What’s behind our love-hate relationship with China?

Aotearoa/NZ is in an unbreakable love hate relationship with China. Like a child we are dependent on China for economic growth so long as we are locked into the capitalist world-economy. We may be unhappy about a parent that is too dominant and punitive on occasions. But like most children we don’t want to run away because there is no alternative but the cold outside.

The Western world in general is waking up to the reality that China is in the process of now leading the world. Not only economically but increasingly politically. The behaviour of Trump towards China displays the reluctance of a petulant child to acknowledge the growing dependence of the US on China.

The US under Trump is actually in its second childhood. During the first, it rose to be the dominant imperialist power in the 20th century, it stood over China demanding absolute obedience. When the Maoists spat the dummy and threw the US and its proxies out to make a revolution in 1949, the US learned the lesson that it had to share the world with a new gang of delinquents who staked out their own territory, and demanded to make deals.

Fast forward to the neoliberal age of global capitalism in the 80’s and 90’s. China opened up to new deals to re-enter the world market and offer opportunities to foreign investors. The Western powers, especially the US, grabbed the opportunity to invest in free trade zones taking advantage of cheap labour and raw materials. But the quid pro quo of this foreign penetration was that China was able to impose its own terms which included the transfer of technology.

The key to this transition was the ‘authoritarian’ centralised state regime that planned the details of this move. The market was subordinate to the centralised state plan of the command economy. By the 2000’s China was rapidly catching up to the Western powers and expanding into the global market.

In the 2010’s China surpassed the Western powers except for the US. During the GFC of 2008 it saved the world economy from total collapse into depression. The former child was now a young adult that bought-up US treasury bonds to cover US state deficit spending. So, the family dynamics were a-changing.

While the West had no answer to the GFC except print money to bail out failed banks and industries, China was going from world factory to world exporter of FDI (Foreign Domestic Investment) and buying up Western debt. Its surplus capital was now being invested in many of the countries that were historically the client states of the West, including the major powers in the US bloc, notably the EU.

Aotearoa/NZ was one of those states and the first to enter into a bilateral trade deal with China in 2008. This deal marked the recognition that China was our new ‘big daddy’ provider not the US. As a result, we have accepted a dependent relationship that allows China to export consumer goods, tourists and students while becoming our major export market for raw commodity exports. China soon moved up the whole value chain to become the key investor in production in Aotearoa/NZ.

While our participation in China’s economic growth also benefits NZ economic growth, the loyalty of our political leaders of all parties is to the historic security ties to the former big daddy, the US. This creates a contradiction between economic interests and political interests that is under great strain and about to breakdown. The cause of the breakdown is the intensification of the great power rivalry between the US, the long-term hegemonic power now in decline, and the rising economic power and political influence of China on the global stage.

This growing rivalry reflects the inevitable terminal decline of capitalism as a global system that cannot survive without destroying the natural bases of its existence, scarce resources, labour power and the ecosystem. The US faces the loss of its global share of resources as China claims an increasing share. While China’s new power is made possible by its economic growth, the US and its remaining allies rely increasingly on the escalation of trade wars into military wars.

Both the US and China however, are reaching their limits as regimes capable of rescuing capitalism from its own self-imposed nemesis, falling profits. They cannot be restored except by a massive destruction of value, mainly less productive industry, and the expulsion of workers from production onto the scrapheap.

This means that depression, the collapse of production resulting in massive devaluation, is inevitable. But no country wants to lead the charge. All bailout unproductive capital building up trillions of dollars of debt. What is needed is a trigger that forces depression onto the whole world economy and devil take the hindmost.

Enter the COVID-19 pandemic as part of the capitalocene. Caused by destruction of ecological and social boundaries by capitalism, spread by the failure of capitalist regimes to see the connection between capitalism, climate change and pandemics, this became the unintended trigger of global depression.

The progress of the pandemic proved that China’s ability to limit its impact on both the lives of its people and the economy was due to a long history of centralised state planning allowing the epidemic to be isolated and quarantined. The failure of the Western powers to move in time left them resorting to panicked shutdowns and lockdowns which created the conditions of economic depression overnight.

Industry was closed down apart from that designated “essential”. Businesses are being subsidised temporarily but the test will be in which have the capacity to survive the lockdowns. Workers are being thrown out of work onto the scrapheap of underfunded and privatised welfare and health systems. Yes, this is what capitalism must demand to survive, the destruction of nature and humanity, so that its terminal decline can be prolonged by a miserable decade or so.

This will be the decade between now and the full-on impact of climate change beyond which there will be no recognisable human future. The Western powers are desperate to catch-up and compete with China globally. But they can only attempt to do so by copying, too late, China’s authoritarian state capitalist regime.

We see everywhere the indecent rush towards Bonapartist central state control of the economy and people. In Aotearoa/NZ Jacinda makes a great female Bonapartist as the Blairite who appeals to the whole nation in the name of classless unity and compassion, and now has the police powers to shut down the extremes of right and left.

Do we, the 80% who as a class work for a living, exploited by the 20% who live off our labour, want to spend the last decade-or-two on earth, dumbed-down into quiescence by the authoritarian regimes of centralised command economies presided over by Trumped-up Bonapartist leaders who draw their ‘authority’ from the herd of lobotomized automatons sleepwalking to extinction?

No.  That that is why while we can can still live and breath we must advocate the urgent need for survival socialism as our only escape route from human extinction.

First published on The Daily Blog