The contradictory rise of China: an interview with Chuang by InfoAut

The contradictory rise of China: an interview with Chuang by InfoAut
Photo: Eric Jenkins-Sahlin
Comrades from the Italian website InfoAut.org contacted us with some questions about recent developments in China. Below are our responses.1
 
Here is how InfoAut introduce themselves:
InfoAut is a portal of the Italian antagonistic movement that, for ten years, has produced and documented counter-information, analysis, theory and stories of struggle. The website is an expression of a network of experiences of conflict that connects social centres, student collectives, and struggles for habitation, in the workplace and over the environment. The tendency of Autonomia in Italy finds expression in InfoAut, using it as an instrument of expression and subjectivisation [i.e. constituting the proletariat as a political subject], and also as a space for debate.

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  1. This November the CPC will carry out the renewal of the Politburo, during a critical phase for the country. President Xi Jinping has effectively elevated himself to the fundamental “core” of the CPC and the state, and has, over the past five years, vested within himself control of a majority of the country’s most prominent political and military positions. In this way, Xi has obtained a role with a level of power comparable to Mao and Deng. Nevertheless, these Congresses are moments in which one can see, through the election of this or that official, possible tendencies in the development of the politics of the People’s Republic of China. What kinds of indications, with respect to domestic and foreign policy, can we derive from the nominations? Which groups within the Chinese governing class will gain more power and which will be suppressed?

In responding to this question, first we’d like to address some common assumptions often associated with this type of discussion. (Not that you necessarily share these assumptions, but many readers may.)

The first is the widespread tendency to vest too much power in the CCP and its state apparatus. It is often assumed that the Chinese government and the Party that administers it have somehow retained a strong level of autonomy from capital. In reality, this is essentially just another version of the old fallacy of Chinese exceptionalism, here applied to the state. On the left, this manifests as a hope that maybe, just maybe, the CCP can descend from heaven in the final moments of whatever crisis is building, somehow forcing China onto the path of socialism, social democracy or some variant through sheer force of will. On the right, the myth appears largely as the expectation that the CCP will act like proper corporate administrators, deftly facilitating the necessary restructuring of industry, dampening unrest, and redistributing bottled-up capital in a sort of global Sino-Keynesianism. You also see this hope manifest at the simple level of the stock market, where many investors are convinced that, in the last instance, the state will always step in to prevent a bottoming-out. The mechanisms differ, but both left and right often act as if the state in China were somehow exceptional when compared to states in the US, Europe or elsewhere.

In reality, the Chinese state and the CCP within it are just as much administrators of capital as any other government. It may prove to be the case (it already has, to a certain extent) that the Chinese method of administration between factions of the ruling class is smoother than the democratic alternatives seen elsewhere. It certainly has allowed the Chinese state, when faced with economic crises, to distribute stimulus funds at an unprecedented scale, with very little delay. Nonetheless, one need only look back on the Japanese case several decades ago to see many of the same claims being made about the exceptional superiority of the Japanese firm and the co-operative method of administration favored by the Japanese state. The same meaningless explanations were invoked: “culture,” “collectivism,” a unique historical experience. In the end, none of these things actually proved exceptional. The Japanese state was unable to stop the coming crisis. It’s doubtful that the Chinese state will fare much better—though its failure will take place on an entirely different scale.

The second misperception is the tendency to attribute policy directly to the “Great Leaders.” In the first part of our economic history (“Sorghum & Steel”), we discussed how the idea of the socialist period as “Mao’s China” is simply a misnomer. History is driven by masses of people in movement, not by helmsmen. Most of the policy choices being made in the socialist period were makeshift responses to crises arising at the grassroots level within industry and society. Similarly, in our forthcoming second installment to our economic history, we will discuss how the reform era’s policies were really never a coherent strategy for marketization. Deng Xiaoping was far less influential than the simple aggregate effect of millions upon millions of peasants transforming agriculture and industry in ways that often were never planned (the rise of Township-and-Village Enterprises are an excellent example of this phenomenon). After the fact, reformers claimed these changes as victories, pretending as if they had been planned by their faction within the Party. But in reality, the reform era was an often extremely incoherent, fundamentally contingent process of transition, with no long-term strategy. Each stage of reforms was cobbled-together to produce a makeshift solution to some immediate crisis. After they were implemented, they made further reforms more probable—but this was hardly a product of Deng’s foresight. At the beginning of the reform era, it is fair to argue (as scholars like Barry Naughton have) that nobody within the state really conceived the reform era as a process of long-term transition to a capitalist society—nor even to a truly “market socialist” society, as would soon be argued.

So it could be misleading to focus on the significance of Xi in relation to a list of leaders such as Mao and Deng. In a very fundamental way, it really doesn’t matter much who is the face of the state. There are inter-factional battles playing out within the ruling class, certainly (there always are), but any faction that takes power has to deal with the same building crises (see our “Scenarios of the Coming Crisis” for more detail on this). The Chinese state is not in any way exceptional, even if it might have certain powers that assist it in apportioning funds or repressing dissent, for example. If Bo Xilai, once held dear by many on China’s “New Left,” had ascended to the head of the party, he would also have had to deal with overcapacity in the steel sector, for example, and there really is only one solution to that problem within a system driven by the capitalist imperative: destruction of excess capital and labor through factory closures, the scrapping of obsolete plant and equipment, mass layoffs, etc.

Just as in democratic elections, we are often encouraged to perceive strong degrees of difference between candidates who are in every essential way the same, save for a few discrepancies in their social programs. But compare Bo Xilai’s management of Chongqing with Xi Jinping’s management of Zhejiang or Shanghai and really there are few fundamental differences—both sought economic growth in their regions, both courted foreign investment, both oversaw the muting of dissent, both had to confront the issue of widespread corruption. But in Chongqing Bo encouraged the revival of a certain level of socialist-era nostalgia and egalitarian values within the cultural sphere, and because of this he was championed by China’s New Left as a somehow superior alternative.

None of this is to say that the ruling class within China does not have important factions. Inter-factional conflict is a major reason why Bo Xilai is in prison, and why Xi’s anti-corruption campaign has targeted some leaders but not others. We hope to dig into these conflicts within the ruling class in depth in a future issue of our journal—at this point, much more research needs to be done on this topic than presently exists, since much inter-capitalist conflict remains extremely opaque due to the nature of the Chinese state. The major difficulty here is precisely the need to see behind the political factions in order to trace out the skeleton of the capitalist class beneath.

  1. The election of Trump seems to correspond to a recent speech delivered by Xi Jinping in Davos, where he proclaimed that China could be a force that guides globalisation. This is happening at precisely a time when the USA seems to want, at the very least, to renegotiate the terms of globalisation, obviously to their own advantage. In the meantime, tensions in the South China Sea between China and the various US proxies in that region are ever increasing. What kinds of scenarios seem to you to be the most plausible for China-US relations in the years to come, including the fundamental aspects underpinning these relations, such as finance?

To answer this question we again have to distinguish between material dynamics and the public pronouncements of politicians. Trump’s announcement of a “renegotiated” globalization (or an “end to globalization,” as many of his supporters hoped) has thus far failed to take any material form. Trump’s administration is increasingly becoming little different than any other administration would have been in similar conditions—even to the extent of pursuing key elements of Hillary Clinton’s proposed foreign policy, such as bombing Syria. Similarly, Xi Jinping’s pronouncement of China’s global expansion via a “New Silk Road” has been anticlimactic, despite widespread media attention. The fact remains that investment in the “Belt and Road Initiative” (B&R) is, at this point, not actually that different than Chinese foreign investment in general, and is really not of a comparable scale to the type of mass-investment programs that established US hegemony in the post-WWII period, such as the Marshall Plan.

We’ll return to the question of Chinese hegemony and overseas investment below. But in regards to US-China relations, it appears, at the moment, that things are hardly as tense as was originally envisioned. Trump’s administration has been warming to China, and the question of the South China Sea, though remaining tense (see our blog entry on Sino-Vietnamese relations, for instance), has for now been superseded by the potential alliance of Chinese and US interests in solving the North Korean question. In almost every scenario conceivable in North Korea, it’s likely that China and the US would be forced to work together, even if China’s response raised ire in the West. There is the possibility, for instance, of Kim Jong-un being ousted from power by domestic elites, and one potential consequence of that might be China offering Kim asylum—essentially giving him an out that allows a comfortable life and doesn’t require this continuing insanity of military up-scaling for the sake of survival. That would obviously be hard to accept in Western political circles, but if the end result is a modicum of stability and the elimination of an immediate military threat to the US and its military allies (namely Japan and S. Korea), it’s something that would most likely be accepted.

Due to continuing financial and more general economic interdependence, any sort of harsh falling-out between China and the US still essentially results in an economic crash on both sides, and therefore remains an unlikely outcome of political decisions on either side. Global trade patterns are certainly changing and world trade has begun to diminish, but despite some proclaiming the “end of globalization,” we really aren’t seeing the same level of national or regional bloc-formation as in the 1930s, for example. Currency conflicts will continue, taking much the same form they took between the US and Japan in previous decades, and the ultimate result will most likely be careful management of inflation paired with the outsourcing of more production from now-higher-wage Chinese manufacturing hubs in places like the Pearl River Delta (PRD) to China’s interior and, increasingly, places like Cambodia, Myanmar and Ethiopia. (See our blog entry about a Chinese factory in Myanmar.) Likely the biggest change, financially, will be what China does to maintain its level of investment in its attempt to deal with a mass of sitting, surplus capital, even as the returns on each unit of investment have been decreasing (again, see our “Scenarios”). There will be a point at which China ceases to be able to be the primary buyer of US debt, and may itself be required to begin running similar financial deficits through international borrowing of some sort. These are the financial machinations that are probably most important to watch, since they threaten individual countries’ abilities to mitigate future crises and generate new forms of international economic disequilibria that contribute to new forms of speculation and make future crises more likely.

  1. One of the most important dispositifs [mechanisms of power] to understand in order to comprehend contemporary China is the hukou, or, in other words, the system of regulation of internal migration within the country, which stratifies citizens by determining the rights they can enjoy on the basis of where their residency is registered. The enormous industrial reserve army constituted by migrant workers, from the inland to the coastal regions, has been fundamental to the Chinese economic boom. The hukou, however, created a system of exploitation of these workers, who weren’t afforded the same rights as local citizens. In this way, these migrant workers constituted, according to, for example, the way they are defined by Pun Ngai, “proletarians whose identity was determined by their uniform” (proletari dall’identità divisa). In recent years, possible reforms and localised experimentation with modifications to the hukou system have been the subject of intense debates, however none of this seems to have touched on the fundamental substance of the system. Do you agree that this dispositif is currently of central importance? What kinds of prospects for change or modification of the dispositif could potentially be on the horizon? 

The importance of hukou as a specific dispositif is inextricably tied to migration. The phenomenon of migrants filling the gap in low wage industrial and service sectors where the costs of the local workforce are not economically feasible is not specific to China, but is rather a global phenomenon. What seems to make hukou somewhat atypical in relation to migration is the fact that it is an institutional division that takes place within the bounds of one nation-state. With regards to migration, status divisions in China are mainly not based on national identity but rather on people’s hukou status, an institution originally created to deal with certain developmental measures adopted during early socialist period.

As discussed in our articles “Gleaning the Welfare Fields” and “Sorghum & Steel,” the modern Chinese hukou[1] that divides the population into rural vs. urban with supposedly corresponding relations to agricultural production (producer vs. consumer) was a socialist era invention designed to extract the rural surplus of food necessary to maintain a growing urban population and industrial development. The main function of the system at the time was that of maintaining a large enough rural workforce, and it operated within an overall tendency towards relocating urban surplus populations to the countryside. But the dismantling of collective agricultural production and introduction of an individual “household responsibility system” also meant a change in the way the hukou regime functioned. Rural households could now become suppliers of labour-power for the newly opened special economic zones (SEZs), providing a seemingly inexhaustible pool of cheap labor for the export-oriented coastal regions.

Post-socialist migration patterns in China can be compared to the post-1990 migration of proletarianized or semi-proletarianized populations from Eastern and Southern Europe to Western and Northern Europe, with migrants moving from underdeveloped regions to the developed ones, but on a much larger scale in both absolute and relative numbers than in the EU. Historically, from the 1990s until the Sun Zhigang Incident of 2003,[2] when the hukou regime in coastal regions was still actively enforced by police measures, the situation rural migrants were facing was in some ways more similar to the situation of non-EU nationals (with police checks, detention centres and deportations).

With the increased demand for large numbers of flexible labour in the coastal regions the policing aspect of hukou became less important and the system’s primary “usefulness” became cheapening of labour costs under the new economic conditions of the reform era. By externalizing the costs of social reproduction of migrant households onto members of their families living in their inland rural places of birth, namely by excluding migrants from certain social services (free education, easier access to housing, etc.) in the areas where they worked, the labour costs remained comparatively low. One could say that for many years the hukou combined with the dormitory regime to play a role antithetical to the old danwei (state enterprise “work unit”) system. When the danwei system was largely dissolved in the late 1990s and early 2000s, it was replaced by a new social security system for urban residents not tied to one’s workplace, but much of this system remained off limits for migrants. Over the past decade, however, although there are still many obstacles for migrants trying to settle down in the first tier cities, they are being increasingly included into social security provisions, and significant improvements have been made in the inclusion of migrants in second tier cities. Nonetheless, hukou is recently being used in an effort to cap migrant populations in large metropolises like Beijing, Guangzhou and Shanghai by reserving certain jobs for locals.[3]

Presently the polemic around hukou and its reform touches on multiple levels of problems. For one, the way the hukou regime functions poses a big challenge to government plans of pivoting the economy from its heavy dependence on export towards the expansion of domestic consumption. If successful, raising 300 million people to “middle class” consumption patterns could hardly be an ecologically sustainable measure, especially for such a densely populated and already serious polluted country such as China (see our response to your sixth question below). In any case, there has been no serious talk of ditching the hukou system as a whole. If we look at the rural hukou holders themselves, because of regional disparities, we can hardly speak of a common migrant worker identity, and even less a rural hukou-holder identity. By and large for younger migrants the promise of rural hukou’s central benefit—access to a plot of farmland in the places where they are registered—no longer holds a promise of a viable income since they do not know how to farm and their remaining plots are now usually too small to allow a significant income from their commercial use.

On the other hand, holding a rural hukou from a certain locale (where land is more valuable for development and its collective owners can receive dividends or compensation for development projects) can be more beneficial than a rural hukou from some other place or even certain urban hukou. Although struggles over the issue of hukou status in urbanized villages seem to be quite common, from the side of the migrants there does not seem to be any mass mobilization against the hukou system per se. It therefore remains to be seen whether hukou status becomes a key issue of migrant mobilization in the future. Due to high rates of migration into urban areas hukou in major metropolises will probably continue to be used in its present function of population control via exclusion of migrants from certain jobs and specific benefits. But the key question here is this: if this migration now constitutes a complete (rather than “semi-”) proletarianisation of large sections of China’s rural population that is already well underway, then what can we learn from the struggles over the conditions of this proletarisation that are already taking place and will surely continue in the coming years? It is these struggles that will to a large part determine the horizon of change.[4]

  1. In their work, scholars like Giovanni Arrighi have suggested the possibility of a rise of China that is not necessarily modelled on the experience of the united states or the west, made possible by the innovations that would have emerged from the unique history of the country over the past 70 years, with the Dengist market reforms that followed the almost 40 years of socialism of the Maoist period. Current events seem to however speak to the contrary, with a China that is more and more undertaking, albeit with its obvious unique aspects, the path of development followed by the USA. Along with this there emerge, at the same time, conflicts based on the contradiction between this mode of development and a country that defines itself as socialist and draws inspiration from the legacy of marxism-leninsm. In what ways do you think we can speak of a ‘chinese path’ of development that is different to the models of governance we have seen up to now in the operation of the global system?

We are wary of taking these theories of the “Beijing Consensus” or “Chinese Hegemony” at face value, and would simply re-emphasize that many of these large-scale events do not follow a model at all, but are instead pieced together over the process of development, constructed from a bricolage of local solutions to local crises that can then be transposed elsewhere. And again: one need only look back twenty or thirty years to see the same claims being made (even among many of the same World-Systems theorists) with regard to to Japan. Many of the same “cultural” or “historical” reasons were given, and the new Japanese century was envisioned as, somehow, fundamentally different than the US century that preceded it. But in the end it didn’t happen. The crisis came, as it always does.

So how do we understand the material dynamics of Chinese expansion, without falling into the assumption that China will, naturally, acquire global hegemony? First, it’s important to quantify the absolute and relative scale of this expansion. We hope to dedicate quite a bit of research to this question in future issues, but at the moment have only the same sort of initial-glance data seen in the mainstream media, largely derived from the Chinese Ministry of Finance (which is based on many questionable methodologies). But from this first-glance data it’s clear that the Chinese expansion, though comparable in relative scale to the same outpouring of Japanese capital in the 1980s and 1990s, hardly matches the scope and scale of something like the Marshall Plan or postwar East Asian reconstruction funded by via US-backed global institutions.

What does seem to be somewhat unique is the Chinese emphasis on infrastructural investment (we’ll address some of this in more detail in response to question #7 below). This is theorized by domestic economists (like Justin Yifu Lin) as a type of global development based on a “New Structural Economics,” and driven by “South-South” aid and investment. In form, it is likely that much of this investment will have a positive effect on certain areas—at least from the perspective of capitalist development. But it’s also true that much of this investment is being poured into over-sized projects in underpopulated areas, as seen in the vast “inland ports” in border territories across Central Asia or the massive infrastructural projects being funded across Laos. Though these projects may facilitate future extraction of natural resources, their present function is much more about providing a sink for surplus capital, which is why most of these projects contractually require that Chinese engineering, construction and related firms be employed throughout the process—and it is simply impossible that road systems, pipelines or distribution warehouses can generate a productive upswing without a population of cheap, mobile laborers. The population of Laos (at 6 million) is, in sum, about the same as the population of Kunming alone, the provincial capital of neighboring Yunnan province, and Kunming is one of the smallest provincial capitals. Most labor on Chinese-financed projects in Laos (and Nepal, Tajikistan, Mongolia, etc.), is done by Chinese workers, employed by Chinese firms—particularly by State-Owned Enterprises (SOEs) experiencing an extreme crisis of overproduction at home.

Meanwhile, China is also facing a severe demographic crunch, with rising labor costs and a shrinking working-age population basically leading to a situation in which its “demographic dividend” has more or less been spent—and all of this before many key demographic turning points (in urbanization rate, rate of population employed in agriculture, GDP-per-capita) have been met. The result is most likely that China hits a deeply uneven form of the middle-income-trap experienced by countries like Mexico and Brazil in previous decades. The primary difference, however, would be shaped by the developmental divide between China’s metropolitan coastline and its poorer interior. The interior, helmed by key cities, will likely experience something most similar to the middle-income trap seen elsewhere. Meanwhile, the coastal cities might experience something more similar to the Japanese, Korean, Taiwanese or Hong Kong-style stagnation, sometimes called a “high-income trap.” But these two zones aren’t truly insulated from each other and can’t be managed in the same way as one manages opposite sides of a national border. That means that any sort of mixture of the middle- and high-income traps is likely to produce its own deep instabilities, driven by geography.

As for the question of Chinese hegemony, it seems unlikely, and therefore somewhat useless to compare China to the US in these regards. It will be more helpful to compare and contrast the Chinese to the Japanese experience a few decades ago, trying to understand what the differing scales (demographic, economic, etc.) of the two countries might imply for the shape of the coming crisis globally. But if we entertain, for a moment, the possibility of Chinese hegemony, it’s clear that a few factors have to be met. First: no hegemonic ascent, as documented by World-Systems theorists like Arrighi, has taken place without some level of military conflict. At this point, China alone is hardly in a position to challenge US military hegemony, and all the talk of “soft power” and a “peaceful” ascent simply obscures the necessarily military character of administering accumulation—a question already being raised as China attempts to expand into Central Asia, the Middle East, East Africa and of course the South China Sea.

Second: there is an essential demographic element to any expansion of accumulation. China itself, in its period of opening, was able to offer an almost unimaginably large, well-trained and highly literate workforce for capitalist production. The Chinese labor force during its opening to the market was roughly equivalent to the size of the labor force in all developed countries (including Japan) combined. There is simply no place in the world, right now, that has a comparable population that has not yet been fully incorporated into global production. So a productive upswing, initiated by Chinese investment, would have to rely on a massive stimulus effort capable of yoking together extremely disparate populations in South/Southeast Asia, the Middle East, Latin America and, most importantly, Africa. But even the population of all the countries of Africa (just under the population of China, but this includes many countries like South Africa and Egypt that are already thoroughly integrated into global capitalist circuits) does not provide a workforce of the same size, relative to the global economy, as China itself offered in its period of opening—not to mention the fact that Chinese firms operating in places like Ethiopia are already having to deal with the issue of lower rates of literacy and general education, all of which are driving up the costs of investment. It’s difficult to see how this global demographic crisis will be solved, even if China could successfully maneuver past all of the domestic crises mentioned above.

British and US expansion took place in favorable demographic conditions, and these conditions shaped their “style” of hegemony. Japanese expansion from the 1960s through the 1980s took place in favorable demographic conditions (with the Chinese population not yet fully-subsumed within global capitalism), and it failed to gain any level of true hegemony despite numerous innovations and efficiencies in its methods of administering capital and its generally sound response to the outbreak of a massive domestic crisis. So it’s extremely unlikely that China, faced with unfavorable demographic conditions and the continuing military dominance of the US, would somehow be able to ascend to global hegemony short of some massive global catastrophe—and it should be noted that even the US was unable to make this ascent without the aid of two world wars and a decade-long global economic collapse, despite favorable demographics and geography.

  1. “Mass incidents”, that is, conflicts (strikes, rallies) in the world of work, continue without pause, above all in the mega factories producing for export. Although moving more and more down a path of transition, the Chinese economy continues to be largely based on traditional industries, above all in the electronic and clothing sectors. What kinds of advances have the continued conflicts of the past few years achieved in terms of rights and salaries? Have the cycles of struggle of the past 20 years, carried out above all by migrant workers, been able to impose new relations between capital and labour? What are the forms of organisation and above all self-organisation that have emerged? 

First, we must acknowledge that most mass incidents are not part of the “world of work” in any direct sense. Different estimates show that perhaps tens of thousands of “mass incidents”—strikes, protests, clashes with police, blockades, and other forms of “undesirable” collective action (from the viewpoint of the state) —occur each year in China.

Estimates vary. More recent 2015 statistics from the Wickedonna project show that around 35% have been classified as involving “workers,” around 25% center on disgruntled home buyers who have been cheated in some way by real estate developers, and around 10% are ruralites subject to government land grabs, etc. Smaller but significant groups include environmental protests, protests against corruption, etc. Sociologist Yu Jianrong also noted that “workers” were among the largest categories of mass actions in the year 2015, along with ruralites and homeowners.[5] Yu’s earlier, more detailed figures claimed that workers accounted for some 30,000 mass incidents in the year 2009, a rate of around 80 per day across China. Yu and other scholars have consistently cited that worker actions account for around a third of all mass incidents in China.[6]

It is important to know that labour actions, and strikes in particular, are but a small part of a much wider spectrum of unrest, each with its own relation to capitalism. Each must be placed in context, and we should not put undue emphasis on the work stoppages in factories, which are an even smaller portion of all the worker actions in China. The latest 2016 statistics from China Labour Bulletin’s Strike Map, for example, show that strikes are only around 15% of all worker actions. The vast majority of actions are protests and demonstrations, which may include, for example, laid-off state-owned enterprise (SOE) workers marching through the streets demanding compensation, construction workers threatening to jump from a building demanding payment of wage arrears, or retired teachers holding a sit-in at a government office demanding the right to a pension. Outside the realm of mass incidents, of course, there are surely countless small work stoppages that occur within factories that do not end up in any statistical record. All told, we simply insist that one cannot assume that an industrial strike action in, say, an electronics or textile factory is somehow representative of most forms of resistance in China. In fact, this trope falls apart even after brief examination of the available empirical data. 

“Traditional industries” is of course matter of definition. Mining, steel and other heavy industries might be better understood as traditional industries in modern China. Yes, export-oriented textiles and electronics have indeed been critical to the last 15-20 years of growth in particular. Both these light and heavy industry jobs still define a large, but declining, portion of the working population. The service sector (roughly defined) is growing rapidly, but most of these new jobs are low-paid, with high turnover and little hope for stability or career advancement for workers.

There have been many changes to labour relations over the past couple decades, but we should be careful not to attribute all these changes purely to the resistance of workers, as many often are too quick to do. We cannot forget that the state and capitalists work constantly to regulate capitalist relations (reproduce the wage relation) to ensure “harmonious labour relations”. Minimum wage increases, revisions to the labour law and state campaigns to address wage arrears, for example, are no doubt in part a response to long-term and intense worker unrest, but these should not be seen purely as “wins” or achievements of worker militancy; we should also acknowledge that policies like the minimum wage increase and other efforts to formalise and stabilise wage relations in China are very much part of the state’s priority to increase domestic consumption and develop China’s internal market

Regarding the struggles of migrant workers over the past 20 years, labour relations have become more highly regulated, with greater provision of social benefits (the Social Insurance system), and have developed a larger bureaucracy of labour-related state organs (arbitration courts, the state-controlled union, not to mention police). Even judging by these meagre changes, things are not much better. While labour relations have been more strictly regulated, only about 1/3 of migrant workers have a contract with their employer[7] despite years of state efforts to formalise relations. Social Insurance benefits are chronically underpaid or not paid at all, and workers have little or nothing to retire on. State bureaucracies operate by their own logic of quotas and propaganda, so drives to promote “rule of law” and “harmonious labour relations” are but a veneer on the surface of a burgeoning social conflict where legal paths of the state are of little use to workers. Today the number of labour disputes registered with the state is surpassing even those registered at the dawn of the financial crisis in 2008.

Taking these things into account, the conflicts have “won” layers of response from the state bureaucracies: tinkering with the labour dispute resolution mechanisms, campaigns to punish employers guilty of wage arrears and other abuses, not to mention increased police budgets, surveillance and crackdowns on organising.

This is not to say that workers have failed to achieve any of their immediate aims. In fact, workers often manage to obtain back pay, compensation owed to them, or wage increases through collective action that prompts responses from the state and employers. As described in our article “No Way Forward, No Way Back,”[8] “mass incidents” in China have often achieved results with little fanfare while nationwide general strikes and riots in Europe can be ignored or repressed. As the Chinese saying goes, “A great ruckus leads to great results, a small ruckus to small results, and no ruckus to no results” (大闹大解决 小闹小解决 不闹不解决).

In terms of organization, there is no shortage of self-organization, among workers and others such as ruralites or urban home-owners deprived of their homes. Especially in this age of mobile devices and social media, all strata of society are able to contact one another and act collectively over the major issues of their lives. Despite intense censorship and monitoring of social media, the number and scale of collective actions and social networks inevitably overwhelm the state apparatus’s ability to control them completely. Workers use a wide array of venues for self-organization:

– social media circles

– networks among friends, family and laoxiang (people from the same area)

– workplace organising

– legal campaigns and petitions

– small worker publications, poetry, music and spaces for workers to discuss life, politics and action

In general, there is a strong case that a “holding pattern” has thus far contained Chinese struggles well within certain boundaries, but that is all the more reason to understand the dynamics of contemporary struggles—in their widest sense, free from the tropes of the old workers movement—and how the current patterns might be broken.

  1. The environmental question seems to be one of the main challenges on the horizon to the sustainability of the Chinese economic model. On this question numerous conflicts have emerged, underlining the contradiction between development and well-being, committing tens of thousands of people to the defense of the environment and of their land, with pollution and environmental devastation being attacked alongside the model of development that produces them. Could this be, aside from the question of work, the theme by which it is possible to measure the endurance of the Chinese political and economic model? 

The environment is indeed a key site of antagonism in contemporary China, engendering some of the largest and most organized protests. In 2004—in one of the largest protests since 1989—tens of thousands overwhelmed the construction site of the massive Pubugou dam, delaying the project and leading to the execution of at least one of the protesters. The demonstrators were angered about the loss of land and forced relocation. The pollution and potential pollution from chemical plants has also led to huge protests. A 2007 protest movement against the building of a paraxylene (PX) plant in Xiamen, Fujian, also rallied tens of thousands, leading to the plant being moved. In Chengdu, Sichuan, protests against smog began after individuals put masks on statues in December 2016. They were heavily repressed.

Environmental damage is not new in China, and the post-1949 developmental regime saw the transformation of nature as central to its project of industrialization and national power. There are two key ways to understand the contemporary environmental damage and the protests it produces. First, environmental damage attacks the social reproduction of the population, in particular in the countryside. Since 1949 the rural-urban divide has been a core structure used for China’s economic development, not only in terms of the extraction of rural surplus for the purpose of industrialization. Additionally, the rural sphere has been used as a sink for urban and environmental problems, this continues today. The rural environment pays a heavy price for investment- and export-based economic growth. Up to one-fifth of China’s rural land is polluted, as is as much as 90% of its water. The very reproduction of rural social life is at stake. Urban protest movements, such as the anti-PX plant protests in Xiamen, have been more effective than rural ones, displaying the unequal power between urban and rural residents as well as the greater fear urban protests provoke in the party. The rapid urbanization that China is now undergoing will not mitigate this problem, as urban residents use about four times the energy of those living in the countryside. Further, expanding cities are rapidly eating up arable land.

Second, the other side of this is the fact that economic development is subsidized not only by cheap labor but also by cheap nature—the environmental costs of development are not paid for by those that profit from it. This is, of course, true of capitalism in general, but in reform-period China it has been particularly egregious because local state officials have been evaluated almost solely based on the GDP growth in their area during their tenure in office. This issue became so bad that the central government attempted to revise how they evaluate officials, proposing a “Green GDP” measure in the early 2000s. The measure was scrapped after local officials and those representing the interests of industries revolted against the plan, although recently talk of the proposal has returned. This is another example of the way in which the central leadership is highly constrained. There are ways in which they can manage the problems and the protests they provoke, such as shifting them into the rural sphere as mentioned above, but such strategies cannot get to the root cause of the problem: capitalism and its development in China rely on cheap nature.

  1. The development of logistics seems to be a fundamental key to understanding the dynamics that span contemporary capitalism. In a recent text, you analysed the business model of Amazon, and the kinds of relations between labour and capital that this model creates. Looking from the other direction, the geopolitical dimension also seems to view logistics as a prime source for further trajectories of economic growth, with, for example, projects like the New Silk Road. Is it possible to say that Chinese-driven globalisation can also be understood in this way: as a restructuring of the precedent American phase above all in this area of logistics?

Clarification: Can we consider China as the new main global player that is going to “substitute” the US? Or do we need to use different interpretive paradigms to grasp what is going on? And do [you] think that the Chinese-driven globalization has at its core a political use of logistics (like the so-called “New Silk Road”)? In other words, can we consider China’s worldwide logistical tissue as a sort of soft power to gain a new global hegemony?

No, China does not seem capable of replacing the US as the new main global player any time in the next few decades, especially because of the military reasons outlined above. So yes, we do need a different paradigm. Above we proposed Japan circa the 1980s as more useful for comparison, but as also noted above, the much larger scale of China’s population, land mass, etc., and the much larger role of international infrastructure development in China’s expansion means that its impact on global capitalism will differ significantly from that of Japan a few decades ago.

Moreover, these infrastructure projects—including the main aspects of the Belt and Road Initiative (B&R) —involve an element of military expansion. While still meager in comparison with the international military presence of the US, Russia and a few other countries, this military expansion (combined with regional economic integration, diplomatic maneuvering, etc.) may within a couple decades help China to begin taking on a role as something like a regional hegemon, leading to a multipolar world. At least this is an explicit goal of relatively nationalistic elements within the Chinese ruling class, according to statements that appear from time to time in publications such as The Global Times. But such a strategy assumes that the global and regional economies can continue growing fast enough, and for long enough, to prevent social unrest from destabilizing this path of geopolitical realignment. One possible outcome of deepening economic slowdown and a spike of widespread unrest (other than the global revolution that we all hope for but which seems highly unlikely in the near future) might be a premature attempt to challenge the US and its proxies militarily. That would probably be disastrous for the Chinese state, to say nothing of the people living in the region. But if the economy manages to maintain sufficient growth and China’s rulers keep a cool head, it seems more likely that they’ll continue to take small steps toward challenging US power in the region only gradually—as they’ve begun to do in the South China Sea.

In this regard, a recent report on Pri.org is helpful:

That China is opening its first [overseas naval] base in far-flung Djibouti is owed to the total encirclement of its Pacific coastline by massive American bases. Its ongoing mission to build little outposts in the South China Sea — which US President Donald Trump erroneously calls a “massive fortress” — has been threatened repeatedly by the US Navy.[…] The US military devours a staggering $622 billion per year — more than four times the Chinese military budget.[… On the other hand,] China’s navy is the fastest growing in the world and, within decades, should prove highly capable of backing down American threats in its near waters. In farther seas, it will increasingly expect the US to back off and respect its right to defend the oceanic arteries that pump economic life into the country.

So if we rephrase your question in terms of regional, rather than global, hegemony, then we could say yes: China’s international (far from “worldwide” at this point) logistical tissue could be considered a form of power—not only soft power but also, to a much smaller but growing extent, hard power—toward the aim of eventually achieving regional hegemony and moving toward a multipolar world.

However, such a statement still obscures some important points. First, China’s international programs such as the B&R involve far more than logistics. It is correct to highlight logistics as central to such programs and China’s international expansion in general, and while this is certainly not unique to contemporary China (of course shipping and the construction of railways, for example, were central to European colonialism), there does seem to be something special about China’s particular use of logistics in this regard. Perhaps it is that such programs officially highlight the construction of infrastructure—especially transportation infrastructure—as a sort of selling point to other states and private investors in order to convince them to enter risky new economic and political relationships. It is possible that this is related to changes in the way logistics works nowadays associated with the “logistics revolution” since the 1980s. In fact, “logistics” as we know it today didn’t even exist before the 1980s, except in the older military sense.[9] Instead there were only separate sectors of transportation, warehousing and commerce, without anything like the computerized integration of these into a single system organized around the needs of transnational retail firms.

For this very reason, however, the term “logistics” may not be the most helpful for understanding China’s programs such as the B&R. If you look at such programs more closely, you’ll see that most of their infrastructure projects concern transportation and energy, but not necessarily logistics as such. Of course such infrastructure is necessary for logistics, but it’s also necessary for military and other purposes, and it’s not unique to the present era or China’s strategy of expansion. Perhaps a more important difference between this aspect of China’s expansion and those of European colonialism or US neocolonialism is simply that we’re living in a postcolonial era where nearly 200 states have to at least give the appearance of negotiating deals with each other as sovereign entities, so any given state cannot simply go and build a railway on another state’s territory (at least not without an excuse that’s accepted by the “international community”).

A second point that this emphasis on logistics as a means for building hegemony obscures is that the more immediate impetus for these expansionary projects is the need to find a sink for China’s surplus capital now that domestic investment is both becoming less profitable and running into material limits epitomized by China’s famous “ghost cities.” What else could China do with its millions of extra tons of steel, for example? Coupled with that is the need to reduce the costs (including transportation costs as well as diplomatic costs) of purchasing raw materials and of selling Chinese products to overseas markets—other ways to temporarily counter the falling rate of profit. Yes, at least some of China’s rulers hope to eventually achieve regional hegemony and regard the B&R as one way to move in that direction, but even that political aspiration should be understood as intertwined with the more immediate economic need to deal with China’s crises of overcapacity and over-accumulation.

Finally, another important function of China’s international expansion is the externalization of social and environmental costs of capitalist development. Above we noted how China’s own countryside has functioned as both a sink for environmental problems and a place where some of the labor of social reproduction has been externalized. But increasingly, as rural China loses the ability to play these roles effectively (due to environmental degradation in many areas, enclosure of the remaining fertile farmland for more direct use by capitalist enterprises, and the more complete relocation of rural families to urban areas), both Chinese and transnational capital must look elsewhere for places to externalize these costs. Chinese firms are now competing with firms from Korea, for example, to obtain land in neighboring countries, such as Myanmar and Laos, and as far away as Brazil, not only to develop transportation infrastructure and energy projects, but also to carry out large-scale agriculture. In addition to providing a sink for surplus capital and decreasing the cost of raw materials, such expansion has also begun externalizing the environmental costs of production, as seen in the destruction of the Amazon rainforest, for example—where Chinese investors are complicit along with those from other countries (and the Brazilian state, of course). Such environmental costs are also tied up with what Jörg Nowak has called “the exportation of social conflict,” since the inevitable resistance to such destruction and expropriation takes place in foreign lands, thus decreasing the impact on China’s social and political stability.[10]

 

Notes

[1]  Systems similar to hukou were also used throughout pre-modern East Asia (including what is now China, Korea, Japan and Vietnam) as means of population control, and a system similar to the modern Chinese hukou system is still used in Vietnam.

[2]  This refers to the 2003 death of migrant worker Sun Zhigang in Guangzhou “as a result of physical abuse he suffered while being detained under China’s custody and repatriation (C&R) system. The case received massive attention in media and on the Internet in China, resulting in the abolition of the C&R system by the national government.” However, Fan of the Factory Stories group argues, “Actually the reasons for its abolition weren’t that simple: the incident was symbolically important, but behind the decision to abolish the system was also the bosses’ need for more labor-power that could move around more freely, giving the bosses a broader selection of workers.” See “Aunties learning to fight: The 2015 Uniqlo strike in historical context,” Chuǎng blog, September 15, 2016.

[3]  One recent example being that of banning migrants in these cities from working as drivers for Didi Chuxing (a Chinese Uber-like ride-share company).

[4]  Our articles “Gleaning the Welfare Fields” and “No Way Forward, No Way Back,” began to analyse such struggles, but there’s much more empirical research to be done on this rapidly changing terrain. Immediate notes from our research (including translations of Chinese texts such as the “Aunties” piece cited above) will continue to be posted on our blog, and we plan to examine these more systematically in the next two issues of our journal.

[5]  http://cul.qq.com/a/20160223/023980.htm

[6]  The details of this argument are made in footnote 3 of this piece:

http://www.gongchao.org/2016/06/01/interview-struggles-organizing-repression/#sdfootnote3sym

[7]  http://www.sixthtone.com/news/1000141/fewer-of-chinas-migrant-workers-have-labor-contracts

[8]  http://chuangcn.org/journal/one/no-way-forward-no-way-back/

[9]  On the commercial adoption of the term “logistics” and some of its associated techniques from the military sphere, see The Deadly Life of Logistics by Deborah Cowen (University of Minnesota Press, 2014).

[10]  Personal communication based on Nowak’s ongoing research related to foreign (including but not limited to Chinese) investment and local resistance to expropriation, exploitation and environmental destruction in Brazil. Comparable cases have been documented in other countries such as Myanmar (on which see “The interplay of activists and dam developers: the case of Myanmar’s mega-dams” by J. Kirchherr, et al., International Journal of Water Resources Development, 2016).

 

  1. The Italian translation of this interview can be found on their website here. Thanks to L for facilitating and translating this exchange.

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