australianvoice (australianvoice) wrote,

The Damage Caused by China's “Socialism” to Workers Around the World

Apart from the control exercised by the USSR over Eastern Europe, socialism in the USSR had little direct influence on the jobs of workers around the world.(1) The case of socialist China from Liberation to the death of Mao is the same. Workers gained a powerful demonstration that it was possible to create a society without capitalist exploitation, but the existence of these societies had no impact on the economies of their own countries.

By contrast the rise of the “market socialism” in China during the last 40 years has produced massive changes throughout the world. An ever increasing flow of basic consumer items, electronic equipment, cars, steel, etc. has helped to destroy jobs in all countries in the West and many more in the “developing world”. Marty Hart-Landsberg and Paul Burkett's book China and Socialism looked at this question more than 15 years ago.

"They regard the hypergrowth of the Chinese economy as something that cannot be viewed in isolation from the development requirements of neighboring states. As should be obvious to anybody who lives under capitalism, there can only be winners and losers. If China is "winning" today - even on a highly distorted basis - other nations have to lose. With a race to the bottom, foreign investment will always be persuaded to leave some place like Mexico and flow to China. So, looking at capitalism as a world system, China's gain can only be understood in terms of some other country's loss.

"In Malaysia, for example, 16,000 jobs have disappeared from the country's high tech production hub as new investment flows to China. A J.P Morgan report states that China's growth in high technology has 'eroded' Singapore's status as an electronics exporter. South Korea has found it profitable to relocate in China as well where militant unionized workers are not a problem. Samsung, Daewoo and LG Electronics now make half their goods outside of Korea, many in China.

"Although Japan is often seen as a strategic partner for China, the benefits of such an alliance will be lost no doubt on Japanese workers who will increasingly see their jobs disappear to China. Under newly instituted WTO rules, it will be much easier for Toyota and company to relocate where they can save 10 to 20 percent on manufacturing costs. The World Bank predicts a major contraction of automobile production in Japan, just around the time when a 10 year old slump appears to be ending."(2)

David Harvey also notes that “Mexico lost 200,000 jobs in just two years as China (in spite of NAFTA) overtook it as the major supplier of the US market in consumer goods.” He reports the same trends noted above:

“During the 1990s China began to move up the value-added ladder of production and to compete with South Korea, Japan, Taiwan, Malaysia, and Singapore in spheres such as electronics and machine tools. This occurred in part as corporations in those countries decided to move their production offshore to take advantage of the large pool of low-cost and highly skilled labourers being churned out by the Chinese university system.”

Call it what you want, socialism or capitalism, the last 40 years of China's history can be seen as a “success” only by using the values of neo-liberal and globalist economics. We saw in a previous article that the level of inequality in China rose rapidly from 1994 to 2010, and has only been changed by abandoning some of the neo-liberal dogmas used to create a giant pool of workers forced to work for very low wages.(4) The neo-liberal/globalist paradigm for the whole world is one giant interconnected system in which the task of each country is to find and/or develop exports which are cheap enough to be competitive in the world market. These commodities and/or services – like call centres – can be bought or used by consumers or companies around the world.

In this neo-liberal utopia a country like China is a perfect model for the rest of the world to follow. But the “world market” has a deeper purpose, to drive down wages everywhere by a combination of shifting work to low wage countries or allowing people from low wage or impoverished countries to have unrestricted access to work in countries which do not have low wages – know as the open borders policy. Whether you want to think of China as socialist or not, the way their economic policies fit into the “world market” is obviously of absolutely no benefit to the workers in the rest of the world. Some of them may have jobs, but they will be jobs which will be at or below subsistence levels, just the sort of jobs capitalists are always looking for. This is why I said the policies of the USSR had virtually no effect on the workers in the rest of the world. They had virtually no effect on workers compared with the effect China's policies have had.

The following passage sums up my central point:

“When confronted by Argentina’s worries about cheap Chinese imports destroying the vestiges of its indigenous textile, shoe, and leather industries that began to revive in 2004, the Chinese advice was simply to let such industries die and concentrate on being a raw material and agricultural commodity producer for the booming China market. It was not lost on the Argentines that this was exactly how Britain had approached its Indian empire in the nineteenth century.”

So what is new here? The Chinese answer to the question put to them is essentially the globalist strategy explained above. The British wanted to wipe out the domestic manufacture of cotton so they could replace it with their own manufactures. Now in 21st century globalism expects most countries like Australia and Argentina to produce the raw materials the countries like China cannot provide for themselves. Few people seem to realise that globalism dictates to each nation how they are to run their economies without any regard to the impact of these policies on the people living in these countries. Countries must fit into the globalist New World Order. There is no alternative, or so we are told by today's dispensing economic wisdom.

There is another way to look at this question. The workers in China expend their labour power to create commodities for sale in other countries. What that means is that they do not benefit themselves from the fruits of their labour. The benefits are enjoyed by the people in the importing countries. Under Mao's policy of self-reliance, the fruits of the labour of Chinese workers were enjoyed by themselves and other Chinese who could buy and use the products they produced. The income derived from the export of these commodities is divided between the workers, their employers and the middlemen who handle the trade in these commodities.

This show us the real alternative for all countries, even China. There is nothing wrong with international trade, but each nation must be able to plan and carry out its own economic plans which should focus on the well-being of the people who live there.

This article is one part of four articles on Chinese "Socialism"

China's Transition from Socialism to State Controlled Capitalism

China's State Controlled Capitalism is Not Very Different From Capitalism in the West

China's“Socialist” Investment in Australia is No Different from that of Other Capitalist Wolves


1. Some will say that Soviet policy with respect to Spain and Nazi Germany was in the end detrimental to the working class in Spain, Germany and France. Even if this is true, it is not relevant to the point I wish to make here.

2. Martin Hart-Landsberg and Paul Burkett, "China and Socialism: Introduction",

3. David Harvey, A Brief History of Neoliberalism, Oxford University Press, 2005,

4. China's State Controlled Capitalism is Not Very Different From Capitalism in the West,

5. David Harvey, A Brief History of Neoliberalism,
Tags: all, archive, imperialism, marxism, usa vs russia/china

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