babyhueypnewton posted:

RedMaistre I wish capitalism was as easy to exploit as you claim. Unfortunately imperialism has one logic and that is the law of value. I'm sure that Yugoslavia (and North Korea for that matter) believed they could make a deal with the devil and retain their souls.

First of all, China is not getting a very good deal. Despite massive economic growth as a low wage manufacturing center, it is not really developing the productive forces. The main form of FDI remains subcontracting, Chinese companies remain dependent on imported technology to be competitve, and China has increasingly become part of global production chains in which it is specialized as a manufacturer of finalized goods (rather than the entire production chain).

foreign producers are coming to dominate the Chinese economy. For example, the share of foreign manufacturing affiliates in China’s total manufacturing sales has grown from 2.3 per cent in 1990 to 31.3 per cent in 2000.8 Foreign firms are also increasingly coming to dominate China’s export activity. The percentage of exports produced by these firms grew from 17.4 per cent in 1990 to 55 per cent in 2003.9 According to Stephen Roach, Chief Economist and Director of Global Economic Analysis for Morgan Stanley, ‘Chinese subsidiaries of global multinationals and joint ventures with businesses from the industrialized world’ accounted for ‘fully 65 per cent of the total increase in Chinese exports’ over the period 1994 to mid-2003.10 As a consequence of these trends, the ratio of exports to GDP has also climbed steadily, from 16 per cent in 1990 to 36 per cent in 2003.11 Thus, China’s economic growth has become increasingly dependent on the export activity of these transnational corporations.

The reality is that China and East Asia are being jointly reshaped by a larger transnational corporate restructuring dynamic that also encompasses the more developed capitalist countries in as well as outside the region. This dynamic is promoting both greater trade dependence and the expansion of integrated cross-border production processes, with China serving as a processor of manufactured components imported from neighbouring countries and the final production platform for the region’s increasingly important extra-regional export activity. It is also pitting different nations’ workers against each other to the benefit of transnational capital and its local subordinates in each country, thereby intensifying exploitation and worsening uneven development and overproduction problems.

Over the last decade . . . Chinese industrial firms have spent less than 10 percent of the total cost of imported equipment on indigenizing technology. Indigenization spending at state firms in the sectors in which China is most often cited as a rising power (telecom equipment, electronics, and industrial machinery) is also low (at 8 percent, 6 percent, and 2 percent of the cost of imported equipment, respectively)...By comparison, such spending by industrial firms in OECD countries averaged approximately 33 per cent. And South-Korean and Japanese firms, during their respective periods of rapid industrialisation ‘spent between two and three times the purchase price of foreign equipment on absorbing and indigenizing the technology embodied in the hardware’

http://content.csbs.utah.edu/~mli/Economies%205430-6430/Hart-Landsberg-China%20and%20Transnational%20Accumulation.pdf

Furthermore, since China is increasingly reliant on imports/exports and global production chains, abroad it is increasingly subject to the law of value and at home increasingly pressured into inter-regional competition. Abroad, the global financial crisis has finally affected China which is the true cause of the recurring property and stock market crises:



https://thenextrecession.wordpress.com/2012/11/16/chinas-transition-new-leaders-old-policies/

Finally, while the Chinese poverty miracle is impressive compared to the rest of the world (where poverty has increased), this line for Marxists is basically revisionism. Much of this comes from proletarianization, which would have happened under Maoism anyway. The main difference is the marketization of the economy so that what was considered 'poverty' under Maoism (despite social services and socialist communalism which is not considered by bourgeois measurements) is now no longer counted. Thus, while poverty has been reduced, not only has inequality massively increased, it's not clear at all that the destruction of socialist democracy was necessary for this (in the data or theoretically).

The other source of poverty reduction is the agricultural revolution, in which foreign technologies (fertilizer, machinery, etc) led to massive increases in rural productivity. This of course is only possible because of China's opening up, but what's important is that this rate is slowing:

Why, then, was the rate of rural poverty decline comparatively slow after 1996? There appear to be four reasons: slower overall growth; a pattern of growth which focused around industrialization and therefore mainly benefited the non-poor; the failure of agricultural output increases to translate into higher rural incomes; and policy failures, in particular an excessive attention to the geographical dimension of poverty.

-Chris Bramall, Chinese Economic Development p. 511

and most importantly:

The third – and perhaps the most important – problem for the rural sector is that increases in farm output did not lead to increases in real income in the late 1990s. This is of great significance, because many of China’s rural poor are farmers; accordingly, increases in farm income are a sine qua non for big falls in rural poverty. However, as Figure 15.4 shows, per capita net farm income rose very slowly over the decade after 1996. Indeed it fell from 976 yuan in 1997 to only 834 yuan in 2000 and, though it has revived since, its average annual growth rate between 1996 and 2005 was less than 1 per cent a year. By contrast, wage income from employment (mainly in TVEs of one sort or another) increased by nearly 11 per cent per annum and in the process overtook farming as an income source. This slow growth of farm income reflected not so much any failure of production but rather price trends. Between 1995 and 2000, the prices paid for agricultural products fell by over 20 per cent on average, whereas input prices fell by less than 5 per cent, thus imposing a squeeze on net farm incomes that was only partially offset by rise in productivity. The fall in product prices occurred because of overproduction. Grain output reached no less than 512 million tonnes at its peak in 1998 (well up on the figure of 408 million in 1989), but this served only to depress product prices, in turn leading to a decline in grain output to a trough of 431 million tonnes in 2003.

-p. 512

lack of price controls, overproduction, increasing exploitation, increasing gap between rural and urban: if this sounds like capitalism at its most contradictory that's because it is. The Chinese economic miracle was remarkable, but it was predicated on Maoism. Now that that well has dried up, or as David Harvey would say that source of 'accumulation by dispossession' is dried up, China is at the crossroads of socialism or capitalism. I'm not a believer in the fragility of socialism, that Marxism is still the main ideology of China and that the state remains the main source of economic activity are not minor accomplishments. However capitalism has it's own logic and China will have to actively work to restore socialism or else the law of value will decide for it.

babyhueypnewton posted:

Oh also it should go without saying this is vastly preferable to the looting of the USSR and I will defend Chinese socialism against american imperialism and trotskyism. It is clearly not capitalist yet and is still the greatest hope for revolutions which do not want to become dependent on American finance imperialism for imports/exports and armed defense. It's just important to understand what it means to try and make a deal with imperialist vampire capitalism, as all the socialist countries who took loans from the IMF or debts for OECD capital goods found out.

North Korea’s external economic policies changed dramatically in the 1970s. The first sign was massive imports of machinery and plant facilities from advanced economies, including Japan, France, West Germany and Britain, beginning in 1972. What was surprising was that trade with these capitalist nations were made with loans.

In 1972-1973, before the global oil crisis, the prices of gold, silver, lead, zinc and other export items of North Korea were rising and Pyongyang must have been confident of its payment capabilities. North Korean leaders had taken note of South Korea’s economic development through introduction of Western technologies. All these developments led North Korea into deciding to spur development with large-scale buildup of manufacturing plants with Western equipment and financing.

North Korea’s foreign debt problem was exposed for the first time in 1974. In July that year, the North failed to make an initial down payment for steel products from Japan and the shipment was suspended. As the news was reported, North Korea’s other trading partners in Japan and Western Europe pressed Pyongyang for payment for their exports and some banks dispatched their representatives to Pyongyang to demand early settlement of its liabilities. To raise capital, the North issued bonds and obtained new loans but failed to elicit any significant support from the international financial community. Thus, in June 1975, North Korea began negotiating payment deferments with major creditor nations.

Noteworthy was that the creditor banks, including ANZ, Morgan Grenfell and BNP (Banque Nationale de Paris), converted their credits to North Korea into bonds and began circulating them at low prices to recover their losses, though in only a small amount. Potential buyers of these bonds may calculate two possibilities: the bond price could rise when North Korea’s political and economic situations improve; and South Korea may repay the bonds when the two Koreas are reunited with the South taking over all outstanding liabilities of the North. Thus the South should find it hard to pay no heed to the North Korea bonds issued by the OECD banks.

the rest of the article is numbers and specifics. Obviously it's easy to claim that negotiating trade and debts with the imperialist countries is revisionism or at best a fool's errand. It's even easier to claim that one cannot build socialism in one country so why bother. But for those of us in the real world, forced to deal with objective reality instead of a revolutionary fantasy, purity comes at a high cost. I think North Korea was mistaken, but Hoxha's policy that:

the Albanian people and their Party of Labor will live even on grass, if need be, but they will never sell themselves for 30 pieces of silver, for they prefer to die standing and with honour rather than live with shame and knelt down.

unfortunately didn't turn out well.

no real point here, just interesting to investigate how socialist countries have uniquely addressed the real demands of living in a capitalist world.