Whether China has become an imperialist country is a question of crucial importance for the global class struggle.
In the historical period of socialism, there were still classes, class contradictions, and class struggles. There is the struggle between the socialist road and the capitalist road, and there is the danger of capitalist restoration. We must recognize the complex nature of this struggle. (Mao Tse-Tung)
The capitalist world system is divided into three structural positions: core, semi-periphery, and periphery. The core countries specialize in quasi-monopolistic, high-profit production processes, and peripheral countries specialize in highly competitive, low-profit production processes. Surplus value is transferred from the peripheral producers to the core producers, resulting in unequal exchange and concentration of world wealth in the core. Semi-peripheral countries have “a relatively even mix” of core-like and periphery-like production processes.
To understand the position of various countries in the capitalist world system, we need to know to what extent a country benefits or suffers from the transfer of surplus values.
The structure of this current world imperialist system originated in the “Allied Bloc” of imperialists during World War II, which was not only a military alliance but also set up international economic agencies such as the IMF and World Bank to manage its sphere of control after the war. Once the Axis Bloc of Germany, Italy, and Japan was defeated, it was absorbed into this Allied Bloc, which was then usually referred to as the “Western Bloc.”
In a study of global inequalities, Giovanni Arrighi described the “organic core” on their average per capita gross national product as the “standard of wealth. In another study, the average GDP of four historical imperial powers was focused United Kingdom, Germany, France, and the United States, which have stayed consistently among the wealthiest countries setting the imperial standard in the capitalist world system since 1870,
Lenin, in Imperialism, the Highest Stage of Capitalism, defined the five “basic features” of imperialism: (1) Concentration of production and capital development to create monopolies, (2) Merging of banking capital with industrial capital, and creation of “finance capital,” (3) Export of capital (4) Formation of international monopolist capitalist associations which share the world among themselves (5) Territorial division among the biggest capitalist powers.
In the debate on “Chinese imperialism,” Marxist theorists contend that China has become a “capitalist-imperialist country” in the Leninist sense that is, internally, China has become a monopoly capitalist country; externally, the monopoly of Chinese capital has manifested itself through massive exports of capital.
As China becomes the world’s largest economy measured by purchasing power parity and the largest industrial producer, China’s demand for various energy and raw material commodities has surged. From 2016–17, China consumed 59 percent of the world’s total supply of cement, 47 percent of aluminum, 56 percent of nickel, 50 percent of coal, 50 percent of copper, 50 percent of steel, 27 percent of gold, and 14 percent of the oil.
A large portion of China’s demand for commodities is supplied by developing countries in Asia, Africa, and Latin America. In this context, Western mainstream media has described China as a new imperialist country exploiting developing countries. In June 2013, the New Yorker carried an article criticizing Chinese capitalists in Zambia for exploiting local copper resources and violating labor rights.
When China joined the World Trade Organization (WTO) in December 2001 and thus signed up to Western rules on the global economy, US geo-strategists congratulated themselves on the latest evidence of the West’s triumph over “Communism.”
Trump’s tariff war after 2018 served as a reminder of the power imbalance between the two states and China’s continuing vulnerability to restrictions on its export markets. Trump intensified a simmering conflict over Chinese tech firms, notably Huawei, and his anti-Chinese racism during the Covid-19 pandemic has prompted talk of a new Cold War.
David Harvey, a Marxist intellectual, recently contended that China’s holding of large US government debt and the Chinese capitalist land grabs in Africa and Latin America had made the issue of whether “China is the new imperialist power” worthy of serious consideration.
- Turner argued that both state and private monopoly capital had been established in China as the four largest state-owned banks controlled the Chinese economy, demonstrating the dominance of finance capital.
From 2004 to 2018, China’s total foreign assets increased from $929 billion to $7.32 trillion. During the same period, China’s total foreign liabilities (that is, total foreign investment in China) increased from $693 billion to $5.19 trillion. This means China had a net investment position of $2.13 trillion at the end of 2018. That is, China has not only accumulated trillions of dollars of overseas assets but has also become a large net creditor in the global capital market. This seems to support the argument that China is now exporting massive amounts of capital and therefore qualifies as an imperialist country.
China was a typical peripheral country in the 1990s. In the early 1990s, China’s labor terms of trade were about 0.05. That is, one unit of foreign labor could be exchanged for about twenty units of Chinese labor. Since then, China’s labor terms of trade have improved dramatically. By 2016–17, China’s labor terms of trade rose to about 0.5. That is, two units of Chinese labor could be exchanged for about one unit of foreign labor. On balance, China remains an economy exploited by the imperialist countries in the capitalist world system, although the degree of exploitation has declined rapidly in recent years.
China has invested within Asia, about $1.04 trillion in Hong Kong, Macao, and Singapore. In Latin America and the Caribbean, $372 billion was invested.
China’s investments in Hong Kong, Macao, Singapore, the Cayman Islands, and the British Virgin Islands (altogether $1.41 trillion or 78 percent of China’s direct investment abroad) are not intended to exploit natural resources or labor in these cities or islands. Some of China’s investment in Hong Kong is the so-called “round trip investment” to be recycled back to China to be registered as “foreign investment” and receive preferential treatment. Much of the Chinese investment in these places may simply have to do with money laundering and capital flight.
The United States benefits from its “Seigniorage privilege.” Because the other countries need to hold massive amounts of foreign exchange reserves in the form of dollar-denominated assets, the United States can “purchase” trillions of dollars of goods simply by printing money without providing material goods in return. The labor embodied in the US “trade deficits,” therefore, should be treated essentially as unilateral transfers from the rest of the world and included in the unequal exchange.
China now clearly qualifies as a semi-peripheral country in the capitalist world system. If China were to become a core country, then it would cease to be a net provider of surplus value to the capitalist world system and be turned into a net recipient of surplus value from the rest of the world.
One has to consider all trade and investment relations involved and find out whether the country receives more surplus value from the rest of the world than it transfers to the rest of the world. On the other hand, if a country transfers substantially more surplus value to the imperialist countries than it receives from the transfer of the rest of the world, the country would be either a peripheral or a semi-peripheral member of the capitalist world system.