigantic dollar reserves — the more than three trillion dollars and euros it has hoarded are now freed up for the accelerated expansion of its financial clout, financial allocations for its development and investment funds, and finally for the establishment of the Asian Infrastructure Investment Bank (AIIB). The Chinese state finds itself increasingly freed from the necessity to invest the proceedings from its exports in American treasury bonds, i.e., involuntarily subsidizing the American world power and its military needs. Inversely, America now declares itself open to blackmail at the hands of the dollar reserves of the People’s Bank of China, i.e., the debt the US has piled up with China. By expanding its autonomous financial and credit power, the creditor gains new liberties vis-à-vis the debtor, even before a decision has been made as to if and how this liberty is to be exercised economically and politically against the American “hegemon.”
As a result of the tremendous growth rates of their capitalism, the Chinese leaders see themselves enabled and at the same time challenged to open up the entire globe as a field of enrichment for their nation — and with the renminbi’s ascent to the status of world money and their powerful national credit they now have powerful instruments for this task. They are establishing “friendly foreign relations” with the help of foreign direct investments (FDIs) in order to orient as many states as possible toward China as the decisive power.
Following its imperialist ambitions, China particularly encourages ‘Third World’ countries to borrow from the Chinese state and be developed by Chinese companies. It offers them the prospect of participating in the growth of the second largest economic power for their own benefit with their contributions of raw materials, and agricultural and industrial products, and at the same time of ‘freeing’ themselves somewhat from their dependencies on other powers, which — like the US, but also Europe, Russia, and India — have themselves established intergovernmental relations on-site. President Xi Jinping praises all this as exemplary “win-win-cooperation” that connects peoples, as a “new type” of international relations, a “community of shared future for mankind” determined by nothing but mutual benefit and mutual respect — in terms of imperialist hypocrisy, the People’s Republic’s leader is second to none of his western colleagues. And he also emphatically insists that western criticism of China’s “neo-imperialism” and “creditor colonialism” unmasks one character above all: the “American hegemon” that intends to do everything it can to keep these countries in its own sphere of control.
With its ambitious “Two Silk Roads” project, the great ‘Middle Kingdom’ is showing neighboring states both close and farther afield a clear path for their progress, and is determined to make its own politico-economic interests, for which it uses these countries, a fundamental component of their reason of state. The aspiring global economic power is using the AIIB (founded to finance the “Belt and Road Initiative” and meanwhile having more than 80 member states), meaning massive amounts of state-generated credit, to lead the development of a new, huge economic area, and at the same time to organize it, with a view to encompassing the entire Asian continent, and extending to Europe and Africa in the west and to the Pacific in the east. This is how China, the imperialist latecomer, is encroaching upon the ‘acquired assets’ of other powers, primarily the US, i.e., is working on a new division of the world.
In the global competition for overcoming old dependencies and creating new ones, the Chinese leaders know well how to employ the complete arsenal of ‘soft power’ at the disposal of a nation in its ever growing economic and political relations with nearly every state in the world. This is yet another example of how well they have understood how capitalist great power works, and use the politico-economic and diplomatic dependencies they have created as a lever for blackmail in inter-governmental disputes: China suspends delivery of rare earths to Japan after ships collide in waters disputed by both states; after Mongolia receives the Dalai Lama, Beijing drastically raises the transfer charges for Mongolian goods and suspends all diplomatic activities with its immediate neighbor; in response to the Nobel prize being awarded in Oslo to the Chinese dissident Liu Xiabo, Norwegian fish imports are banned; conversely, the Philippines are promised investments of over 20 billion dollars plus arms deliveries, thus “blackmailing” it into resolving territorial disputes about ownership claims in the South China Sea in bilateral negotiations with China, and to no longer insisting on its complaint brought before the Permanent Court of Arbitration (PCA), and on the ruling the PCA issued against China; and the Chinese leaders ‘expect’ the global car maker Mercedes-Benz to officially apologize for using a Dalai Lama quotation in its advertising — which in the eyes of the German public is a shameful “kowtow” that the Daimler chief nonetheless forces himself to make with a view to his important export market. With these actions, the People’s Republic demonstrates to the world of states where its “red lines” are.
China’s ‘soft power’ is by no means restricted to the use of economic blackmail. Just like their Western colleagues, the Chinese leaders know how to interfere in the internal affairs of foreign nations, their political decision-making, and the formation of public opinion. China systematically lobbies parliaments in liberal democracies, which includes donating money to parties and individual politicians. Just as systematically, it promotes its cultural imperialism with more than 500 Confucius Institutes in 142 countries to spread its own language and “Chinese values” all over the world. The sixty million Chinese living abroad are co-opted by the state as being essentially members and representatives of the great Chinese nation from which they stem. The many thousand Chinese students who study at elite universities in the US or the UK or at technical universities in Germany are expected to present themselves abroad as proud ambassadors of their great country and the “socialism with Chinese characteristics.” Conversely, China has opened its universities to the education-hungry youth of the whole world, trained 440,000 students from around 200 countries — and reckons to produce graduates who are gratefully obliged to their host, and contacts all over the world who are open to Chinese interests.
China’s rulers aren’t impressed by the response of Western countries in its immediate neighborhood, Australia and New Zealand, nor of the US and Germany, who denounce China’s battle for heads in politics, culture, and universities as a threat to democracy and their countries’ internal security, and declare a fight against this ‘sharp power.’ After all, apart from their ‘soft’ power, China’s leaders have ever greater ‘hard power’ at their disposal for ensuring worldwide respect for the interests and rights of their nation.
“China’s peaceful rise”: The global economic and financial power builds up its military power and procures “world class forces” for “a new era” (Xi)
The leaders of the People’s Republic, now turned capitalist, did not rely on the deterring power of the nuclear weapons they inherited, but rather, with claims to territory, brought into play their claims to be a valid East Asian/West Pacific regulatory power, and armed their military to become the leading regional power. China follows the textbook logic of imperialist ascendancy that the Western powers have long since accomplished: the wealthier and the more powerful a nation becomes as a global economic and financial power, the more strongly it asserts its interests and rights, and builds up its military force to win respect for the nation’s right from the other states, which respect it considers an absolute necessity. China’s list of national rights — not exactly a small one from the start — has grown longer and longer with economic and political successes: it ranges from reunification with the renegade “23rd province” Taiwan (which since the foundation of the People’s Republic is a nonnegotiable constitutional requirement) to territorial claims in the East and South China Seas; from the demand for secure maritime trade routes (for the supply of raw materials and goods to domestic industries and the delivery of Chinese exports to the world) to the right to have friendly, reliable states along the Chinese sphere of influence growing with the Silk Roads, right up to the property rights that China has established with its investments and loans and that reach to the furthest corners of the globe.
China’s state party found the army — once created for the defense of the country and equipped accordingly — simply useless for these global security needs. For some time, and today with ever greater resolve, it has been pursuing “the modernization of our national defense … and that by the mid-21st century our people's armed forces [will] have been fully transformed into world-class forces.” (Xi Jinping at the 19th National Congress of the Communist Party of China, October 18, 2017, chinadaily.com.cn). The dimensions of this build-up reflect the plan to shift China’s capabilities from a strategic defense based on deterring the US with its nuclear arsenal to an operational level of offensive wherever the People’s Republic deems it necessary, in order to safeguard the assertion of its own interests and geopolitical ambitions against all threats and obstacles:
“A military is built to fight. Our military must regard combat capability as the criterion to meet in all its work and focus on how to win when it is called on. We will take solid steps to ensure military preparedness for all strategic directions, and make progress in combat readiness in both traditional and new security fields.… This will enable us to effectively shape our military posture, manage crises, and deter and win wars.” (Xi Jinping, op. cit.)
The People’s Liberation Army’s task is to project power and fight a war from a superior position that guarantees victory in any particular security scenario. The party is convinced that it will reach its military objective by mid-century at the latest. The volume of its huge capitalist wealth may still be smaller than America’s, but it is growing at a far higher rate, providing the Chinese state with a productive economic base it uses for its ascent to the status of military superpower. And the state commits itself to lavishing its wealth on its imperialist machinery of violence, which is as great a national concern for it as is the accumulation of capital:
“We should ensure that efforts to make our country prosperous and efforts to make our military strong go hand in hand.” (Xi Jinping, op. cit.)
Party chief Xi, also chairman of the central military commission and commander in chief of the armed forces, is committed to the “dialectics” of economic growth and military power, and is increasing the military budget in lockstep with economic growth by 6–7 percent annually.
The progress in military power resulting from this is already enormous, both in terms of technological military capabilities and the effect it has on the state powers in the near vicinity and farther afield. By modernizing its nuclear arsenal and equipping it with multiple warheads, China ensures the credibility of its nuclear deterrence, and counters the American deployment of anti-missile systems in South Korea and Japan that target China. It develops and successfully tests space weapons and killer satellites in order to be able to win battles in this space dimension that will be of crucial importance in future (world) wars. Advances made in the civilian competition in the IT sector (quantum technologies, artificial intelligence, big data) are systematically utilized to build up a cyberwar capacity. The accelerated equipping of its navy — China is now building its third aircraft carrier and procuring the infrastructure necessary for its operations; the first naval base outside China in Djibouti is to be followed by others — serves its global power projection, but also asserts its territorial claims in the Chinese Seas against the right traditionally exercised by the American military to dominate the entire Pacific Ocean including the maritime regions surrounding China. The Chengdu stealth bomber, undetectable by American radar, and air-to-air missiles provide China with the military capacity to seriously threaten the American naval and air presence in the South and East China Seas.
All this is meant to make an impression on its militarily inferior neighbors but also on the regional Asian powers Japan, Australia, and India, and to ensure for China the respect it feels entitled to as a successful global economic and leading regional power. China’s accelerated military build-up and its territorial and maritime sovereign claims are primarily directed against the American world power, which for its part sees itself fundamentally challenged in its global rights. The “rejuvenated nation” is intent on nothing less than pushing the “American hegemonic power” out of Asia, i.e., changing the balance of power in Southeast Asia. To achieve this, it demonstrates its resolve, if challenged, “to fight the bloody battle against our enemies … not a single inch of our land will be, and can be, ceded from China.” (Xi’s closing speech at 13th National People’s Congress, March 17, 2018)
“Socialism with Chinese characteristics”: The Communist Party of China (CPC) asserts its force monopoly against China’s enemies
The western powers — the US above all — immediately realized that China’s autonomous turn to capitalism and its ‘opening up’ to other countries provided them an opportunity for targeted attempts at subverting the Communist Party’s monopoly on power. Not only did they direct their capitalists to the People’s Republic to make a profit, but along with them a cross-section of representatives of their civil society — political advisers, academics, creative artists, and the many NGOs that all subscribe to the western values of democracy and human rights. Their clear mission was to contribute to “reforming” the “communist regime,” i.e., to regime change, even if no one wanted to say so openly. Trump and Merkel, Macron, May, Abe — they all have now to deal with the new, great leader representing a self-confident China that has crushed all the many Western attempts at subversion. The Party managed to face down every challenge to its monopoly on the use of force. And the Western leaders are faced with a CPC convinced that its one-party rule is superior to the democratic method of exercising state power.
From the beginning, the Chinese state communists have offensively counteracted all subversive activities coming from the outside. Where the Western democracies deployed the human rights weapon to challenge the legitimacy of the CPC’s rule over country and people, they countered in the only language that imperialists understand: with a powerful counterthreat. The leaders of party and state reject any meddling in their domestic affairs, but if it happens — if the West supports dissidents, awards Nobel Prizes to Chinese human rights activists, and demands freedom for Tibet — it is taught a lesson that Western democracies deem their own exclusive right to teach: business and good relations are only to be had with good political conduct.
The same is true for the innumerable foreign nongovernmental organizations on Chinese soil. The liberties they were granted in the wake of the ‘opening’ and which they increasingly abused — in the state authorities’ judgment — for activities that “damage national and public interests” or “threaten Chinese national unity, security, or ethnic unity,” have been greatly restricted. The Chinese communists have learned from the various ‘color revolutions’ in states of the former Soviet Union the extent to which these Western ‘civil society’ organizations can subvert a nation. They are determined never to let things get that far in their country, and have drafted a special “Foreign NGO Law” to control the ‘fifth column’ of the West. The internet and social media are also basically hostile powers, dominated by American corporations and thus beyond Chinese control. This sphere is becoming ever more important for shaping public opinion and political will; for the nation’s leaders, ‘opening’ it up is a direct threat to national security. They have mandated a “clean cyberspace” for the 800 million Chinese citizens that use it. They have used their political power and modern technologies to build the “Great Firewall,” sharply criticized by the West, which turns Chinese cyberspace into a space where unauthorized access by outsiders is blocked out, and from which no unauthorized escape into the World Wide Web can be made. They ban American corporations Facebook and Google-Alphabet from the Chinese market, and they order all net communication to be done via Chinese internet companies and on Chinese servers, which can be easily intercepted by the government. Censorship and surveillance are not restricted to the internet. The state extends it to every foreign enterprise that does business with public opinion, education, science, or entertainment. Market access is only granted to Western publishers and media corporations if they conform to current censorship criteria, e.g., delete from their publications incriminated terms such as “Taiwan,” “Tibet,” or “cultural revolution.”
With these measures, the Chinese state communists have countered the Western activities aimed at interference and infiltration. And they have thwarted Western “hopes” that market economy and rising wealth must inevitably divide state party and people, and bring about the victory of democracy also in China. Disenchanted, those in the West have to note that the “people’s democratic dictatorship under the leadership of the CPC” (incorporated into the Constitution of the People’s Republic of China) has stood its ground, and they see many indications that party and people are standing united more closely and firmly than they have for a long time. Since his election to party leader, Xi Jinping has made the strengthening of party unity, and of the unity of party and people, top priority of his leadership. Xi is rigorously pursuing the restoration of party discipline. His anti-corruption campaigns have spared neither “tigers nor flies,” have called to account millions of minor and major party leaders, have purged selfish careerists (potential rivals for party leadership, incidentally), have brought into line the rest of the party in all its enormity, and have thus strengthened not only the party but also his own leading position in it. Above all, the party leader claims to have reconstituted with his great battle against corruption the legitimacy of the party with the people, who get easily agitated about neglectful officials and corrupt civil servants, and whose dissatisfaction with the authorities is conceded and met constructively with the help of patriotic show trials and severe punishments.
The party has also confronted the “contradiction” that its promise, targeting the citizens’ materialism, to bring about ever more prosperity and a better life, is by no means a reliable foundation for a solid unity of state and people. It has declared the “great Chinese dream of strengthening the nation” to be the innermost desire of the Chinese people, and that realizing this is how “the party serves the people.” Since then, the party hasn’t missed an opportunity to promote patriotism and to anchor it firmly in its billion-plus nation. School teachers and professors have to tell about the history and the greatness of China, writers and artists have to “praise our party, our country, our people, and our heroes” (Xi), sportsmen have to win medals for the glory of the country, preferably the most medals, but in any case more than the great American rival. The party is satisfied with the progress it has made in making one people of the Chinese — a people full of national pride in everything “Chinese.”
The powers of the West — the US first and foremost — have noted this other top “Made in China” achievement, using it as an opportunity to sharply criticize their previous expectations that the introduction of capitalism in China would be the beginning of the end of China acting on its own authority, thus as unequivocal proof that a turnaround in their practical dealings with the People’s Republic is imperative:
“Nearly half a century since Nixon’s first steps toward rapprochement, the record is increasingly clear that Washington once again put too much faith in its power to shape China’s trajectory. All sides of the policy debate erred: free traders and financiers who foresaw inevitable and increasing openness in China, integrationists who argued that Beijing’s ambitions would be tamed by greater interaction with the international community, and hawks who believed that China’s power would be abated by perpetual American primacy … Growth was supposed to bring not just further economic opening but also political liberalization. Development would spark a virtuous cycle, the thinking went, with a burgeoning Chinese middle class demanding new rights and pragmatic officials embracing legal reforms that would be necessary for further progress. The evolution seemed especially certain after the collapse of the Soviet Union …Washington now faces its most dynamic and formidable competitor in modern history. Getting this challenge right is doing away with the hopeful thinking that has long characterized the U.S. approach to China. The Trump administration’s first National Security Strategy took a step in the right direction by interrogating past assumptions in U.S. strategy.” (“The China Reckoning: How Beijing Defied American Expectations,” Foreign Affairs, March/April 2018)
As if hard-boiled imperialists had allowed themselves to be fooled by Chinese communists for decades, the strategic masterminds of US foreign policy now self-critically put on record that they had simply all been wrong about China! The American nation has to own up to this without ifs or buts. And it has to agree with Trump, who in the latest American security doctrine targets the People’s Republic as a “revisionist power” and threatening “rival”:
“For decades, U.S. policy was rooted in the belief that support for China’s rise and for its integration into the post-war international order would liberalize China. Contrary to our hopes, China expanded its power at the expense of the sovereignty of others. … It is building the most capable and well-funded military in the world, after our own. Its nuclear arsenal is growing and diversifying. … Although the United States seeks to continue to cooperate with China, China is using economic inducements and penalties, influence operations, and implied military threats to persuade other states to heed its political and security agenda. China’s infrastructure investments and trade strategies reinforce its geopolitical aspirations. Its efforts to build and militarize outposts in the South China Sea endanger the free flow of trade, threaten the sovereignty of other nations, and undermine regional stability. China has mounted a rapid military modernization campaign designed to limit U.S. access to the region and provide China a freer hand there. … States throughout the region are calling for sustained U.S. leadership in a collective response that upholds a regional order respectful of sovereignty and independence.” (National Security Strategy of the United States of America, 2017)
III. The imperialist substance of Trump’s criticism of China
China has succeeded in becoming a world economic power and a global force for order under the conditions of the predominant Western world/market order — and the US president is taking action against this result. With a friendly manner but in the form of an ultimatum, he demands that the People’s Republic’s leaders assist him in his world order politics of open blackmail: first, exemplarily and very directly, with respect to North Korea, the principal nuisance in East Asia; more tacitly for the new Middle East initiative against Iran. In return, Trump temporarily suspends his diplomatic attacks on China’s successes in global business; then he reopens the long-announced trade policy front, threatens to impose protective and anti-dumping tariffs, and demands that China halve its annual trade surplus with the US, which is estimated to lie between 350 and 500 billion dollars.
In conjunction with the stereotypical accusation of previous administrations of having given up, even betrayed, American business interests, this demand reveals more than just patriotic furor. It contains a politico-economic truth — a bitter one from an American point of view. The great promise that China’s opening up to capitalism would, if not remove the long since overshot limits of capital accumulation in the advanced ‘West,’ then at least push them far, far away, has turned exactly into what the nature of the capitalist mode of production dictates: the temporary escape from global overaccumulation has proven to be a new, potentiating factor of overaccumulation. In this respect, China has taken on the part of exploiter of an infinite amount of profitable labor relative to American capital markets. The American counterparty to a considerable extent plays the role of turning China’s capitalistically productive labor into global capitalist wealth by virtue of its globally powerful credit money. That is to say, America, with its debts secured by its global power, finances the global overaccumulation on which and with which China enriches itself materially. The slightly paradoxical result being that China earns dollars in and on the US — which it largely invests in US bonds — and in this way secures this currency its rank as world money. In so doing, China manages to push the limits to the accumulation of its own productive capital into the distant future, at the expense of American industry. The politico-economic achievement of Trump’s nationalism consists in identifying in this interesting symbiosis the incompatibility of both sides, the conflict between two complementary sources of overaccumulation increased on a global scale, and transforming it into a trade dispute with quantifiable trade volumes at stake. In substance, Trump’s America has opened up a conflict about the benefits and burdens of the rampant overaccumulation — a crisis competition, in a sense, before the manifest onset of the crisis whose specter rises from boundlessly escalating Sino-American business.
As the global leader acting on behalf of American interests, Trump tackles this conflict — as usual! — in the field of blackmailing between states, where force and credit, business and weapons, diplomacy and military exercises are commensurate factors. What is remarkable is that he turns the politico-economically fundamental conflict with China toward national self-criticism, toward bashing previous American politics. On the one hand, Trump himself shares, supports, and cultivates the enemy image of China as a nation committing economic crimes; on the other hand, he blurs this image by repeatedly pointing out that there is nothing wrong with a state that uses all available means to pursue its unilateral benefits at its rivals’ expense. He directs attention to his own side, claiming it had not countered this justifiable aspiration with the superior right of the stronger party but had encouraged it with miscalculating concessions. In this way, Trump, from his deal-maker's standpoint, hits on the fundamental contradiction of the USA’s present imperialism: the contradiction of a politics conducted from the standpoint of the arranger of all the conditions for deals between states; of the supervisor with a say on all the terms of business and therefore on all business transactions and how they go; of the creator of world money, and the financial market for global business, always profiting from all these transactions; of the market-maker, so to speak, rather than the deal-maker — the contradiction of managing the world order as the adequate method of securing the national interest. It is indeed the case that the US has set the conditions which China has so successfully exploited for its own benefit. And yet it is not in the least the case that the People’s Republic has violated the licenses granted under the prevailing world/market order — this, too, is another aspect of Trump’s understanding of China’s competitive endeavors. China may have exploited this order against the national interests of its creator and guarantor, but it has exploited this order for itself. It has shattered the premises under which the US created and guaranteed this order and exposed them as deception: the claimed identity of rules and regulations, dollar, and American profits. In Trump’s eyes, this is nothing but a great failing — of all things! — of previous American administrations, and insidiousness on the part of the Chinese rival. But however his self-critical mind perceives it, it is in fact the contradiction of the type of world domination into which the US also incorporated China.
With his China policy, Trump is carrying out the termination of the previously guaranteed imperialist system on the great, serious rival of American world domination. But more than that. Trump is exemplarily embarking with sweeping practical effect on a policy of direct confrontation against this opponent that is aspiring for equal rank, a policy of either-or, of “everything for us — nothing for them we haven’t conceded to them out of our own calculations.” In the case of China, Trump is making the transition to an excluding type of imperialism that asserts explicitly, bilaterally, and confrontationally the incompatibility of the American power of global access with a second geopolitical actor that of its own authority and from the standpoint of its own right defines and forms — and is actually able to form — its interests, its independent existence, and its extended reach to all other states, but hardest of all: its relation with the US.
This is the substance of Trump’s revisionism: the decision, given as an ultimatum, of incompatibility regarding the coexistence of two, truly sovereign, imperialist dealmakers.
“The United States hasn’t had a Trade Surplus with China in 40 years. They must end unfair trade, take down barriers and charge only Reciprocal Tariffs. The U.S. is losing $500 Billion a year, and has been losing Billions of Dollars for decades. Cannot continue!” (Trump on Twitter, April 7, 2018)
“‘They buy those start-up companies that are on the cutting edge of artificial intelligence, robotics and everything we’re gonna need,’ [White House National Trade Council Director Navarro] said. ‘If we don’t have the industries of the future, we don’t have a future. … The U.S. is acting swiftly on Intellectual Property theft. We cannot allow this to happen as it has for many years!’ he wrote. … ‘We can’t have a country, as the president said, without those industries [steel and aluminum] … All we’re looking for is fair and reciprocal trade and I think our allies at the end of the day will understand that all we’re doing here is defending two key industries so that we can come and help with their defense when they need us,’ Navarro said.” (www.foxbusiness.com, March 11, 2018)
“‘What the United States is doing is strategically defending itself from China’s economic aggression’ [Navarro] … President Trump put China squarely in his cross hairs on Thursday, imposing tariffs on as much as $60 billion worth of Chinese goods to combat the rising threat from a nation that the White House has called ‘an economic enemy.’ … The measures are Mr. Trump’s strongest trade action yet against a country that he says is responsible for thousands of lost American jobs and billions in lost revenues. … The White House said it was taking action in retaliation for China’s use of pressure and intimidation to obtain American technology and trade secrets.” (New York Times, March 22, 2018)
“Did China ask us if it was OK to devalue their currency (making it hard for our companies to compete), heavily tax our products going into their country (the US doesn't tax them) or to build a massive military complex in the middle of the South China Sea? I don't think so!” (Trump on Twitter, Dec 5, 2016)
“China and Russia challenge American power, influence, and interests, attempting to erode American security and prosperity. … China seeks to displace the United States in the Indo-Pacific region, expand the reaches of its state-driven economic model, and reorder the region in its favor. … China and Russia target their investments in the developing world to expand influence and gain competitive advantages against the United States.” (National Security Strategy of the United States of America, 2017)
 Trump on Twitter, Feb 21, 2013.
 A comprehensive discussion and critique of the rise of Chinese capitalism can be found in these articles in GegenStandpunkt: “Chinas besonderer Weg zum Kapitalismus” (China’s special path to capitalism) 4-94; “China kommt in die WTO” (China enters the WTO) 4-2000; “China in der WTO: Noch ein ‚großer Sprung nach vorn‘ – in der Konkurrenz um Reichtum und weltpolitische Macht” (China in the WTO: Another ‘great leap forward’ — in the competition for wealth and global political power) 2-02; “China will Weltmacht werden” (China intends to become a global power) 3-06; all untranslated.
 With its “Made in China 2015” strategy adopted in 2015, China aims at becoming a “leader in the ‘fourth industrial revolution’” with the help of “smart manufacturing,” and to compete with the German “Industrie 4.0” initiative and the American “Industrial Internet” (www.merics.org). The state is commanding its universities and research institutes to come up with application-related research results for ten selected industrial sectors in which China aims to take the lead in international competition. It is mobilizing huge amounts of state credit (Advanced Manufacturing Fund, €2.7 billion; National Integrated Circuit Fund, €19 billion; subsidies to the national chip industry of €150 billion, plus a range of financing vehicles at the regional level) — compared to which Germany’s €200 million investment in its “Industrie 4.0” project looks rather modest. The capital required for such ambitious projects is generated by merging state-owned and private companies to form clusters of high-tech companies. The state supports its corporations in their efforts to adopt the technological know-how of their foreign competitors by acquisitions, or it uses its own financially strong state investment fund to acquire foreign companies. All these measures are part of a plan to trim the domestic market share of foreign suppliers of technology, and to raise the share of Chinese manufacturers of innovative manufacturing technology and critical materials to 70%. The Chinese government remains silent about the global market share its high-tech companies are to capture.
 The US, still enjoying technological primacy, is intent on preserving its edge over its competitors on global markets in the face of Chinese efforts either not to let itself be excluded from the scientific and technological achievements that are indispensable for its competitiveness, or, as the case may be, increasingly to acquire them themselves. Successful Chinese attempts to catch up are “theft” in American eyes; the US denounces it, consequently forbids China to acquire technologically leading and security-related American companies, and introduces punitive trade sanctions on account of “unfair appropriation of our intellectual property”:
“The acts, policies, and practices of the government of China directed at the transfer of U.S. and other foreign technologies and intellectual property are an important element of China’s strategy to become a leader in a number of industries, including advanced technology industries, as reflected in China’s “Made in China 2025” industrial plan, and other similar industrial policy initiatives. … The National Security Strategy states that, ‘The United States must preserve our lead in research and technology and protect our economy from competitors who unfairly acquire our intellectual property.’ Our trade policy will support these efforts. In fact, as discussed in more detail below, we have already launched an investigation pursuant to Section 301 of the Trade Act of 1974 into allegations that China is engaged in unreasonable and discriminatory efforts to obtain U.S. technologies and intellectual property. If necessary, we will take action under Section 301 to prevent China from obtaining the benefit of this type of unfair practice.” (2018 Trade Policy Agenda and 2017 Annual Report of the President of the United States, ustr.gov)
Trump has opened up a trade war with China and warns “his friend Xi” of “punitive tariffs in the billions” as a fair retribution for the theft of American intellectual property: “President Trump is preparing to impose a package of $60 billion in annual tariffs against Chinese products, following through on a longtime threat that he says will punish China for intellectual property theft and create more U.S. jobs.” (Washington Post, March 19, 2018)
 More details in these GegenStandpunkt articles: “Das Volksgeld soll Weltgeld werden” (People’s money to become world money) 1-14, untranslated; “China’s progress on the path to financial power and world power” 4-15.
 Under the title “Chinese oil futures launch may threaten primacy of U.S. dollar,” professional observers of global business report on what this latest financial innovation will do for the international community of speculators, and the foreseeable shift in the balance of power between the world moneys:
“China’s launch on Monday of its crude futures exchange will improve the clout of the yuan in financial markets and could threaten the international primacy of the dollar … The launch of the oil futures denominated in China’s renminbi currency, also known as the yuan, is China’s first commodity derivative open to foreign investors. … (This) challenges the petro-dollar system, in which oil deals are executed in dollars. This would decrease demand for the greenback and boost U.S. inflation. … Pricing oil in renminbi and launching a trading hub will raise China’s prominence and integrate it further in global markets. And demand for yuan from foreign investors eager to participate in the Shanghai International Energy Exchange will boost the currency’s value and divert trading away from the dollar. Appetite for dollars would shrink, driving the price of the currency down. … As it stands, oil exporters store the revenue from their U.S. oil sales in Treasury bonds — a process known as “petro-dollar recycling.” As a result, the rise of the petro-yuan would also jeopardize a key source of financing for U.S. deficit spending.” (Reuters, March 26, 2018)
 The silk road project carries such great significance for the state party that it made the “Belt and Road Initiative” (BRI) a constituent part of the constitution of the People’s Republic at its last National People’s Congress. At the press conference after the event, the Foreign Minister told the world about expanding China’s friendly economic relations, in particular with Europe:
“A large number of BRI projects are well underway and adding needed momentum to the economic and social development of our partner countries. For example, China is building over a dozen power stations for Pakistan, the largest of which is supplying electricity to tens of millions of Pakistanis. When all of them are completed, power cuts and shortages will be a thing of the past in Pakistan. In Serbia, a Chinese enterprise bought a troubled steel mill and turned it around in less than a year, both saving more than 5,000 local jobs and helping to re-energize the city in which the steel mill is located. In Greece, a Chinese group took over the operation of its largest seaport, ramped up the container volume and put it back in the same league as Europe's largest ports. China is also partnering with France to build a nuclear power plant in the UK, a stellar example of high-tech cooperation under the BRI.” (Foreign Minister Wang Yi Meets the Press, March 9, 2018, fmprc.gov.cn)
Europe, and its leading power Germany in particular, is less than happy about this. They view these as Chinese attempts to establish business relations with individual EU member states that make them dependent on China, thus splitting the European Union.
 Today, the European Union views China’s economic activities in Europe less as welcome investments than as the creation of unwanted dependencies in individual member states, which can be blackmailed by the People’s Republic. The Greek state’s veto against a EU vote to condemn China’s violations of human rights serves as an example and a warning: with Chinese investors acquiring the port of Piraeus after Greece’s national debt crisis, €280 million thereby flowing into the Greek budget, and the increasing importance of Greece as a hub for goods transported to Europe on the Silk Road, China is said to have bought not only the port, but also the Greek government.
 ‘Sharp power’ is an expression coined by the National Endowment for Democracy, an American think tank, to denote China’s foreign policy, carefully distinguished from the ‘soft power’ that is totally accepted as complementing the military ‘hard power’ of American imperialism.
 It is “practice” and “history,” of course, i.e., success in international power competition, that proves for Chinese state communists the superiority of their ruling system:
"In the early days of reform and opening up, the Party made a clarion call for us to take a path of our own and build socialism with Chinese characteristics. Since that time, the Party has united and led all the Chinese people in a tireless struggle, propelling China into a leading position in terms of economic and technological strength, defense capabilities, and composite national strength. China’s international standing has risen as never before. Our Party, our country, our people, our forces, and our nation have changed in ways without precedent. The Chinese nation, with an entirely new posture, now stands tall and firm in the East.“ (Xi Jinpng’s report at 19th CPC National Congress, October 18, 2017, chinadaily.com.cn)
 China’s Foreign NGO Law (see http://www.chinafile.com/ngo/latest/fact-sheet-chinas-foreign-ngo-law)
“China took a major step on Thursday in President Xi Jinping’s drive to impose greater control and limit Western influences on Chinese society, as it passed a new law restricting the work of foreign organizations and their local partners, mainly through police supervision. More than 7,000 foreign nongovernment groups will be affected, according to state news reports. … The new law is the latest in a series of actions taken by Mr. Xi against the kind of Western influences and ideas that he and other leaders view as a threat to the survival of the Communist Party, such as an independent judiciary and media. … Some officials in Beijing have characterized foreign nongovernment groups as ‘black hands’ working to undermine one-party rule in the country. Those suspicions have grown under Mr. Xi. … Beijing is already suspicious of foreign and Chinese nongovernment organizations that receive funding from outside sources deemed politically suspect ...” (“Clampdown in China Restricts 7,000 Foreign Organizations,” New York Times, April 28, 2016)
“China’s cabinet on Wednesday released broad new definitions of conduct punishable under its three-year-old counter-espionage law, as China seeks to bolster its defense against threats to national security and social stability. Over five years, President Xi Jinping has ushered in a flurry of new state security legislation to defend China from perceived threats both inside and outside its borders. … In new regulations on implementing a counter-espionage law first adopted in 2014, China’s state council expanded on the legislation to clarify, for example, that collusion involves any form of contact or assistance with groups that harm China’s national security. The rules include behavior, such as using religion or cults to harm national security, that go beyond standard definitions of espionage, namely the practice of obtaining information about a foreign government by spying. The state council rules say that ‘hostile groups’ include any groups that challenge the power of the Chinese Communist Party or the “socialist system.” (“China adds broad new definitions to counter-espionage law,” www.reuters.com, December 6, 2017)
 With its banning of Virtual Private Networks (VPNs), the government has now closed the last loophole in the “Great Firewall of China (GFW).” These fee-based data services allowed Chinese internet users to bypass censors if they wanted to access the foreign websites of Google, Facebook, YouTube, Instagram, but also Western news agencies, newspapers, etc. German companies in particular were outraged about the VPN ban. Up till now, they have used VPNs for their internal company communication, and now fear becoming easy prey for the Chinese secret services with regard to industrial espionage and theft of their intellectual property.
© GegenStandpunkt 2019