The Chinese Rise

Carlos Zilio, PIECES OF MINE, 1971, felt-tip pen on paper, 47x32,5
Whatsapp
Facebook
Twitter
Instagram
Telegram

By BRUNO HENDLER*

China became a power not because of the opening of socialism to neoliberal capitalism. Rather, capitalism was framed within a long-term market development program.

1.

The Chinese rise can be viewed from different angles that sometimes complement each other, sometimes negate each other. The most important effort for those who seek to interpret this process is to avoid the most alarmist theses (such as the possible military confrontation between the USA and China) and short-term predictions (such as those that foreshadow, for decades, that the Chinese political regime is on the verge of collapsing in the face of an economic crisis – which never comes).

Two processes are fundamental to understanding China's rise in the global economy. One of them corresponds to a change in the pattern of domestic accumulation in relation to the Mao Era (1949-1976), which was marked by basic reforms, industrialization of the rural area and a five-year plan that caused millions of deaths in the countryside. Two years after the death of Mao Zedong, more precisely in 1978, under the leadership of Deng Xiaoping, China began what they call the “period of reform and opening”. It opened up to foreign trade, investment and technology and began to experience strong processes of urbanization, industrialization, public investment, trade surplus, exploitation of cheap labor and accelerated economic growth that, on the one hand, remained at the average of 10% for about three decades, on the other hand, it provoked a strong regional, social and environmental imbalance.

Since the mid-2000s, the Chinese economy has entered a Third Era, in which the export-oriented manufacturing industry has been overshadowed by the service sector, low value-added activities have given way to better-paid, more sophisticated and less expensive jobs. unhealthy and growth at all costs has been replaced by a new social contract with increased household income and consumption, some social security and public health coverage and some environmental concern. Twenty years ago, it would be absurd to imagine that the United States would withdraw from global pacts to protect the environment and that China would become the country that invests the most in renewable energy and that it is at the forefront of some discussions on climate change.

The second process is the transformation of the capital-State alliance resulting from the consolidation of companies in the sectors of energy infrastructure, transport (mostly state-owned) and in cutting-edge technology and innovation sectors (generally private). In both cases, the government plays a crucial role in decision-making, in the allocation of resources, in the provision of financial subsidies and in the creation of business incubators. startups that bring together universities, laboratories, businessmen and political leaders.

Although the share of private initiative has grown a lot in recent years, especially among small and medium-sized companies, many specialists point to state leadership as a crucial factor in promoting indigenous technology, absorbing intellectual property from companies in the Global North and in the consolidation of “national champions” in sectors that the government considers strategic, such as steel, oil, civil construction, military branches, information technology, etc. In short, there is evidence that China was not propelled to great power status thanks to an opening shock from socialism to neoliberal capitalism. On the contrary, capitalism was framed by a long-term Chinese market development project.

However, the slogans of harmony and the “Chinese dream”, advocated by Xi Jinping, hide several contradictions and internal disputes in the power game in the Communist Party. There is a lot of opposition from the new Chinese millionaires in relation to projects defined by the government and the new middle class, richer and more cosmopolitan, tends to fight for more individual freedoms and for new agendas of gender, sexuality and ethnic minorities. But these disputes have a particular flavor of Chinese, Confucian, and Asian mentality, and any generalization from a Western bias runs the risk of being seriously wrong. The social forces of deep China are very different from anything that exists in the West and replicating our theoretical models to understand them can generate very distorted views of reality.

2.

In the first half of the 1970s, Immanuel Wallerstein proposed a vision of the social sciences that broke with methodological and epistemological boundaries between sociology, economics, political science and history. For him, these disciplines had become ensconced in their own realms of theories and concepts and lost the notion of the whole, that is, the social system that emerged in Western Europe, in the “long sixteenth century”, and which came to encompass the entire planet. since the XNUMXth century. It is this system, which has an international division of labor based on the incessant accumulation of capital and a field of struggle for power between sovereign national states, which Wallerstein calls the modern world-system or capitalist world-economy.

Another of Wallerstein's contributions is the construction of bridges between the abstract theories of the social sciences and the concrete events of history. By saying that the modern world-system exists only in a defined place and time (the “Spacetime”) he recognizes that no concept is eternal and immutable, but some social patterns can exist for a long time, sometimes centuries or decades – and these are the structures and conjunctures that shape the short time of the facts.

Understanding Wallerstein's work is not an easy task. It is a dense reading that generates restlessness and a lot of work, as it forces you to seek the deepest roots of everyday news. This is because the most immediate events are conditioned by structures (social, political, economic and cultural) that have been developing for a long time and that, therefore, do not change easily. It is this presence of structures that takes us back to the XNUMXth century to understand the rise of contemporary China or to the XNUMXth century to understand US power in the XNUMXst century. It is to think, for example, of structural racism in Brazil and the USA from cycles of “segregation” (income, civil rights, education, housing, criminal law) even after the abolition of slavery. In short, it is a constant effort to understand social reality beyond what is shown on television news – or rather, it is to understand news on television news through the prism of long duration.

Authors such as Immanuel Wallerstein and Giovanni Arrighi deal with cycles of hegemonies that made global a system of power and wealth that emerged in Europe at the end of the Middle Ages. This process, which dates back more than five centuries, has framed the non-European and non-Western world in successive centre-periphery networks, first with the Iberian-Genoese cycle, then the Dutch, the English and, finally, the North American. What do these cycles have in common? They were the product of successful alliances between states and companies that became richer and more powerful and pushed to the periphery of the system (first with colonies, then with spheres of influence in the Global South) the costs of economic production and intensive use of violence.

Thus, the hundred years of relative peace and “civility” in Europe from 1815 to 1914 (between the Napoleonic Wars and the First World War) were concomitant with a series of “barbarities” perpetrated by European imperialism in Africa and Asia. The great insight of these authors is to show that one thing did not exist without the other, that is, the “civilizing progress” at the center of the system, in the West, only occurred because its costs were supported by non-Western peoples on the periphery of the system.

3.

Wallerstein suggests that "the world as we know it" is bound to disappear and be replaced by some other system. But what's next? Not even the author himself knows for sure, limiting himself to suggesting a bifurcation between a more authoritarian and violent order, and another more democratic and emancipatory. Giovanni Arrighi is more incisive, as his thesis does not deal with a crisis of the system itself, but a crisis in the system, in which the hegemony of the XNUMXth century, that of the USA, tends to be overshadowed by an ascendant power, China.

Arrighi points to the Asian giant as the engine of a new cycle of world economic expansion, but without the military supremacy that characterized the hegemonies of England and the USA. Therefore, Chinese leadership tends to be hybrid, as it can become a more powerful economic center than the US, but it is still far from becoming more powerful than the US in military terms or cultural appeal. Another author of this current, Andre Gunder Frank, reinforces Arrighi's thesis: for him, the rise of East Asia, and of China in particular, is not a novelty, but a return to the historical pattern of Asian centrality prior to the XNUMXth century. From this derives the name of his classic book: “ReOrient” [ReOrient: Global Economy in the Asian Age (University of California Press)].

In any case, the mere rise of China as a challenging and alternative force to the liberal and democratic model preached by the US is enough to think about the crisis of Western hegemony. Add to this the crisis of legitimacy of the political regimes of European countries and the European Union, the anti-democratic and protectionist outbursts of the Trump administration, the friction between North Americans and Europeans within NATO, the issue of refugees from the Middle East and of North Africa in Europe and the alignment of interests, albeit subtle, of a Eurasian Beijing-Moscow-Berlin bloc: the scenario for the fragmentation of the western North Atlantic bloc, which was the center of the world for five centuries and which it was governed, for the last two hundred years, by an anglophone arrangement with England and then with the USA.

It is, however, a long-term process and it will not be tomorrow or the day after tomorrow that the West will be supplanted by another great civilization. According to Arrighi, it remains for China and India to lead the group of countries in the Global South that will give rise to “a less unequal community of civilizations”, but this is an optimistic view in view of the enormous social obstacles that still remain and the obstacles to be imposed by developed countries. An example of these obstacles is the retreat of the Brazilian position in relation to the BRICS (a group that was created with great protagonism from Brazil) and the alignment of the current government with the USA.

4.

It is important to remember that until the XNUMXth century China and India were the most powerful economies in the world and their adjacent regions (Middle East, Central Asia and East Asia) were part of long distance trade circuits which, when connected by trade companies from the XNUMXth century onwards, reached Europe and America. After two centuries of Eastern decline in the face of the rise of a West driven by the Industrial Revolution, what we see is a return of world wealth (and power) to Asia. Today, China is the most relevant player in the region, but it is far from being the only one. The origins of this process go back to the post-World War II period, when the USA provided resources for the reconstruction of Japan. This country became the center of an Asian economy based on more agile production networks, with smaller and more flexible companies that outsourced lower value-added activities to the first generation Asian Tigers (South Korea, Taiwan, Hong Kong and Singapore) and second generation (South East Asian countries such as Indonesia, Malaysia and Thailand).

It is in this scenario, known as the “Asian growth miracle”, that China took a ride and began its rise in global value chains. But, as has been said, anyone who argues that Chinese growth was due to the magic touch of the “magic wand” of capitalism and the opening of the domestic market is mistaken. The first decades of economic reform after 1978 were characterized by heavy public investment, protectionism and state control of strategic sectors – that is, it was the framing of the market by the long-term national project. Added to this is the increase in household savings, the growing profits of small private export-oriented companies and the gradual transfer of foreign technology with joint ventures in special economic zones and voilà: China arrived at the turn of the XNUMXst century as the “factory of the world”.

 5.

The external projection is fundamental to understand this third era of the contemporary Chinese economy. While the Deng Era (from 1978 to the mid-2000s) was marked by public investment and export incentives, this new moment is defined by the recycling of accumulated capital in new economic peripheries. If before China reinvested a large part of its sovereign funds in US public debt securities, now these funds have been recycled in a multitude of financial services that support the internationalization of Chinese companies in Africa, Latin America and Asia.

I believe that this projection on the Global South stems from three “engines” that reinforce rather than oppose each other – even though there are important contradictions: (a) the geopolitical/strategic engine, conceived by the military and institutions linked to defense issues; (b) the political economy engine, managed by groups and institutions linked to the Ministry of Commerce (MOFCOM), large public banks and large state-owned companies; (c) and the symbolic/institutional engine linked to the Ministry of Foreign Affairs and other actors responsible for disseminating the soft power Chinese. Finally, members of the Chinese Communist Party wield strong influence in all these spheres.

These “engines” are theoretical models and, in practice, China's international performance results from the interaction between its agents. I usually say that for us, here in Brazil, to understand the modus operandi Chinese and seek benefits in bilateral interactions, it is extremely important to study their relationship with their neighbors, and Southeast Asia is an excellent “laboratory” for analysis. Between the XNUMXth and XNUMXth centuries, China played an important role in the dynamics of power and wealth in Southeast Asia – first with the role of emissaries and navigators in the service of emperors and later with the role of families and merchant guilds on the coast of Shanghai, Fujian and Guangzhou.

On the one hand, the center-periphery relationships that China has built in Southeast Asia are not very different from what countries like Germany, Japan, Russia and the US have done (and still do) in their regional surroundings. In general, we see a mix of economic attraction, military superiority that can be used for protection or coercion, and symbolisms that reinforce asymmetry. But among all the cases, the Chinese projection in its surroundings – not only in Southeast Asia, but also in Central Asia – is perhaps, together with the US, the most robust case of convergence of these three vectors. The clearest example is the New Silk Road (the Belt and Road Initiative) which, because it does not have a clear definition, works as a broad umbrella of strategic, economic and symbolic relationships that have China as the center. And for us to obtain practical gains from these interactions, here in Brazil, it is essential to study how Indonesia, Malaysia and the Philippines have reacted to the Chinese rise, for example.

6.

Giovanni Arrighi suggests that the world enters a phase of systemic chaos when a hegemony is in decline and the struggle for power and wealth between countries, companies and classes becomes more acute. It is a window of opportunity for actors from the periphery to seek a place in the sun, but it is also a moment of struggle for groups “at the top” to maintain their advantages, monopolies and privileges. The first (signalling) crisis of US hegemony would have occurred in the 1970s with the Vietnam War and the end of the gold-dollar standard and the second (terminal) crisis would have occurred in the 2000s, with the Iraq War and the crisis financial year 2008.

To paraphrase Gramsci, “the old refuses to die and the new cannot be born” – because the USA still retains a good part of the world’s wealth and power and China, as an emerging great power, is still unable to provide systemic answers to the great world's problems, just as the North Americans did in the post-war period, in 1945. However, the withdrawal of US foreign policy and China's leading role in multilateral forums and in the creation of institutions parallel to Western ones, such as the Bank of Asian Investment and Infrastructure, are clear signs that systemic chaos can be replaced by a new Sinocentric world or a Sino-American or even Asian-West consortium.

In this transition period, a full-scale war is almost impossible, but friction between the US and China is expected and is already happening. Under a realistic theoretical bias, direct confrontation is unlikely because it is about two nuclear powers capable of mutually destroying each other, so that the military dispute will be pushed to unconventional sectors such as cyberwarfare, dominance of aerospace technology and even the race for routes and resources at the North Pole – and Sino-Russian proximity could make a difference in these areas.

Under a Marxist bias, the dispute for areas of influence, so common in the Cold War, also tends to reappear, mainly in Asia, but also in Africa, the Middle East and Latin America. In this case, we will see more of the same: co-option of political elites and economic incentives and/or punishments to shape the foreign policy alignment of countries in the Global South. If, on the one hand, China seems to have more financial leverage and political will to do so, see the New Silk Road, the US will be pressured to assert its alliances built in the Cold War and “proxy conflicts” may reappear.

The current crisis in Venezuela, for example, can only be understood when taking into account the actions of the two powers. Another case is the recent wave of formalization of diplomatic relations by Central American and Caribbean countries with Beijing (Dominican Republic, El Salvador, Panama, Costa Rica, among others), isolating Taiwan in exchange for economic incentives. It is curious to note that the region that was the target of “Dollar diplomacy” in the early XNUMXth century became the target of “Yuan diplomacy” in the XNUMXst century.

Under a liberal bias, war is unlikely because the economies of China and the US are interdependent: if one crashes, the other crashes too. However, both have sought alternatives to this “mutual assured economic destruction”: the US via trade protectionism and China via capital recycling in non-financial sectors in the Global South and Europe. Ultimately, I do not believe that economic interdependence is a sufficient or necessary factor to avoid war, whereas nuclear deterrence is.

* Bruno Hendler Professor of International Relations at the Federal University of Santa Maria (UFSM).

Text established from an interview given to Wagner Fernandes de Azevedo in the magazine IHU online

 

See this link for all articles

10 MOST READ IN THE LAST 7 DAYS

______________

AUTHORS

TOPICS

NEW PUBLICATIONS