Economic War: U.S. and China

China (Hutch)By ERNIE GOTTA

A travel ban on Chinese Communist Party (CCP) members is being considered by President Trump’s administration as the trade war between the U.S. and China intensifies. Using the same language in the Immigration and Nationality Act that Trump used to justify the “Muslim ban,” officials are looking to possibly end travel and immigration for 92 million members of the CCP. Of course, this measure would take immense resources to implement as political party affiliations are not on travel documents. This ban is being considered following China’s sanctioning of Ted Cruz and Marco Rubio for their condemnation of human rights abuses of religious and ethnic minority populations.

The sanctioning and bans are only maneuvers in a broader financial fight. The basis for the economic conflict has many layers, which include the Trump administration’s concerns over national security issues, deeper Chinese economic incursions into U.S. and European markets, and China’s growing global military presence—which props up their economic interests in deeply exploited nations in Asia, Africa, and Latin America.

One of the main areas of conflict centers around China’s advancing tech industry. Technology research and development is driving a potential shift of alliances that is threatening even some of the most hardened relationships. Israel, for example, has courted Chinese firms. Israeli Prime Minister Benjamin Netanyahu went so far as to say that the relationship between China and Israel is a “marriage made in heaven”. However, the U.S. has been working overtime to put roadblocks in China’s way, including leaning on its network of imperialist allies.

The Chinese tech firm Huawei is the most recent target, regarding the company’s attempt to expand a 5G telecommunications network internationally. Pressure from the U.S. led some countries to ban Huawei. The ban includes Japan, Australia, and Britain but is likely to spread in some aspects to New Zealand and India. India, of course, is the site of a recent border skirmish with China that left many dead.

China: New imperial power

The 2018 document adopted by Socialist Resurgence at our founding, “China: A New Imperial Power” details at great length China’s transformation from a workers’ state to a rising imperialist country and is crucial to understanding the current and future conflicts shaping our world. The rise of new imperialist countries like China and Russia have a number of consequences for the U.S. that include providing a counterforce to unilateral domination of world markets through economic coercion and military might. The shifting geopolitical situation creates the possibility of new alliances among imperialist nations that have remained steady since the aftermath of World War II.

The realignment of forces means a new reality for U.S. imperialism. This new reality makes President Trump’s “America First” rhetoric necessary for one wing of U.S. capitalism. But at the same time, it highlights the divisions among the U.S. ruling elite and how each sector operates to best advance their interests as a class. Although a trade war between the two imperialist nations has persisted for a year, it developed out of differing approaches by U.S. administrations in response to China’s push to assert control over the South China Sea.

Obama’s controversial “Pivot to Asia” was in part a recognition of U.S. imperialism’s need to contain and put pressure on China, as an emerging player in world imperialism. The failure to implement Obama’s keystone Trans Pacific Partnership (TPP) highlights the tensions in ruling-class strategy with regards to China. The TPP was designed to establish neo-liberal economic relations based on past agreements like the North American Free Trade Agreement (NAFTA) to more easily exploit workers in China’s sphere of influence.

Yet President Trump in his first three days in office halted the “pivot,” at least in its formal aspects, by stopping the TPP. Instead of confronting China through free-trade agreements that utilize “soft” economic power, Trump has opted to attempt choking up Chinese investments directly through a trade war. While contradictory on the surface, these two strategies both have the same political end goal, which is increasing U.S. dominance and marginalizing China.

Although there is an economic price being paid by smaller industrial firms that are finding difficulties acquiring cheap supplies, larger industrialists are able to find ways around the tariffs, including changing assembly and shipping processes. At the same time, President Trump’s base of support is renewed by unleashing a xenophobic atmosphere. Xenophobic comments about COVID-19, labeled by Trump as the “China virus,” have encouraged a wave of attacks on Chinese-Americans and Asian immigrants in general.

Wars and revolutions?

A great fear of U.S. capitalism is, of course, the scenario expressed by many economists who believe China will surpass the U.S. in the next decade or two as the leading economy in the world. The capitalists know this better than anyone because their super-profits are at stake. They also know that these transitions historically don’t come peacefully and that wars can open to a broader class conflict and even the possibility of workers’ revolution. Despite pretensions of diplomacy, instability is unavoidable as capitalism drives forward competition that puts nations into conflict with each other over the exploitation of the world working class.

Bridgewater, Conn.-based hedge-fund billionaire Ray Dalio is writing a series of articles via Linkedin to examine empires from the Dutch and British to the United States, in what he hopes will illuminate a path forward for U.S. capitalism. The study also weaves together a narrative of the histories of the U.S. and China that will culminate in the present-day economic conflict. Behind the dispute seems to be the overarching fear of what Dalio views as a coming restructuring of the world. Again and again, he returns to war and revolution as an expression of the massive debt and giant gaps in wealth inequality that exist as part of an empire’s rise and decline. Of course, there is no doubt Dalio is primarily concerned about his own wealth.

Even before the start of the COVID crisis and the George Floyd protests, U.S. capitalists like Dalio have been sounding the alarm warning of class conflict. The present conditions of the world working class and the wealth gap are unequaled in human history.

Including the U.S., there have been numerous uprisings across the globe. Chile, Sudan, Ecuador, Mali, Haiti, Puerto Rico, Kashmir, and many other places have seen workers and farmers mobilize in the millions against the super-exploitation brought by world imperialism. However, a revolutionary working-class leadership has yet to develop that can build a real confrontation for power. The struggle for power will have to confront both the capitalists who dominate each nation and the world imperialist powers that extract vast amounts of wealth with their help.

No amount of so-called diplomacy between the exploiters of the world working class can end the great crises caused by the fundamental contradictions of capitalism. Workers in the U.S. and China have nothing to gain from the current economic war except to deepen their understanding of how the capitalist system works. The road of imperialist domination is paved with “trade agreements” written with the same pen as sanctions and military orders. As long as a small minority of profiteers controls the production of the materials humans need to live, war, violence, and class exploitation will remain written into the system.

Illustration by General Strike Graphics.

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