China: Xi’s third term – part 3: chips, dual circulation and imperialism

Even as Xi Jinping was promising China’s Communist Party’s national congress that China would “resolutely win the battle” in key areas of technology, employees of technology companies in China and elsewhere were being told to down tools. Dozens of the hundreds of executives and engineers with US citizenship or green cards who work in or with China’s semiconductor sector, many of them born in China, have been told by their employers – whether those are foreign or Chinese companies – to stop work while their employers seek clarification of a new US rule that bars US citizens and residents from supporting China’s advanced chip-making industry without a licence.

It is now crystal clear that the US, enabled by a bipartisan consensus in Washington, is determined to stop China upgrading technologically.  This has massive implications for Beijing’s ambitions in areas such as artificial intelligence and autonomous driving.  The new Chips Act introduced by the Biden administration is accompanied by a 139-page report released by the Department of Commerce’s Bureau of Industry and Security.   

The report targets not only US companies’ involvement in selling tech products to China but also US persons (i.e. anyone with a US passport or green card). This puts the many founders of Chinese tech companies who were educated in the US, and acquired a US passport on the way, in a seemingly difficult position. It will also make it much harder for Chinese tech companies to attract talent. Similarly, R&D laboratories set up by some Chinese companies in the US now look vulnerable. Alibaba has research labs in Seattle and Silicon Valley while Tencent also has a research lab in Seattle. And US pressure will be brought to bear to stop Holland’s ASML and Japanese companies from supplying China.

All of the above makes it clear the extent to which China is now treated as “an enemy” of the US.  This goes far beyond what used to be called “containment”. It also raises the issue of how long Beijing continues to turn the other cheek since, so far, it has done nothing to make life difficult for American companies operating in China, save for its Covid restrictions, on the view that it wants to keep encouraging foreign direct investment.

The US move on chips also has big implications for TSMC and other Taiwan companies given the amount of semiconductors Taiwan exports to the mainland. Taiwan’s chip (integrated circuits) exports to China totaled $155bn in 2021 and $105bn in the first eight months of 2022, and accounted for 36% and 38%, respectively, of total Chinese chip imports.  Indeed, the most interesting aspect of Nancy Pelosi’s Taiwan trip in early August was her meeting with TSMC founder Morris Chang and chairman Mark Liu, most particularly in the context of legislation on semiconductors passed by Congress in late July which will provide $52.7bn in subsidies to encourage chip manufacturers to build factories in America.

TSMC is already building a fab in Arizona. Construction of the factory started in June 2021 and its main facility is now reportedly completed, while production is scheduled to begin in 2024. Under the chips legislation TSMC will be required to transfer its technology to the US.

Unlike previous attempts by the Trump and Biden administrations to target specific Chinese companies from accessing advanced technologies (the ban of Huawei was the classic example), the new rules effectively cover every Chinese entity. They, or their US or foreign suppliers, will have to apply for a licence to gain or provide access to advanced chip technologies.

If the US strategy does prove effective – and the response of a wide range of non-Chinese companies operating in the sector in freezing dealings with China suggests it could be – it would cut China off from the critical building blocks of most 21st century technologies.

Why is the US applying these drastic measures against China’s trade and technology?  It’s the fear that China could become not just a manufacturing and import source for US consumers, but a rival in every area to US hegemony over the world economy.

What particularly triggered this new policy on China by the US was the global financial crash and the Great Recession.  Under its state-controlled model, China survived and expanded while Western capitalism collapsed. China was fast becoming not just a cheap labour manufacturing and export economy, but a high technology, urbanised society with ambitions to extend its political and economic influence, even beyond East Asia.  That was too much for the increasingly weak imperialist economies.  

The US and other G7 nations have lost ground to China in manufacturing, and their reliance on Chinese inputs for their own manufacturing has risen, while China’s reliance on G7 inputs has fallen.

Source: Manufacturing shares from World Development Indicator online database.

According to a recent report by Goldman Sachs, China’s digital economy is already large, accounting for almost 40% of GDP and fast growing, contributing more than 60% of GDP growth in recent years. “And there is ample room for China to further digitalize its traditional sectors”.  China’s IT share of GDP climbed from 2.1% in 2011Q1 to 3.8% in 2021Q1. Although China still lags the US, Europe, Japan and South Korea in its IT share of GDP, the gap has been narrowing over time. No wonder, the US and other capitalist powers are intensifying their efforts to contain China’s technological expansion.

China has spent more than $100 bn to fast-track the development of a domestic chip-making industry.  It is a critical component of its “Made in China 2025 program,” which set out China’s plans to dominate artificial intelligence, autonomous vehicles, next-gen information technology, telecommunications, advanced robotics and aerospace, among other technology-related sectors by 2049.

So the US strategy changed.  If China was not going to play ball with imperialism and open up its economy completely to foreign investment and continue to expand its technology base to compete with the US, then it had to be stopped.  The recently deceased Jude Woodward wrote an excellent book describing this strategy of containment that began even before Trump launched his trade tariff war with China on taking the US presidency in 2016.  Trump’s policy, at first regarded as reckless by other governments, is now being adopted across the board, after the failure of the imperialist countries to protect lives during the pandemic.

The aim is to weaken China’s economy and destroy its influence and perhaps achieve ‘regime change’.  Blocking trade with tariffs; blocking technology access for China and their exports; applying sanctions on Chinese companies; and turning debtors against China; this may all be costly to imperialist economies.  But the cost may be worth it, if China can be broken and US hegemony secured.

The CPC congress emphasized China’s response.  “We must adhere to science and technology as the number-one productive force, talent as the number-one resource, [and] innovation as the number-one driving force.”.  SoBeijing sees the decision to try to freeze Chinese domestic manufacturing above a defined level of technological advancement as deeply provocative. Forcing China to rely on foreign production for the latest and greatest chips plays exactly into Xi’s fear of “technological vassaldom.”  So China is moving towards a more self-reliant growth model.

That is the basis of what the Xi leadership calls a ‘dual circulation’ development mode, where trade and investment abroad is combined with production for the huge domestic market. 

The dual circulation model was first formally announced at a Politburo meeting in May 2020 and sets out a rebalancing of the Chinese economy away from “international circulation” (the first kind of circulation on which China has relied, namely, reliance on external demand as a stimulus to growth) towards “domestic circulation,” or increasing self-dependence.

The political hot spot for intense conflict between the US and China is Taiwan.  Taiwan (Formosa) was taken over by fleeing Nationalist forces in China after the Chinese communists won the civil war and took control in 1949.  From the beginning, the Chinese Communist government and the United Nations recognised Taiwan as part of China.  But from the beginning, the Nationalists were backed by the US with funds and arms, first with the aim of overthrowing the Communists on the mainland and later, when that became impossible, to maintain the island’s autonomy from China.  And since the rise of the Chinese economy, the US and the rest of the imperialist bloc has encouraged moves by the Taiwanese to build and confirm total independence.  Taiwan could then become a permanent thorn in China’s side and also the launchpad for military operations against Beijing in the future.

The Russia invasion of Ukraine has given the US and NATO the excuse to intensify the economic, political and military encirclement of China with Taiwan as its hub.  By the broadest definition of military intervention, the US has engaged in nearly 400 military interventions between 1776 and 2019, with half of these operations occurring since 1950 and over 25% occurring in the post-Cold War period. these interventions have revolved around economy, territory, social protection, regime change, protection of US citizens and diplomats, policy change, empire, and regime building.  The US backed by an extended NATO, no longer confined to the Atlantic seaboard, sees China as the next area for ‘intervention’ down the road.

The Western media helps by continually talking of China’s so-called ‘aggressive behaviour’ and its crimes against human rights.  Whatever the truth in those charges, they are easily matched by the crimes of imperialism in the last century alone: the occupation and massacre of millions of Chinese by Japanese imperialism in 1937; the continual gruesome wars post-1945 conducted by imperialism against the Vietnamese people, Latin America and the proxy wars in Africa and Syria, as well as the more recent invasion of Iraq and Afghanistan and the appalling nightmare in Yemen by the disgusting US-backed regime in Saudi Arabia etc.  And don’t forget the horrific poverty and inequality that weighs for billions under the imperialist mode of production.

But the economic and political conflict between China and the US is the major geopolitical issue of the 21st century – much larger than the Russia-Ukraine war.  US National Security advisor Jake Sullivan summed it up recently.  “This is a decisive decade… in which the terms of our competition with the People’s Republic of China will be set.”He continued: “The PRC’s assertiveness at home and abroad is advancing an illiberal vision across economic, political, security, and technological realms in competition with the west,”  China must be stopped because “It is the only competitor (to the US) with the intent to reshape the international order and the growing capacity to do it.

China is at a crossroads in its development. Its capitalist sector has deepening problems with profitability and debt.  But the current leadership has pledged to continue with its state-directed economic model and autocratic political control.  And it seems determined to resist the new policy of ‘containment’ emanating from the so-called ‘liberal democracies’. The trade, technology and political ‘cold war’ is set to heat up over the rest of this decade, while the planet heats up too.

42 thoughts on “China: Xi’s third term – part 3: chips, dual circulation and imperialism

  1. “Whatever the truth in those charges, they are easily matched by the crimes of imperialism in the last century alone: the occupation and massacre of millions of Chinese by Japanese imperialism in 1937; the continual gruesome wars post-1945 conducted by imperialism against the Vietnamese people, Latin America and the proxy wars in Africa and Syria, as well as the more recent invasion of Iraq and Afghanistan and the appalling nightmare in Yemen by the disgusting US-backed regime in Saudi Arabia etc. And don’t forget the horrific poverty and inequality that weighs for billions under the imperialist mode of production: whatever the merits of your economic analysis, this is crass whataboutery.

    1. No, I don’t think it’s “crass whataboutery”. The point of whataboutism is to point out how disingenuous your opponent is. This statement comes after the following:

      “The US backed by an extended NATO, no longer confined to the Atlantic seaboard, sees China as the next area for ‘intervention’ down the road.
      The Western media helps by continually talking of China’s so-called ‘aggressive behaviour’ and its crimes against human rights.”

      I believe the argument is as follows: The US wants to destroy China as a competing power. To do this, it has utilized its media. The MO of the media is to focus on alleged human rights violations in China. As a gross human rights violator itself, the USA is thus being disingenuous. It is therefore clear that the rise in anti-China articles in US media is simply a propaganda effort.

      1. It is exactly whataboutism. Despite the propaganda efforts, what matters here is not ‘whatever the truth in those charges,’ but ‘what the truth in those charges.’ So to speak, all the former imperialist crimes should be criticised, instead of justifying or ignoring the current issues in China. Replacement of an imperialist nation with another imperialist nation can do no good. It is here where the significance of the current analysis should be derived.

        Despite the abysmal records of all former capitalist countries, China, and other competitive rivals against US hegemony, have not yet seemed better. Hopefully, CCP should face and properly handle all these issues. Though, only hopefully.

    2. If the US really wants to stop human rights violations and persecution of minorities, it can start at home – that’s the point. Otherwise, the rhetoric the US uses is merely a fig leaf for otherwise naked imperialism and it clearly works for liberal subjects and some supposed nominal leftists. Leftists ought to resist imperialism at home, it’s our greatest task in the international struggle against capitalism to break up the imperialist western machine so being placated by “well, while the US military machine is awful at least it’ll guaruntee human rights in the places it bombs somehow despite all evidence contrariwise over the last 70 years”

      To then sit and say that is all merely “whatboutism” is a thought terminating cliche meant to ensure leftist passivity in the imperial core.

    3. The inane charge of “whataboutism” is invoked whenever a mere glance at relevant context puts a limit on the relevance of a particular charge, especially in the vague ideologically-fueled areas of “human rights” and “aggression”.

      This isn’t just “crass”, though it is that, it is blatantly partisan handwaving.

  2. To summarize. Time is running out for the USA as China catches up technologically. Whether China can still play for time to do so is questionable given the depth and extent of the recent technical embargoes. Should China retaliate, which could mean expropriating the foreign fabs in China, then we are back to the 1930s but with nuclear weapons.

    War is the militarization of competition. By declaring an economic war on China and having provoked the existing war in the Ukraine, the USA has declared its intention of defending its hegemony by all means necessary. I support a Russian victory in the Donbass, not only to put an end to the pogroms against Russian speakers there, but also to frustrate NATO’s march to War in the Pacific.

    On the eve of Pearl Harbour, the industrial base of the USA was three times larger than Japan’s. Today the opposite is the case relative to China. Michael, I do not think your data illustrates this in sufficient detail. At its peak earlier this year, China consumed half of the world’s raw materials and components. Its manufacturing base is larger than the combined output of the USA, Japan, South Korea, Germany and France measured by volume (PPP). The question is, can quantity make up for quality? Answer that depends on the gap but seeing that China can now build jet engines and produce 7nm chips that gap is much narrower than it was 3 years ago, and it will be even narrower in another 3 years.

    The challenges facing the international working class this decade are without parallel.

    1. One of those challenges, although not without parallel, is “I support a Russian victory in the Donbass, not only to put an end to the pogroms against Russian speakers there, but also to frustrate NATO’s march to War in the Pacific.”

      Or.. “I support the partition of Ukraine without any change to the socio-economic conditions that produced this war, because Russia’s capitalism provides a buffer for China to develop its capitalism.”

      That’s where so-called anti-imperialism gets you– squarely and securely in the lap of this or that competing capitalism.

      With a program like that I can’t imagine that workers aren’t beating a path to UCBP’s door.

    2. Socialist tactics must be concrete. Correct. And profitable, profitable for the working classes. All of them and starting with the Ukrainian working classes and their lives, of course. So in your tactic ”first let’s attack the big capitalists (USA, EU) and then we’ll see what we do with the small ones (Russia, China,…)” what are the returns and specific terms for the workers that you expect ? And above all, these results, on what known and agreed arguments and on what historical evidence are they based? In the defenders of the tactic ”first we go for the USA-EU,” I only always see the title of the tactic but I never see the concrete results, deadlines, and the arguments and historical data that support it. I am not an expert in geopolitics (but Anti Capital, which does seem to be, has already given it a long history of failures in Africa, Asia and South America with this tactic) but if I can tell you that in a smaller territorial area within a country the historical and today’s socialists (including yourself) do not start the tactics of the socialist revolution by promoting it in the companies of the big capitalists (Wall Street, City, IBEX35, etc…) but rather start it in the small capitalists (small and medium Business). And the socialists do not start with the big capitalists because anyone without much calculation realizes that this tactic will be much more costly in effort and time than the opposite tactic. One must be extremely careful (and scientific) with socialist tactics and strategies knowing that there are (many) lives at stake. Lives that, sometimes, are not taken into account in the numbers of the tactics that we design on paper and at a distance from the conflict.

    3. Geopolitical alignment with this or that imperialism, whatever else one might say about it, cannot be said to have anything to do with revolutionary Marxist internationalism and its project for proletarian revolution. It is strictly chauvinist opportunism. This distinction in principle was first established by the Zimmerwald Left 1915-1917.

  3. Didn’t the West do this to the Soviet Union for decades by embargoing the export of high technology, especially that of computing? It destroys the lie that it was a struggle between capitalism and socialism, ie the Cold War that was at the heart of the struggle, when it was, as ever, the simple fact of Western hegemony over markets and resources that drove the situation.

    1. The “lie”? You mean that capitalism isn’t “Western hegemony over markets and resources”? Or, that the former Soviet Union wasn’t socialism? or both? Or that a “cold war” between “real capitalism” and real socialism wouldn’t involve a struggle by capital to maintain control over markets and resources?

  4. 1. On the semiconductors sanctions:

    Whatever the motives and intents of the USA, it is patent that the objective of the sanctions is to drain China of semiconductor technology and transfer it to US territory. That would make them a variation of the doctrine of Protectionism, created by on of the so-called American “Founding Fathers” Alexander Hamilton.

    My bet is those sanctions will ultimately fail, albeit they will delay China. The key here is that the doctrine of Protectionism only works if the sanctioning part is the ascendant industrial power, i.e. if it has the so-called “infant industry”.

    They USA doesn’t and can’t have an “infant industry” because it is the deindustrializing part, i.e. the descending industrial power. It is already trying to reindustrialize at very high OCC rates. That means that, even if it manages to, by brute force, bring back semiconductor factories, the profit rates will continue to fall – in fact, this tendency will only accelerate.

    China, on the other hand, is the ascending industrial power. It is China that has the “infant industry”. Well, some twenty years ago, China had virtually no semiconductor industry. Now it, unexpectedly, already dominates the 5nm technology (via a leak obtained by a Canadian source) – a breakthrough Western experts thought would only be achieved by China in 10-20 years.

    Even if those sanctions bite, China will still have some semiconductor industry, which is better than the none it had twenty years ago. The resulting vector is still positive; China will still have the “infant industry”. Progress will continue, even if at a slower pace, which is better than the no progress it had twenty years ago; China is the ascending industrial superpower.

    The only case in which the USA – as the solitary capitalist superpower – can obtain an “infant industry”, according to Alexander Hamilton’s doctrine, is if it manages to start a new Kondratiev Cycle. In such case, the technology would be brand new and revolutionary, which would mean the “game” would basically change its rules and be restarted.

    Deep down, the USA is seeking to replicate the success of the COCOM, which blocked exports of technological goods to the USSR. The problem here is that the USSR was born isolated and started the Cold War game with a -35% GDP lag (thanks to WWII) behind the enemy, while China manage to integrate with the capitalist world and had the decades it needed to “catch up” before starting to compete. Besides, the American Empire is much weaker today than it was in 1975-1980.

    2. On the Taiwanese/geopolitical question

    Xi Jinping made it clear in his speech that China would not have a fully modern military until 2027. The diagnosis is clear: China is still very inferior to the USA in military strength. China doesn’t face the USA directly for the simple fact it can’t.

    However, there are signs the American military power – even in the sea, where it is the strongest – is relatively waning. China already has the largest navy in terms of number of vessels, and is on pace to build some aircraft carriers.

    Besides, we have to think logically: the Chinese navy (PLAN) was weaker in 2016 than it is now; and the USA was in better shape in 2016 than it is in now. In 2016, the PLAN started to gobble up the South China Sea (SCS), which triggered Obama/Hillary Clinton’s doctrine of “Pivot to Asia”. The SCS, before that, was effectively an American lake; it was the perfect opportunity for the USA to declare a hot war against China, in a theater that best favored its strengths (the sea, fully in control of the USN). That was the moment to declare, wage, win a hot and non-nuclear war and crush China once and for all.

    Not only that didn’t happen: the USN watched, powerless, the PLAN catwalk and take the entire SCS. The SCS is now a Chinese lake, in a matter of just one year. Nobody talks about “Pivot to Asia” anymore, and, during Trump, the doctrine had to be “updated” to the Indo-Pacific Hypothesis, i.e. the USN had to retreat to the second island chain in the East and to the Indian Ocean to the West.

    The very concept of containing China from the sea is not new: Japan, since at least Abe’s first ever term, coined the concept of “Arc of Freedom”, which comprised of an arch of island nations in SE Asia that would create a liberal cordon sanitaire that would “strangle” China. It didn’t even got out of paper.

    Another option the Americans thought of was to use India to wage a hot, land war against China, a la using Ukraine against Russia. An attempt was made in the Gawan Valley scuffle, triggered when the Indians interpreted the urbanization of a village on the Chinese side of the border as an act of aggression. It obviously didn’t work and, even if it worked, there was no chance it could ever escalate to a fully-fledged hot war, since the only point of contact between India and China is the Gawan Valley, in the middle of nowhere, encrusted between the Himalayas, where India’s 1.3 billion strong demographic would mean nothing. Besides, it would require logistics that are beyond Indian comprehension, let alone capacity, to wage even a small scale war in such difficult terrain.

    China’s biggest vulnerability is through land, and from further west: Xinjiang and Tibet (in that order). That’s how you win a war against China: a massive land invasion from the far west, taking all of its territories west of the Gobi and pressing the Han against the coast. Attempts were made during the Cold War by the CIA in Tibet (independence of the Tibet, propping up the Dalai Lama) and now, in an attempt to trigger a color revolution in Xinjiang (sanctions, re-impoverishment of the region, sow the seeds of terrorism). This are bound to fail, hence a suicide mission in Taiwan is back on the cards.

    3. On the question of time

    Last but not least, we have the obvious fact that time (peace) is on China’s side. China doesn’t need to make the first move because the inertia of the status quo favors it.

    The USA is going to collapse soon and, with it, the entire Western Civilization. Latin America, whatever its liberal elites think or how they act, will continue to be increasingly dependent on China just to keep themselves and their comprador-style economy afloat. Relation with Russia is the best in History. Central Asia is being connected with railroads, bridges and pipelines as we speak (thus weakening the importance of the Strait of Malacca).

    It is the USA – and, by extension, all of its provinces, which comprise the Western Empire/Civilization – that is racing against the clock and need to make the first decisive move, not China.

    1. I would remind the reader that some of those providing grand assessments of potential military campaigns were just 7 months ago proclaiming Russia’s victory in Ukraine, and the superiority of both Russian armaments and resupply capabilities. Caveat emptor.

      1. Russia is winning in the Ukraine. The Ukraine as we know it today will cease to exist (it already has legally, as the four oblasts of the southeast are officially part of the Russian Federation). Not to talk about Crimea, which is Russian since 2014.

        The three elements that constitute a nation-State on the Westphalian model are: people, territory (unity of) and State. The glue that binds those three together is the Armed Forces. The Ukraine has already lost its original Westphalian territory, therefore it lost its territorial unity, therefore, from a national point of view, it has already ceased to exist as it was originally constituted, therefore “as we knew it”.

        It’s amazing really. The Ukraine has literally lost territory and people still talk about as if Russia is losing.

      2. According to MK Bhadrakumar’s latest piece, it seems that USNATO forces are now participating directly in the conflict. Will this change the overall outcome? I sincerely hope not!

        “Russian Foreign Minister Sergey Lavrov said on Oct 18, 2022 that evidence of military personnel of United States and other Western countries having their boots on the ground in Ukraine is mounting.”

        This is a very scary development, creeping escalation; first mercenaries (they’re probably all dead or fled by now, so now it’s USNATO boots on the ground!

    2. Yeah, now take the data and compare it as a total of the US GDP (i.e. compare it to American finance and American services). And don’t forget to take into account American debt, which industrial output has to cover (because much of the manufacturing materials technically assembled in the USA come from abroad, paid with printed Dollars).

      After you do that, compare the data you brought to the total global industrial output.

      1. Been there, done that. Between 1980 and 2020 US GDP grew 800-900% while industrial output grew 100%. China GDP grew around 100 fold or 10,000 percent.

        US industrial output represents 19% of GDP, while China’s represents about 39%.

        This is exactly what you expect when comparing a “mature” (or overripe) economy to a fast-growing economy– faster growth from the emerging economy: a higher percentage accounted for by industrial (and agricultural) sectors with the more rapid growth a factor of the lower productivity of labor; and the “value-output” per worker persistently lower in the faster growing emerging economy.

        None of the above means the US has “de-industrialized.” And none of these stats account for related party output– US owned enterprises, and US subsidiaries across the globe

        What’s next? that the US has demilitarized because it has so much of its military based in other countries?

      2. @ Anti-Capital

        … and Egypt grew 500% in the 21st Century, and India grew 700% in the 21st Century etc. etc.

        When everybody is growing 600%, nobody is growing 600%. In the world of the nation-states, it is not enough to grow: you have to grow more than the competition.

      3. So what’s your point? That marxists should support a US war on China because the of preponderance of US direct investments there?– therefore making China US imperialism’s doupleganger? And if that’s so…… because US military bases surrounding this monster are capable of destroying both US imperialisms in one blow….what true marxist would oppose such a war?

        Such is the liberal dialectics of Western Marxism

      4. It seems to me that China took the (quasi) capitalist road because socialism simply couldn’t work in an imperialist-dominated world, socialism is simply not permitted to succeed in such a world. The same could be said of Venezuela, Nicaragua, Syria or indeed any country that tries to be independent of the USA. So what are they to do? It’s capitulate of resist. China chose the only road that was possible under the circumstances and because of its unique circumstances, a vast population and a powerful central state. And yes, it used its cheap labour and the power of the central state to do it with. What choice did China have? We need only look at Venezuala to see what happens to countries that try to take a route independent of the USA. A valiant effort no doubt, but who pays the price? Who always pays the price! Until US hegemony is broken, destroyed, this is the reality of our world.

      5. I certainly agree that China had no choice. But neither did the “West”. I see things a bit more positively than you. I outline my view in a reply to Wal that hasn’t been posted yet.


      6. My “point” is that the “deindustrialization” of the US is not quite the deindustrialization that is commonly proclaimed.

        And that pronouncements on military doctrine, particularly ones like this: “That’s how you win a war against China: a massive land invasion from the far west, ” should not, cannot, be taken seriously.”

        As for the rest of what mandm says maybe some “liberal western Marxist” somewhere thinks what mandm thinks he or she thinks, but I don’t and I don’t know any who do.

    1. Meanwhile in China, at the closing ceremony of the congress, former president Hu was unexpectedly forced to leave the stage, while PM Li, contrary to foreign expections, is not on the list of the central committee and likely will not have another term of PM.

      What an age…

      1. Apparently, the guy is old and sick and that’s why he was ‘forced’ to leave the stage. You musy have been reding the Guardan/NYT again.

  5. It is not clear to me there is any reason to think Russia’s “invasion” of Ukraine serves as an excuse to expand the war on China. (Except in the sense that it means WWIII has started and—like Finland in 1939—everyone has to pick a side and being for the war against Russia is being for the imperialists and therefore being for the war against China too.)

    But I would like to point out the US/the IMF/the EU have been supporting fascist Ukraine’s government and military since the coup of 2014 with the aim of conquering Crimea. Bases in Crimea will support the wars in the Caucasus to seize the oil of the Russian Federation by detaching Azerbaijan etc. From there, military and political/economic support for interventions in central Asia will attack China on its inner Asian frontiers.

  6. China is not food or energy secure. It has poisoned half of its fresh water. And, its population is going to halve by 2060. Time is not its friend.

    One other point, China’s navy is not blue-water significant. This means it’s like a massive coastguard with operational limits of less than 100 miles.


  7. Very interesting the writing and the debate that it replaces. Although in my opinion the main challenge that China has in terms of technological progress is the manufacture of the equipment that allows the manufacture of the different critical equipment in the technology sector, whether they are CPUs, GPUs, memories, etc. Reach the level of companies such as Lam Research, Applied material, ASML. Regarding the budget that was approved in the North American Congress, it seems little to me since TSMC will spend around 40 billion a single company in 2022. I would also like to say that the scarcity of chips is in those that are built in more than 100nm, because new factories have not been manufactured. Some say that all you have to do is throw money away, but I imagine it’s not that easy. In the memory sector, I was surprised by the progress that YMTC of China presents, rivaling Micron and SK Hynix, since Samsung is in free fall and I don’t know how it will manage to stay on its feet.

    1. Reading Western mainstream media and Twitter I’ve observed there are two main opinions:

      1) those who claim the semiconductor war will hurt the USA and China more or less equally; benefit no one (by far the minority opinion);

      2) those who are optimistic (on the USA’s side), claiming this was a heavy blow to China, praising Biden for escalating the conflict against China in a way that favors the USA, and

      3) those who are euphoric, claiming this was a master move by Biden, and that these sanctions were a magic bullet that instantly destroyed China as a viable “competitor” of the USA, ending once and for all all of its ambitions to become a superpower.

      Opinions #2 and #3 are the majority, at least in the liberal (pro-Democratic Party) mainstream media and social media. They more or less divide the majority by (#2)35-65%(#3) by my perception.

      My take on this situation is that, albeit there is some very small grain or truth or at least case to be made for #2, opinion #3 is certainly wrong. The magic bullet argument is logically fallacious by definition, because it arises from the absurd presupposition that the USA can win the race/war against China at any time, whenever it wants to, and it is only not doing so already because, by some moral-ethic/divine orientation, it is restraining itself.

      Just to give some recent examples (if we go back one century, there are a lot more). Where was the magic bullet when the PLAN was taking over the SCS? Where was the magic bullet when the USAA and the CIA were being humiliated in Afghanistan? Where was the magic bullet when the USA took over Iraq? Where was the magic bullet when the Lehman Brothers went down in 2008? Where is the magic bullet that’s going to defeat Russia in the Ukraine?

  8. In this sentence: “If the US strategy does prove effective – and the response of a wide range of non-Chinese companies operating in the sector in freezing dealings with China suggests it could be – it would cut China off from the critical building blocks of most 21st century technologies.”
    there is only a small uncertainty, the “IF”

  9. I will not comment on the question of tactics except to say that since 1945 the hegemon (USA) has been the home of reaction. When investigating the relationship between China and the USA it is important to analyze the strengths and weaknesses on both sides. Both sides are waging this economic war from a position of weakness. Nothing underscores this issue more than the question of financial health. My most recent article shows that US banking profits fell 29.2% YoY in Q3 surpassed only by the fall in profits at the height of the financial crisis.

  10. In the media, the Chinese head of state and party leader, Xi Jiping, is described as the “autocratic ruler” with an “abundance of power” that has not existed in China since the days of Mao Zedong. On closer inspection, this abundance of power turns out to be a fragile appearance, a shiny but thin shell.

    Each of us knows the game of skill Mikado: The further you progress in this game, the more fragile the construction of sticks becomes, the greater the risk that the entire system collapses with a single intervention.

    The Chinese Communist Party of the past twenty years bears a close resemblance to a game of pick-a-stick. The more successful the party and government were in economics, the closer they came to the traditional goal of making China a respectable and respected country again, the further the Chinese CP strayed from its original socialist ideals. However, the double-chord of social advancement of Chinese peasants and workers with China’s political advancement in the world has been the secret of the CPC’s success since its founding in 1921.
    This basic chord was lost as economic prosperity grew and the gap between rich and poor widened across the country. There have always been these two forces in the party – the one that was primarily concerned with national economic success, and the other that wanted to adhere to the socialist goal of eliminating poverty and dependency on the way to a free, classless society . Balancing these forces within the party ensured the party’s intellectual and political dominance in China.
    With the rise of the economy, the Communist Party increasingly lost its spiritual compass, corruption in the country increased, and the reputation of party cadres across the country declined. This sentiment exploded in the nationwide pro-democracy movement of 1989. This broad movement proved that the collapse of the Soviet Communist Party and the subsequent dissolution of the Soviet Union was not a specifically Russian problem. The signs of dissolution of party rule had long infected China. Saving the Chinese CP became the agenda of the old party guard. With this agenda, the young Xi Jiping was selected and sponsored by the conservative core of the party – and nobody rises in the Chinese party hierarchy without sponsorship from above. The trauma of a possible disintegration of the party into warring factions forced the renunciation of “collective leadership” and inevitably led to the personality cult and to a third term in office for Xi Jiping.
    Xi Jiping is not an “autocrat”. Rather, Xi Jiping is the personification of “party rule”, which cannot be organized in any other way than through representation by a single individual. In the last ten years, Xi Jiping has stabilized party rule in China and prevented it from disintegrating with campaigns against corruption and against the “rule of the billionaires”. But the more and the longer everything in this large country depends on one person, the more unstable the system becomes.
    It’s like Mikado: the fewer alternatives and options become, the more fragile the system becomes.
    Wal Buchenberg, 2022.10.23

    1. Your line of argument is a variation of the “middle class uprising” theory, which was established in the West after the 1989 Counter-revolution.

      The “loss of spirituality” argument is, besides being a blatant pro-Christian propaganda, logically self-defeating: if economic growth stunts spirituality, which leads to collapse, then spirituality can only arise when economic growth is stunted, therefore spirituality (i.e. religion, Christianity) can only prosper when people are economically worse, i.e. living worse.

      The numbers have just come out: China’s GDP grew +3% the last three quarters. It may not be that spectacular growth from one decade ago, but it is still growth. One can argue China is stagnating, but not collapsing.

  11. Your excellent discription of the CCP’s evolution misses the fact that China has responded to peasant/proletarian resistance more and more positively (in favor of the peasant/worker resistance) rather than negatively: for example, raising working class living standards by reeling in private industrial sector worker abuse with programs like its “social credit” system, by recognizing peasant demands and assisting in establishing peasant owned cooperatives througout the country, and by the state’s vast socialist ecological projects.

    In 1973 the US (and its Eiuropean colonies) needed China to save its failing system. Not vice versa. China has used US/Western capital to fight capitalism and capitalist imperialism. Its failure would be a blow to workers and peasants everywhere.

  12. As for the geopolitical economics (GPE), conducted from revolutionary Marxist internationalist principles or not (and in almost all of the commentary here, certainly not), what has gone missing in the comparisons of China vs. the USA is relation of the GPE perspectives to the deep crisis of the US liberal imperialist political regime in 2016, with the emergence of an openly rebellious Far Right grasping for regime change. The US Far Right has always been a subordinate player in the liberal political regime, so long as it stayed in its lane. When it veered out of lane, it was swatted down, as with Army-McCarthy in the 1950’s, Goldwater’s smashing defeat in 1964, Iran-Contra in the mid-1980’s, the abandonment of “Reaganomics” after 1986 (Plaza Accords etc) and finally Bush Sr. tossing “no new taxes” under the bus in 1991. The Far Right’s most important “role” advancement was in reactionary economic policy from the mid-1970’s on, but not in the formation of US imperialist policies.

    The Far Right began its departure from imperialist regime norms domestically in the 1990’s under Newt Gingrich, but the twin disasters of the Iraq occupation war and the 2008 economic crisis, plus the fact that China nevertheless continued its capitalist economic advance, has clearly thrown the Far Rights into a frenzy, most dangerously in the USA, but with many reflected instances throughout NATOLand, Australia and Japan (Modi’s India is an entirely distinct case, and not at all a “pawn of the USA” – India is the single largest manufacturer and repository of Russian-design weapons on the planet, outside of Russia (and China) itself, for example).

    The Far Right in the USA seeks to displace the liberal imperialists and place itself as the dominant player in a new, more reactionary regime. They are almost certainly reacting to phenomena such as what can be seen in the industrial stagnation since the great 2008 crisis:

    With Trump’s 2016-20 administration, the US Far Right has already succeeded in shoving the Biden liberal imperialists into a far more openly confrontational posture against China. Their differences lie over Russia’s Putin regime. First, the US Far Right admires the Putin regime and congratulates it in imposing in Russia what it seeks to impose in the USA. (I leave it to the pro-Russia “Left” to sort things out with their new MAGA bedfellows) Second, therefore they also think it is stupid to drive Putin’s Russia into a defacto alliance with China, the “main enemy”, furthermore committing the USA to a “two front struggle”, if not outright war. (BTW, anybody who thinks the USA is “directly fighting” in Ukraine needs to perform a habeas corpus for the thousands of US GI bodybags – I’ll even settle for hundreds!).

    For the Russo-Ukraine war has already exposed the current production limits of US supply of NATO ordinance, even though Ukraine relies primarily upon Russian design weapons, of its own make, or captured, or from other countries (here again India could be a big supplier if the US would bribe Modi for weapons, in exchange for forgiving India’s Russian oil import transgressions (what a “pawn”), as the UK is already doing with Pakistan’s Russian caliber artillery ordinance! But that runs counter to the US MIC program to capture Ukraine as a customer, and India itself would be a future conversion target). The ramp up promised by Raytheon, Lockheed and others is projected to take 2 years at least, while the Pentagon’s program to completely convert Ukraine to NATO weaponry and doctrine will take 10 years! Both are far too late to assist Ukraine to dislodge Russia from its Occupied Territories, including Crimea.

    Funneling the world’s massive supply of Russian design ordinance into Ukraine would be the surest road to Ukraine victory, but that is precisely not likely thanks to the US.

    Hence the US Far Right will portray Ukraine as another liberal imperialist regime failure, adding another arrow to its regime change arsenal. Successful regime change by the Far Right would then have at the top of its international agenda -besides patching things up with Russia, where the Putinists would love to fake a “surrender” to such a new regime – a massive ramp up of US military production, without also promoting a social-democratic style re-expansion of US industrial production in general – that would not only strengthen the social power of the US working class, but also undermine the broader social basis of the Far Right itself in the capitalist parasitism lodged in the social reproduction of US society, aka “the consumer sector”, to underlie the influence it already has in the domestic “security services” organized around DHS and the muni police forces. The lack of security on Jan. 6th 2021 was no accident.

  13. Interesting….but fails to deal with the failure of the neoliberal regime to save the profitability of the capitalist mode of production. The US relies solely on violence, not production or trade–and lives by theft, rents, and interest. Putin is an epiphenomenon of this failure.

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