The Global Crisis:
World Capitalism at a turning Point.
Mutations in the World inter-imperialist Balance of Power.
(«Proletarian»; Nr. 7; Summer 2011)
In mid-August 2010 When the Japanese authorities issued GDP (Gross Domestic Product) figures for Japan’s second quarter, the whole world could see that they were lower than the Chinese: the Chinese economy, according to this criterion , had become the second largest in the world ahead of the Japanese economy, and everything indicates that this result will be confirmed for all of 2010. Some preliminary information from the International Energy Agency indicate that it is also likely to become the biggest consumer of energy in the world .
In late 2009, the Beijing government had triumphantly announced that China, edging out Germany, now ranked as the of world’s largest exporter; ten years ago, it stood at ninth.
Without doubt the effects of the economic crisis in 2008 and 2009 explain these changes in part, China’s exports in 2009 declined for example by less (-16%) than German (-18%), U.S. (-18%) and especially Japanese exports at (-30.8%). However this increase in Chinese exports is a long-term trend, which illustrates the country’s economic growth.
In 1999, the United States was the world’s leading exporter of goods and in 2003 Germany enjoyed first place, while China kept advancing. Specifically, the ten largest exporters in 1999 were as follows, in order: USA, Germany, Japan, France, Britain, Canada, Italy, Netherlands, Belgium and China. In 2009 we had: China, Germany, USA, Japan, France, Netherlands, Italy, Belgium, South Korea (in twelfth place ten years earlier) and Great Britain: the old “despot of the world market ” was thus relegated to the tail of these rankings.
During the last decade, Chinese exports rose 20%, those of India (still far distant from the ranks of the export leaders) by 16% and those of South Korea 9.7%, while the U.S. grew by only 4.3% and Japan 3.3% (lower than European countries like the Netherlands: 8%, Germany 7.5%, Italy: 5.7% or even France: 4.6%) .
CHINA, NEW “WORKSHOP OF THE WORLD”?
The media routinely claim that China is the “workshop of the world”, applying to it the appelation that was used for Great Britain in the nineteenth century, and that Marx himself did not hesitate to use. What reality is there really behind this cliché?
First let’s cast an eye over the past. Marx wrote in 1858 that Great Britain (which had been the first to experience the Industrial Revolution) enjoyed a “monopoly situation which makes it the workshop of the world” , with its industry producing goods for the whole world, but he also added that British capitalism was undermining itself in this situation by exporting its capital and it also provided its future rivals with machinery and equipment with which they developed their own industry. In 1870 Britain still produced 53% of global iron, 50% of its coal and consumed almost 50% of the cotton produced in the world and was estimated to represent nearly 32% of the world’s industrial production and it ensured nearly a quarter of global trade. It was then at the height of its economic power. But behind it loomed a vigorous competitor (although still with little presence on the world market), and which was the leading client for British machinery and equipment: the United States with 23% of industrial production in the world. They were followed by Germany (13%), followed by France, trailing at 10%. Russia was 3.7%, Belgium 2.9% Italy 2.4%, other countries follow with negligible amounts.
On the eve of the first world war, if Great Britain still held the largest share of world trade (16%, against 13.8% in Germany, 11.5% U.S., 10% France) it had clearly lost its place as workshop of the world, it represented only 13.6% of world industrial production against 32% in the U.S. who took over first place in the last years of the nineteenth century, but it was also passed by Germany which doubled (14.8%), Russia where the anti-Tsarist revolution was fermenting had itself surpassed French imperialism, the “loan shark in the world” with: 8.2% and 6.1% respectively, Italy at 2.5%, with Japan, a newcomer which had demonstrated its military might against Russia, at 2.4% .
American power would be greatly amplified by the consequences of the First, then the Second World War which was a gigantic business, Yankee imperialism firmly asserted not only its economic and trade dominance, but also, consequently, its political and military hegemony and throughout much of the twentieth century world, to an extent and to a degree unknown to the old British imperialism. In 1945, coming out of the conflict, the United States, to which the war had caused no destruction of its production apparatus, was handling about half of world industrial production.
But even after rebuilding and restarting the economies of the countries ravaged by war, they have long maintained a dominant share of this production, thus in 1953 they still accounted for 44.7% of world industrial production, followed by the Soviet Union (10.7%) and Britain (8.4%). Germany was at 5.9%, France 3.2%, Japan 2.9%, Italy 2.3%, tied with China. But the share of the U.S. in world exports was only 18.8% (while the share of Western Europe was 39.4% ) – for them the domestic market was by far the most important.
The ensuing decades saw a slow but inexorable decline of the overwhelming economic superiority of U.S. as its imperialist competitors, Europe and Japan progressed rapidly.
In 1980 the share of the United States in global industry is almost back down to the 1913 level: 31.5%. the USSR remained the second industrial power at 14.5%; of course it did not achieve socialism nor surpass America economically as Khrushchev promised in the fifties. Indeed, Japan became the second largest economy in terms of GDP and rose to third place in international industrial production at 9.1%, followed by Germany (5.3%), China (5%), Great Britain (4%), France (3.3%), Italy (2.9%). Japan launched out vigorously to conquer the global market and nothing seemed about to stop it with the U.S. and European media increasingly echoing the fears of their industries over the “threat” constituted by the growing flow of Japanese goods. In late 1978 the Chinese government inagurated its big turn in favor of economic liberalization and a market economy .
Ten years later, the Soviet Union struggled, in a deep crisis, while Japan continued its ascent. The world’s leading industrial powers in 1990 ranked as follows: U.S. 28%, are closely followed by Japan at 22%. Germany accounts for 12% of world industrial production, followed by Italy (6.6%), Great Britain and France then being almost unchanged (5.7%). Russia at 3.3%, fell behind China (4%) – the fall of the ruble probably accentuating the Russian decline whose main cause was the severe economic crisis that led to the breakup of the USSR. It should be noted that the European countries (one can also note Spain: 3%) did better than just resist the decline that affected Uncle Sam they have managed to increase their share of world industrial production; China still has stagnated, while private companies were increasingly developing there at the expense of large state enterprises.
We come now to the current situation. The services of the UN, which are the main (or rather the only) source for international comparison, no longer provide data on industrial production in the world, but rather on the much more confusing criteria of “value-added in industry” . It is not possible to make accurate comparisons with previous data.
According to this criterion, the United States were still in 2008 (latest figures available) the greatest industrial power (24% of world total), but a powerful newcomer appeared during those 18 years and has grown dramatically: China, which is 18% (having achieved 6% in 1995, 10% in 2000, 13% in 2005, etc.). Japan, which peaked in 1995 at 26%, representing only 14% of the global total. Germany followed: (10%), far ahead of Italy (5%), Britain (4.2%), France (4%), Russia (3.3%), Brazil (3.1%) and Korea (3%). Regarding “manufacturing” (industry taken alone, excluding mining and energy), the differences are smaller: the U.S. is 18%, China at 15.6% and Japan at 15.4%.
In short, if China today is not at all the “world’s workshop” as were in turn Great Britain and the United States, this does not prevent the complaints coming from EU and U.S.capitalists facing this new competitor from being as noisy as those echoed twenty years ago against the Japanese competitor. Once again the American press is concerned about the risk of the U.S. losing their industrial predominance maintained for over a century and, worse, that their entire economy will pass into the secondary ranks in fifteen or twenty years.
STEEL PRODUCTION AND CRISES
Some figures will illustrate the rise of the new Asian giant.
To avoid disproportionately burdening this article, we will consider only the production of steel, but there’s a reason. It is indeed a classic index of the development of production and industry of a country and the changing balance of power between the major economic imperialisms. Steel is used variously in food cans, construction or automobiles and for armaments. The party has devoted several works to the study of changes in steel production in different countries and its relationship with the outbreak of major world conflicts .
The period known as the Cold War was marked by a race for first place among steel producers between U.S. and USSR, which ended up triumphing in 1974, at the moment when grave economic reverses erupted to put an end to the “thirty glorious years” (in the words of the bourgeois economists) of economic expansion after World War II: with 136 million tonnes against the U.S.’s 132 and 119 in Japan. Other countries that were among the 10 largest steel producers at this time: Germany with 53 million tons, France 27, China 26, Italy 23, Great Britain 22, Poland 13 and the Czechoslovakia 12.7.
5 years later, coming out of the economic crisis, the international economy eventually resumes growth, albeit at a slower pace. In 1979 the top ten world producers are in order: the USSR (149 million tonnes), USA (123), Japan (111), Germany (43), China (37), Italy (26), France (23), Poland (19), Brazil (15), Czechoslovakia (14). The Western capitalist countries and Japan have failed to return to the levels of 1974 (Great Britain finds itself relegated to twelfth in the world after Spain) and the sharp recession in 1980-82 will have significant repercussions, but the international hierarchy of industrial nations does not go through any major changes. The so-called “socialist camp” seems solid and even well-shielded from the economic crises that seem to strike only the West.
Fast forward ten years to 1990, when the Soviet Union is on the verge of collapse the world plunged into a new international recession, we have the following classification: the USSR maintained its wide lead with 154 million tons of steel produced in the year; this amount is undoubtedly in decline relative to its historic peak of 1988 (163 million tons), but the country is suffocating under the weight of metal overproduction.
Japan is second at 110 million, followed by the United States who have descended to 89 million (a level not much higher than that of ... 1948). China has climbed to fourth with 66 million tonnes, ahead of Germany (38.4), Italy (25), Korea (23), Brazil (20), France (19) and Great Britain (18), which takes advantage of the fall of Poland and Czechoslovakia to return to the top ten, managing to double Spain on the way. Western industrial countries and Japan are still well below 1974 levels, with the exception of Italy and especially Spain, which has resumed steady growth after a short decline in 1975-1976.
Now we come to the verge of the recession of the early twenty-first century, the “New Technology” bubble had not yet burst and the attacks on the World Trade Center have not yet occurred, we are still in the euphoria of the “new economy” which, according to the propagandists of capitalism, had eliminated crises, but the upheavals that took place in our ranking of steel producers reflect the mutations that have occurred in the balance of power between imperialisms, starting with the demise of the USSR.
The world’s largest producer of steel in 2000 is actually China with 127 million tons, followed by Japan at 106 million and the United States at 101 million. Russia is far below (59), Germany (46), Korea (43.7), Ukraine (31), Brazil (27), India (26.9), Italy ( 26.7). in 1996 China overtook Japan, which had been the world’s largest producer of steel for a few years, its production stagnant for a decade.
Signaling renewed industrial vitality in contrast, the United States have seen their production increase almost 13% during this decade although it remains well below that of 1974; in Europe, German production increased by over 7%, that of Italy 6%, that of France, which with 20 million tons is no longer part of the top 10 global producers, has still increased by 5%, while production in Britain fell by 15%. The largest increase in production in Europe is that of Spain with a 16% increase, allowing it to exceed the British production again (15.8 million against 15.1).
But these changes are small when compared with the increases of new countries: over the same period Brazilian production rose 25%, that of India 79%, that of Korea by 90% and of course China breaks all records with an increase of 92%. Also noteworthy in the same trend is the increase in Turkish production (54% with 14 million tons) and especially of Mexican production: up 80% with 15.6 million tons of steel. Industrialization is now spreading at a rapid pace in countries long relegated to the periphery of the capitalist world.
Let us now turn to the current situation, or rather to that which immediately preceded the current crisis. When we take into account the the 2007 figures, world production of steel has begun to decline, albeit in an uneven and geographically differentiated manner, from May to June 2008 until April 2009: a decline of almost 25% – unprecedented since the last World War – which began in the major capitalist countries, the epicenter of the economic crisis, when it fell to 50%, before spreading over the planet.
During the Great Depression, the decline in world steel production had been uninterrupted for 3 years until 1932 when it was 58% below the record of 1929; at that time only a handful of countries produced steel. This caused numerous economists to say: “The difference with 1929 is that today we have China!”. It is true that in the current crisis the fall in production of the major countries was briefer but more brutal than then, Chinese production fell by only 4% and started to rise again in 2009, while the Western countries and Japan were still in full stagnation.
Returning to 2007, Chinese domination in steel production is overwhelming, with 489 million tonnes, a quantum leap of 380% in 7 years! This amount is comparable to that of total world production in 1967. Japan comes next with 120 million (13% increase) while the United States fell back to 98.5 million (-2.5%). Following we see Russia sharply increased to 72.4 (22%), India booming at 53 (97% increase!), Korea at 51.5 (+18%), Germany 48.6 (+2.3%), Ukraine 42.8 (+38%), Brazil 33.8 (+25%) and Italy at 31.5 (18%). We must also note, in eleventh place, the surging Turkey with 25.8 million tonnes (+84%), Mexico, into the American orbit, saw its growth slow down (+13%).
Regarding other European countries, Spain continues its rise (19 million tonnes, 20% increase), while France is declining (19.2 million, -4%) as well as Great Britain (14.3 million, -5%).
Producing 35% of the cast steel on the planet (as much in one month as Germany produces in a year) and relegating the other producers to these congruent portions: 9% for Japan, 7% for the United States, 5% for Russia, 4% for India, while China is not the world’s workshop, it has well and truly become the world’s steelmaker !
THE DOMINANCE OF FOREIGN CAPITAL
The structure of Chinese exports has changed over the years, as the strength of its industry developed. While not so long ago it was exporting mainly textile products and clothing at low prices, it is now computers or machines that are becoming its flagship products for export. This is a typical feature of capitalism which develops first in so-called “light industry” and the production of consumer goods; and then, as and when it develops the industry and production of capital goods becomes increasingly important.
The textile industry was the largest industry in China when Mao’s armies took over (as it was in England in the first half of the nineteenth century), but in the Maoist period, textile exports from China on the world market suffered drastic reductions as did all other exports.
The economic reforms of the late seventies gave a boost to economic exchanges with the rest of the world from China and its share increased from a mere 1% in 1980 to over 8% in 2008. Exports went from $14 billion in 1979 to $1,218 billion in 2007. The textile and clothing industry was the first beneficiary of this shift, in recent years Chinese textile exports were stronger than those of other developing countries, where this industry, leaving the old capitalist countries, was largely concentrated to reach their peak in 1985. The garment industry, which requires added industrial activity continued to grow proportionately and in 1994 China became the world’s largest exporter of clothing. That year the textile, garment, leather and toy sectors etc. represented more than 34% of Chinese exports, while that of electrical and mechanical equipment accounted for less than 13%. Today China is still the world’s largest exporter of textiles and clothing (producing 23% of world textile exports and 33% of garment exports in 2007), but now mechanical and electrical equipment constitute almost 60% its exports.
China is now the largest producer of appliances, electronics, building materials, the second largest producer in chemicals, etc.
If we consider a product as emblematic of modern capitalism it would be motor vehicles, officially considered a “key area” by the authorities in Beijing , we find that in 2007 China was the third largest producer, of all categories combined (ie, commercial vehicles and cars), the United States was the largest producer with 10.8 million vehicles (of which 4 million cars), followed by Japan with 11.6 million (10 million cars ), China with 8.9 million (6.3 cars), Germany with 6.2 million (5.7), Korea with 4 million (3.7), France with 3 million ( 2.5), Brazil with 2.9 million (2.3), Spain with 2.8 (2.2), Canada with 2.6 (1.3), India with 2.2 (1.7). Ten years ago, China was only in tenth place with just 1.6 million vehicles! However, the leading Chinese auto company, FAW, in 2007 was the twentieth largest producer in the world with 600,000 vehicles produced: it is the American company General Motors, which produced and sold the most vehicles in China, foreign manufacturers as a whole hold 70% of the market share...
This example illustrates a typical little known but very important characteristic of the current Chinese economy: the dominance of foreign capital over the most dynamic and productive industries. According to an expert from the Chinese government commenting, with satisfaction tinged with bitterness, on the news that China was the world’s largest exporter, “about 83% of high technology products and 75% of electronics exports were manufactured in foreign-invested enterprises” .
Official Chinese statistics demonstrate that domination ; in 1986 companies with foreign capital were responsible for 5.6% of imports and 1.8% of exports and by 2007 the percentages were 57.8 % of imports and 57.1% of exports: more than half of China’s foreign trade is actually the product of subsidiaries of foreign firms! But it’s not just trade which we address here and in 1990 foreign-funded enterprises accounted for 2% of the total industrial production in China. In 2007 this production reached 31%. Without doubt this percentage has been decreasing since 2003 when it reached almost 36%, but when we consider also that some of the purely Chinese owned companies are subcontractors of foreign companies, there is no doubt that industrialization and especially the progress of China’s foreign trade depends to a significant amount on international capital. Foreign companies still provide 40% of Chinese GDP .
In recent decades, the Chinese authorities have deliberately decided to appeal to foreign investments, first in “special zones” and then throughout the country to accelerate economic growth, because the weakness of indigenous capital left no choice. The old Maoist slogan “count only on your own forces” is dead and buried: foreign capital has been the driving force of Chinese economic development over the last twenty years...
In this regard, another significant feature of foreign trade is to raise the importance of “export processing”, that is the export of goods produced (or assembled) from imported parts or components.
More than half of total exports comprise this category, the percentage amounts to 85% for enterprises with foreign investment, this rate is much higher for exports of electronics and capital goods, than for textiles, steel and chemicals where foreign companies have little representation. Chinese capitalism is thus only partially in control, and not at all in terms of sectors characterized as “high technology” production chains of goods exported by his country. Typically, companies with foreign capital that import components and parts from neighboring Asian countries, to produce low-cost goods – by Chinese workers who are exploited in a bestial fashion – which are then exported to the developed capitalist countries, including those where the capital comes from.
The media noted that the news that the Chinese economy would surpass that of Japan, had not caused a commotion there. It’s not just because the Japanese capitalists are enticed by the China market, but also and perhaps especially because the relocation of part of their production in this country has represented for many a real lifeline of oxygen, and lower production costs, starting with those in the workforce, have enabled them to find a loophole to the decline in their rate of profit: “the opportunity to assemble their products at low prices in China gave new life to many Japanese companies”, wrote a financial daily .
Since the early 90’s the flow of direct foreign investment in China, encouraged by government incentives, has experienced very strong growth, so that the country has become the second largest destination for foreign investment in the world after the United States. Nearly 70% of these investments have taken place in industry and just under 25% in real estate (which for some years has been the second engine of China’s economic growth). The most important investors are, according to official statistics, Hong Kong, tax havens, Japan, the United States, Taiwan and South Korea. Hong Kong and the tax havens (Virgin Islands, Cayman Islands, etc.) are intermediary relays used by capitalists in other countries, or even by Chinese capitalists.
The growing importance of foreign capital in Chinese industry is probably only temporary; foreign capitalists regularly complain after investing in China, that in a few years they find themselves faced with Chinese competition for goods that they produce. They are in the situation of British capitalists of the eighteenth century who financed and equipped their competitors, or American capitalists in the post Second World War who have financed the rehabilitation of European and Japanese imperialism.
But in the meantime, the current importance of foreign capital in the economy is bound to have profound consequences, including on the country’s politics.
China is presented in the media as the new power objectively destined to wrest global economic dominance from the U.S. Does it have a have greater chance of success than previous candidates, Japan and Russia?
Compared to the latter it has the advantage of its huge mass of population, which represents a great reservoir of manpower and potentially a huge market. But despite its impressive economic performance that we have briefly illustrated, it is still far from having overcome a deep economic backwardness. If GDP per capita can be regarded as an index, probably crude but nevertheless significant, of development of a capitalist country then China is around the hundredth globally . The most important part of the workforce is still employed in agriculture (over 40%), and often almost outside of monetary circuits and from the market.
This means that there is still an enormous road for it to travel before it is actually one of the major economies, one of the major imperialisms, which dominate the planet. And on this road it will inevitably collide with them; already its insatiable appetite for raw materials and energy are in conflict with the already established imperialisms, from Iran (which is now its number one supplier of petroleum) to Africa and Latin America. To “secure” supply routes and more generally to defend its interests, it undertook an extensive program of modernization of its armaments and its huge but poorly equipped army; Chinese military spending has reached second in the world (but is very far from that of the United States) , provoking the alarm of its neighbors, Japan and India.
But long before reaching a military confrontation, clashes of interests between the big and not-so-big powers take the form of economic pressure of all types. In the mid-eighties, to stop Japan’s economic ascendancy, which seemed inexorable, the United States imposed an increase in the value of its currency against the dollar on it, that is to say a decline in the competitiveness of its goods (the “Plaza Hotel” accords). Japan, whose territory is dotted with American military bases and whose “security” is provided by the U.S. military – making it politically subservient to the U.S., was forced to obey.
And today, as yesterday, U.S. officials wish to obligate the potential new rival, China, to overvalue its currency. But they do not have the political and military leverage that they used on Japan: China is militarily independent of the United States. Moreover, unlike Japan, we saw that exporting firms are in fact partly subsidiaries or subcontractors of U.S. firms: if the Chinese yuan rises, mobile phones from Apple will become more expensive and will be more difficult to sell. Thus all the American capitalists are not equally partisans of pressuring the Chinese government to allow its currency to appreciate. Finally, the fiscal and economic position of the United States is weaker than it was thirty years ago and so also is their economic leverage: the U.S. needs China to continue to buy their bonds and to finance their deficits. Therefore it will not be so easy for the United States to repeat with China what they accomplished with Japan.
Nevertheless, the contradictions, clashes of interests and crises between the two countries are bound to increase. It is difficult to say more, but what is certain is that the United States, the No. 1 enemy of the world revolution as we have called it in party texts, will never abdicate its place as ruler of the world – in the same way that the American capitalists will never abdicate their position as the ruling class: in both cases, it is only by violence that they will be dethroned ...
ABOVE ALL THE BOURGEOISIE CREATES ITS OWN GRAVEDIGGERS
Foreign capital in China is obviously attracted by the low wages that allow the production of goods that are very competitive in the global market while reaping huge profits. According to Eurostat figures, for the last dozen years, the gross monthly salary of a worker in China was 100 euros (against 1,500 in France). After this summer’s strikes the Chinese government announced it was raising the minimum wage to 117 euros (137 in Shanghai), the management of Honda-China gave a 24% increase in wages, which would bring them to 237 euros (strikers have returned to work after clashes with the official union). At Foxconn where wages vacillate somewhere around the minimum wage (100 euros per month for 6 days per week), the management had promised in the international press to raise 245 euros, but in reality this increase will be given to workers who have been successful for a period of three months in increasing their productivity sufficiently: no doubt there will not be many... The rise in real wages is much smaller, going only from 100 to 130 euros. But before these increases, the group announced it would move 20% of its employees to Shenzhen, in the north of the country where the minimum wage is 101 euros. These wage increases have led some multinational companies to consider moving to other countries (for example, the U.S. firm Nike has recently demonstrated a tendency to disengage from China to go to Vietnam) or as Foxconn to relocate within the country where wages are much lower than in coastal regions.
But despite these gains, which are moreover only a little above inflation, wages remain very low and they are still appealing to the greed of capitalists seeking to exploit the proletariat. So do not expect them to leave China, on the contrary. They will continue to invest and settle in a country officially “socialist” and led by a party which claims to be “communist” but it is really a paradise of capitalist exploitation.
Let’s examine the case of Foxconn. This Taiwanese corporation is the world’s largest producer of components for electronics, cell phones, etc. It employs 900,000 workers in China, 300 to 400,000 in Shenzen, a city in southern China. Located not far from Hong Kong, this former small fishing town was chosen for this reason in 1979 to host the first “Special Economic Zone”, where foreign capitalists could invest freely. The success of this area is such that the city proper now has more than one and a half million inhabitants, with the metropolitan area at more than 7 million inhabitants (the largest increase in population throughout China).
Recruited among the young “migrant workers” from the Chinese countryside, concentrated in huge settlements, workers at Foxconn are subject to a bestial exploitation: usually up to 10 hours a day and often much more, six days a week (when there is no mandatory overtime on Sunday) and with a barracks discipline. Most are exhausted in a few months of this regime, and replaced by others. China is indeed an almost inexhaustible reservoir of manpower at low prices coming from the rural areas where hundreds of millions of people still live in subsistance conditions. In a downturn, migrant workers are dismissed and sent home without further ado: Officially, this was the case for 24 million at the height of the crisis.
The accelerated development of capitalism in recent decades in China has created a large working class, many tens of millions of people. According to official statistics, during the reforms of 1978 there were 53 million people employed in industry while by 2003 (latest official figures), there were 89.5 million. According to an American study , this figure rose to 111 million in 2006 (with 325 million employed in agriculture at this time), by comparison, in the same year, the number of people employed in industry in the U.S. States was 14 million. Of course, all persons employed in industry are not workers, there are managers, security guards, etc.. But proletarians comprise the vast majority of employees. On the other hand the working class in the Marxist sense of the term, is not limited to factory workers, even if they have a determinant position and role and there is also the proletariat in the categories listed under “services”, in commerce, transport, etc. but also in the “peasant”category: farm workers. All this leads to the conclusion that the Chinese working class is the largest in the world.
Grouping these proletarians in gigantic industrial concentrations, subjecting them to conditions of bestial exploitation, capitalism also creates the conditions for their struggle of immediate resistance. The strikes this summer reported in the international press (and which may be just the tip of the iceberg) are just one prime example. The accelerated development of productive forces in China in recent decades, including the development of the most important of them: the working class, also leads the development of all types of contradictions, beginning with social contradictions, the ever-increasing gap between proletarians and capitalists. China has had no opportunity, as they had in the “workshops of the world” to anesthetize their proletariat as with the British and American proletariat by granting them higher and better living conditions than those of workers in other countries, since it is furious exploitation that is the basis for its growth.
The resources of the Chinese state are fully utilized to accelerate industrialization and to maintain growth at a high rate, including for social reasons: the Chinese authorities themselves have said that less than 6% growth would threaten social peace. But this rapid growth inevitably leads to overproduction – not overproduction in terms of the needs of the population – which are enormous, but when compared to the market, the gigantic plan to support the economy in the current crisis only made things worse on this level. A report by the European Chamber of Commerce in China in 2009 gave some figures of this overproduction in some sectors of industry . To take the most glaring example, the steel industry, the report indicated that at the end of 2008 production capacity was 660 million tons for a market of 470 million, and during the year 2009, new mills were starting up corresponding to a future additional production of 58 million tons ... This overproduction, which also seriously affects the real estate industry, cannot be contained forever by state intervention. Although it may be deferred for some time, the inevitable crisis will hit China with a force much greater than in 2008. And as everywhere, it is the workers who will pay the price, with in addition a mass of petit-bourgeois enriched in various speculations (over twenty million people gamble with their savings on the stock market), which will be brutally proletarianized.
Before it manages to become the world’s largest economy, China will inevitably become one of the most important and most violent arenas for class struggle in the world. It is no coincidence that China is the country where the death penalty is the most common : the capitalist cannot do without the repression and terror that it causes, even when the proletarian struggle is missing, the more internal tensions are elevated, the stronger the repression. There is no doubt that the Chinese working class will be tomorrow the worthy heir of the proletarian fighters of 1926-27 whom it will be up to them to avenge.
It will be able to provided it manages to find its class weapons, Marxism and the authentic communist program, and it understands the need to form a class party. This will be neither automatic nor rapid: it is indeed a problem that arises not only for the Chinese proletarians but for the proletarians of the world, and which can only be solved internationally.
(To be continued)
 If we use the GDP at “Purchasing Power Parity” (PPP: figures adjusted to account for price differences between countries), China overtook Japan in 2001. These figures are estimates and should not be taken literally. Thus in 2007 the World Bank, which gives these figures, has found a “miscalculation” in its estimate of China’s GDP at PPP, and has provided a new estimate, lowering estimated GDP by... 40%. This new estimate reflected the desire of the Chinese to benefit from the status of being a developing country.
 The Beijing government has refuted this assertion, which puts it in a delicate position in climate negotiations.
 see International Herald Tribune, 20-21/02/2010.
 cf Marx, “British Trade”, New York Daily Tribune, 03/02/1858. Programme Communiste No. 64.
 These historical estimates vary according to source, especially in that Russia is sometimes placed after France.
 See in this regard the report of a general meeting of the party: “China, the capitalist superpower”, Le Prolétaire n°295 (september 1979)
 This “value added” is equal to the value of goods produced, less the value of “inputs”, plus commercial margin. This is then grafted, or not, onto the PPP calculations.
 Starting with the article “Sua Maesta l’acciao” in the series “Fil du Temps” in 1950, and the various studies under “cours de l’impérialisme” some of which appear in english.
 These are the figures of the World Steel Association, available online at www.worldsteel.org.
 From July 2008 the government decided to increase customs duties on imported parts to encourage foreign manufacturers to expand their local production.
 According to People’s Daily, 11/1/2010. see:
http / / french.peopledaily.com.cn/Economie/6864541.html
 Official statistics on the subject are available online: www.fdi.gov.cn
 The latter figure is advanced by the North Carolina Department of Commerce, International Trade Division (2009).
 see Financial Times, 23/08/2010;
 According to IMF estimates, it was somewhere between that of Cape Verde and Congo. See Financial Times, 26-27/09/2009
 SIPRI gave a 2007 figure of China’s military spending of $100 billion, against $661 billion for the United States. see Financial Times, 11/06/2010.
 see “Manufacturing in China”, Monthly Labor Review, April 2009. Official Chinese statistics add up urban industrial employment, employment in the “rural industrial enterprises” and industrial employment in informal enterprises.
 see Financial Times, 30/11/2009.
 Amnesty International estimates the number of people executed in China at “several thousand ”, which is more than all the other countries in the world combined! The Chinese authorities did not give figures. www.amnesty.org/fr/death-penalty/death-sentences-and-executions-in-2009 cf. On the other hand we find the United States who have, by far, the record number of people imprisoned.
International Communist Party