Of course the Chinese Communist Party (CCP) is aware of the problem – the so called “middle income trap” – which in reality occurs at the quite low income levels of high-end Third World countries like China, Mexico and Brazil. The CCP is attempting to overcome the roadblocks by upgrading China’s technological capacity, especially through the flagship Made in China 2025 policy framework. While the theory is very simple – nations must technically upgrade in order to continue to raise incomes – the practice is fraught.

It would be possible to move up the ranks of the global division of labour if China could develop a scientific base and internal social organisation equal or superior to that of US imperialism. This is of course possible in the abstract. However, the policy of the CCP cannot be abstract but must correspond to the realities of an imperialist world system. It has chosen to attempt to develop Chinese society via a path of capitalist development integrated into the imperialist world market. Therefore it is the concrete realities of this market and social production processes that underlie it that Chinese capital must navigate.

The polarisation of money income manifests the underlying social productive polarisation: the division of the world into spheres of high and low labour productivity, technology, scientific development and social organisation. The world division of labour is also divided between high-end, most sophisticated labour processes monopolised within the imperialist core and low-end or ordinary labour processes, which are distributed to the Third World. China is not an exception to this rule but the major example of it – the most successful developer of ordinary labour processes.

Technical polarisation of the global division of labour means that the overwhelming bulk of labour processes carried out in the low income countries, including China, consist of basic or ordinary labour. For this reason the social demands on most Chinese workers, technicians, scientific workers etc. do not involve systematic thinking and problem solving in the most advanced available manner. From this material-social base, the cultural development of the society can never be as advanced as that of imperialist societies, which monopolise humanity’s social and scientific advances for themselves.

The imperative of capitalist profitability ensures that no true assault on the commanding heights of world scientific development and the division of labour can be launched from a low material-social base. Storming the commanding heights would involve competition with the most advanced capital for the most advanced labour processes – a competition that a less developed or, as Che Guevara described it, ill formed capitalist social formation, is ill suited to carry out. This is why frontally challenging imperialism will not deliver the highest available profits to Chinese capital. Challenging imperialist monopoly at its margins is necessary to make profits. Yet a frontal challenge risks complete debacle.

For this reason, the interests of Chinese capital will never form the social basis for a full blooded assault on imperialist dominance (even ignoring the politically perilous level of working class social mobilisation that would be required for an underdeveloped society to wage such a serious campaign against imperialist supremacy). Chinese capitalism is not and can never become the revolutionary social force that can storm the heavens of US power.

What could conceivably happen is that more areas of the labour process that are presently dominated by the imperialist societies and hence subject to monopoly pricing, could be wrested from them and become the domain of Third World production – the same thing that has already happened, for example, in low grade steel production and other industrial processes. The same may be true several years from now for the production of basic automobiles. If the proportion of necessary world labour coming under the control of non-monopoly capitalists increases, or the degree of imperialist technical superiority in high-end labour is reduced (and thereby the degree of imperialist monopoly in these is reduced), then the gap between Third World and First World income could conceivably narrow relatively – even as the overall polarisation remains robust. However, a narrowing gap between the two camps is the opposite result to the overall outcome of neoliberal period (1980–2015) and far from inevitable.

Nothing in Trump’s policy indicates China is some kind of existential threat to US hegemony. To China boosters, the very existence of economic conflict between the US and China seems to prove their view of China’s rise. However, this is not the case any more than the existence of conflict between workers and their boss proves they stand on an equal footing, or are just the same thing.

Imperialist core capital has historically driven extremely hard bargains against even the weakest Third World capital. The “trade war”, which is really an economic attack on China by US imperialism, is about the distribution of the value brought into the world economy by Chinese labour. No Marxist (besides Harveyxli) argues that Chinese capital is a net appropriator of value created by US, British or other First World workers.

The battle being waged between US and Chinese capital is over the degree to which value created by Chinese labour (and therefore Chinese capital) is appropriated by First World capital and US capital in particular. Sections of US capital evidently believe they can achieve better terms, i.e. extract a greater proportion of Chinese value, by embarking on an economic war against China – even if there are different ideas about the best method of war, or how much of a war is desirable before accepting a truce.

Yet, not all aspects of Trump’s policy reflect US capitalists’ specifically economic interests. Some aspects reflect their broader political interests and also the political interests of the Trump White House. After all, Trump can hardly sell a trade war to US workers purely on the basis of benefit to US corporations. He must talk mostly about jobs, and hence emphasise the trade balance and currency levels – even if these are not the key issues for the most powerful sections of US capital.

Since China joined the World Trade Organisation two decades ago, compared to other Third World states, it has enjoyed considerable advantages in negotiating the terms of its own exploitation: the size of its cheap, trained and educated labour force; its relatively well-developed and centralised state apparatus (a historical product of the Chinese masses’ defeat of imperialist political power in China after World War Two); and the size of its domestic market.

As seen, the primary beneficiaries of Chinese workers’ gigantic contribution to world labour have been the US and other imperialist countries. Yet these relative strengths of the Chinese state also coincided and combined with the runaway profits bonanza of cheap labour globalisation during the neoliberal period. In this historical context, Chinese capital was able to use its unique position as the centre of world labour to technically upgrade relatively rapidly compared with other Third World states. The degree of its success is reflected in China’s “rise” from about the income level of India in 1980, to a level today on a par with Mexico and Brazil.

However, since around 2011 cheap labour globalisation has ceased to be principal driving force of above average profits in the world economy. While many companies still rely on cheap Third World labour, and new instances of offshoring will continue (as was already the case prior to the neoliberal period) this is no longer the characteristic driver of economic expansion that it was.xlii In 2019 a greater portion of imperialism’s cheap labour needs can be provided by other Third World societies, giving imperialism a stronger hand to play off the various non-monopoly producing countries against each other.

Of course the Chinese domestic market is still crucial for imperialism to dominate, but it is no longer so rapidly expanding. Unless a radical technological upgrade is successful, the Chinese market will decline in relative importance to the same extent that China’s labour contribution falls as a proportion of total world labour. These weaknesses are counterbalanced by the considerable upgrading that sections of Chinese capital have achieved.

In the new situation, US capital today, or sections of it, are looking to reconfigure the terms of its engagement (exploitation) of China to better reflect its new strengths, weaknesses and needs. It’s not that the major US capitalists face competitors in China capable of defeating them. Rather, they face competitors more able to squeeze certain aspects of the monopolies’ overall dominance and reduce their profits for certain, particularly low-end, less profitable operations and take some market share at the margins.

This is reflected in Trump’s repeated refrains about China “stealing” US “intellectual property” and demands for a Chinese crackdown. What US capital seeks is not legal protection to artificially (politically) forestall the collapse of its tottering dominance over the labour process – although that is likely the case for marginal, individual capitals or sectors. Rather, the dominant sections of US capital seek legal protections that will increase the projection of their technological dominance. Greater legal protection extends the period of time that above average profits can be secured for a given new labour process, product, etc. by slowing competitors’ adoption of it.

Even the complete removal of legal protections would not end the ability of US capitalists to make above average profits on the basis of technological innovation simply because US capital is more technically advanced. If China were in fact developing its own world-beating technologies – the US state would not be demanding strict intellectual property laws; it would be busy trying to copy Chinese innovation.

The other principal aim of the Trump administration is winding back Chinese state subsidies for large state-owned enterprises (SOEs – many of which also have a large degree of private ownership). This reflects another advantage China does possess (at least compared to other Third World societies). As the largest Third World state, and one with a relatively strong state apparatus developed during the Chinese revolution, state subsidies for otherwise uneconomic producers are a key way that Chinese capital is able to compete globally. In doing so it undermines imperialist profitability in competing sectors by undercutting them on price. Yet Chinese state subsidies also increase the profitability of other branches of the imperialist economy, and potentially its overall profitability.

By subsidising and cheapening products, the Chinese state (and ultimately workers) in effect subsidise cheap inputs to the businesses that purchase these commodities. To the extent subsidised products are utilised by First World capital, this is essentially another form of offering Chinese labour cheaply on the world market. Chinese state organisation of subsidies allows China’s cheap labour advantage to be concentrated and shifted from the most labour intensive industries like textiles to higher rungs of manufacturing.

Once we remove the perception that China’s current technological level is a temporary phase in some sort of long march of inevitable transition to dominance, it becomes clear how devastatingly imperialism is plundering China, East Asia and the Third World. All of the burdens taken on by Chinese workers, all of the terrible environmental devastation, dispossession of farmers, separation of working parents from their children and many other injustices and crimes, are not sacrifices in aid of Chinese capitalism’s coming global triumph. They are the sacrifices of China’s success as Third World capitalism par excellence, as the number one provider of good, cheap products to the imperialist economies.

The sooner imperialist exploitation of China is recognised by Marxists and others on the left, the sooner it will be possible to start working towards building international solidarity with China and other Third World struggles. The surest way to break any possibility of Chinese workers trusting and looking for unity with working people in the United States and the other imperialist countries is to swallow the propaganda that China is fast becoming an imperialist power. The Chinese working class knows that it is not. The imperialist world’s workers, so far, do not.

wouldn't mind having a look at this other thing by the same author https://onlinelibrary.wiley.com/doi/abs/10.1111/wusa.12376