By Michael Xu
After a short period of reconciliation, China and the U.S. resumed their trade war. Just a week ago, the exchange rate of the U.S. dollar and Chinese RMB exceeded 1 to 7. One U.S. dollar equals 6.8 Chinese Yuan, meaning that for Chinese students at CC, tuition for the 2019–20 school year effectively rose by about 5.5%. The situation has worsened for low income people in both the U.S. and China.
On the first night of the Democratic debates for the 2020 presidential election, most of the candidates believed that China posed the greatest geopolitical threat to the United States. This was the predominant sentiment even one year into the Russia investigation, during which U.S. intelligence agencies concluded that Russia worked to rig the 2016 presidential election. As a consequence of the trade war between the U.S. and China, “The Tariff Man” (in President Donald Trump’s own words) possesses the power to disrupt the global market.
I believe that to the American people, especially those who subscribe to more conservative or libertarian ideologies, China is a mirror of Western capitalism’s past, present, and future. What the U.S. fears about China, ultimately, is what it fears about itself, as well as the world that it has shaped.
China resembled capitalist countries in their early years. American political sociologist Barrington Moore traced the development of British capitalism to the enclosure and resultant disenfranchisement of British peasants. The enclosure process involved a legal maneuver by which several small farmers’ land holdings were conglomerated into a large property with a single owner. Britain’s ever-growing economy needed a new labor force and additional means of production, and the enclosure process handed it both.
Similarly, since the start of “Reform and Open Up,” tens of millions of peasants in China lost their land to the government, all of which would later be used for the expansion of cities. The relocated people had no choice other than to work in urban areas, but they also could not claim welfare, making them incredibly cheap to employ.
As a result, China has been able to manufacture cheap goods which, in turn, attract foreign corporations. My account here is a gross simplification of the actual urbanization process, but further analysis of the similar violence and cruelty presented by both Great Britain and China illuminates the common root of the problem.
Many also see China’s growing assertiveness in areas such as Africa and the South China Sea as warning signs of China’s global political condition. However, a closer examination will reveal that the situation is more complicated. It is no secret that China has an overcapacity and overproduction problem, which is part of the self-destructive nature of capitalism that philosopers Karl Marx and Friedrich Engels identified. Marx believed that the need for new market “chases the bourgeoisie over the whole surface of the globe.”
This certainly was, and probably is still, the case for western capitalist countries. China experienced this effect first-hand when British gunboats showed up and bombarded its cities because the Qing government confiscated and destroyed the opium that the British used to open the Chinese market. Now, China feels pressure to reinvest its overproduced capital, which reveals China’s motive for launching the “Belt and Road Initiative” pledge to build infrastructure in less developed countries in exchange for more lucrative trade deals and raw materials.
China reflects current western capitalism in the sense that it has exacerbated social inequality. Take the automation sector, for one. China’s continued reliance on manufacturing jobs means that it is particularly inclined to adopt automation. Foxconn is one of the largest manufacturing companies in China, and it “plans to fully automate 30 percent of its production by 2020.” It has already “cut more than 400,000 jobs by deploying tens of thousands of robots between 2012 and 2016.”
Foxconn is not alone in this regard. Across China, “companies had cut 30 percent to 40 percent of their labor force between 2015 to 2017 due to automation,” as reported by the South China Morning Post. In the U.S., on the other hand, 25 percent of the jobs are “at a high risk of automation,” according to the Brookings Institute.
Another major issue associated with China’s capitalist practices is climate change. China and the U.S. have the two greatest levels of carbon emissions in the world. The amelioration of the current climate problem no doubt requires cooperation between the two countries, but unfortunately, President Trump is convinced that climate change is a hoax promoted by China.
Finally, China is learning some lessons that the U.S. finds difficult to grasp. Although the Chinese government has always maintained a tight grip on Chinese civil society, its economic and political reform has many neoliberal characteristics. Regulations have been loosened, and the state refrained from intervening in both private and public sectors to promote economic development.
However, such reforms have led to some dire consequences. Environmental protection was rendered impotent, causing serious pollution problems, and tax laws are flawed with many loopholes. When Chinese municipal governments fail to collect sufficient taxes, the need for revenue drives them to claim more land from their peripheral regions and therefore pushes the cost of housing up. Ultimately, low income or rural families are the most negatively impacted. Corruption has become prevalent, with the local economy becoming dependent on it.
During Trump’s presidency, we have seen similar problems – the Environmental Protection Agency being the best example. The agency’s budget has been cut again and again. The budget cut, which stems from President Trump’s tax policies, has taken away resources once dedicated to alleviating the disproportional effects of environmental degradation on low income people and people of color. The EPA has also rolled back many regulations put forth by the Barack Obama administration, especially carbon emission caps. This move favors the fossil fuel industry, which gives President Trump and the Republican Party financial support.
This article is not intended to create a kind of false equivalence between the U.S. and China, nor does it seek to attribute specific problems to a particular government. I believe that there is plenty of evidence that suggests we need to reflect deeply upon the capitalist system that we share. Too often, we allow our rage to be hijacked by national resentment, and it serves no purpose other than to hurt the innocents.
A dear friend of mine, who with no doubt one of the smartest people that I know, is supposed to go to Columbia University as an exchange student this semester. However, his visa is still pending as I write this piece. The FBI has called upon U.S. universities to monitor Chinese scholars and students for potential spy work. Meanwhile in China, various agricultural products are getting more expensive, while U.S. soy farmers have no place to sell their harvest.
What should the U.S. see when it looks at China? A vague projection of itself in the capitalist world and most importantly, the home to a fifth of the world’s population, the majority of whom simply want to have a good life.