Gramsci (notebook prison, 1930): "The crisis consists precisely in that the old is dying and the new has not yet been born, in this interregnum appear a great variety of morbid symptoms"
 Will there be another spring for capitalism? 3rd Great Depression has begun. The recessionary spiral is of a magnitude unparalleled in history. This is not an other one crisis. Even more another great depression. This is a system blackout. Capitalism has run out of batteries. The system no longer has anything to offer. Its circuits are fusing in a short circuit global. Unquestionably the system is collapsing. Over 40% of global wealth has already been engulfed in a spiral of depression. In the U.S., more than 18 billion (including real estate and stock market) have been volatilized. A second massive wave of financial Tsunami disaster is threatening on the horizon of heavily affected economies by the autumn's one. Finance is sinking the real economy while attempting to save their assets at the expense of public finances, and this collapse are adding energy to the second wave. A huge feedback that will take forward much of what remains of the battered financial system. The elites are in a hurry transferring their damaged balance sheets to the public sector in a coordinated macro operation of "trash for cash" (money for garbage) in which private financial institutions change their unmarketable junk assets - which do not generate interest - by debt issued by states, which generates interest (paid by taxpayers). In reality no one is following any kind of economic policy. The problem is not about unsuccessful "economic policies". What is happening is a gun assault to the state resources to offset the losses of speculative business of all kinds. Drills and dynamite masked in the guise of anti-crisis economic policy. The insolvent rich do not take the path of insolvent poor. They are saved upon the resources of the rest. In the last 6 months, the Treasury and the Fed have already purchased or guaranteed about 12 billion of junk debt. Democrats overpassing Republicans in the race.  T. Geithner, L. Summers, J. Corzine, K. Sheppard, K. Salazar, J. L. Jones ... The entire Obama team is composed of elements guaranteeing large corporations interests. "Yes We Can" actually means the unconditional revitalization in all possible ways, of zombie banks - Citigroup, Bank of America, JP Morgan, Wells Fargo, Goldman Sachs ... - dead banks, whose debts exceed the value of its assets, and which are kept alive with public funds transfusions. The Obama-Geithner plan - and its variants in Europe - seeks to delay as much as possible - with continuous transfusion of public funds - the recognition of the gargantuan financial embezzlement, . The rest is pure decoration, public relations to divert attention to the huge financial and non financial bailouts under way.  But the size of the hole grows and grows. 14 billion are derived from 1.5 billion in sub prime and assuming a leverage of only 10 times this amount gives us a total of 140 trillion in derivatives embedded on the battered Wall Street balance sheets. The estimated volume of toxic ones increasing every hour - 4, 5, 7, 10 trillion? -. Recognition of financial bankruptcy delay implies real economy deteriorates further and the financial pyramid becomes more and more toxic. We are in a deflationary asset value path of such a magnitude that soon it will no longer be possibly to transfer to the public sector, without facing frightening consequences in monetary terms and bankrupt states.  But the current situation is so serious that even if the pyramid is dismantled and the banking system is nationalized and restored , the business confidence and will not return. There will not be another bubble growth, there will not be another spring. Climate change is also active in capitalism and this is a winter with no foreseeable end. No work, no consumers. Without consumers there is no demand. The state can "boost" eventually, but can not substitute indefinitely consumption and investment. The only response is more productivity, more outsourcing, less wages, and ultimately, more depression. We have entered the self liquidation phase of capitalism, a global self immolation after the aura of the absolute concentration of capital. Holocaust capitalism To the surprise of many, capitalism has entered into bankruptcy without help or assistance of anyone. Never in the history of capitalism, the socialist opposition had been so weak and insignificant, yet the system collapses. This would lend support to the theory - expressed in this blog - that a socialist-communist opposition tempered capitalism and promotes stability. Without opposition, without the "co-existence", the system becomes operational in its purest form, without limitation or brakes and the invisible hand that guides the goddess greed is just taking it to the precipice and economic collapse.  The overwhelming triumph of neoliberal ideology at its most exultant expression, which had even managed to get the successors of Stalin become champions - Al Capone - of capitalism and Mao successors proclaim the slogan "get rich is glorious", the system has entered in its liquidation phase. All fuses are melting in the system once the growth catalyst for growth has been exhausted. Without socialist opposition we are in Global Lock out The system produces and employs only if it is able to accumulate profits and to get even more benefits. Successive stages of wealth accumulation has been polarizing wealth exponentially until it reaches a stage where the equation has been broken, much of the production remains unsold and the spiral of depression started. Without profit capitalism strikes, does not invest except to merge and absorb their competitors, in an unbridled orgy of cannibalism. Although people need housing, food, clothing, credit ... the system has stopped, factories remain empty, the ships do not leave, plasma displays remain in the warehouses, crops are left rotting and there are only empty tables in restaurants. Is the overproduction crisis that studied the socialists of the nineteenth century but this time on a global scale. There are no escapes forward. No longer are there new, untapped markets, verge continents, inexhaustibly oceans, ... even world wars to fight. The rate of profit had stagnated absolute an definitively. The Big One At the moment the depression spiral is staggering. All planet production is stopping at a rate of hundreds of thousands of unemployed additionally every day. USA production fell by - 3.4% in the last quarter of 2008, Japan - 17.2%. German industrial production fell by 13% and Korea 21%. China industrial production has plummeted over the past 5 months.  The 3rd Great Depression has begun. The recessionary spiral is of a magnitude unparalleled in history. This is not a crisis. This is not only a great depression. This is a system blackout, the real and final Great Depression, the Big One . Capitalism has been run out of batteries. The system no longer has anything to offer. Its circuits are fused in a global blackout. All "anti crisis" measures taken so far responded to the absence of an anti capitalist opposition and therefore all, absolutely all, contribute to deepen the blackout in a desperate attempt to postpone it. All of them try to socialize the losses of their bosses in a ridiculous attempt to recreate the conditions for another credit bubble, a pyramid, another speculation, the only way capitalism believes continue operating. There will be no rebound The irrational and suicidal capitalist drift has led the world to a limit of stress that is threatening the very survival of our species in the galaxy. Never than before, socialism is a pure matter of survival for the species. Capitalism was never a good system for the economic and social organization but has the capacity - systemic - to reproduce and replicate without control, no matter this will put in serious jeopardy the fate of mankind. From this 3rd Great Depression we will no got out in conditions of capitalism. Capitalism, once reached the stage of globalization can only bring more and more crises, more and more depression. Its it genetic code. This time the cycle will not stop, since the conditions for the rebound - an improved rate of gain - need another predator system expansion, submit other continents ... other planets?. As tumor grows the system needs for oxygen. Without growth, the system is drowning. The twenty-first century marks the physical limit of capitalism. What remains to be seen is if capitalism cancer kills its host or humanity recover in some way this terminal illness. The last stage of capitalism: the Criminal Capitalism The last Great Depression will only be overcome by socialism. Never before was more true the phrase "socialism or barbarism." In the current dominance of large multinational corporations, geographic areas of the planet will change the color of black, the color of mafia - failed states in bankruptcy. A dark stain that will be moving in the North direction, which was considered immune to barbar-capitalism. Its already usual for companies in distress, i front of the closure of bank finance, loan request to the mafia, the Camorra and organized crime. Loans "a la Russian." Few state organization, the more criminal organization. We are entering fully into the era of criminal-capitalism (the Camorra and the Cosa Nostra are collecting "taxes" amounting to 250 million euros a day) Bankrupt financial state opens the path to organized crime to control economic activity with enormous and increasing financial resources to penetrate and control entire sectors of the economy. As legal-state tax raising capacity decreases, illegal criminal revenue increases, an so its power and penetration on the economy. The post-Soviet Russian model (mafia - oligarchy - institutional corruption) will become widespread as the optimal model of capitalism under permanent depression: Appropriation of bankrupt administration public assets , penetration of organized crime in the representative institutions - Duma, the Federal Council - the acquisition of immunity by the major criminals, the financing of election campaigns... All Est Europe is walking in this direction. Italy is reforming to that objective. The criminal capitalism controls the entire production system Russian. More than half of the bank - about 400 banks - and through it the press and television, are in the hands of organized crime. The privatization of state coercion - 800,000 individuals in private security forces out of state regulation - make the security agencies criminal corrupt instrument at Mafia service. Back to Marxism ¿Stupefaction? Already a increasing number of economists seem to have experienced a miraculous conversion to Keynesianism and accepted be classified as such. But Keynesian politics where only possible due to heavy socialist opposition and could implement a phase in which capitalism could still lift head, conditions that no longer exist. The great promise of capitalism, deified by the "market fundamentalism" was that there was no need to study the problems, plan, monitor, ... because markets take care of everything. Faced with environmental disasters, resource depletion, growing poverty, ... more passivity an more passivity. The free market - no one remembered to mention that with monopolies "free" is a ridiculous term- and the "invisible hand" will settle all. Basing a system of social and economic organization in the glorification of greed and social insolidarity in order to obtain optimum social and economic, is one of the fallacies of the more sublime imagination. But still more sublime is the stubborn, well-paid and often concerned dedication of prevalent economics in denying the evidence of a long history of blood, misery and exploitation, a irrational and systematic looting and a traumatic and permanent tendency to implode, to war and to self-destruction. Marxism has taken 150 years studying the capitalist crisis. At counterflow, Paul M. Swezy, Harry Magdoff, (publishers and missing the Monthly Review), John Bellamy Foster, Mike Davis, James Petras, Robert Brenner, Robin Blackburn ... maintained and kept up their sharp florets, unraveling the mysteries of capitalist cancer and metastasis . There should we drink if we want to understand something of what is happening. Given the enormous magnitude of the disaster also the traditional economist are brecked. The only argument yo hear from the few economists left speaking is that, although touched and in bad situation, compared with the negative experiences of "real socialism", capitalism would be a lesser evil, and with some tweaks and adjustments, it could still function. The problem is that there is no time. These are not tweaks and adjustments but plug huge waterways of a system that is going to be ruined by moments before the imminent attack of a second financial tsunami of disastrouse proportions. Nationalist protectionism or socialist relocation Capitalism has proven time and again that can be reborn from its ashes. It is a true cancer reprogramming quickly and capable to contaminate and alter the best approaches. Social projects based on the coexistence have ended strengthening the system they pretend to replace - see other articles on this blog - and this is always an element to take into account in the future. "Every man for himself". Nationalism is rebirthing vigorously throughout the world. In this logic, the political pressure during the Great Depression of the 30s, led to a redistribution of income and wealth at the national level by means of protectionism. Closing the national market for national corporations, employers can encrease wages to generate the demand necessary for their business. It is imperative a return to the "localization" of production. It has been the "financial" scale economics, supported by social and environmental dumping, what has emptied and closed the factories of the antic industrial countries. But the relocation of production at a scale based on the respect for social and environmental rights is only possible under conditions of socialism. Resurgence of fascist totalitarianism The world has experienced the wretched consequences of national "socialists" (sic!) experiences. Crises are the best fertilizer for these mutations and degeneration of the capitalist system. Capitalism in crisis mutates rapidly to totalitarianism. Weimar Republic progressive government was destroyed by the same capitalist forces that had led Germany to war and defeat. Over 80% of the members of the Nazi party were unemployed and were instructed to communicate their anger and resentment to the rest of the population to finally brought them under the authoritarian yoke. The tactics that were used then are used again in the U.S. and the rest of the world, against any progressive alternative to the crisis. Pseudo-bureaucratic socialism Rosa Luxemburg: " The negative, the tearing down, can be decreed; the building up, the positive, cannot. New Territory. A thousand problems. Only experience is capable of correcting and opening up new ways. Only unobstructed, effervescing life falls into a thousand new forms and improvisations, brings to light creative force, itself corrects all mistaken attempts. The public life of countries with limited freedom is so poverty-stricken, so miserable, so rigid, so unfruitful, precisely because, through the exclusion of democracy, it cuts off the living sources of all spiritual riches and progress" (quoted by Wu Yiching "Rethinking Capitalist Restoration") The trajectory of the pseudo-socialism of the twentieth century shows that the central political problem in a socialist revolutionary process is to ensure that this process is not transmuted into its opposite and become the basis for a new kind of oppression and exploitation. Ultimately, socialism and democracy must be an indivisible part of a single project. The nationalization of the means of production and distribution, without the accompanying socialization of political power only creates a legal fiction while maintaining the alignment of work relationships, in which a "bureaucracy" is given the power and privileges. This situation paves the way to some of the key ingredients - the primitive accumulation of capital - for a quick mass privatization of public assets and a new capitalist mutation. During the process there is a transformation of the bureaucratic elite in capitalist mafia elite, the mafia assuming a preeminent rol in the process, as in the Soviet Union, or a bureaucratic capitalist mutation, in which mafia is subordinate and incardinated in a symbiotic relation with corrupt bureaucracy, as in China. The result is the reinstatement assets, public goods and workers in the globalized capitalist circuit under conditions of hyper-exploitation. But the result is also confirmation that the totalitarian pseudo-socialism is dead. The path of the XXI century true socialism will be free of past preconditions. Surviving the Great Depression: R + D = SR Production and employment can only return with rational , socialist, solidarity and sustainable parameters. The formula is simple: Redistribution + Democracy = Sustainable Recovery The capitalist formula behind the "productivity" eulogies is: Monopoly Concentration + Deslocalisation= Depression Permanent Socialism today is a pure matter of survival John Bellamy Foster: "How we choose to act today in response to this failed system is therefore the most critical question that humanity has ever faced.". The question is not capitalism or socialism. Capitalism is a form of social organization hypertrophic and suicidal, terminally ill, which threatens the very existence of mankind. In Great Depression conditions capitalism kill gradually its host. We have fully entered this Malthusian phase in which much of humanity becomes superfluous (Russia, 90 years). Thus, for a vast majority of the population and other forms of life on the planet, socialism is a matter of pure survival. But socialism does not fall from the sky. The "visible" hand of social solidarity means that there is not any automatism worth. Socialism, unlike its rival, is not an automatic mechanism for the organization of the productive system. Socialism must create, build, maintain, defend, refine and improve ... changing individualistic greed for solidarity and cooperation. The humble twenty-first century socialism The twenty-first century socialism has, however, a sad edge. Capitalist path is a dead end without other scape way that the self destruction of human society. XXI Century socialism has not the glorious option of "surpassing" capitalism, but the humble task of trying to heal humanity and the planet from the deadly wound breached by high levels of irresponsible predation and lack of solidarity. Socialism = deprivatization of the commons The capitalist system threatens the biological survival in the medium term and the immediate economic survival. Socialism has not only to do with the distribution of wealth and labor exploitation, but the organization of a new environmentally sustainable way of life. The climate, environment, nutrition, health and education, water, energy, biodiversity, information (one of the reasons of the crisis has been the the "privileged" information or its shameless handling by the information monopolies). Market (privatized, corrupted and manipulated by private monopolies, or simply crushed by the monstrosity of Wal Mart and similars), land, natural resources, ... heritage of humanity, public goods to be returned to social control, to be managed democratically out from the clutches of predatory multinational corporations, many of which operate on as virtually private monopolies. But the forms of production, the conditions under which it occurs, what is produced ... will have to be under democratic control, social and rational for the sake of sustainability, solidarity and a legacy to future generations. Is already long and problematic the history, full of hopes and shadows but also achievements, failures, corruption and betrayal, of socialist, communist and social democratic experiences. This material is a valuable arsenal to advance the task of building a socialist world that allows a humble cohabitation and a sustainable social organization of the human species within the whole planet. Actually existing socialism will not be a panacea, a happy world, a unique and finished model, but the result of a difficult process that will germinate after a difficult birth of complex projects, contrasts, trial and error, faced with a capitalist cancer that although disbanded would offer, no one doubt it, a stubborn resistance. Links: For an overview of the history of social projects: Robin Blackburn: Fin de Siècle: Socialism after the Crash. Yiching Wu: A critical study of capitalism restoration in China Atilio Boron: A similar approach . | ||
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3/30/2009
GLOBAL CAPITALIST BLACKOUT
9/22/2008
THE SPECTER OF SOCIALISM TRAVELS THE WORLD
.
Nouriel Roubini (New York University's Stern School of Business):"
"This is what the free-market ideologues at the Fed, Treasury and White House have now become – especially after the bailout of Fannie and Freddie’s shareholders, management and bondholders – Comrade Paulson, Comrade Bernanke and the Bolshevik Great Leader Bush. But then their whole approach and ideology has always been not one of free market capitalism but rather one of privatizing gains and socializing the losses; or socialism for Wall Street, the rich and the well connected. So they will now get what they deserve and worked so hard to achieve: a nationalization and bailout of the U.S. financial system."
Nicholas von Hoffman: State Capitalism Comes to America
"The Clinton-Bush II administrations finished the work of destroying and/or emasculating the regulatory framework inherited from the 1930s New Deal and replaced it with nothing. Their deregulation was the economic equivalent of opening the doors to a maximum security penitentiary and letting the most dangerous criminals in captivity out to feast on the civilian society. ..Instead of rounding up the escaped felons from their Wall Street dens and re-imposing law and order, Paulson and Federal Reserve Chairman Ben Bernanke have been running to the scenes of the crimes committed by the escapees to attend to the wounded and cart off the dead"
The two parties, when the matter is to help the guys of Wall Street, seem to embrace socialism. Both electoral machinery, Democrats and Republicans, collaborated with the delight that provides the easy lobby check in your pocket, in generating a real cascade of "modernization" (often crude accounting tricks) that have helped create the breeding ground for the 1929 Financial Crash and the Great Depression of the 30, but this time with dynamite built in.
. In 1980, Democrats eliminated the federal caps on interest rates and other regulatory measures that condemned the Savings and Loans eliminating the healthy competition with banks. The reaction was more than expected. When the American Savings (S. & L.), driven by the deregulation of 80s, paid high interest on deposits guaranteed by the state and were devoted to making the risky gambling that lead them in swarm into bankruptcy, loading taxpayers with a $ 100.000 million black hole.
. The same law also eliminated the federal law prohibiting usury (which has resulted that today are usual one-day – high rates loans and predatory credit cards) warming the atmosphere for strengthening the subprime cyclones that came later.
. In 1992, the Commodity Futures Trading Commission (CFTC), in charge to monitor speculation in the markets for commodities, issued the 35 regulation exempting certain types of energy contracts from the requirement of being contracted in regulated NYMEX and in 2000 other rule of the same agency (Commodity Futures Modernization Act) exempted from any regulation the electronic transactions. In practice it means that most of the largest transactions in the market are "over-the-counter", secret, deregulated and totally opaque, a perfect breeding ground for speculation in energy and raw materials that are disrupting the markets.
. A fortiori most banks are allowed to mount subsidiaries - "SIV funds" - where they put their CDOs and MBSs that disappear off the consolidated balance sheet of the parent institution. At a stroke capitalization ratio had gone down in history. The banks could now raise their level of exposure to infinity and would not hesitate to do so. The more mortgages, packaging and sold CDOs more benefits at each stage of the process.
. For 25 years the Federal Reserve has been in line with the greedy desregulation. So the monetary policy was designed in one direction, favoring capital over labor, creditors over debtors and finance over the real economy, betraying the foundations of regulation, supervision and financial discipline on that the central bank was created in 1913.
Nouriel Roubini (New York University's Stern School of Business):"
"This is what the free-market ideologues at the Fed, Treasury and White House have now become – especially after the bailout of Fannie and Freddie’s shareholders, management and bondholders – Comrade Paulson, Comrade Bernanke and the Bolshevik Great Leader Bush. But then their whole approach and ideology has always been not one of free market capitalism but rather one of privatizing gains and socializing the losses; or socialism for Wall Street, the rich and the well connected. So they will now get what they deserve and worked so hard to achieve: a nationalization and bailout of the U.S. financial system."
Nicholas von Hoffman: State Capitalism Comes to America
"The Clinton-Bush II administrations finished the work of destroying and/or emasculating the regulatory framework inherited from the 1930s New Deal and replaced it with nothing. Their deregulation was the economic equivalent of opening the doors to a maximum security penitentiary and letting the most dangerous criminals in captivity out to feast on the civilian society. ..Instead of rounding up the escaped felons from their Wall Street dens and re-imposing law and order, Paulson and Federal Reserve Chairman Ben Bernanke have been running to the scenes of the crimes committed by the escapees to attend to the wounded and cart off the dead"
Federal Mortgages.Inc
The two parties, when the matter is to help the guys of Wall Street, seem to embrace socialism. Both electoral machinery, Democrats and Republicans, collaborated with the delight that provides the easy lobby check in your pocket, in generating a real cascade of "modernization" (often crude accounting tricks) that have helped create the breeding ground for the 1929 Financial Crash and the Great Depression of the 30, but this time with dynamite built in.
. In 1980, Democrats eliminated the federal caps on interest rates and other regulatory measures that condemned the Savings and Loans eliminating the healthy competition with banks. The reaction was more than expected. When the American Savings (S. & L.), driven by the deregulation of 80s, paid high interest on deposits guaranteed by the state and were devoted to making the risky gambling that lead them in swarm into bankruptcy, loading taxpayers with a $ 100.000 million black hole.
. The same law also eliminated the federal law prohibiting usury (which has resulted that today are usual one-day – high rates loans and predatory credit cards) warming the atmosphere for strengthening the subprime cyclones that came later.
. In 1992, the Commodity Futures Trading Commission (CFTC), in charge to monitor speculation in the markets for commodities, issued the 35 regulation exempting certain types of energy contracts from the requirement of being contracted in regulated NYMEX and in 2000 other rule of the same agency (Commodity Futures Modernization Act) exempted from any regulation the electronic transactions. In practice it means that most of the largest transactions in the market are "over-the-counter", secret, deregulated and totally opaque, a perfect breeding ground for speculation in energy and raw materials that are disrupting the markets.
. A fortiori most banks are allowed to mount subsidiaries - "SIV funds" - where they put their CDOs and MBSs that disappear off the consolidated balance sheet of the parent institution. At a stroke capitalization ratio had gone down in history. The banks could now raise their level of exposure to infinity and would not hesitate to do so. The more mortgages, packaging and sold CDOs more benefits at each stage of the process.
. For 25 years the Federal Reserve has been in line with the greedy desregulation. So the monetary policy was designed in one direction, favoring capital over labor, creditors over debtors and finance over the real economy, betraying the foundations of regulation, supervision and financial discipline on that the central bank was created in 1913.
5/19/2008
GLOBAL CAPITALISM IN CHINA
Spanish
The 6 castaways
Suppose six castaways on a desert island, five Asians and one American. They decide to share the work as follows: an Asian would be in charge of hunting, fishing another, another gathering, another of supply of firewood and other food preparation. The American will eat and take care of the rest of the day sunbathing. Asians subsist with the leftovers. Economists say that the U.S. is the only engine of economic growth of the island and that without his excellent appetite Asians would be unemployed.
The pro-capitalist reforms undertaken since the death of Mao for the reintroduction of global capitalism into China have been presented as a kind of fairy tale. China would be heading rapidly towards a modern and advanced society, (such as Japanese or Korean cases) with middle-class consumers, which could even overtake the U.S. or Europe in a few decades.
The reality is more prosaic. Of course, reforms have transformed China's economy from head to toe. The state enterprise sector has declined from 100% in 1978 to less than 40% at present and its contribution to China's GDP has fallen to less than 20%. The state still controls the subsidiary sectors (petrochemical, electricity, coal and metals) but Chinese growth depends in extreme degree on exports of multinationals operating in the country. In 1990 exports accounted for 16% of GDP. In 2006 they exceeded 40%.
There has been a kind of global great division of labor. Transnational corporations have turned China into a completely oriented export economy while the state sector has specialized, meekly, to broaden the bases, supply and export infrastructures for that platform.
Asia was in permanent emergency situation during the Cold War. Japan and the Asian "tigers", U.S. allies, were provided with generous financial and military aid and, especially, the opening of Western markets for their products. The economic "miracle" was linked to the fear of communist expansion. Japan specialized in high value-added production, the 4 tigers in intermediate production and aspiring tigers in labor intensive producing. It was a capitalism with a human face, unions, decent wages and middle class consumers.
Under the Asian old industrial order, each "tiger" specialized in the export of a specific group of finished products. But the system was based on an imbalance that was getting greater every year. Asia exported more than it imported. The difference was invested in U.S. treasury bonds, which allowed Reagan cut taxes and thus stimulate Western consumption. Soon Asian economies become major U.S. creditors.
But as Keynes said, if you owe a thousand dollars to a bank that's your problem but if you owe a million, is the bank who has the problem. Most Asian countries would shed some titles in encreasingly devalued dollars but they had to keep buying them if they wanted to continue exporting. So Japan and the Asian Tigers had to continue to finance the increasing twin deficits (budget and trad ) of his gigantic client.
Following the 1985 Plaza Accord, the U.S. forced a drastic revaluation of the Yen relative to the $ to fix the huge trade imbalance with Japan. The response of the Japanese capital ( the Keiretsu in collusion with the government) was to create a platform for exports in the Asian mainland. Between 1985 and 1990 more than $ 15,000 million in direct investment landed in Southeast Asia. South Korea and Taiwan would soon follow.
In this new model the old tigers offshore intensive labor processes to mainland countries with lower wages installing key in hand factories in Malaysia, Indonesia, Philippines, Vietnam, ..., to assemble the components from former Asian tigers.
It was in these circumstances that the Chinese bureaucracy was incorporated into the system by offering docile cheap labor, rigidly framed, and a huge ecological space to destroy.
Since 1990, not only former Asian tiger multinationals were operatings from China but the vast majority of the planet multinationals joined the system, relocating much of its production plants to China who became the low-cost platform of export consumption production worldwide.
The corrupt Chinese bureaucracy had much to offer to global capitalism. Three decades of Maoism (1949-1976) had put on foot a country ravaged by imperialism. China experienced rapid growth in its infrastructure that propeled the development of agriculture and industry. A mid 1970s China occupied the 6th place among the most industrialized countries and had an advanced research and development sector (since the 1950s had developed several generations of computers, often with nothing to envy to the global capitalist powers). There was not great social inequalities and educational level and health care were enviable for a population around 1,000 million.
After backing down to global capitalism Chinese leaders did not hesitate to defame Mao methods and devalue the achievements of the Great Leap Forward (1958-61) and the Cultural Revolution (1966-1976) to justify the need for their "reforms".
Initially the "reformists" to win the support of the Chinese masses, raised prices the state paid to farmers and promoted the equal sharing of communes between rural families, which lead to an increase in the percentage of farm income on total National Income from 30% to 44% between 1978-1984.
Having secured the reformist path, the agricultural sector was sacked in favor of the capitalist exporter sector. There was a sustained net transfer of resources from the countryside to the city (via taxes, government spending, transfers of bank deposits and loans) with the result of a rapid decline in agricultural income and a social crisis that began to expel population at an exponential rate.
One of the keys to the Chinese economic "miracle" has been internal migration which represents 70 % of manufacturing employment and over 80 % of employment in construction. It is estimated that between 150 and 200 million rural people have migrated to the cities. Although remaining years in the cities , they and even their children born in the city, are classified as " rural" and must pay substantial sums for their temporary urban residence "permits", permits that are not entitled to education, health, housing or state pensions. This is the Chinese equivalent for "undocumented" immigrants in Europe and North America (the cheap slavery XXI century). The peasants driven from the field are kept permanently in an irregular situation, with no rights of any kind, and in many cases, even with no contract at all , to be exploited with impunity by legions of subcontractors working for the large multinationals.
With a low domestic demand the model performance depends on consumption in the U.S. and Europe. Japan, Korea and Taiwan export intermediate goods to China who also attracts imports from the Philippines, Malaysia and Australia. But the goods assembled by Chinese industry are almost entirely exported to U.S. and Europe.
In addition, the model is doomed to implode as it involves the progressive industrial relocation and impoverishment of Western consumers. Since the late 1990 's "globalization " just resisted with increasing doses of credit that were added in successive speculative bubbles.
With the financial collapse, the whole "global" framework created after the Plaza Accord crumbled .
The Chinese reaction against their Western customers crisis has been engaging in a hellish race to increase its industrial and export capacity ( where are they going to export?), A kind of oriental cheap credit bubble, a outrageous public investment and housing bubble Japanese style or Spanish that triggered up the prices of the planet raw materials.
China buys long-term USA government debt as placement of its huge trade surpluses. If China stop doing it the mountains of accumulated currency would force the rise of the exchange rate of the yuan against the dollar. So buying U.S. debt, China is subsidizing its export sector and thus the profits of multinationals operating in their territory (many of USA private property)
A common topic of business magazines is the "Chinese locomotive" . The western economic recovery would be achieved by pressing the Chinese government to implement a policy of market liberalization in order to rebalance trade with the West (raising the exchange rate of the Yuan and opening its domestic market to Western products).
The argument assumes that Chinese workers would end up earning decent wages to act as global consumers. But decent wages would sink the “competitiveness” of Chinese multinational export platform. In fact Chinese private consumption relative to GDP had fallen from 47% in 1992 to 36% in 2006 (in the U.S. is over 70%). The decline in the wage share in the overall Chinese income has been one of the worst of the world.
China has jumped on the inequality and social polarization global podium (2nd after Nepal). At present, China can boast rank second (only behind the U.S.) in terms of dollar billionaires. Yachts, private jets, super luxury sports cars, residential and exclusive clubs, big wild game, LVMH, Moët, Hennessy Louis Vuitton , ... are the only “consumer” sectors with certain prospects in China.
The problem is that large multinational companies are not interested in this roadmap. They have designed a complex transnational network in which Asian industrial powers export parts and components to China where they are assembled and exported to the West. China has become the centerpiece of the scheme increasing its share in information technology and communication products sector from less than 3% of total world exports in 1992 to 24% in 2006.
Currently over 60% of U.S. imports from China come from the factories installed in that country by U.S. multinationals. To Western "nations ", to its unemployed workers, they should yuan appreciation but to multinationals, including U.S. , no.
The threat to industrial activity and Westerners jobs depends on the relationships between states or nations but due to the current operative transnational oligopolies that have made China the world's assembly shop . The locomotive , in any case, pull the large multinational corporations.
Two phases can be distinguished in this process.
In the 1980s Chinese per capita GDP was 14 times lower than in the USSR. Over 70% of the workforce were farmers (14% in the USSR). Chinese planning had always been much less rigid and more decentralized than Soviet. The authorities of the provinces and municipalities enjoyed a certain autonomy (that the Cultural Revolution had increased) unknown in central USSR.
After Mao's death , between 1976 and 1992 followed a series of reforms aimed, in theory, to the gradual introduction of market relations in socialism. This process proved the falsity of the alleged incompatibility between bureaucracy and capitalist market. By contrast, the prerogatives of the bureaucracy resulted not only not antagonistic with the market but perfectly compatible, coexisting and mutually reinforcing, facilitating the process of privatization and division of assets and means of production.
The grain prices were increased. Then began a phase of experimental reform in the provinces of Anhui and Sichuan in which the communes were disbanded and the use of land vested equally between farmers allowing them to grow what they wanted after completing the required supplies to the state (family responsibility system). After the generalization of this experience throughout the country, the result was a significant increase in production and farm income.
In this first phase, urban China remained dominated by the public sector but it was allowed the emergence of small familiar private companies r with the option of employing up to 7 employees as additional workforce. From 1984 market relations gradually replaced planning for resource allocation. It was allowed to public companies retain a portion of the benefits that were generally used to improve the living conditions of employees or invested in a wide collection of services related to the production unit and including apartment complexes, clinics, schools, shops, cafes, sports and leisure facilities.
Thus the dominance of large public sector units was complemented by a private marginal sector.
The de-collectivization was completed in 1984, giving way to households farmers who did not own land but obtained an assignment of it in good conditions. At the same time, given that rural industry was outside of central planning, factories in rural areas, promoted and managed by local authorities, began to be build, based mainly on the area workforce.
However, in rural areas near the "Special Economic Zones" (southwest of Guangdong and Fujian) entrepreneurs who came from Hong Kong and Taiwan developed capitalist companies although officially registered as 'collective companies'.
Thus, in the period between 1978 and 1992, except for the Special Economic Zones, the Chinese economy was divided between two sectors: a large industrial public sector and a growing private sector in which family production relations prevailed. It was still a market economy coexisting with a powerful planned sector.
Private capitalism is nothing new in China. Although there were capitalist enterprises before 1949, they constituted only a small part of the economy. However, between these two dates (1992-2000) the entire Chinese economy has been converted to the capitalists parameters.
After the famous " Southern Tour " of Deng Xiaoping in 1992 - " to get rich is glorious" - the Chinese Communist Party leadership officially adopted the goal of a “socialist market economy " which, in the Chinese context, meant an accelerated march towards global capitalism based on a brutal process of primitive accumulation of capital, in which public assets are systematically converted into private equity and appropriated by the capitalist bureaucratic class, using state coercion mechanisms.
In the 1990s the majority of state and collective ownership enterprises in China were privatized. Between 1996 and 2004 the number of state enterprises was reduced by 40% and 36 million state or collective workers were laid off. The proportion of urban workers in the public sector fell from 82% to 26% . Only between 2005 and 2006, six million more were redundant, Chinese officials said. The remaninig public sector workers lost their job security, health care, child care, pensions and housing and were reduced to outright workforce exploited by domestic and foreign capitalists.
The rules limiting the size of private companies and restricting foreign investment were lifted. While small Chinese entrepreneurs from Hong Kong, Taiwan and Singapore found local partners to set up business in the villages and towns of the mainland, Korean and Japanese multinationals and soon also the North American and European , found them in the highest level of the corrupt bureaucracy. In 2000 almost one third of Chinese industry was yet taken over by foreign capital. In 2007 more than two thirds of the industrial sector was in the hands of foreign multinationals.
Under this slogan, China proceeded to a thorough restructuring of the remaining large public enterprises under the "corporate" standard model of the great transnational corporations . Its assets were converted into shares listed in the stock exchange. The state reserved a controlling stake in strategic sectors (banking, oil, steel, energy, telecommunications and weapons). The structure of these companies has been redesigned to respond to profit as its main goal, firing in the process more than 50 million employees.
The new “Chinese” multinationals - CNPC, CNOOC, Sinopec, SINOCHEM, , Lenovo, ... - , operate according to the unscrupulous procedures and criminal conduct codes of their Western counterparts, traded on the international stock exchanges, are involved in mergers and acquisitions and acquire strategic reserves of fossil fuels and minerals in competition with Shell, Exxon , ... in Níger, Nigeria, Angola, Congo, ect. ), hire top Western CEOs - with no record of their salaries - and bribe corrupt governments and gain sufficient weight to participate in international oligopolistic markets.
"Release the small" meant the privatization of everything else according to the Russian pattern. Small and medium-sized enterprises of urban, local or village areas, were privatized in a process of expropriation and privatization of resources at a scale and speed that has never been recorded in history (except the Russian case).
Private Capitalism need capitalist and as usual accumulation processes are murky and shameful. As in Russia, the first generation of "capitalist" is carrying out their particular "primitive accumulation of capital" based on the appropriation and systematic theft of all the country's resources. Embezzlement , commissions, kickbacks, fraud money, currency manipulation , forced land and farms expropriations, ... with the invaluable collaboration of Western industrial joint ventures, hotel chain companies, real estate, .. converted into real cheerleaders of the "communist" Chinese authorities.
In rural areas, devastated and impoverished by pollution, evictions and abuse of local authorities, the dismantling of the communes has meant the demise of health care and public education. Over one hundred million have migrated to the "special zones" and large cities, forming the world's largest army of cheap labor.
The salary of a Chinese worker accounted for 4% of that of an American in 2004 and probably was lower given the unreliability of Chinese statistics. So Chinese consumption has grown much less than its total production. The massive Chinese expansion has been fueled by investments and exports. The share of wages in China's GDP decreased from 51-52% in the 80 to less than 38% in the first years of the new millennium with the consumption share dropping from 50-52% to 36% in the same period.
But the model is far from that followed by Japan and Korea in the postwar period. There have appeared a "middle class" equivalent to those existing in developed countries. Chinese capitalism, such as Russian, has been reborn with a huge and growing social polarization degree. What for the Russian new capitalism has meant the exploitation of oil and raw materials, for the Chinese has been the exploitation of the masses of impoverished migrant peasants put at the service of the great transnational corporations.
Between the kleptocrats millionaires and the workers has developed only a thin social layer mainly composed by foremen, labor traffickers, corrupt officials, gangsters and mobsters, small businessmen (already threatened by Wal Mart and other chains of supermarkets) and professionals or technicians. In total they would not reach 70 million thanks to the merciless exploitation of 200 million workers and ecological destruction across the country, with the rest 1,000 million sinking in misery.
The Chinese Communist Party has turn into a kleptocratic mafia, Russian style, with the particularity of a " more orderly "transition” and maintaining a dictatorial state structure with the function to faciliate the largest capitalist exploitation of planet labor to the benefit of the transnational corporations.
The children and grandchildren of PCC leaders occupy the majority ( between 85 and 90% ) of senior executive positions in the areas of finance and insurance, export, real estate and engineering. A third of the 800 richest Chinese (2007) are members of the CCP, 38 of whom are delegates of the National People's Congres . The rest have family connections with party members or officials.
The capitalist restructuring of the Chinese bureaucracy has been done under the direction of the transnational corporations which in exchange for premiums, some shares deliveries and bribery, have framed an army of cheap and docile labor, and acquired a whole continent to steal its resources, exploit, deplete and destroy.
Defenders of the system say the huge growth has resulted in substantial increases in income, even for the most disadvantaged.
Although official statistics manufacturing wages doubled between 2002 and 2008 (from $2/h to 4$/h), the fact is that the percentage of wages to GDP has steadily decreased throughout the period ( 56,5 % in 1983, 53% in 1992, 36.7% in 2005) while the corporate profits have steadily climbed.
The deceptive "per capita income" index may indicate that urban residents enjoy lucky incomes well above those of the previous decade. But rent comparisons conceal income loss in previously subsidized goods and services as housing, transportation , food, energy, health and education . The annual income of the limited group of Highest paid cadres and professional of the 1980s was no more than 1,400 yuan on average and yet they lived under conditions similar to the Western middle classes. In 2006 , the average annual income of most urban exceed 3,800 yuan, however they live in damaged apartments, unable to afford to see a doctor and having trouble making ends meet.
It is also false that have grown well-paying jobs. Manufacturing employment is even lower than the Maoist era. According to ILO, urban industrial population decreased between 1990-2002 from 53,9 million to 37,3 million. Almost all urban employment growth has occurred in the service sector, cleaning, construction, domestic service, street vending, self-employment, repairs, ... that now constitute the largest category of urban employment in China.
All infrastructures created, as in colonial times, follow this uneven and destructive model in which the Chinese masses have insofar only the role of astonished spectators of the suicidal greed of multinationals and of their new sponsors with red card.
Decentralization, lax environmental and labor standards have been the incentive for the installation of industrial enclaves in the margins of large Chinese rivers. The Chinese economic boom has been a massive environmental collapse. Even the World Bank has warned of "catastrophic consequences for future generations."
China builds an average of 2 power plants a week based on coal adding energy capacity equivalent to the entire energy capacity of Britain each year. Hundreds of dams rises each year, while hundreds of new urban centers are dwindling land to water and crops (National Geographic, May 2008. p. 114).
Every year some 40,000 Chinese factories discharged million tons of untreated waste into rivers, lakes and coastal areas, a volume equivalent to the flow of the Yellow River, ruining fertile lands and decreasing exponentially drinking water resources. The Grand Canal is increasingly resembling a sewer.
In a country that did not known landfills, where almost everything was recycled , are now being installed thousands of new landfills every year that occupy about 1200 km2 of land.
All Guandong province has become a huge "multinational" landfill accepting the "business" industrial waste from other countries.
Has been mainly export which has pulled demand in China. The Chinese surplus in 2007 was already $ 378,000 million (12% of GDP). From a global perspective these surpluses have been absorbed by U.S. trade deficits (The European Union and Japan have balanced the Balance of Payments)
Coal consumption has more than doubled since 1990 (an average of two coal plants a week) and has already surpassed the U.S. in CO2 emissions. The real estate and infrastructure boom is consuming 54% of global cement production and 36% of steel.
But if the current level of investment is maintained and U.S. demand do not longer responds as until recently, this will leave China with a huge excess production capacity that the final demand of the world market can not absorb. China will experience a crisis of overproduction that will leave much of the installed capacity unused.
The monstrous buildings constructed in Beijing and other urban centers by the most famous Western architects are sure to rest empty, the factories abandoned, blast furnaces, shipyards, power plants and hydroelectric plants ... without orders and without demand, leaving a trail of millions of workers out of work and unable to return to their home areas destroyed by pollution and/or dispossessed of their water resources.
The mad capitalist rush leads protests on the rise. According to official figures the "untixing shijian" (term which includes all kinds of demonstrations, sit-ins, strikes, marches, blocking traffic, making buildings, etc.) have grown from about 8,700 cases in 1993 to 32,000 in 1999, 50,000 in 2002, 58,000 in 2003, 74,000 in 2004 and 90,000 in 2005. Labor rights groups based in Hong Kong estimated 300,000 cases occurred in 2003. In December 2005 clashes between peasants and the People's Armed Police (sort of paramilitary) in the village of Dongzou, Guandong Province, caused dozens of casualties.
The reasons for the riots are varied: confiscation of land (farmers do not own the land but have contracts to use for 30 years) without compensation and resettlement in worse land , evictions, corruption, free trade unions ban (except single union official), pollution and contamination of aquifers, rivers, lakes. Acid rain, etc.
The protests achieved a tax reform in 2002 that significantly reduced the peasant tax burden making some improvements in social, education and health.
In general the response of the authorities has been to isolate, if possible, the disturbances, allowing some and suppressing others. Using paramilitary and provocative forces. Arrests of leaders "a posteriori" ... But what matters most is the tight control of information. The blackout. Control of reports and footage or photos ( the police, however, makes use of the cameras to act then against leaders) . Internet, despite enforcement efforts to control information, has become an effective means for filtering information. What the authorities fear most is the connection between the protests themselves and especially the participation of the intelligentsia (students, graduates , technicians, ... )
It has been said that the Chinese capitalist economy should be restructured in a more "sustainable" way and redirected towards domestic demand and consumption.
Podría corroborarlo la entrada en vigor en enero de 2008 de la nueva ley del Contrato de Trabajo - exigencia de contrato escrito, indemnización por despido de un mes por año trabajado, regulación de la jornada laboral y paga extra por horas extraordinarias, contribución obligatoria de un 13 al 15% del salario al fondo social y de pensiones, negociación colectiva en el marco del sindicato oficial... - . Pero se busca más el efecto propagandístico que la implementación. Si la ley se desarrolla como se han venido respetando las leyes medioambientales en China pueden estar tranquilos capitales y capitalistas al respecto.
Suppose that neoliberal globalization is not what everyday experience attests and the Chinese Communist Party will keep some of the motivations of its founders and decide that is necessary to make some concessions to the Chinese workers and peasants in order to create a market and domestic demand. Could corroborate these the entry into force in January 2008 of the new Labor Contract Law - the requirement of a written contract, severance pay of one month per year worked, regulation of working hours and extra pay for overtime, a mandatory contribution 13 to 15% of salary to the social fund and pension, collective bargaining under the official union ... - . But the party is looking over the propaganda effect of that than its real implementation. If the law is developed in the same way that has been developed the Environmental Law in China, capital and capitalism can be reassured about.
The party has no intention or has the means to impose such redistribution to transnational corporations, to the wealthy Chinese capitalists (many of them with intimate connections within the party and the government) and to the provincial and local governments which corrupt members are in partnership with decentralized mafia structures and also in partnership with foreign capitalists.
The implementation of the new labor law would imply an increase in labor costs between 15 and 20% in most industries which under current conditions would mean the closure of at least one third of the plants operating in the territory.
A Chinese Keynesian capitalism on the path of stability and growth as desired by many sponsors of the Olympic Games is a mirage likewise is a mirage too a Chinese industrial locomotive leading the capitalist world economy to another "gold age" or at least replace that hollow U.S. economy.
This is an inherent contradiction of the predatory neoliberal capitalist model based on hyper-exploitation of resources. The system needs more and more consumers to sell them the output produced for non-consumers workers, but it not find them anyware. When global capitalism drains a territory, its resources and population, it goes to another area to maintain or increase the rate of exploitation.
The problem is that there are no more green space for further expansion "capitalist way." The drift of current capitalist China, without going to the utopia of the Chinese living the "American way of life " is precipitating the ecological collapse of the planet.
China now consumes 15% of world's energy and if you keep the current growth rate will exceed U.S. energy consumption very soon. But Chinese energy consumption is obtained in 70% of coal so in seven years the Chinese coal burning for energy will be more than doubled. Nuclear power plants planned in nothing will replace the frantic pace of construction of new coal power plants.
Chinese oil consumption, if you keep the current growth path, will double in nine years . If that is so, in the next decade would exceed current U.S. consumption by 1.5 times.
With peak oil looming and the little room left to avoid climate change, is this perspective to follow in terms of capitalism?
. The 80 % of China's GDP is directly related to the export sector
. The domestic consumption has decreased from 50% of GDP in 1980 to less than 33% today.
. China has become the 2nd Asian country with more social inequalities (after Nepal) . In 2005, according to the Boston Consulting Group, China had 250,000 millionaires in dollars (excluding the value of their primary residence). The group, which represents less than 0.4% of the population own over 70% of the wealth and among them a few hundred have more than a billion dollars each and the disparity continues to increase. The 90%. The 90% of the 20,000 richest are offshoots of Chinese PC senior. Wen Jiabao, is one of the of the world 's richest prime ministers. His son is the owner of the largest private equity in China and his wife controls the Chinese jewelry business. Jiang Zemin, general secretary of the party, has a wealth estimated at more than 1,500 million while the wealth of Rongii Zhu, a former prime minister, would be around 1,000 million.
. China is the country with most Rolls Royce sold ($ 397,000/unit). LVMH, Moët, Hennessy, Louis Vuitton, the world's first signature luxury products, plans to open two or three stores a year in China.
. "Orange County is a heavily guarded residential enclave north of Beijing and houses a million $ Beverly Hills style, designed by an architect from Newport Beach and decorated by Martha Stewart.
. China builds an average of two coal-fired power plants a week each year adding energy capacity equivalent to the entire capacity of Britain (National geografic, May 2008. P. 114), has 11 operating nuclear plants and plans to build more than three hundred in the coming decades.
. 1000 new cars every day in Beijing
. Oil imports : 1996, 166 million barrels; 2006, 1,065 million barrels.
. 1978, 172 million lived in cities. 2007, 577 million (40% of total). Each year 10 million are leaving the country and hundreds of industrial cities.
. Of the 660 Chinese cities, 400 are short of water (over 100 with severe shortages).
. Each year 4,000 tons of contaminated wastewater are dumped into the Yellow River. 50% The Yellow River -with is largely other assorted colors - is biologically dead and often the water runs drie in the last section going through the "cancer villages" before reaching the sea. To "remedy" it in 2007 the government approved an investment of $ 52,000 million in new chemical plants to install on its banks, north of Yinchuan (the least damaged).
. Between 1987 and 1992 half of one million Ha of agricultural land were converted to urban uses. Throughout China farmers lose their land against urban tide and often uncompensated and with repression by corrupt officials. Speculation in land on the urban periphery has become the main form of official corruption in the country.
. 350,000 people were resettled only to make way for the construction of the Olympic Stadium while for visitors and journalists do not see the abject poverty many houses were demolished forcibly relocating the residents in the periphery. Meanwhile Shanghai forced the relocation of 1.5 million people between 1991 and 1997 to make way for skyscrapers, luxury apartments and shopping centers. Beijing for the same reasons drove away 1 million during the same period.
. Investment from abroad : 50,000 million/year (2000-2005)
. The 9% of Chinese exports to the U.S. goes to Wal-Mart. A Chinese worker who makes a toy popular in USA (Thomas the Tank Engine) would have to work six months to buy it.
. Trade deficit USA/China: 6,000 million in 1985, 266,000 million in 2008.
Links:
Yiching Wu: Rethinking Capitalist Restoration in China.
Legislation in China
Visibility in Chinese cities
Tortures en China
Andy Xie: "China will overtake the U.S. as the leading power in 15 years"
"Ren, peoples building" designed by the Danish firm Plot for the Expo 2010 in Shanghai.
The 6 castaways
Suppose six castaways on a desert island, five Asians and one American. They decide to share the work as follows: an Asian would be in charge of hunting, fishing another, another gathering, another of supply of firewood and other food preparation. The American will eat and take care of the rest of the day sunbathing. Asians subsist with the leftovers. Economists say that the U.S. is the only engine of economic growth of the island and that without his excellent appetite Asians would be unemployed.
Tiger Or Tamed Elephant
The pro-capitalist reforms undertaken since the death of Mao for the reintroduction of global capitalism into China have been presented as a kind of fairy tale. China would be heading rapidly towards a modern and advanced society, (such as Japanese or Korean cases) with middle-class consumers, which could even overtake the U.S. or Europe in a few decades.
The reality is more prosaic. Of course, reforms have transformed China's economy from head to toe. The state enterprise sector has declined from 100% in 1978 to less than 40% at present and its contribution to China's GDP has fallen to less than 20%. The state still controls the subsidiary sectors (petrochemical, electricity, coal and metals) but Chinese growth depends in extreme degree on exports of multinationals operating in the country. In 1990 exports accounted for 16% of GDP. In 2006 they exceeded 40%.
There has been a kind of global great division of labor. Transnational corporations have turned China into a completely oriented export economy while the state sector has specialized, meekly, to broaden the bases, supply and export infrastructures for that platform.
Asian tigers
Asia was in permanent emergency situation during the Cold War. Japan and the Asian "tigers", U.S. allies, were provided with generous financial and military aid and, especially, the opening of Western markets for their products. The economic "miracle" was linked to the fear of communist expansion. Japan specialized in high value-added production, the 4 tigers in intermediate production and aspiring tigers in labor intensive producing. It was a capitalism with a human face, unions, decent wages and middle class consumers.
Under the Asian old industrial order, each "tiger" specialized in the export of a specific group of finished products. But the system was based on an imbalance that was getting greater every year. Asia exported more than it imported. The difference was invested in U.S. treasury bonds, which allowed Reagan cut taxes and thus stimulate Western consumption. Soon Asian economies become major U.S. creditors.
But as Keynes said, if you owe a thousand dollars to a bank that's your problem but if you owe a million, is the bank who has the problem. Most Asian countries would shed some titles in encreasingly devalued dollars but they had to keep buying them if they wanted to continue exporting. So Japan and the Asian Tigers had to continue to finance the increasing twin deficits (budget and trad ) of his gigantic client.
The new Pacific model
Following the 1985 Plaza Accord, the U.S. forced a drastic revaluation of the Yen relative to the $ to fix the huge trade imbalance with Japan. The response of the Japanese capital ( the Keiretsu in collusion with the government) was to create a platform for exports in the Asian mainland. Between 1985 and 1990 more than $ 15,000 million in direct investment landed in Southeast Asia. South Korea and Taiwan would soon follow.
In this new model the old tigers offshore intensive labor processes to mainland countries with lower wages installing key in hand factories in Malaysia, Indonesia, Philippines, Vietnam, ..., to assemble the components from former Asian tigers.
It was in these circumstances that the Chinese bureaucracy was incorporated into the system by offering docile cheap labor, rigidly framed, and a huge ecological space to destroy.
Since 1990, not only former Asian tiger multinationals were operatings from China but the vast majority of the planet multinationals joined the system, relocating much of its production plants to China who became the low-cost platform of export consumption production worldwide.
China for sale
The corrupt Chinese bureaucracy had much to offer to global capitalism. Three decades of Maoism (1949-1976) had put on foot a country ravaged by imperialism. China experienced rapid growth in its infrastructure that propeled the development of agriculture and industry. A mid 1970s China occupied the 6th place among the most industrialized countries and had an advanced research and development sector (since the 1950s had developed several generations of computers, often with nothing to envy to the global capitalist powers). There was not great social inequalities and educational level and health care were enviable for a population around 1,000 million.
After backing down to global capitalism Chinese leaders did not hesitate to defame Mao methods and devalue the achievements of the Great Leap Forward (1958-61) and the Cultural Revolution (1966-1976) to justify the need for their "reforms".
Initially the "reformists" to win the support of the Chinese masses, raised prices the state paid to farmers and promoted the equal sharing of communes between rural families, which lead to an increase in the percentage of farm income on total National Income from 30% to 44% between 1978-1984.
Having secured the reformist path, the agricultural sector was sacked in favor of the capitalist exporter sector. There was a sustained net transfer of resources from the countryside to the city (via taxes, government spending, transfers of bank deposits and loans) with the result of a rapid decline in agricultural income and a social crisis that began to expel population at an exponential rate.
The "paperless" Chinese (nongmingong)
One of the keys to the Chinese economic "miracle" has been internal migration which represents 70 % of manufacturing employment and over 80 % of employment in construction. It is estimated that between 150 and 200 million rural people have migrated to the cities. Although remaining years in the cities , they and even their children born in the city, are classified as " rural" and must pay substantial sums for their temporary urban residence "permits", permits that are not entitled to education, health, housing or state pensions. This is the Chinese equivalent for "undocumented" immigrants in Europe and North America (the cheap slavery XXI century). The peasants driven from the field are kept permanently in an irregular situation, with no rights of any kind, and in many cases, even with no contract at all , to be exploited with impunity by legions of subcontractors working for the large multinationals.
Model failures
With a low domestic demand the model performance depends on consumption in the U.S. and Europe. Japan, Korea and Taiwan export intermediate goods to China who also attracts imports from the Philippines, Malaysia and Australia. But the goods assembled by Chinese industry are almost entirely exported to U.S. and Europe.
In addition, the model is doomed to implode as it involves the progressive industrial relocation and impoverishment of Western consumers. Since the late 1990 's "globalization " just resisted with increasing doses of credit that were added in successive speculative bubbles.
With the financial collapse, the whole "global" framework created after the Plaza Accord crumbled .
The Chinese reaction against their Western customers crisis has been engaging in a hellish race to increase its industrial and export capacity ( where are they going to export?), A kind of oriental cheap credit bubble, a outrageous public investment and housing bubble Japanese style or Spanish that triggered up the prices of the planet raw materials.
Chinese locomotive?
China buys long-term USA government debt as placement of its huge trade surpluses. If China stop doing it the mountains of accumulated currency would force the rise of the exchange rate of the yuan against the dollar. So buying U.S. debt, China is subsidizing its export sector and thus the profits of multinationals operating in their territory (many of USA private property)
A common topic of business magazines is the "Chinese locomotive" . The western economic recovery would be achieved by pressing the Chinese government to implement a policy of market liberalization in order to rebalance trade with the West (raising the exchange rate of the Yuan and opening its domestic market to Western products).
The argument assumes that Chinese workers would end up earning decent wages to act as global consumers. But decent wages would sink the “competitiveness” of Chinese multinational export platform. In fact Chinese private consumption relative to GDP had fallen from 47% in 1992 to 36% in 2006 (in the U.S. is over 70%). The decline in the wage share in the overall Chinese income has been one of the worst of the world.
China has jumped on the inequality and social polarization global podium (2nd after Nepal). At present, China can boast rank second (only behind the U.S.) in terms of dollar billionaires. Yachts, private jets, super luxury sports cars, residential and exclusive clubs, big wild game, LVMH, Moët, Hennessy Louis Vuitton , ... are the only “consumer” sectors with certain prospects in China.
Labour costs in China ( in % relative to the U.S. )
The problem is that large multinational companies are not interested in this roadmap. They have designed a complex transnational network in which Asian industrial powers export parts and components to China where they are assembled and exported to the West. China has become the centerpiece of the scheme increasing its share in information technology and communication products sector from less than 3% of total world exports in 1992 to 24% in 2006.
Currently over 60% of U.S. imports from China come from the factories installed in that country by U.S. multinationals. To Western "nations ", to its unemployed workers, they should yuan appreciation but to multinationals, including U.S. , no.
The threat to industrial activity and Westerners jobs depends on the relationships between states or nations but due to the current operative transnational oligopolies that have made China the world's assembly shop . The locomotive , in any case, pull the large multinational corporations.
The penetration of global capitalism in China
Two phases can be distinguished in this process.
The small jump to global capitalism
In the 1980s Chinese per capita GDP was 14 times lower than in the USSR. Over 70% of the workforce were farmers (14% in the USSR). Chinese planning had always been much less rigid and more decentralized than Soviet. The authorities of the provinces and municipalities enjoyed a certain autonomy (that the Cultural Revolution had increased) unknown in central USSR.
After Mao's death , between 1976 and 1992 followed a series of reforms aimed, in theory, to the gradual introduction of market relations in socialism. This process proved the falsity of the alleged incompatibility between bureaucracy and capitalist market. By contrast, the prerogatives of the bureaucracy resulted not only not antagonistic with the market but perfectly compatible, coexisting and mutually reinforcing, facilitating the process of privatization and division of assets and means of production.
The grain prices were increased. Then began a phase of experimental reform in the provinces of Anhui and Sichuan in which the communes were disbanded and the use of land vested equally between farmers allowing them to grow what they wanted after completing the required supplies to the state (family responsibility system). After the generalization of this experience throughout the country, the result was a significant increase in production and farm income.
In this first phase, urban China remained dominated by the public sector but it was allowed the emergence of small familiar private companies r with the option of employing up to 7 employees as additional workforce. From 1984 market relations gradually replaced planning for resource allocation. It was allowed to public companies retain a portion of the benefits that were generally used to improve the living conditions of employees or invested in a wide collection of services related to the production unit and including apartment complexes, clinics, schools, shops, cafes, sports and leisure facilities.
Thus the dominance of large public sector units was complemented by a private marginal sector.
The de-collectivization was completed in 1984, giving way to households farmers who did not own land but obtained an assignment of it in good conditions. At the same time, given that rural industry was outside of central planning, factories in rural areas, promoted and managed by local authorities, began to be build, based mainly on the area workforce.
However, in rural areas near the "Special Economic Zones" (southwest of Guangdong and Fujian) entrepreneurs who came from Hong Kong and Taiwan developed capitalist companies although officially registered as 'collective companies'.
Thus, in the period between 1978 and 1992, except for the Special Economic Zones, the Chinese economy was divided between two sectors: a large industrial public sector and a growing private sector in which family production relations prevailed. It was still a market economy coexisting with a powerful planned sector.
The great leap into global capitalism (1992-2000)
Private capitalism is nothing new in China. Although there were capitalist enterprises before 1949, they constituted only a small part of the economy. However, between these two dates (1992-2000) the entire Chinese economy has been converted to the capitalists parameters.
After the famous " Southern Tour " of Deng Xiaoping in 1992 - " to get rich is glorious" - the Chinese Communist Party leadership officially adopted the goal of a “socialist market economy " which, in the Chinese context, meant an accelerated march towards global capitalism based on a brutal process of primitive accumulation of capital, in which public assets are systematically converted into private equity and appropriated by the capitalist bureaucratic class, using state coercion mechanisms.
In the 1990s the majority of state and collective ownership enterprises in China were privatized. Between 1996 and 2004 the number of state enterprises was reduced by 40% and 36 million state or collective workers were laid off. The proportion of urban workers in the public sector fell from 82% to 26% . Only between 2005 and 2006, six million more were redundant, Chinese officials said. The remaninig public sector workers lost their job security, health care, child care, pensions and housing and were reduced to outright workforce exploited by domestic and foreign capitalists.
The rules limiting the size of private companies and restricting foreign investment were lifted. While small Chinese entrepreneurs from Hong Kong, Taiwan and Singapore found local partners to set up business in the villages and towns of the mainland, Korean and Japanese multinationals and soon also the North American and European , found them in the highest level of the corrupt bureaucracy. In 2000 almost one third of Chinese industry was yet taken over by foreign capital. In 2007 more than two thirds of the industrial sector was in the hands of foreign multinationals.
"Keep the big and drop the small"
Under this slogan, China proceeded to a thorough restructuring of the remaining large public enterprises under the "corporate" standard model of the great transnational corporations . Its assets were converted into shares listed in the stock exchange. The state reserved a controlling stake in strategic sectors (banking, oil, steel, energy, telecommunications and weapons). The structure of these companies has been redesigned to respond to profit as its main goal, firing in the process more than 50 million employees.
The new “Chinese” multinationals - CNPC, CNOOC, Sinopec, SINOCHEM, , Lenovo, ... - , operate according to the unscrupulous procedures and criminal conduct codes of their Western counterparts, traded on the international stock exchanges, are involved in mergers and acquisitions and acquire strategic reserves of fossil fuels and minerals in competition with Shell, Exxon , ... in Níger, Nigeria, Angola, Congo, ect. ), hire top Western CEOs - with no record of their salaries - and bribe corrupt governments and gain sufficient weight to participate in international oligopolistic markets.
"Release the small" meant the privatization of everything else according to the Russian pattern. Small and medium-sized enterprises of urban, local or village areas, were privatized in a process of expropriation and privatization of resources at a scale and speed that has never been recorded in history (except the Russian case).
Private Capitalism need capitalist and as usual accumulation processes are murky and shameful. As in Russia, the first generation of "capitalist" is carrying out their particular "primitive accumulation of capital" based on the appropriation and systematic theft of all the country's resources. Embezzlement , commissions, kickbacks, fraud money, currency manipulation , forced land and farms expropriations, ... with the invaluable collaboration of Western industrial joint ventures, hotel chain companies, real estate, .. converted into real cheerleaders of the "communist" Chinese authorities.
In rural areas, devastated and impoverished by pollution, evictions and abuse of local authorities, the dismantling of the communes has meant the demise of health care and public education. Over one hundred million have migrated to the "special zones" and large cities, forming the world's largest army of cheap labor.
Chinese Middle Classes?
The salary of a Chinese worker accounted for 4% of that of an American in 2004 and probably was lower given the unreliability of Chinese statistics. So Chinese consumption has grown much less than its total production. The massive Chinese expansion has been fueled by investments and exports. The share of wages in China's GDP decreased from 51-52% in the 80 to less than 38% in the first years of the new millennium with the consumption share dropping from 50-52% to 36% in the same period.
But the model is far from that followed by Japan and Korea in the postwar period. There have appeared a "middle class" equivalent to those existing in developed countries. Chinese capitalism, such as Russian, has been reborn with a huge and growing social polarization degree. What for the Russian new capitalism has meant the exploitation of oil and raw materials, for the Chinese has been the exploitation of the masses of impoverished migrant peasants put at the service of the great transnational corporations.
Between the kleptocrats millionaires and the workers has developed only a thin social layer mainly composed by foremen, labor traffickers, corrupt officials, gangsters and mobsters, small businessmen (already threatened by Wal Mart and other chains of supermarkets) and professionals or technicians. In total they would not reach 70 million thanks to the merciless exploitation of 200 million workers and ecological destruction across the country, with the rest 1,000 million sinking in misery.
The Chinese Communist Party has turn into a kleptocratic mafia, Russian style, with the particularity of a " more orderly "transition” and maintaining a dictatorial state structure with the function to faciliate the largest capitalist exploitation of planet labor to the benefit of the transnational corporations.
The children and grandchildren of PCC leaders occupy the majority ( between 85 and 90% ) of senior executive positions in the areas of finance and insurance, export, real estate and engineering. A third of the 800 richest Chinese (2007) are members of the CCP, 38 of whom are delegates of the National People's Congres . The rest have family connections with party members or officials.
The capitalist restructuring of the Chinese bureaucracy has been done under the direction of the transnational corporations which in exchange for premiums, some shares deliveries and bribery, have framed an army of cheap and docile labor, and acquired a whole continent to steal its resources, exploit, deplete and destroy.
The fallacy of income growth
Defenders of the system say the huge growth has resulted in substantial increases in income, even for the most disadvantaged.
Although official statistics manufacturing wages doubled between 2002 and 2008 (from $2/h to 4$/h), the fact is that the percentage of wages to GDP has steadily decreased throughout the period ( 56,5 % in 1983, 53% in 1992, 36.7% in 2005) while the corporate profits have steadily climbed.
The deceptive "per capita income" index may indicate that urban residents enjoy lucky incomes well above those of the previous decade. But rent comparisons conceal income loss in previously subsidized goods and services as housing, transportation , food, energy, health and education . The annual income of the limited group of Highest paid cadres and professional of the 1980s was no more than 1,400 yuan on average and yet they lived under conditions similar to the Western middle classes. In 2006 , the average annual income of most urban exceed 3,800 yuan, however they live in damaged apartments, unable to afford to see a doctor and having trouble making ends meet.
It is also false that have grown well-paying jobs. Manufacturing employment is even lower than the Maoist era. According to ILO, urban industrial population decreased between 1990-2002 from 53,9 million to 37,3 million. Almost all urban employment growth has occurred in the service sector, cleaning, construction, domestic service, street vending, self-employment, repairs, ... that now constitute the largest category of urban employment in China.
The Chinese "multinational" landfill
All infrastructures created, as in colonial times, follow this uneven and destructive model in which the Chinese masses have insofar only the role of astonished spectators of the suicidal greed of multinationals and of their new sponsors with red card.
Decentralization, lax environmental and labor standards have been the incentive for the installation of industrial enclaves in the margins of large Chinese rivers. The Chinese economic boom has been a massive environmental collapse. Even the World Bank has warned of "catastrophic consequences for future generations."
China builds an average of 2 power plants a week based on coal adding energy capacity equivalent to the entire energy capacity of Britain each year. Hundreds of dams rises each year, while hundreds of new urban centers are dwindling land to water and crops (National Geographic, May 2008. p. 114).
Every year some 40,000 Chinese factories discharged million tons of untreated waste into rivers, lakes and coastal areas, a volume equivalent to the flow of the Yellow River, ruining fertile lands and decreasing exponentially drinking water resources. The Grand Canal is increasingly resembling a sewer.
In a country that did not known landfills, where almost everything was recycled , are now being installed thousands of new landfills every year that occupy about 1200 km2 of land.
All Guandong province has become a huge "multinational" landfill accepting the "business" industrial waste from other countries.
Overcapacity Crisis
Has been mainly export which has pulled demand in China. The Chinese surplus in 2007 was already $ 378,000 million (12% of GDP). From a global perspective these surpluses have been absorbed by U.S. trade deficits (The European Union and Japan have balanced the Balance of Payments)
Coal consumption has more than doubled since 1990 (an average of two coal plants a week) and has already surpassed the U.S. in CO2 emissions. The real estate and infrastructure boom is consuming 54% of global cement production and 36% of steel.
But if the current level of investment is maintained and U.S. demand do not longer responds as until recently, this will leave China with a huge excess production capacity that the final demand of the world market can not absorb. China will experience a crisis of overproduction that will leave much of the installed capacity unused.
The monstrous buildings constructed in Beijing and other urban centers by the most famous Western architects are sure to rest empty, the factories abandoned, blast furnaces, shipyards, power plants and hydroelectric plants ... without orders and without demand, leaving a trail of millions of workers out of work and unable to return to their home areas destroyed by pollution and/or dispossessed of their water resources.
Demonstrations and protests
The mad capitalist rush leads protests on the rise. According to official figures the "untixing shijian" (term which includes all kinds of demonstrations, sit-ins, strikes, marches, blocking traffic, making buildings, etc.) have grown from about 8,700 cases in 1993 to 32,000 in 1999, 50,000 in 2002, 58,000 in 2003, 74,000 in 2004 and 90,000 in 2005. Labor rights groups based in Hong Kong estimated 300,000 cases occurred in 2003. In December 2005 clashes between peasants and the People's Armed Police (sort of paramilitary) in the village of Dongzou, Guandong Province, caused dozens of casualties.
The reasons for the riots are varied: confiscation of land (farmers do not own the land but have contracts to use for 30 years) without compensation and resettlement in worse land , evictions, corruption, free trade unions ban (except single union official), pollution and contamination of aquifers, rivers, lakes. Acid rain, etc.
The protests achieved a tax reform in 2002 that significantly reduced the peasant tax burden making some improvements in social, education and health.
In general the response of the authorities has been to isolate, if possible, the disturbances, allowing some and suppressing others. Using paramilitary and provocative forces. Arrests of leaders "a posteriori" ... But what matters most is the tight control of information. The blackout. Control of reports and footage or photos ( the police, however, makes use of the cameras to act then against leaders) . Internet, despite enforcement efforts to control information, has become an effective means for filtering information. What the authorities fear most is the connection between the protests themselves and especially the participation of the intelligentsia (students, graduates , technicians, ... )
Keynesian Capitalism in China?
It has been said that the Chinese capitalist economy should be restructured in a more "sustainable" way and redirected towards domestic demand and consumption.
Podría corroborarlo la entrada en vigor en enero de 2008 de la nueva ley del Contrato de Trabajo - exigencia de contrato escrito, indemnización por despido de un mes por año trabajado, regulación de la jornada laboral y paga extra por horas extraordinarias, contribución obligatoria de un 13 al 15% del salario al fondo social y de pensiones, negociación colectiva en el marco del sindicato oficial... - . Pero se busca más el efecto propagandístico que la implementación. Si la ley se desarrolla como se han venido respetando las leyes medioambientales en China pueden estar tranquilos capitales y capitalistas al respecto.
Suppose that neoliberal globalization is not what everyday experience attests and the Chinese Communist Party will keep some of the motivations of its founders and decide that is necessary to make some concessions to the Chinese workers and peasants in order to create a market and domestic demand. Could corroborate these the entry into force in January 2008 of the new Labor Contract Law - the requirement of a written contract, severance pay of one month per year worked, regulation of working hours and extra pay for overtime, a mandatory contribution 13 to 15% of salary to the social fund and pension, collective bargaining under the official union ... - . But the party is looking over the propaganda effect of that than its real implementation. If the law is developed in the same way that has been developed the Environmental Law in China, capital and capitalism can be reassured about.
The party has no intention or has the means to impose such redistribution to transnational corporations, to the wealthy Chinese capitalists (many of them with intimate connections within the party and the government) and to the provincial and local governments which corrupt members are in partnership with decentralized mafia structures and also in partnership with foreign capitalists.
The implementation of the new labor law would imply an increase in labor costs between 15 and 20% in most industries which under current conditions would mean the closure of at least one third of the plants operating in the territory.
A Chinese Keynesian capitalism on the path of stability and growth as desired by many sponsors of the Olympic Games is a mirage likewise is a mirage too a Chinese industrial locomotive leading the capitalist world economy to another "gold age" or at least replace that hollow U.S. economy.
This is an inherent contradiction of the predatory neoliberal capitalist model based on hyper-exploitation of resources. The system needs more and more consumers to sell them the output produced for non-consumers workers, but it not find them anyware. When global capitalism drains a territory, its resources and population, it goes to another area to maintain or increase the rate of exploitation.
The problem is that there are no more green space for further expansion "capitalist way." The drift of current capitalist China, without going to the utopia of the Chinese living the "American way of life " is precipitating the ecological collapse of the planet.
China now consumes 15% of world's energy and if you keep the current growth rate will exceed U.S. energy consumption very soon. But Chinese energy consumption is obtained in 70% of coal so in seven years the Chinese coal burning for energy will be more than doubled. Nuclear power plants planned in nothing will replace the frantic pace of construction of new coal power plants.
Chinese oil consumption, if you keep the current growth path, will double in nine years . If that is so, in the next decade would exceed current U.S. consumption by 1.5 times.
With peak oil looming and the little room left to avoid climate change, is this perspective to follow in terms of capitalism?
Figures
. The 80 % of China's GDP is directly related to the export sector
. The domestic consumption has decreased from 50% of GDP in 1980 to less than 33% today.
. China has become the 2nd Asian country with more social inequalities (after Nepal) . In 2005, according to the Boston Consulting Group, China had 250,000 millionaires in dollars (excluding the value of their primary residence). The group, which represents less than 0.4% of the population own over 70% of the wealth and among them a few hundred have more than a billion dollars each and the disparity continues to increase. The 90%. The 90% of the 20,000 richest are offshoots of Chinese PC senior. Wen Jiabao, is one of the of the world 's richest prime ministers. His son is the owner of the largest private equity in China and his wife controls the Chinese jewelry business. Jiang Zemin, general secretary of the party, has a wealth estimated at more than 1,500 million while the wealth of Rongii Zhu, a former prime minister, would be around 1,000 million.
. China is the country with most Rolls Royce sold ($ 397,000/unit). LVMH, Moët, Hennessy, Louis Vuitton, the world's first signature luxury products, plans to open two or three stores a year in China.
. "Orange County is a heavily guarded residential enclave north of Beijing and houses a million $ Beverly Hills style, designed by an architect from Newport Beach and decorated by Martha Stewart.
. China builds an average of two coal-fired power plants a week each year adding energy capacity equivalent to the entire capacity of Britain (National geografic, May 2008. P. 114), has 11 operating nuclear plants and plans to build more than three hundred in the coming decades.
. 1000 new cars every day in Beijing
. Oil imports : 1996, 166 million barrels; 2006, 1,065 million barrels.
. 1978, 172 million lived in cities. 2007, 577 million (40% of total). Each year 10 million are leaving the country and hundreds of industrial cities.
. Of the 660 Chinese cities, 400 are short of water (over 100 with severe shortages).
. Each year 4,000 tons of contaminated wastewater are dumped into the Yellow River. 50% The Yellow River -with is largely other assorted colors - is biologically dead and often the water runs drie in the last section going through the "cancer villages" before reaching the sea. To "remedy" it in 2007 the government approved an investment of $ 52,000 million in new chemical plants to install on its banks, north of Yinchuan (the least damaged).
. Between 1987 and 1992 half of one million Ha of agricultural land were converted to urban uses. Throughout China farmers lose their land against urban tide and often uncompensated and with repression by corrupt officials. Speculation in land on the urban periphery has become the main form of official corruption in the country.
. 350,000 people were resettled only to make way for the construction of the Olympic Stadium while for visitors and journalists do not see the abject poverty many houses were demolished forcibly relocating the residents in the periphery. Meanwhile Shanghai forced the relocation of 1.5 million people between 1991 and 1997 to make way for skyscrapers, luxury apartments and shopping centers. Beijing for the same reasons drove away 1 million during the same period.
. Investment from abroad : 50,000 million/year (2000-2005)
. The 9% of Chinese exports to the U.S. goes to Wal-Mart. A Chinese worker who makes a toy popular in USA (Thomas the Tank Engine) would have to work six months to buy it.
. Trade deficit USA/China: 6,000 million in 1985, 266,000 million in 2008.
Links:
Yiching Wu: Rethinking Capitalist Restoration in China.
Legislation in China
Visibility in Chinese cities
Tortures en China
Andy Xie: "China will overtake the U.S. as the leading power in 15 years"
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