Page 2 of 2 China prepares for next surge
By Mark Selden
nations, China and Japan, to construct a new regional - or eventually world -
economic order?
The challenges of any attempt to do so are illustrated by the heavy
inter-national strains that Europe and the euro face in the context of world
depression despite the institutional strengths and accomplishments of the
European Union.
In economic terms, a critical issue is whether China, Japan and other East
Asian nations will achieve pre-eminence in the new green technologies that will
critically shape the economies of the future. What is certain is that, while
regions have risen and fallen
over the centuries, there has been no regional as opposed to national hegemony
in historical capitalism to date, an outcome precluded by inter-state
conflicts.
It is necessary, moreover, to consider the internal problems confronting China.
Fallows, along with many contemporary analysts, notes the proliferation of
popular struggles in recent decades, but dismisses the possibility of intense
social conflict or revolutionary change in China in the face of economic
crisis. While recognizing the potential instability that could arise from
large-scale unemployment and falling incomes, he emphasizes the fact that
worker and villager discontent has addressed specific grievances, rather than
targeting the system or the state.
Such a perspective slights both the legacies of history and the significance of
strikes and protests that shape societies without precipitating a revolutionary
rupture, as in the US in the 1930s and many nations in the 1960s.
It is critical, in particular, to recall that in the course of the last two
centuries, China, has repeatedly been in the eye of the world storm of
rebellion and revolution. Indeed, it has perhaps the world's longest and most
fully developed tradition of rebellion and regime change from below. As Arrighi
and Binghamton colleagues in the World Labor Group documented, the 20th century
was marked by two massive waves of worker and/or national insurgency, prior to
and following the two world wars, giving rise both to national independence and
revolutionary movements and to transforming the social balance, with China
figuring prominently in each. [9] Particularly if economic turmoil leads to
regional and global wars, the possibility of tumultuous class struggle should
not be ruled out for China, Asia or other regions.
In the face of rising challenges from below, the Chinese state has in recent
years, with an accent on stability, demonstrated uncanny ability to limit
protest by preventing horizontal alliances, keeping protesters isolated, and
channeling most protest into the legal system. [10] But it has done so while
riding the wave of economic growth, mobility and rising prosperity since the
1970s.
Bold action on jobs
In the face of world depression, the Chinese state has moved far more boldly
than the US or any industrialized nation to create jobs through funding
construction and fostering new industries. Equally important, as Wang Shaoguang
has documented, there is evidence that the current Chinese leadership has begun
to reconstruct the welfare and health safety net that was largely swept aside
in China, as in England and the US, in recent decades: through a basic income
program, healthcare and pension programs, for example. [11] These measures,
together, suggest the kinds of flexible response that the Chinese state is
capable of mounting in the face of challenges from below.
China nevertheless confronts three formidable immediate and long-term hurdles
above and beyond the current world overproduction and financial crisis. The
first of these is the specter of famine. North and northwest China are in the
midst of the most severe drought in at least half a century, with precipitation
levels 70-90% below normal and water tables ruinously depleted from excessive
well drilling.
The Food and Agriculture Organization's 2009 report on "Crop Prospects and Food
Situation" indicates that 9.5 million hectares of winter wheat in seven
provinces have been severely affected by drought. [12] In this respect, China
shares with other developing nations acute problems of hunger and poverty.
Here, too, proactive state policies will be essential if the disaster is to be
mitigated. Nevertheless, while the problems are acute, China's financial and
institutional resources appear to be greater than those of many other, and
particularly developing, nations. [13]
Perhaps most challenging in the long run is whether China can shift gears to an
environmentally sustainable development course. Thus far, with World Bank and
US plaudits, it has followed the path of earlier developers to achieve rapid
sustained growth but at a price of an environmentally disastrous combination of
toxic industrialization, construction of the world's largest dams, heavy
reliance on coal- and oil-driven production, and mass use of the automobile.
Cumulatively, these have taken an immense toll on land, water, and air.
If China's reckless development trajectory followed in the footsteps of earlier
pioneers such as the US and Japan, the environmental consequences have been
graver. All signs point toward a leadership that remains deeply committed to
pursuit of very large engineering projects for damming and water diversion with
potentially dire consequences not only for the Chinese earth and Chinese
people, but for China's neighbors in Southeast Asia threatened by water
diversion.
China may eventually join an emerging consensus that prioritizes green
technology and even, perhaps, begins to rein in the god of growth ... but with
its vast legions of rural poor, this will not be any time soon. Whether China,
as exemplified by BYD's green automotive production, can become a pioneer in
the emerging new industry remains to be seen.
A second challenge is the specter of rising inequality. In the course of three
decades of rapid development, China's developmental priorities transformed a
highly egalitarian income distribution pattern into one of the world's most
skewed distributions, with class, city-countryside and ethnic divisions all
pronounced. This structurally determined outcome coincided, moreover, with the
dismantling of the nation's extensive welfare network. [14] Can this genie be
put back in the bottle? The state's recent proactive welfare policies, if
deepened and sustained, could help. Strikingly, US programs, and not only its
bailouts for billionaires, thus far ignore issue of inequality in a nation in
which income inequality soared and the welfare structure was evicerated in the
same years that China's did.
Arrighi argues in light of the history of capitalist transitions and
financialization that US hegemony entered its twilight in the 1970s and reached
its terminal phase with the collapse of the financial and real-estate bubbles
in 2008, a conclusion made inevitable by the earlier transition from industrial
to financial primacy and the neo-liberal regime that gave the latter free rein.
Perhaps ... yet, while recognizing the formidable problems confronting the
Barack Obama administration, in the absence of a serious contender in the form
of a new hegemon, whether a nation or a region, such a conclusion seems at
least premature.
The strengthening of the dollar in the face of the US financial meltdown and
huge deficits, and the Obama administration's attempts to launch the next wave
of US growth on green foundations, suggest possible policy alternatives that
could help to restore American economic preeminence and prevent, or at least
forestall, the imminent demise of its hegemonic power.
We should not rule out such possibilities, in particular a protracted muddling
through in which the US remains indisputably the most powerful among rival
powers for the foreseeable future. This could take place even under
circumstances in which attempts to bail out the nearly bankrupt financial
sector show few signs of gaining traction, in which a continued war in Iraq and
an expanding war in Afghanistan and Pakistan, together with the stable growth
both of the military budget and the global network of military bases, are
emblematic of US vulnerability rather than of hegemony.
Notes
The author is indebted to Andrew DeWit, Gavan McCormack, R Taggart Murphy and
especially Giovanni Arrighi for suggestions of sources and perspectives on the
issues.
1. James Fallows, "China's Way Forward," Atlantic Monthly, April, 2009.
2. "There are monetary echoes from the 1930s too," China Financial Markets
January 21, 2009.
3. "Did SAFE really buy that many US (and global) equities?," Follow the Money,
March 19, 2009.
4. "In Downturn, China Sees Path to Growth, The New York Times, March 17, 2009.
5. "Steeling for 80% Export Growth," Shanghai Daily, March 19, 2009.
6. "This Week's Raw Steel Production," The American Iron and Steel Institute,
Steelworks, March 14, 2009. I am indebted to Andrew DeWit for data on Japanese
and US steel production and exports.
7. Interview with David Harvey, "The Winding Paths of Capital," New Left Review
56, Mar-Apr 2009. See also The Long Twentieth Century: Money, Power and the
Origins of Our Time (London: Verso, 1994) and Adam Smith in Beijing:
Lineages of the 21st Century (London: Verso, 2008).
8. Arrighi notes, however, factors which could work in China's favor: (1) the
importance of demographic size should be left open and (2) the possibility that
China has more to gain from the US getting stuck in wars that it cannot win -
as envisaged in Adam Smith in Beijing (part III) - should be left open.
Personal communication March 23, 2009.
9. Giovanni Arrighi, Beverly Silver and Melvyn Dubofsky, eds, "Labor Unrest in
the World-Economy, 1870-1990", special issue of Review, vol 18, no 1, Winter,
1995. The analysis is further developed in Beverly J Silver, Forces of Labor:
Workers' Movements and Globalization since 1870, Cambridge University
Press, 2003.
10. Elizabeth J Perry and Mark Selden, eds, Chinese Society: Change, Conflict
and Resistance, 2nd edition, 2003.
11. "Double Movement in China," Economic and Political Weekly, Jan 13, 2009.
12. FAO
report.
13. For early rumblings of North China drought, see Edward Friedman, Paul G.
Pickowicz and Mark Selden, Chinese Village, Socialist State (New Haven:
Yale University Press, 1991) and Revolution, Resistance and Reform in Village
China (New Haven: Yale University Press, 2005).
14. See Ching Kwan Lee and Mark Selden, "Inequality and Its Enemies in
Revolutionary and Reform China," Economic and Political Weekly, Jan 13, 2009.
Mark Selden is a senior research associate, East Asia Program, Cornell
University and a coordinator of The Asia-Pacific Journal. His recent books
include China, East Asia and the Global Economy: Regional Global
Perspectives and The Resurgence of East Asia: 500, 150 and 50 Year
Perspectives. See also Mark Selden, China's Way Forward? Historical and
Contemporary Perspectives on Hegemony and the World Economy in Crisis. The
Asia-Pacific Journal, 13-1-09.
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