Spanish
Mike Davis: " Quite simply, our analogical mind cannot solve all the differential equations generated by the incipient fragmentation of the Eurozone and a gasket exploding the motor of Chinese growth ".
“Beyond Tsingtao beer and low-end refrigerators Haier, China does not have anything as a brand in the U.S."
Boston Consulting Group: "Corporations that take a long relocating to China, will be absorbed into a vicious circle of incompetitividad costs, loss of business, under-utilization of capacity, and irreversible destruction of value."
The Chinese ‘miracle’ is the palpable demonstration of the benefits of opening up, globalisation and neoliberalism. I doubt it, I doubt it, I dooouuuubt it. .
China has again fallen into the exploitative net of the large foreign multinationals and, as in the XIX Century, it has been the same corrupt Chinese bureaucracy which has put itself forward as the intermediary, whilst the majority of the population, resources and territory are the fodder that feeds the sociopathic and ecocidal global machine. .
- In 30 years China has moved from a GNP of $216 000 million to one of 6 billion. It has assets of $3 billion in foreign currency reserves. China is the biggest industrial power in the world and in June 2011 it surpassed the USA in energy consumption. .
- Since its entry into the WTO in 2001, Chinese GNP has shot up at an amazing double-figure annual rate, giving the impression of a Chinese renewal which would quickly bring the country to a place among the first ranking nations in world economic development.
- Chinese exports have moved on from low-tech products (clothes, shoes, games) to those with a high technological-added value. This has created the illusion that the country is climbing up to the top rungs in the international division of labour
- Chinese exports have shifted from low-value technology products (clothes, shoes, toys, ...) to products with high added value. Call centers, financial services, accounting and auditing services, leading sectors of engineering, law firms, medical centers and R & D laboratories (GE, GM, Alcatel, Microsoft, IBM, Bayer, Ericcson, DuPont, .. ., have established research and development centers in China). This has created the illusion that the country is climbing up to the head of the international division of labor.
- In fact, China is the major world producer of 170 products (steel, aluminium, cement, computers, and mobile telephones) and has accumulated reserves which have already surpassed 3 billion dollars (with which it would be able to acquire entire companies, including those in the old imperial nations). China now boasts a large group of top-ranking multinationals and is investing in numerous projects in poor countries, especially in Africa, that facilitate the penetration of its mining and oil companies.
.
- China has become the largest emitter of toxic gases into the atmosphere (depending on which way the wind is blowing the citizens of Los Angeles can now breathe pollution made in China). made in China)
The 2008 Olympics, the 60th Anniversary of the Revolution in 2009, the Shanghai Expo in 2010… the message?... China has reached the status of a world power and is now threatening to overtake the USA.
The Economist expects Chinese GDP will exceeds the U.S. in 2018. He also claims that the renminbi (Chinese currency) could become fully convertible in 2020 and compete with the dollar on equal terms in 2030.
It is claimed that Hong Kong could surpass Wall Street as a global financial center by 2030 and that by this time, more than half of the Global Fortune 500 firms would be Chinese.
Have the reforms been able to transform China into a new capitalist power? If this so then do we now have a new imperialist power on the scene? An unstoppable giant which in a few years has turned itself into a major economic world power?
This is the image which the news agencies and the media are peddling. If we look underneath the flowery carpet, however, we find an irrational Chinese export model, trapped at the end of the international division of labour, a China that is rapidly running out of natural resources, irreversibly destroying the environment and submitting the vast majority of its people to an inhuman regime of exploitation.
The opening up of the Chinese internal market and the savage penetration by international capital was presented as a necessary condition for Chinese access to the sophisticated, cutting-edge technology under the control of the multinationals (leaving aside the notable domestic innovations developed over 30 years of the socialist era). This is a complete joke. The multinationals never had the slightest intention of letting go control of the state-of-the-art technology which they had treasured and developed (biotechnology, IT, new materials, development of alternative energy, high-range industrial equipment) given that this constituted the principal barrier for the preservation of the advantages and profits of their monopoly.
Foreign capital renewed its penetration of China at the beginning of the 1980’s. The objects were twofold: to convert certain areas into macro-platforms for export assembly (similar to the Mexican assembly lines but on a much larger scale) and secondly to invade the Chinese internal market. .
The role of the foreign multinationals was seen in the beginning to be restricted by the obligation to form joint-ventures in order to prevent them from taking control of the companies. The lure of a few concessions without any strategic value, however, led to the corrupt, kleptomaniac bureaucracy succumbing to the blandishments of the capitalists, and they ended up capitulating and accepting Chinese entry into the WTO at the end of 2011. It was the carte blanche for which the multinationals had been waiting to complete their full penetration.
The truth of the matter was rather simpler. The Chinese bureaucracy realised very soon that the process of re-conversion into a capitalist class on a national scale would be slow and uncertain and that co-operating with the invasion of foreign capital would be the quickest and surest way of enriching themselves.
In agreement with the terms of the WTO, from 2004 onwards (at the end of a short period of adjustment) foreign capital would be treated in the same way as Chinese capital and all sectors, including services, would be open to international capital. In less than a decade the majority of the old joint ventures had passed into foreign hands and the multinationals had assaulted most of the Chinese industrial and service sectors (pharmaceuticals, soft drinks, beer, bicycles, lifts, cement, glass, rubber, tyres, agricultural machinery, processing of agricultural products, retail, postal services).
Without the burden of joint ventures, multinationals can even outsource to China everything, including their R & D centers, no fear to protect "their" valuable intellectual property. .
With the sickening collaboration of the Chinese kleptocracy, the foreign multinationals are free to close factories and fire their workers as their fancy takes them, without any compensation, they can appropriate agricultural land and urban plots and buildings paying derisory compensation, contaminate and pollute at will, exploit the labour force ignoring the existing minimum regulations and harshly reprimand and punish with impunity any flicker of protest or insubordination.
After the financial crisis of 2008 the Chinese authorities decided to implement a huge stimulus package of nearly $ 0.6 billion and an increase of 150% on bank loans.
The financial collapse beyond the Pacific seemed to return air to the less neoliberal wing of the PCC.
Between 2008-2010, the public industrial sector was revitalized. The National Development and Reform Commission (successor to the old Central Planning Agency) ordered that only products produced by public or private Chinese, could be used for projects funded by the government. The public banks lending favored companies controlled by government or mostly Chinese capital.
Beijing aggressively promoted wind power and high-speed trains. In strategic industries, from wind turbines to nuclear power generators, favored national champions delimiting the sector against foreign companies.
Cities and provinces boosted research spending, recycling and investing in new industries such as biotechnology, which attracted many Chinese scientists returning emigrants to the West.
The Chinese auto company BYD Auto, located in Shenzhen, has set ambitious targets: to sell 400,000 cars in 2009, the e6 launch in 2010 of a plug-in five-seat electric car in the U.S., with a range of 300 km., become the largest automaker in China in 2015 and overtake Toyota as the top brand in the world in 2025, producing 10 million vehicles per year, half of them for export.
Mike Davis: " Quite simply, our analogical mind cannot solve all the differential equations generated by the incipient fragmentation of the Eurozone and a gasket exploding the motor of Chinese growth ".
“Beyond Tsingtao beer and low-end refrigerators Haier, China does not have anything as a brand in the U.S."
Boston Consulting Group: "Corporations that take a long relocating to China, will be absorbed into a vicious circle of incompetitividad costs, loss of business, under-utilization of capacity, and irreversible destruction of value."
The Chinese ‘miracle’ is the palpable demonstration of the benefits of opening up, globalisation and neoliberalism. I doubt it, I doubt it, I dooouuuubt it. .
China has again fallen into the exploitative net of the large foreign multinationals and, as in the XIX Century, it has been the same corrupt Chinese bureaucracy which has put itself forward as the intermediary, whilst the majority of the population, resources and territory are the fodder that feeds the sociopathic and ecocidal global machine. .
A rather strange ‘development’
- In 30 years China has moved from a GNP of $216 000 million to one of 6 billion. It has assets of $3 billion in foreign currency reserves. China is the biggest industrial power in the world and in June 2011 it surpassed the USA in energy consumption. .
- Since its entry into the WTO in 2001, Chinese GNP has shot up at an amazing double-figure annual rate, giving the impression of a Chinese renewal which would quickly bring the country to a place among the first ranking nations in world economic development.
- Chinese exports have moved on from low-tech products (clothes, shoes, games) to those with a high technological-added value. This has created the illusion that the country is climbing up to the top rungs in the international division of labour
- Chinese exports have shifted from low-value technology products (clothes, shoes, toys, ...) to products with high added value. Call centers, financial services, accounting and auditing services, leading sectors of engineering, law firms, medical centers and R & D laboratories (GE, GM, Alcatel, Microsoft, IBM, Bayer, Ericcson, DuPont, .. ., have established research and development centers in China). This has created the illusion that the country is climbing up to the head of the international division of labor.
- China has become the largest emitter of toxic gases into the atmosphere (depending on which way the wind is blowing the citizens of Los Angeles can now breathe pollution made in China). made in China)
The 2008 Olympics, the 60th Anniversary of the Revolution in 2009, the Shanghai Expo in 2010… the message?... China has reached the status of a world power and is now threatening to overtake the USA.
The Economist expects Chinese GDP will exceeds the U.S. in 2018. He also claims that the renminbi (Chinese currency) could become fully convertible in 2020 and compete with the dollar on equal terms in 2030.
It is claimed that Hong Kong could surpass Wall Street as a global financial center by 2030 and that by this time, more than half of the Global Fortune 500 firms would be Chinese.
Have the reforms been able to transform China into a new capitalist power? If this so then do we now have a new imperialist power on the scene? An unstoppable giant which in a few years has turned itself into a major economic world power?
This is the image which the news agencies and the media are peddling. If we look underneath the flowery carpet, however, we find an irrational Chinese export model, trapped at the end of the international division of labour, a China that is rapidly running out of natural resources, irreversibly destroying the environment and submitting the vast majority of its people to an inhuman regime of exploitation.
Three issues
Here are some silly questions which economists are either unable or loathe to answer. :- Why does China, the largest creditor in the world, with $1.2 billion lent out, often at rates of real negative interest, not make use of that money itself, and appears to be obliged to offer unbeatable conditions to attract foreign investment (in fact it has accumulated over a billion dollars in foreign direct investment which provide juicy profits for their multinational owners)?
- Why does the Chinese government continue conceding subsidies and discounts to foreign multinationals ($83 000 million a year), whilst cutting the wages of its own workers and farmers?
- ¿Porqué, a pesar de que China se ha convertido en el "taller del mundo" (output creciente), los empleos industriales, por el contrario, han estado decreciendo desde 1996?
China once again in the hands of the foreign multinationals
The opening up of the Chinese internal market and the savage penetration by international capital was presented as a necessary condition for Chinese access to the sophisticated, cutting-edge technology under the control of the multinationals (leaving aside the notable domestic innovations developed over 30 years of the socialist era). This is a complete joke. The multinationals never had the slightest intention of letting go control of the state-of-the-art technology which they had treasured and developed (biotechnology, IT, new materials, development of alternative energy, high-range industrial equipment) given that this constituted the principal barrier for the preservation of the advantages and profits of their monopoly.
Foreign capital renewed its penetration of China at the beginning of the 1980’s. The objects were twofold: to convert certain areas into macro-platforms for export assembly (similar to the Mexican assembly lines but on a much larger scale) and secondly to invade the Chinese internal market. .
The role of the foreign multinationals was seen in the beginning to be restricted by the obligation to form joint-ventures in order to prevent them from taking control of the companies. The lure of a few concessions without any strategic value, however, led to the corrupt, kleptomaniac bureaucracy succumbing to the blandishments of the capitalists, and they ended up capitulating and accepting Chinese entry into the WTO at the end of 2011. It was the carte blanche for which the multinationals had been waiting to complete their full penetration.
The truth of the matter was rather simpler. The Chinese bureaucracy realised very soon that the process of re-conversion into a capitalist class on a national scale would be slow and uncertain and that co-operating with the invasion of foreign capital would be the quickest and surest way of enriching themselves.
In agreement with the terms of the WTO, from 2004 onwards (at the end of a short period of adjustment) foreign capital would be treated in the same way as Chinese capital and all sectors, including services, would be open to international capital. In less than a decade the majority of the old joint ventures had passed into foreign hands and the multinationals had assaulted most of the Chinese industrial and service sectors (pharmaceuticals, soft drinks, beer, bicycles, lifts, cement, glass, rubber, tyres, agricultural machinery, processing of agricultural products, retail, postal services).
Without the burden of joint ventures, multinationals can even outsource to China everything, including their R & D centers, no fear to protect "their" valuable intellectual property. .
With the sickening collaboration of the Chinese kleptocracy, the foreign multinationals are free to close factories and fire their workers as their fancy takes them, without any compensation, they can appropriate agricultural land and urban plots and buildings paying derisory compensation, contaminate and pollute at will, exploit the labour force ignoring the existing minimum regulations and harshly reprimand and punish with impunity any flicker of protest or insubordination.
2008, a short left turn
After the financial crisis of 2008 the Chinese authorities decided to implement a huge stimulus package of nearly $ 0.6 billion and an increase of 150% on bank loans.
The financial collapse beyond the Pacific seemed to return air to the less neoliberal wing of the PCC.
Between 2008-2010, the public industrial sector was revitalized. The National Development and Reform Commission (successor to the old Central Planning Agency) ordered that only products produced by public or private Chinese, could be used for projects funded by the government. The public banks lending favored companies controlled by government or mostly Chinese capital.
Beijing aggressively promoted wind power and high-speed trains. In strategic industries, from wind turbines to nuclear power generators, favored national champions delimiting the sector against foreign companies.
Cities and provinces boosted research spending, recycling and investing in new industries such as biotechnology, which attracted many Chinese scientists returning emigrants to the West.
Saving Chinese automobile industry
Beijing tried to shore up Chinese automobile industry against the onslaught of Volkswagen (VLKAY), Toyota, Buick, and other foreign brands. The domestic automakers such as BYD Auto, Geely, Chery and SAIC, tried to survive manufacturing very cheap subcompacts ($ 4,400). But the best hope was placed in electric car development by BYD Auto with strong production aid and consumer subsidies.The Chinese auto company BYD Auto, located in Shenzhen, has set ambitious targets: to sell 400,000 cars in 2009, the e6 launch in 2010 of a plug-in five-seat electric car in the U.S., with a range of 300 km., become the largest automaker in China in 2015 and overtake Toyota as the top brand in the world in 2025, producing 10 million vehicles per year, half of them for export.
With such prospects and enthusiastic collaboration of Warren E. Buffett, BYD Auto's shares soared (Buffett would score shortly after gains of more than one billion $ by selling their shares). BYD Auto has become one of the best-selling brands in 2009 but in 2010 and 2011, despite heavy subsidies, sales plummeted.
In 2010, the set of "Chinese" brands is less than 29% of Chinese car market (4,300,000 cars compared to a total of 15 million units) despite the frequent mergers and acquisitions (in February 2010, Geely acquired Zhejiang Zhongyu Auto, the only special vehicle manufacturer in Asia approved by Mercedes-Benz, in August 2010, BAIC forged a joint venture with the group YingXiang of Chongjin, in January 2011, BAIC purchased Baolong group, based in Guangzhou, in December 2010, GAIC acquired 51% of Jiao Auto and in March 2011 merged with Changfeng Auto, another state company; in December 2010, ChangAn Auto, acquired Yunnei Power).
In 2010, the set of "Chinese" brands is less than 29% of Chinese car market (4,300,000 cars compared to a total of 15 million units) despite the frequent mergers and acquisitions (in February 2010, Geely acquired Zhejiang Zhongyu Auto, the only special vehicle manufacturer in Asia approved by Mercedes-Benz, in August 2010, BAIC forged a joint venture with the group YingXiang of Chongjin, in January 2011, BAIC purchased Baolong group, based in Guangzhou, in December 2010, GAIC acquired 51% of Jiao Auto and in March 2011 merged with Changfeng Auto, another state company; in December 2010, ChangAn Auto, acquired Yunnei Power).
Had the model been revised? Had there been a anti-neoliberal turn, a return to protectionism, to import substitution, to stimulating domestic consumption to public investment planning, ..., a return to state control over the economy by controlling, suppressing and slowing the penetration of multinational capital acidic?.
Between 2009 and 2011 China experimented with an alternative model to that promoted by the multinationals in the province of Chongqing, which has 32 million inhabitants.
Social policies ( common prosperity )
One of the pillars of Chongqing's model involved a series of egalitarian social policies aimed at reducing the gap between rich and poor, and the rural-urban gap . The core of the new social Chonqging’s model was " common prosperity " or " red GDP " . Contrary to the propaganda of the neoliberal model that suggests that a growing cake crumbs fall for all, what is important in Chongqing is the equal sharing of the pie rather than its size.
15.800 million $ where invested in social housing construction for the use of recent college graduates, migrant workers and low-income residents.
In 2007, the cities of Chongqing and Chengdu were selected to develop pilot projects to mitigate the rural-urban gap and facilitate the integration of rural residents in the cities. Under the hukou registration system, citizens are classified as rural or urban, a distinction that determines not only where they live, but also affects the opportunities of education, taxation, property rights , etc. . (hundreds of millions of "undocumented " Chinese, whose exploitation is the hidden face of the obscene profits that are shared between multinational monopolies and Chinese kleptocracy).
Have the reforms been able to transform China into a strong ‘independent’ capitalist country? A new imperialism, on the face of it capable of competing with and even overtaking the old capitalist empires, an unstoppable giant?
In reality the multinational monopolies control 60% of all exports and more than 80% of exports of electronic products and machinery. The Chinese companies are mere subcontractors and the final product for export carries the brand name of the multinational and not the subcontractor. In China the foreign multinationals import parts and components from other countries, (Germany, USA, Korea, Japan…), they control the prices of these imports and of the exports and also the commercial channels as much inside China as outside. If the Chinese have no control over the price of imported components or over the final price of the products they assemble, then the profits escape from China. When the price of an Apple iPhone was $179 in the USA, the portion that remained in China for its assembly (apart from the pollution) was $6.50. (menos del 1,8% del valor total)
The best indicator of the fall into dependence on multinational external capital is its rapid penetration of the internal Chinese market. In less than 5 years the great majority of Chinese brands have disappeared completely from the market, The foreign monopolies dominate the vast majority of the economic sectors of the internal market as much in industry as in the service sector (medical services, training, sport, gymnasiums, education, consultancy, insurance, advertising, real estate…) and have begun to force their way into public services and monopolies (projects for water supply, purification and sewage systems for the large cities.
Chinese society has polarized extraordinarily in the last twenty years. Whilst scarcely 10% ‘enjoy’ the penetration of foreign capital (kleptocrats, subcontractors, mafia, foremen…) the tourism of the 21st Century which we are told is going to save Spain, more than 90% that is to say more than a milliard of a million Chinese , are forced to endure in their earthly life and in their increasingly more precarious health, the avaricious penetration of foreign capitalism that Mao managed to keep the brakes on during the first 30 years of the revolution. .
The Chinese bureaucracy, although it may appear to be more independent, given that it still controls some of the key sectors of the economy, does not differ much from the corrupt administrations of other poor countries in the grip of multinational monopolist capital. In reality, its new role as the Chinese capitalist class consists in taking its own cut as it participates with the pack of capitalist multinationals in the looting of its own people, resources and territory. More than a million of these new Chinese capitalists have already acquired US or other western nationality and are buying real estate hand over fist in New York, London and Paris. They have become permanent clients of the most opaque tax havens.
The new Chinese entrepreneurs register their companies in tax havens (BVI Cyman Islands, Bermuda, ...) to obtain the same advantages and the same preferential treatment (sic) enjoyed by foreign firms. They loot in China and stash their wealth abroad, always keeping their bags packed for a quick getaway.
The brand new Chinese multinationals CNCP, CNOOC, Sinopec, SINOCHEM, Lenoro function in accordance with the procedures and codes of conduct of their western counterparts, they are quoted on the international stock exchange, participate in fusions and acquisitions and acquire strategic reserves of fossil fuels in collusion with Shell and Exxon in Niger, Sudan, Nigeria, Angola, Congo etc. They contract top foreign executives paying them western level salaries, corrupt and bribe governments and compete with their western counterparts in the unscrupulous exploitation of their own country.
In 1977, before IBM presented its PC , China developed a prototype of a small computer (and a microprocessor in 1980). Four computer companies were created from this network of R & D: Legend (now Lenovo), Founder, Great Wall Computer, and Stone. Lenovo was incubated at the Chinese Academy of Sciences. These companies were able to grow rapidly and dominate the domestic computer market for several interrelated reasons:
. They were able to combine innovations in Chinese language processing previously developed by public institutions of the network of R & D, with the acquisition of hardware and technology to adapt to the production of computers capable of processing Chinese characters.
. Policies restricting direct access foreign computer manufacturers to the Chinese market
After China's entry into the WTO, the penetration of multinational companies (HP, Acer, Dell, Asus) was about to end Chinese companies. The Lenovo's market share fell from 36 percent in 2006 to 29 percent in 2007 and that of other Chinese brands more. With major public support Lenovo managed to resist and recover market share.
To survive, Lenovo had to become a global multinational. Lenovo acquired IBM's PC unit in 2005, moved its center of operations to the U.S. and hired Americans engineers and developers to improve their products. Today Lenovo is a Chinese multinational that exploits with as much or more fury than Aple, HP or Dell its Chinese employees....
The neoliberal reforms have failed to develop a modern agricultural system (indicative of a modern independent state). At the end of the 1970’s, plans were made to modernise agriculture. After de-collectivisation (finalised in 1984), increased production was achieved for a short time and then it stagnated.
In the USA or Europe the agricultural sector is traditionally protected by fixed prices, market organisation, transport infrastructure, help and subsidies. Japan, South Korea, Taiwan, and Singapore are countries which promote agrarian reforms and massive investment in education, at the same time controlling the penetration of foreign capital and subordinating it to their strategies of national development.
In China, on the other hand, the kleptocracy, both central and local, has ignored the agricultural sector, where corruption does not produce profits. The fragmentation (more than 2 million small family holdings) has made production inefficient. Peasants do not have the money to invest in modern agricultural machinery and have still less for the improvement or maintenance of the communal drainage and irrigation systems constructed during the socialist era. Profits from agriculture are too small to attract private capital. In fact the vast majority of the agricultural sector produces just enough for its subsistence and more than 150 million peasants have left in search of employment in the cities, abandoning their agricultural work and further worsening the situation. The increased price of agricultural inputs (between 30% and 50% in 2011) and the expropriations are driving many ruined peasants from the land.
La subida de los precios de los insumos agrícolas (entre el 30 y el 50% en 2011), y las expropiaciones, están expulsando del campo a numerosas familias campesinas arruinadas que se convierten en carne de cañón para la fabricación del "milagro chino". Se trata de los nongmingong o migrantes internos, institucionalmente inferiores y marginados socialmente. Su hukou (carnet de identidad_residencia) rural les impide el acceso a bienes y servicios subsidiados tales como atención médica, vivienda, pensiones y educación para sus hijos, lo que limita su capacidad para integrarse en la sociedad. El aislamiento social se presta a la discriminación y los habitantes de las ciudades tienden a culparles de la delincuencia en general. El estereotipo de los migrantes rurales es que son incultos, ignorantes, sucios, y con alta propensión a ser delincuentes (el equivalente de los inmigrantes en EEUU o en Europa)
The rising prices of agricultural inputs (between 30 and 50% in 2011), and expropriations, are driving out of the country numerous peasant families who become fodder for the "Chinese miracle". These are the "nongmingong" or internal migrants, institutionally and socially marginalized. They are denied access to subsidized goods and services such as medical care, housing, pensions and education for their children, limiting their ability to integrate into society. Social isolation lends itself to discrimination and urban dwellers tend to blame them for crime in general. The stereotype of rural migrants is that they are uneducated, ignorant, dirty, and with a high propensity to be delinquent (the equivalent of immigrants in the U.S. or Europe)
The accelerated loss of cultivatable land (through increased industrial zones, warehouses, urbanisation, road building) over the last 30 years of reforms is over 25%, without taking into account the areas lost through pollution.
Chinese agriculture has fallen into the same path of dependency and under-development as the majority of poor countries on the planet. In a few years China has moved from self-sufficiency to dependence on food from outside the country. China is, in fact, the country which imports the most agricultural products from the USA.
There has been a huge diversion of water to urban and industrial ends, to the detriment of the public agricultural irrigation schemes constructed during the socialist era which every day are deteriorating further through lack of upkeep. This, together with the effects of climate change, is making drought and desertification widespread. The major cause, however, of the terrible scarcity of water which is threatening China is the pollution of its rivers and aquifers (a quarter of the major rivers have been so severely polluted that the liquid which flows in them cannot be used for anything. In the Zhu River Delta (the source of water and food for 47 million people in 10 cities in the area) in Guangdong Province, which is plagued with factories for the assembly of computers, audiovisual equipment and telephones, the concentration of heavy metals (copper, zinc, iron, nickel, mercury, lead) in the river and the surrounding rice paddies and vegetable fields and aquifers is 5000 times over recommended levels. In the rural areas a third of the population struggle to get access to clean drinking water.
Wages in China as a share of GDP have fallen from about 53% of GDP in 1992 to less than 40% in 2006. Private consumption as a percentage of GDP has also decreased from about 47% to 36% during the same period. Nowhere in the world has been falling as great as in China.
One of the keys to "success" are economic state policies toward China domestic immigrants, representing about 70 percent of the manufacturing workforce and 80 percent of the construction workforce. The nongmingong, no papers, constitute the vast majority of labor in the service of foreign multinationals operating in China. During the last twenty years, some 150-200 million Chinese have moved from the countryside to urban areas in search of employment. These workers are immigrants in their own country and suffer enormous discrimination. For example, because they remain classified as rural residents under the Chinese registration system (lack of resident hukous hurban card), not only must pay to register as temporary urban residents, but have no right to services available to public urban-born residents (education, health, housing and pensions). The same is true for their children, even if they were born in an urban environment.
Mike Davis: " “The two hundred million Chinese workers in industry, mining and construction, constitute in reality the most dangerous class on the planet. Their complete awakening to the bubble could determine whether or not a socialist world is possible”".
After the crash of 2008 and the drop in exports, the terrified Chinese bureaucracy, fearing that widespread unemployment would lead to street revolts, responded with an enormous plan of fiscal and monetary stimulus which was started in November 2008 with an injection of $ 0.586 billion ( for infrastructure, transport ,industry, subsidiaries) to put everyone to work. The stimulus continued until it reached more than $2 billion (33% of GNP).
China is consuming more steel and cement per capita than any other industrialised country in history. Millions of Chinese are employed in the construction of forests of skyscrapers, cities without people, highways without cars, railway lines without trains and so on.
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Chinese banks provided low-interest loans to all and sundry to stimulate the expenditure of local administrations, invest in businesses and above all to blow up a bubble of gigantic proportions.
Inflation shot up, above all in food (14%), energy and housing, in contrast to miserable wages ($2 500 a year in urban areas and $600 in the countryside) and the kleptocrats jumped whenever news of the Arab Spring or the indignado movement was mentioned on the television
The property bubble is of epic proportions. Cities constructed to receive millions of people, with offices, sports stadiums, swimming-pools megastores, airports, motorways… which remain completely empty. Housing prices have shot up 100% since 2008. Buyers purchase to speculate not to occupy.
China 2013
As in the west, the Chinese banking system is very concentrated (5 banks have accumulated 50% of the mortgages). Indebtedness, as in the west has reached unsustainable rates. Arrears have already reached percentages between 8% and 12% (Moody’s estimate). The frightened Chinese authorities raised interest rates three times in 2011 and have managed to increase bank reserves to prevent an enormous explosion, but these measures have come too late.
The enormous over-capacity installed over the last few years, the proportions of the credit-property bubble, the unsustainable level of indebtedness will cause º the whole system to collapse sooner or later . When the banking crisis explodes , the money will leave the country as soon as possible, and with it, or before it, (as money moves fast these days), a good part of the Chinese elite.
The outlook for the global economy were not too healthy at the beginning of the century. Producers of raw materials (copper, steel, tin, ...) had stopped investing in capacity given the tight demand. In 2008, the huge Chinese pull caught unawares producers and prices soared since supply was delayed and speculation had huge unemployed funds available. From 2009 producers began to invest to increase capacity. China consumed about 40% of global copper, 60% iron and cement ... Chinese do not consumed commodities only on bridges, ports, airports, highways, new towns, ... but they stored anticipating future price increases.
With the slowdown, or possibly crash, Chinese demand will vanish from the market (it is even possible that companies are forced to offer to sell their huge stocks, from vendors claimants (net buyer to net seller). This will soon lead to a sharp fall in the price of raw materials (accelerated by speculation).
The end of the Chinese miracle immediately drag the commodity producing countries (Brazil, Argentina, Peru, Chile, Indonesia, ...), the famous "emerging", that in a flash plasma again plunge into Permanent Depression which appeared to have been disconnected. China Crisis and raw material prices
Pao Yu Ching: China: Continuing Class Struggle Sixty-two Years after the Revolution
Real information about China: INSTITUTE FOR POLITICAL ECONOMY
Economic news about China: Economists Pick Research
Chinese geography
Video on the housing bubble
An explanation of the decline in manufacturing employment in China
Bo Xilai and the Chongqing model (2009-2011)
Striking Black
In the municipality of Chongqing was launched
a campaign to eradicate organized crime. A total of 4,781 suspects were
arrested, including 19 crime bosses, hundreds of members of the Triad ( Chinese
mafia ), and a number of party officials, police, government and party members.
More than 9,000 suspects were investigated. Fourteen of them were high-ranking
officials, including members of the Chongqing Higher People's Court. Several
police officers were arrested, including the former director of the Municipal
Office of Justice and Chongqing
party chief. On November 6, 2009, over 800 people had been arrested and 327
were processed.
Social policies ( common prosperity )
One of the pillars of Chongqing's model involved a series of egalitarian social policies aimed at reducing the gap between rich and poor, and the rural-urban gap . The core of the new social Chonqging’s model was " common prosperity " or " red GDP " . Contrary to the propaganda of the neoliberal model that suggests that a growing cake crumbs fall for all, what is important in Chongqing is the equal sharing of the pie rather than its size.
15.800 million $ where invested in social housing construction for the use of recent college graduates, migrant workers and low-income residents.
In 2007, the cities of Chongqing and Chengdu were selected to develop pilot projects to mitigate the rural-urban gap and facilitate the integration of rural residents in the cities. Under the hukou registration system, citizens are classified as rural or urban, a distinction that determines not only where they live, but also affects the opportunities of education, taxation, property rights , etc. . (hundreds of millions of "undocumented " Chinese, whose exploitation is the hidden face of the obscene profits that are shared between multinational monopolies and Chinese kleptocracy).
Only 27 % of the 32 million urban habitants had card ( hukous ) in 2007. Suddenly,
3,220,000 "paperless" of Chongqing
cities became " have papers " with better wages, pension rights,
social housing, social rents, pensions, the right to education of their
children and public health.
Cheap credit was provided to rural villages to bring into cultivation marginal lands. Social policy was strengthened during the November 2008 taxi strike, in which more than 8,000 taxi drivers took to the streets for two days to protest high fees, unregulated competition and rising fuel prices. In China, labor protests often blamed on criminal incitement and are violently repress . In Chongqing taxi strike, however, it was held a televised roundtable dialogues and even was allowed the formation of a union of taxi drivers.
The model promoted the growth of the public sector in order to promote social welfare. Public Investment Companies were set up to promote equitable development, taking control of more than 1,160 dilapidated state enterprises to develop them and turn them into viable businesses. As a result, public assets in Chongqing grew dramatically.
In 2011 it was clear that the Chinese neoliberal-multinacional capitalist model was losing steam. Certain Western media advised a "soft landing " stimulating domestic demand to replace declining Western demand recession. Obviously, the "Chongqing model" could have expanded and widespread as a replacement to the neoliberal model, avoiding the collapse of exports and favoring a global industrial relocation and ultimately, a wage recovery, not only in China, but throughout the planet, to the detriment of large multinational monopolists interests.
Clearly, monopolies and the corrupt Chinese bureaucracy reacted in unison orchestrating a dirty plot against the model and its instigator Chongqing Bo Xilai. Western mainstream media monopoly (Wall Street Journal, CNN , Financial Times, ... and the Chinese ) united the Chinese bureaucracy accusing Bo Xilai of wanting to reinstate the "cultural revolution", corruption and murder.
Cheap credit was provided to rural villages to bring into cultivation marginal lands. Social policy was strengthened during the November 2008 taxi strike, in which more than 8,000 taxi drivers took to the streets for two days to protest high fees, unregulated competition and rising fuel prices. In China, labor protests often blamed on criminal incitement and are violently repress . In Chongqing taxi strike, however, it was held a televised roundtable dialogues and even was allowed the formation of a union of taxi drivers.
The model promoted the growth of the public sector in order to promote social welfare. Public Investment Companies were set up to promote equitable development, taking control of more than 1,160 dilapidated state enterprises to develop them and turn them into viable businesses. As a result, public assets in Chongqing grew dramatically.
In 2011 it was clear that the Chinese neoliberal-multinacional capitalist model was losing steam. Certain Western media advised a "soft landing " stimulating domestic demand to replace declining Western demand recession. Obviously, the "Chongqing model" could have expanded and widespread as a replacement to the neoliberal model, avoiding the collapse of exports and favoring a global industrial relocation and ultimately, a wage recovery, not only in China, but throughout the planet, to the detriment of large multinational monopolists interests.
Clearly, monopolies and the corrupt Chinese bureaucracy reacted in unison orchestrating a dirty plot against the model and its instigator Chongqing Bo Xilai. Western mainstream media monopoly (Wall Street Journal, CNN , Financial Times, ... and the Chinese ) united the Chinese bureaucracy accusing Bo Xilai of wanting to reinstate the "cultural revolution", corruption and murder.
The liquidation of Chongqing model means the
resignation to escape the neoliberal networks that plague China. It
signifies the triumph of large corporations and the most abject submission of
the klepto-bureaucratic state to the monopolist globalization, despite the
growing unrest and instability in Chinese society. It means that Chinese elites
(capitalists and bureaucrats) share the same interest as the global elites
(multinational and collateral) to maintain a system that benefits them at the
expense of the majority (0.4 % of the population accounts for 70% of all the
country's wealth).
The 2008 capitalist crisis means that consumers opt for cheaper products and to Beijing and CIA to greater flexi - exploitation of workers greater global market share , increased business and increased profits. The " left turns " remain mere glimpses of the mirror as China plunges into the chaotic traffic multinational monopoly capitalism.
The 2008 capitalist crisis means that consumers opt for cheaper products and to Beijing and CIA to greater flexi - exploitation of workers greater global market share , increased business and increased profits. The " left turns " remain mere glimpses of the mirror as China plunges into the chaotic traffic multinational monopoly capitalism.
Chinese capitalist imperialism?
Have the reforms been able to transform China into a strong ‘independent’ capitalist country? A new imperialism, on the face of it capable of competing with and even overtaking the old capitalist empires, an unstoppable giant?
In reality the multinational monopolies control 60% of all exports and more than 80% of exports of electronic products and machinery. The Chinese companies are mere subcontractors and the final product for export carries the brand name of the multinational and not the subcontractor. In China the foreign multinationals import parts and components from other countries, (Germany, USA, Korea, Japan…), they control the prices of these imports and of the exports and also the commercial channels as much inside China as outside. If the Chinese have no control over the price of imported components or over the final price of the products they assemble, then the profits escape from China. When the price of an Apple iPhone was $179 in the USA, the portion that remained in China for its assembly (apart from the pollution) was $6.50. (menos del 1,8% del valor total)
The best indicator of the fall into dependence on multinational external capital is its rapid penetration of the internal Chinese market. In less than 5 years the great majority of Chinese brands have disappeared completely from the market, The foreign monopolies dominate the vast majority of the economic sectors of the internal market as much in industry as in the service sector (medical services, training, sport, gymnasiums, education, consultancy, insurance, advertising, real estate…) and have begun to force their way into public services and monopolies (projects for water supply, purification and sewage systems for the large cities.
Chinese society has polarized extraordinarily in the last twenty years. Whilst scarcely 10% ‘enjoy’ the penetration of foreign capital (kleptocrats, subcontractors, mafia, foremen…) the tourism of the 21st Century which we are told is going to save Spain, more than 90% that is to say more than a milliard of a million Chinese , are forced to endure in their earthly life and in their increasingly more precarious health, the avaricious penetration of foreign capitalism that Mao managed to keep the brakes on during the first 30 years of the revolution. .
Costes laborales chinos en relación a EEUU
The Chinese bureaucracy, although it may appear to be more independent, given that it still controls some of the key sectors of the economy, does not differ much from the corrupt administrations of other poor countries in the grip of multinational monopolist capital. In reality, its new role as the Chinese capitalist class consists in taking its own cut as it participates with the pack of capitalist multinationals in the looting of its own people, resources and territory. More than a million of these new Chinese capitalists have already acquired US or other western nationality and are buying real estate hand over fist in New York, London and Paris. They have become permanent clients of the most opaque tax havens.
The new Chinese entrepreneurs register their companies in tax havens (BVI Cyman Islands, Bermuda, ...) to obtain the same advantages and the same preferential treatment (sic) enjoyed by foreign firms. They loot in China and stash their wealth abroad, always keeping their bags packed for a quick getaway.
The brand new Chinese multinationals CNCP, CNOOC, Sinopec, SINOCHEM, Lenoro function in accordance with the procedures and codes of conduct of their western counterparts, they are quoted on the international stock exchange, participate in fusions and acquisitions and acquire strategic reserves of fossil fuels in collusion with Shell and Exxon in Niger, Sudan, Nigeria, Angola, Congo etc. They contract top foreign executives paying them western level salaries, corrupt and bribe governments and compete with their western counterparts in the unscrupulous exploitation of their own country.
Lenovo a Chinese multinational increasingly less "Chinese"
China possessed a dynamic R & D infrastructure prior to the start of the reform period. In the 1950s, the Chinese state established a network of R & D following the Soviet model. The Chinese first computer was developed in 1958 (the first computer in Japan is 1957) China produced its first integrated circuit in 1964, only five years after the first U.S. patent.In 1977, before IBM presented its PC , China developed a prototype of a small computer (and a microprocessor in 1980). Four computer companies were created from this network of R & D: Legend (now Lenovo), Founder, Great Wall Computer, and Stone. Lenovo was incubated at the Chinese Academy of Sciences. These companies were able to grow rapidly and dominate the domestic computer market for several interrelated reasons:
. They were able to combine innovations in Chinese language processing previously developed by public institutions of the network of R & D, with the acquisition of hardware and technology to adapt to the production of computers capable of processing Chinese characters.
. Policies restricting direct access foreign computer manufacturers to the Chinese market
After China's entry into the WTO, the penetration of multinational companies (HP, Acer, Dell, Asus) was about to end Chinese companies. The Lenovo's market share fell from 36 percent in 2006 to 29 percent in 2007 and that of other Chinese brands more. With major public support Lenovo managed to resist and recover market share.
To survive, Lenovo had to become a global multinational. Lenovo acquired IBM's PC unit in 2005, moved its center of operations to the U.S. and hired Americans engineers and developers to improve their products. Today Lenovo is a Chinese multinational that exploits with as much or more fury than Aple, HP or Dell its Chinese employees....
Failure of agricultural development
The neoliberal reforms have failed to develop a modern agricultural system (indicative of a modern independent state). At the end of the 1970’s, plans were made to modernise agriculture. After de-collectivisation (finalised in 1984), increased production was achieved for a short time and then it stagnated.
In the USA or Europe the agricultural sector is traditionally protected by fixed prices, market organisation, transport infrastructure, help and subsidies. Japan, South Korea, Taiwan, and Singapore are countries which promote agrarian reforms and massive investment in education, at the same time controlling the penetration of foreign capital and subordinating it to their strategies of national development.
In China, on the other hand, the kleptocracy, both central and local, has ignored the agricultural sector, where corruption does not produce profits. The fragmentation (more than 2 million small family holdings) has made production inefficient. Peasants do not have the money to invest in modern agricultural machinery and have still less for the improvement or maintenance of the communal drainage and irrigation systems constructed during the socialist era. Profits from agriculture are too small to attract private capital. In fact the vast majority of the agricultural sector produces just enough for its subsistence and more than 150 million peasants have left in search of employment in the cities, abandoning their agricultural work and further worsening the situation. The increased price of agricultural inputs (between 30% and 50% in 2011) and the expropriations are driving many ruined peasants from the land.
La subida de los precios de los insumos agrícolas (entre el 30 y el 50% en 2011), y las expropiaciones, están expulsando del campo a numerosas familias campesinas arruinadas que se convierten en carne de cañón para la fabricación del "milagro chino". Se trata de los nongmingong o migrantes internos, institucionalmente inferiores y marginados socialmente. Su hukou (carnet de identidad_residencia) rural les impide el acceso a bienes y servicios subsidiados tales como atención médica, vivienda, pensiones y educación para sus hijos, lo que limita su capacidad para integrarse en la sociedad. El aislamiento social se presta a la discriminación y los habitantes de las ciudades tienden a culparles de la delincuencia en general. El estereotipo de los migrantes rurales es que son incultos, ignorantes, sucios, y con alta propensión a ser delincuentes (el equivalente de los inmigrantes en EEUU o en Europa)
The rising prices of agricultural inputs (between 30 and 50% in 2011), and expropriations, are driving out of the country numerous peasant families who become fodder for the "Chinese miracle". These are the "nongmingong" or internal migrants, institutionally and socially marginalized. They are denied access to subsidized goods and services such as medical care, housing, pensions and education for their children, limiting their ability to integrate into society. Social isolation lends itself to discrimination and urban dwellers tend to blame them for crime in general. The stereotype of rural migrants is that they are uneducated, ignorant, dirty, and with a high propensity to be delinquent (the equivalent of immigrants in the U.S. or Europe)
The accelerated loss of cultivatable land (through increased industrial zones, warehouses, urbanisation, road building) over the last 30 years of reforms is over 25%, without taking into account the areas lost through pollution.
Chinese agriculture has fallen into the same path of dependency and under-development as the majority of poor countries on the planet. In a few years China has moved from self-sufficiency to dependence on food from outside the country. China is, in fact, the country which imports the most agricultural products from the USA.
There has been a huge diversion of water to urban and industrial ends, to the detriment of the public agricultural irrigation schemes constructed during the socialist era which every day are deteriorating further through lack of upkeep. This, together with the effects of climate change, is making drought and desertification widespread. The major cause, however, of the terrible scarcity of water which is threatening China is the pollution of its rivers and aquifers (a quarter of the major rivers have been so severely polluted that the liquid which flows in them cannot be used for anything. In the Zhu River Delta (the source of water and food for 47 million people in 10 cities in the area) in Guangdong Province, which is plagued with factories for the assembly of computers, audiovisual equipment and telephones, the concentration of heavy metals (copper, zinc, iron, nickel, mercury, lead) in the river and the surrounding rice paddies and vegetable fields and aquifers is 5000 times over recommended levels. In the rural areas a third of the population struggle to get access to clean drinking water.
The nongmingong and the "success" of multinationals
Wages in China as a share of GDP have fallen from about 53% of GDP in 1992 to less than 40% in 2006. Private consumption as a percentage of GDP has also decreased from about 47% to 36% during the same period. Nowhere in the world has been falling as great as in China.
One of the keys to "success" are economic state policies toward China domestic immigrants, representing about 70 percent of the manufacturing workforce and 80 percent of the construction workforce. The nongmingong, no papers, constitute the vast majority of labor in the service of foreign multinationals operating in China. During the last twenty years, some 150-200 million Chinese have moved from the countryside to urban areas in search of employment. These workers are immigrants in their own country and suffer enormous discrimination. For example, because they remain classified as rural residents under the Chinese registration system (lack of resident hukous hurban card), not only must pay to register as temporary urban residents, but have no right to services available to public urban-born residents (education, health, housing and pensions). The same is true for their children, even if they were born in an urban environment.
The Chinese bubble
Mike Davis: " “The two hundred million Chinese workers in industry, mining and construction, constitute in reality the most dangerous class on the planet. Their complete awakening to the bubble could determine whether or not a socialist world is possible”".
After the crash of 2008 and the drop in exports, the terrified Chinese bureaucracy, fearing that widespread unemployment would lead to street revolts, responded with an enormous plan of fiscal and monetary stimulus which was started in November 2008 with an injection of $ 0.586 billion ( for infrastructure, transport ,industry, subsidiaries) to put everyone to work. The stimulus continued until it reached more than $2 billion (33% of GNP).
China is consuming more steel and cement per capita than any other industrialised country in history. Millions of Chinese are employed in the construction of forests of skyscrapers, cities without people, highways without cars, railway lines without trains and so on.
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Chinese banks provided low-interest loans to all and sundry to stimulate the expenditure of local administrations, invest in businesses and above all to blow up a bubble of gigantic proportions.
Inflation shot up, above all in food (14%), energy and housing, in contrast to miserable wages ($2 500 a year in urban areas and $600 in the countryside) and the kleptocrats jumped whenever news of the Arab Spring or the indignado movement was mentioned on the television
The property bubble is of epic proportions. Cities constructed to receive millions of people, with offices, sports stadiums, swimming-pools megastores, airports, motorways… which remain completely empty. Housing prices have shot up 100% since 2008. Buyers purchase to speculate not to occupy.
China 2013
Consumption in relation to GDP (34%) is lower than in the poorest countries of sub-Saharan Africa. The controlled value of the Yuan to maintain the pace of export demanded by the multinationals implies that imports of copper, steel, petroleum, ..., prove very expensive.
Who buys raw materials?. While multinationals occupy most lucrative sectors of the Chinese economic spectrum, public enterprises and the Chinese state are those who "invest" a great deal of the accumulated foreign exchange buying huge commodity stocks (accumulated in anticipation of future price increases )
In such conditions, most of the investment, infrastructure, real estate, ..., are very expensive and beyond the reach of depressed Chinese consumers (only for multinational infrastructure advantage is a manna without paying a dim).
Who buys raw materials?. While multinationals occupy most lucrative sectors of the Chinese economic spectrum, public enterprises and the Chinese state are those who "invest" a great deal of the accumulated foreign exchange buying huge commodity stocks (accumulated in anticipation of future price increases )
In such conditions, most of the investment, infrastructure, real estate, ..., are very expensive and beyond the reach of depressed Chinese consumers (only for multinational infrastructure advantage is a manna without paying a dim).
As in the west, the Chinese banking system is very concentrated (5 banks have accumulated 50% of the mortgages). Indebtedness, as in the west has reached unsustainable rates. Arrears have already reached percentages between 8% and 12% (Moody’s estimate). The frightened Chinese authorities raised interest rates three times in 2011 and have managed to increase bank reserves to prevent an enormous explosion, but these measures have come too late.
The enormous over-capacity installed over the last few years, the proportions of the credit-property bubble, the unsustainable level of indebtedness will cause º the whole system to collapse sooner or later . When the banking crisis explodes , the money will leave the country as soon as possible, and with it, or before it, (as money moves fast these days), a good part of the Chinese elite.
China Crisis and raw inputs prices
The outlook for the global economy were not too healthy at the beginning of the century. Producers of raw materials (copper, steel, tin, ...) had stopped investing in capacity given the tight demand. In 2008, the huge Chinese pull caught unawares producers and prices soared since supply was delayed and speculation had huge unemployed funds available. From 2009 producers began to invest to increase capacity. China consumed about 40% of global copper, 60% iron and cement ... Chinese do not consumed commodities only on bridges, ports, airports, highways, new towns, ... but they stored anticipating future price increases.
With the slowdown, or possibly crash, Chinese demand will vanish from the market (it is even possible that companies are forced to offer to sell their huge stocks, from vendors claimants (net buyer to net seller). This will soon lead to a sharp fall in the price of raw materials (accelerated by speculation).
The end of the Chinese miracle immediately drag the commodity producing countries (Brazil, Argentina, Peru, Chile, Indonesia, ...), the famous "emerging", that in a flash plasma again plunge into Permanent Depression which appeared to have been disconnected. China Crisis and raw material prices
Pao Yu Ching: China: Continuing Class Struggle Sixty-two Years after the Revolution
Real information about China: INSTITUTE FOR POLITICAL ECONOMY
Economic news about China: Economists Pick Research
Chinese geography
Video on the housing bubble
An explanation of the decline in manufacturing employment in China
