China’s accession to the World Trade Organisation (WTO) which was agreed in Geneva on
September 17th, marks a significant milestone in the consolidation of capitalism in the world’s most populous country.
Beijing’s application to join the WTO’s forerunner, GATT, was first made in 1986. At the time, it represented a long term aspiration of the pro-market forces in China that had already overseen the effective privatisation of agriculture but had failed to make inroads in the industrial sector.
Negotiations were put on ice in the aftermath of the Tiananmen massacre as the more ‘conservative’ wing of the bureaucracy, closely tied to the military and heavy industrial sectors, came to the fore. However, they were re-opened after the Fourteenth Party Congress of 1992 made it clear that pro-restorationist forces around Jiang Zemin and Zhu Rongji had assumed control.
Despite their attempts to force the pace of change, the new leadership were unable to overcome the obstacles to capitalist domination in time to be among the founding members of WTO in 1994. However, the conditions set down for membership established the priorities for Beijing.
Within two years, the most crucial of them, the dismantling of planning institutions, incorporation of industries as autonomous agents largely free from state control and the creation of a ‘free’ market in labour by the abolition of the ‘iron rice bowl’ of job security, food subsidies and retirement pensions had largely been achieved.
However, although the way was now open for capitalist development inside China, and foreign investment began to pour into the country as a whole, not just the Special Economic Zones, the country was not yet ‘open for business’ from the point of view of the international corporations. The legacy of state controls, party dictatorship and wholesale corruption meant that the ‘terms of trade’ were often against them.
Accession to the WTO marks a recognition that here, too, Beijing has now implemented the demands of the corporations, led inevitably by the USA. Even where ‘unacceptably high’ tariffs still protect some aspects of the Chinese economy, particularly agriculture, they have seen enough to believe that Beijing will dismantle them on the agreed time scale – five years for most sectors.
The initialling of the accession agreement in Geneva – it will be formally ratified in Dohar at the November WTO summit – was, unsurprisingly, overshadowed by the destruction of the World Trade Centre the previous week. Nonetheless, it will have at least as much impact on the shape of world history in coming decades.
Within China, the anticipated flood of higher quality, lower priced foreign goods in all sectors will bankrupt whole industries and lead rapidly to concentration of capital, frequently with foreign involvement, if not outright dominance. Especially in the ‘service sectors’ of insurance, banking, accountancy and pensions, the almost complete lack of home grown companies of any size will ensure the pre-eminence of multinational giants.
Chinese capitalists, whether the established ones from Hong Kong, Taiwan and further afield or those who have emerged in the last twenty years, do not yet have an independent and established political leadership. Most are content to live with the continued power of the Communist Party which has done so much to advance their interests. Yet, the corruption of the Party, the increasingly unnecessary scale of bureaucratic power and the development of rivalries between different regions and sectors are sure to stimulate the emergence of political parties vieing for supremacy.
The majority of China’s population still works in agriculture and many will suffer as cheap food comes onto the markets. The Economist quotes Deutsche Bank experts’ predictions of 1.6 m farmers losing their livelihoods in each of the next five years. Beijing’s economic strategy is to utilise this huge reservoir of labour, plus the millions laid off from state industries, to speed up industrialisation, especially in the interior regions that have not benefited from foreign investment. What this will mean, in practice, is a continuation, a worsening, of the low wage sweat shop production that has underpinned the growth of China’s export trade in the last ten years.
Already, literally millions of workers have taken action to defend their jobs and their living standards through strikes, demonstrations and even armed occupations of plants and government offices. These battles and campaigns are reforging the labour movement and laying the foundations of an independent working class on a scale not seen since the 1920’s.
Within China, then, the prospect is one of economic, political and social instability in which the contending classes will clarify their interests, consolidate their organisations in conflict with one another and, increasingly, with the continued dominance of the Communist Party and its dictatorship.
China’s presence within the WTO will also alter the balance of the world’s economic system. The inability of the Seattle WTO conference to agree a new round of trade ‘liberalisation’, and the continued failure to reach agreement even on the agenda for Dohar, underline the fact that even when capitalist globalisation proceeds practically unopposed, it inevitably creates its own contradictions. In seeking to advance her own cause, China will necessarily influence the balance of power between the G8 and the ‘Third World’.
Equally, on the political and military levels, her aspirations to being first a regional and, eventually, a world power, an imperialist power, will further destabilise the ‘New World Order’ established after the collapse of the Soviet Union.
For the foreseeable future, China will remain a semi-colony whose own interests and development will contradict the demands and objectives of the imperialist powers. In any conflict with an imperialist power, revolutionaries will unconditionally defend China while emphasising the reactionary character of her state and government. However, where China seeks to further her imperial ambitions by war against another semi-colony, we will adopt a defeatist position.
In recent years, the most apparent source of conflict has been with Taiwan, a semi-colonial power which, throughout the Cold War, was a direct agent of the USA. The Taiwanese regime was imposed on the island by the defeated Guomindang troops of Chiang Kaishek whose successors retain the objective of uniting Taiwan with mainland China. With the restoration of capitalism in China, there is now no fundamental obstacle to this, from their point of view, apart from their own survival as a regime.
However, the Taiwanese people themselves, who formed a largely autonomous ‘province’ of China under the Qing dynasty and were annexed by Japan in 1895, have never been able to exercise their right of self-determination. After the dismantling of the Guomindang dictatorship in the mid 1990’s, independence candidates received widespread support in elections and we recognise the right of the Taiwanese to independence should they so wish.
It is against this background of instability, internally and externally, that revolutionaries in China and abroad have to establish links, clarify programmes and build a new party of the Chinese working class as an integral section of a new, revolutionary international.