China, the emerging imperialist power in competition with the U.S.A.

While the US is still the most powerful imperialist nation, China's growth into an imperialist rival is of major global relevance.

Introduction

Marco Rubio, Trump’s new Secretary of State, emphasized at his inauguration that “China is the most dangerous and potent adversary the United States has ever faced”. In similar terms, two years earlier, Blinken, Biden’s Secretary of State, stated at the G. Washington University: “we will remain focused on the most serious long-term challenge to the international order, the one posed by China (…) the only country with the intent to reshape the international order and, increasingly, with the economic, diplomatic, military and technological power to do so”.

These words attest to the antagonism between the US, the imperialism that has held – and continues to hold – world domination since the end of World War II, and the emerging Chinese imperialism. The irruption of the Chinese Artificial Intelligence (AI) company Deepseek, challenging the plans of the big American technological monopolies, is a vivid manifestation of this antagonism.
Indeed, since the emergence of China as a new imperialist power following its response to the great economic crisis of 2008, we have entered a prolonged period of conflict between the two imperialisms. It is a clash that conditions the course of the world economic organization, globally stagnant since the crisis of 2008. It fully affects the world division of labor and sets off balance the relations between states, relocating the role of the countries and regions of the world. This antagonism has become a central axis of world politics.

Trump’s accession to the US presidency precipitates the crisis of the World Order. It will accentuate the commercial, technological and geopolitical clashes with China and fuels the global arms race, increasing tensions and even the risk of military collisions.
In this article we will focus on the process of restoration of capitalism in China, under the initiative and leadership of the Chinese Communist Party (CCP) bureaucracy, until the country’s conversion into an emerging imperialist power. We will also review the current state of the conflict with the US and the current situation of China, which is facing Trump’s new tariff wave in a complicated domestic scenario.

Capitalist restoration in China

The restoration process took place in the context of the reconciliation of the CCP with US imperialism. This reconciliation, with great geopolitical implications (such as the Chinese invasion of Vietnam), gained its most colossal dimension in the capitalist restoration of China, which initiated a process of reordering of the world economy that was to give rise to Globalization, in which China was to become the “factory of the world”. Finally, the Great Recession of 2007-08 called Globalization into question and provoked an enormous crisis that generated a massive response from Chinese capitalism, which culminated in its emergence as a new imperialist power, in rivalry with the USA.

Capitalist restoration is inseparable from its great promoter and beneficiary: the CCP, the party of the Mao-Stalinist bureaucracy and backbone of the Chinese dictatorship. It’s overwhelming weight comes from having usurped the 1949 revolution and risen above it for 60 years as an omnipotent bureaucratic caste.

Foreign investments would never have arrived, let alone in the gigantic volume in which they did, without the existence of a capitalist bureaucratic dictatorship that ironclad guaranteed them the profits extracted from a super-exploited and disenfranchised working class and also provided the infrastructure, cheap supplies, a market and a favorable tax environment.

A dictatorship which, at the same time, actively promoted autonomous capitalist accumulation. The CCP always sought to use the restoration to become itself the heart of Chinese capitalism, forming a conglomerate with the new private bourgeoisie, which was already emerging strongly in the heat of imperialist FDI (foreign direct investment).

Led by Deng Xiaoping, the Mao-Stalinist bureaucracy, unlike the USSR, did not fracture or burst into pieces, but maintained its unity and directed and controlled the process of capitalist restoration. It preserved the political independence of the regime and maintained a gradualist pace (“crossing the river feeling the stones under the water”), making sure to maintain its monopoly as a party-state at any cost.

The decision to restore capitalism, a few years before Gorbachev, was the choice of the triumphant bureaucratic apparatus of the so-called Cultural Revolution (1966-1976). Initially set as an inter-bureaucratic struggle instigated by Mao to recover the power lost after the catastrophic consequences of the “Great Leap Forward”, the Cultural Revolution ended in a true counter-revolution, in which the Maoist apparatus, with the army at the forefront, put an end to a rebellion of sectors of youth and workers that got out of hand with blood and fire.¹

From Deng’s “Reform and Opening up” (1978) to the Tiananmen Massacre (1989)

Capitalist restoration began in 1978-1979, coinciding with Deng’s visit to Washington. The initial focus of the “Reform and Opening-up” was the countryside, where the overwhelming majority of the Chinese population (80%) lived. Communes and collective farms were abolished and the “family responsibility system” was introduced. Decollectivization progressed very fast and the reform was surprisingly successful, helped by higher grain prices, credits and technical improvements.

The complement of decollectivization were the non-agrarian “Town and Village Enterprises” (TVEs), which were concentrated in the coastal regions. In the first decade, they were the main engine of capitalist accumulation. From employing 28 million workers (1978), they went on to employ 125 million (1993) and to produce 25% of GDP. Later, when, after the Tiananmen massacre (1989), capitalist restoration accelerated, priority shifted to the coastal cities and the TVEs entered into open crisis.

After 1992, coinciding with the restorationist acceleration, rural areas were severely neglected, provoking a serious crisis that forced peasants to emigrate en masse. Meanwhile, the government promoted the sale and purchase of land use rights, land concentration, land usurpation by local governments and the creation of an agrarian bourgeoisie.

Restorationist measures in the countryside were the essential piece to “liberate” 200 million peasants and force them to move to the cities as migrant labor (nonmigong). These peasant migrants ended up working in a factory-barracks regime, with very low wages, precarious jobs; without the right to pensions, health insurance or basic education for their children, because they lacked the urban residence registration (hukou). An apartheid that turns them into second-class citizens, with an inherited rural identity.
The ultimate secret of the Chinese economic miracle of the past 40 years lies largely in the surplus value extracted from these migrant workers, who make up a substantial part of the Chinese working class.

The “Reform and Opening-up” pack also established four “Special Economic Zones” (SEZs), including Shenzhen, designed to attract foreign investment. Beginning in 1984, the CCP facilitated foreign capital access to 14 similarly privileged coastal cities, this time in collaboration with local governments.

This phase responded to the advance of Chinese integration into the Asian production chains of the new industrial branches (ICT, “information and communication technologies”), export-oriented, supported by the investments of the “Asian Tigers” and Japan.
Price liberalization of consumer goods continued, resulting in rampant inflation (21% in 1988), combined with a sharp increase in social inequality and widespread corruption.

On these bases, the popular uprising developed which, led by the students, had Tiananmen Square as its epicenter, spreading throughout the country, demanding freedom, an end to corruption and social justice. On June 4, 1989, in view of the extension of the movement and the growing involvement of sectors of workers, aware that its development led to questioning the dictatorship of the CCP, the army crushed the revolt in blood and proceeded to a savage repression.

After Tiananmen, capitalist restoration advanced by leaps and bounds

After the massacre, for a brief interregnum, the process was paralyzed by internal divisions over the pace and modalities of the restoration and how best to preserve the monopoly of the CCP and its dictatorship. Deng’s famous “Southern Trip” in February 1992, at the age of 88, ended the interregnum and gave way to the “Great Compromise”. This unified the different factions of the CCP. With Deng at the forefront, they made it clear that, after Tiananmen, there was no turning back.

The “small and medium-sized” state-owned enterprises (SOEs) were privatized, falling into the hands of provincial and local bureaucrats, in combination with their cronies and former directors. The large SOEs were profoundly restructured: part of their capital went public; between 30 and 40 million workers (60%) were laid off and those who remained suffered an immense labor regression. At the same time, the arrival of foreign capital exceeded the best expectations.

The leap after joining the WTO (2001)

China’s entry into the WTO in 2001 accelerated the liberalization measures, improved the conditions for foreign investment, opened many doors to the Chinese market and allowed a strong boost to exports. It meant a strong increase in foreign investments, this time led by the USA and the other big imperialist countries. In 2009, 27% of global investments were destined to China.

Western multinationals began to make massive use of China, via direct investment and subcontracting, to produce components and for their final assembly, which in turn provoked a generalized industrial delocalization in their countries. At the same time, the American bourgeoisie forced an intense fall in wages and working conditions in their country (which was generalized throughout the world). Here, in a nutshell, is the substance of the “Chimerica”. In this process, in only two decades, China became the “factory of the world”, surpassing in 2011 the USA as the biggest manufacturing power.

The Chinese bourgeoisie emerged and grew stronger from its integration into the supply chains of the factories created by foreign investment, with massive exports, through colossal infrastructure works and the massive urbanization of the country. It did so by becoming strong in segments of the manufacturing processes and exploiting China’s huge rural market. China’s own backwardness allowed it, paradoxically, to skip entire stages of development. Thus, the adoption of high technology in telecommunications was not done by going through each stage of advanced capitalist countries, but by installing fiber optic cables throughout the country practically all at once. Something similar can be said about electric vehicles or solar panels, in which China is the leading technological and commercial power.

The process of autonomous capitalist accumulation, with the emergence of powerful private oligopolies, has been massively supported by the State, which has kept in its hands the credit system , energy and basic industries and has developed infrastructures. The State has provided the private oligopolies, concentrated in the final consumer goods sectors, with loans, aid, shareholdings, as well as cheap energy and production goods and also friendly taxation. At the same time, it forced the transfer of Western technology through joint ventures, in exchange for Western access to a semi-slave labor force and to the growing Chinese market.

The control of the restoration process has allowed the State to maintain investment rates of 40% of GDP for decades (with the consequent reduction of the population’s consumption) and to promote, especially since the accession of Xi Jinping, a powerful deployment of investments abroad. As for GDP, according to the National Bureau of Statistics, between 1980 and 2014 it presented an average growth rate of 9.5%. Although since then the rate has been in decline: in 2017 it was 6.9%, in 2024 it has reached just 5% and for 2025 they forecast 4-5%.

Intertwining between state and private capital

Chinese capitalism is characterized by an amalgamation of state and private capital. Large private corporations (Internet, high-tech, electric cars, telecommunications, electro-electronics, pharmaceuticals, robotics…) benefit from massive financing and contracts from the State, which plays a key role in their foreign expansion. Large SOEs and state-owned banks have private equity participation and are listed on Chinese stock exchanges; many are also listed in Hong Kong and a significant number on foreign exchanges. Together, the large private and state-owned corporations form large consortiums.

According to 2017 official data, the private sector contributed more than 60% of GDP and maintained the same percentage in fixed capital investment and foreign investments. It accounted for more than 70% of high-tech companies, more than 80% of urban employment and more than 90% of new jobs.

In October 2020 China’s superrich reached, in the heat of the pandemic, a combined fortune of $4 trillion, more than the GDP of Germany. Jack Ma’s family (Alipay) led the macabre list with a fortune the size of the Russian economy. The Star Market, Shanghai’s technology exchange (the Chinese Nasdaq) had “created” in this time 13 new billionaires, among them the owner of Tiktok and the founder of the e-commerce platform Pinduoduo.

The Chinese imperialist drive

Lenin, in his work Imperialism, the Highest Stage of Capitalism (1916), linked the emergence of Germany as an imperialist power to the response of Germanic capitalism to the great economic crisis of the late 19th and early 20th centuries. Similarly, China’s response to the great recession of 2007-2008 (which cut its exports short and caused a massive devaluation of capital) triggered its imperialist drive as a way to preserve and expand the power of the Chinese oligopolies and maintain the regime’s own political independence.

The Mao-Stalinist bureaucracy forced the credit machinery, increasing investment to 45% of GDP and proposed a “change of development model”, which took precise contours with Xi Jinping (2012).

D. Harvey, in his book Marx, Capital and the Madness of Economic Reason (2017), points out, “In 2007 there was not one km of high-speed rail, in 2015 there are 20,000 km (…) Between 1900 and 1999, the USA consumed 4, 5 million tons of cement. Between 2011 and 2013, China consumed 6.5 million tons. In two years, the Chinese consumed more cement than the US in a whole century (…) In recent years, more than half of the world’s steel production and consumption has taken place in China.” All this placed China’s GDP in 2011 in second place globally.

During these years, along with major infrastructure, the real estate sector jumped from 9% of GDP (2000) to 21% (2020). Overinvestment in sectors such as steel and cement was accentuated, while manufacturing, telecommunications and high-tech were lagging behind, and the country’s profit rate and productivity were falling.

The answer was a package with two combined components: the first, the “Made in China 2025” program, launched by Xi in 2015. It specified 10 priority sectors and key technologies such as 5G, Artificial Intelligence (AI) or semiconductors (chips). It promoted “national champions”, i.e. Chinese monopolies to which it preserved domestic market dominance in order, on that basis, to assert its global primacy. Later came the “China Standards 2035” program, with the goal of setting global standards for new technologies.
The second component was exports. If up to then, the export of goods had grown rapidly, now, with Xi Jinping, it was the export of capital that took off at breakneck speed. In 1990, China was 16th in the ranking of capital exporters. In 2010 it was 4th and in 2018 it was 2nd. In 2019 its FDI was US$117 billion, while that of the US was US$125 billion. In 2020 Chinese outward investment exceeded inward foreign investment.

The formula that condensed the Chinese exit abroad was the BRI (Belt and Road Initiative), launched in 2013 and converted by Xi into the main mechanism of Chinese imperialist expansion. The BRI is a tool of control and appropriation of energy sources and raw materials, of exit from domestic overproduction and conquest of markets, particularly in semicolonial countries (the “Global South”), of expansion of Chinese monopolies and offshoring of labor-intensive Chinese industries. As a “natural” extension of the BRI, there are the large investments in Latin America, associated with the conversion of China into the region’s main trading partner.
Over the last few years, Chinese imperialism, hand in hand with the State, has invested heavily in the Asian and African markets, where it is the leading creditor (and the second on a global scale). It has strengthened intense relations with Russia with an eye on Central Asia and energy supplies. It has made a strong entry into the Middle East, where it is the main trading partner. In Africa, it has displaced the traditional powers (France, Great Britain, the United States). A conclusive expression of this is the recent holding in Beijing (September 2024) of the China-Africa Cooperation Forum with the participation of heads of state and government from more than 50 African countries.

China has become the first trading partner of Latin America (where 21 countries have joined the BRI) and is, after the US, the second largest exporter of capital to the region. Examples include the electric car (EV) factory of ByD in Brazil, the investment in Bolivia by CATL (the world’s leading battery producer) to extract lithium from the Uyuni salt flats, and the construction of the ports of Chancay (Peru) and Ensenada (Mexico).

The Chinese monopolies have become distinctly belligerent forces in the global struggle for resources, markets and “spheres of influence,” with the BRI as the spearhead. China’s remarkable and growing military buildup is part of this movement, particularly its naval power in the South China Sea.

It was China’s imperialist impulse that brought Globalization (with its Chimerica) and the World Order, in which the US had until then exercised absolute and undisputed dominance, into crisis.

The China-US conflict today

Shortly after Trump’s inauguration, major American technology companies announced at the White House a mega investment of US$500 billion. The objective: to ensure the American monopoly on AI, necessary for a worldwide appropriation of technological super-profits and for maintaining American global hegemony. The emergence, a few days later, of the Chinese AI chat room, DeepSeek, questioned these plans and cast doubt on the American primacy in AI and the role that China would play in this vital field.
The US continues to maintain its world economic hegemony, sustained by an overall productivity that clearly surpasses that of China, to which must be added its global financial (and, of course, geopolitical and military) dominance. The USA remains the leading power in terms of final consumer goods (digital industry, cutting-edge electro-electronics, pharmaceuticals and aerospace). China, however, already reaches 12.24% of the world in this field and is, at the same time, the largest global producer of means of production (30.83% in 2023). It is by far the “world’s manufacturing superpower” and was, at the end of 2024, the world’s leading economy in terms of GDP purchasing power parity (ppp), second only to the USA in current dollars.

Just a few days before DeepSeek’s appearance, the US agency Bloomberg pointed out that China was the world leader in electric cars (EV), drones, solar panels and high-speed trains, and was vying to be the world leader in robots and medicines. China’s C919 commercial aircraft already competes in Asia with Boeing and Airbus. If all this is of great importance, the battle for leadership in semiconductors (currently in the hands of the American company NVIDIA) and in AI is even more so, given that, if China were to overtake the US in this field, it could give rise to a seismic wave of enormous consequences.

China is clearly inferior to US imperialism in the financial field. The US is the great financial superpower, with its banking system, international financial institutions (IMF, WB) and the role of the dollar as universal currency. However, China is working hard to become, in parallel with its foreign investments, a global financial power. In this field, the BRICS+ group , led by China, aims to take steps towards the creation of a financial and monetary structure as an alternative to US domination.

Trump’s accession to the Presidency, with all his extra-economic measures, including his threats and bluster, does not reflect the strength of US imperialism but its decadence. For many decades, since the end of World War II, from which it emerged as the undisputed dominant power, the US did not rely, as a rule, on extra-economic measures to impose its overwhelming economic hegemony, based on its higher productivity and financial dominance, i.e., it relied on its “soft power”. The culmination (and last stage) of this process was neoliberal Globalization, with the famous “Washington Consensus” and its full freedom of movement of capital and goods. Of course, in the background of this process has always been the US military, with its gigantic arsenal, its more than 700 bases in the world and its selective interventions.

This general situation has been changing and today it is stridently manifesting its bankruptcy in Trump’s second term, with his “tariff war” and the rest of his extra-economic measures, including provocations. Trump’s new pattern expresses the deterioration of US economic primacy in key sectors and reflects, as a whole, the loss of US global influence, particularly in the face of the rise of China. Trump is resorting to extra-economic measures to re-establish the lost dominance, at the price of openly calling into question the battered foundations of the World Order that emerged after World War II, renewed after the fall of the USSR.

The dispute between the US and China is taking and will take increasingly acute forms. Everything suggests that Trump, in addition to maintaining the technology embargo, is at the beginning of a major tariff battle against Chinese exports, with repercussions in other countries. China’s strength as a manufacturing superpower is also its weakness in the face of a generalized tariff offensive, due to its dependence on exports and its current overproduction. Likewise, the US economy is also highly dependent on Chinese imports and the closure of these could have serious consequences.

China, in the face of the US offensive, will intensify its external expansion, particularly towards the Global South. And it will have to do so in the face of the US seeking to reconquer areas of influence gained by China, prevent it from establishing alliances and impose a regional military encirclement such as AUKUS.

In reality, we are in the midst of an unprecedented process that combines economic elements (technological and commercial) and geopolitical issues, as well as the internal situation of the respective countries. The outcome of this process will depend on this combination and its effects over time. A process where everything will be put to the test.

Earlier we mentioned the increased risk of military collisions. In truth, this possibility does not stand alone but depends on the general course of the conflict in the coming years. In your case, the most likely hot spot is in the Taiwan Strait and the South China Sea. This is where Admiral Lisa Franchetti, head of the US naval forces, was pointing in September 2024 when she stated that the naval engagements in the Red and Black Seas were of great help to them in “preparing for a Chinese attack on Taiwan”: “I am very focused on 2027”.

China’s difficult economic situation

Since the end of the COVID pandemic, the Chinese economy has not been able to recover. There is a slowdown in growth, far from that of decades ago, with deflationary tendencies, driven by consumption that is not picking up and by the price war between manufacturers, motivated by the existing overproduction, which is evident in the case of electric cars. Unemployment reaches 20% among young people, casting a shadow over their expectations and aggravating their terrible working conditions. Local governments are suffering a very serious financial crisis, which stems from the bursting of the real estate bubble (Evergrande bankruptcy, 2021), which has left them without their main source of resources, the sale of land, and with a debt of great proportions. There are places where local governments cannot even pay their employees and contractors.

The real estate crisis is far from being resolved. State investments only softened the crisis and the same is true now, with recent measures such as the approval of funds to finish unfinished buildings. Housing prices and transactions continue to fall, in February 2025 the Shenzhen authorities bailed out Vanke Real Estate and at least a dozen developers, unable to pay off their debts, are facing liquidation petitions. The effect of this crisis on the Chinese economy as a whole is downright depressing.

All this is happening in the midst of the tariff offensive (and technological embargo) restarted by Trump against an economy highly dependent on exports (even if half of them currently go to the so-called Global South), in a world situation marked by stagnation, which the tariff war may aggravate.

Leading economists in the Chinese establishment are warning of the danger of entering a deep balance sheet recession like the one that seriously affected Japan in the 1990s. Their proposals are to launch, in the style of 2008, a mega-package of public spending in order to revive the private sector and revive consumption (although the current public debt, at 100% of GDP, is not such a good thing). In the same way, and with even more reason than in 2008, they propose to give a new boost to external expansion. They speak of a Green Development Program for the Global South, which, they say, would be the Chinese equivalent of the American Marshall Plan that followed the Second World War. This plan responds to the fact that the domestic market is not capable of absorbing the overproduction linked to new energies, first and foremost the electric car (EV). On the other hand, focusing on the Global South would serve to circumvent US and EU trade barriers and consolidate areas of influence.

Xi’s difficulties and fears about the Chinese situation are indirectly reflected in his anti-corruption campaign, which is affecting senior business and state officials, including some ministers and high-ranking military officers. A sign of his fears is the republication, in the CCP newspaper Qiushi, of one of his 2023 speeches, in which he said, “The slightest mistake could detonate a butterfly effect where small dangers escalate into serious threats, localized risks become widespread, and socio-economic risks become political risks.”

This phrase of Xi’s reflects the fear of a serious deterioration of the economic-social situation and that, likewise, this will end up provoking an entry on the scene of the Chinese working class , bypassing the official “trade union”, an instrument of framing against free trade union organization.

The situation of Chinese workers

So far, the mobilizations at the end of 2022 against the brutal and humiliating application of the Covid-Zero policy, led by migrant workers and university students, have been the most important since the defeat of Tiananmen (1989). They demanded an end to the savage lockdown, confronted the repressive policy and demanded democratic freedoms. Then there were major mobilizations of retirees in Wuhan and other cities against cuts in medical benefits. The struggles of the country’s oppressed nationalities, such as those of the Xinjiang Autonomous Region, which includes the Uyghurs, or Tibet, must also be taken into account.

The mobilizations in 2024 were limited to a series of factory strikes, mainly in the construction sector and in steel production, caused by wage arrears and, in several cases, by relocations and layoffs. According to the China Labour Bulletin (CLB), there were 1508 strikes, not affecting large companies.

Regarding working conditions, the Hong Kong newspaper, South China Morning Post (SCMP), has reported the widespread existence of the well-known 996 regime, common among Internet and technology companies: working hours from 9 a.m. to 9 p.m. for 6 days a week, despite labor legislation prohibiting it. When there were protests against this labor regime in March 2019, Jack Ma, the Alibaba tycoon declared, “The 996 system is a blessing (…) If you come to Alibaba you have to be willing to work 12 hours a day, otherwise why do you come?”

SCMP also reported on the recent scandal of 163 Chinese construction workers working on the construction of the ByD factory in Bahia (Brazil), in a semi-slave regime: “long working hours, beds without mattresses, common washroom for dozens of workers”, with no weekly rest day and, in this case, with passports withheld. SCMP revealed that this is a situation similar to that experienced in China by workers in this sector, made up of rural migrants, where legally recognized rights are systematically violated (8 hours of work per day, 44 hours per week, one day of rest per week). Equally brutal is the case of the workers who work for the ultra-fast fashion brand Shein, also rural migrants. The Panyu district of Guangzhou is known as “Shein’s village”, with some 5,000 factories and workshops. Most of the workers in Panyu have only one day off a month, work 75 hours a week (10, 11 or 12 hours a day, Sundays three hours less) and are paid by the piece.

Footnotes

1. The Great Leap Forward was a plan promoted by Mao in the countryside between 1958 and 1962. It was characterized by the forced collectivization of the peasants, through the establishment of rural communes to which they assigned the objective of multiplying agricultural production (with obligatory quotas) and the generalized installation of small rural blast furnaces to melt steel, whose production was to surpass that of the British in 15 years. A central aspect of the plan was to ensure agricultural exports to repay the debt contracted with the USSR. The plan, arbitrary, coercive and without resources to make it possible, was based on an enormous overexploitation of the peasantry and failed in all its objectives: agricultural production did not increase, steel was largely unusable and dozens of dams built at the time collapsed in 1975. On the contrary, it led to an enormous famine which caused the death of millions of peasants (at least 10 and there are sources which estimate 35 million).