Capitalism’s handling of the pandemic has caused a sanitary, social and human catastrophe for the majority of the world’s population. In this catastrophe, in parallel to the millions of dead, the list of billionaires stands tall. The entire capitalist world economic organism has reacted according to the supreme norm of capital, the law of accumulation. It is worth noting, however, the enormous speed of the centralization of capital spurred on by the pandemic.

By Ricardo Ayala and Felipe Alegría

In March 2021 the press informed us that “the world’s super-rich increase their fortune by 412 billion dollars – 8 billion per week – reaching a record total of 3.228 billion in their fortunes. Tesla’s Elon Musk adds $151 billion, quite a record, to become the richest man in the world, at $197,000. [1]

We are, in fact, facing a brutal display of the development of the “general law of capitalist accumulation” that Marx described in Capital: This law determines an accumulation of misery equivalent to the accumulation of capital. Therefore, what in a pole is accumulation of wealth is in the opposite pole, that is, in the class that creates its own product as capital, accumulation of misery, torments of labor, slavery, despotism, ignorance and moral degradation. [Reflecting as never before] “the antagonistic character of capitalist production.” [2]

One of the terms of the question posed in the title, whether China is capitalist, could basically be answered by compiling information on the development of Chinese social relations during the pandemic and seeing to what extent they maintained the same tendencies of imperialist capitalism.

However, against all the evidence that we will detail later, the Chinese Communist Party (CCP) and its international acolytes claim that what we have in front of us is a “socialism with Chinese characteristics”, a functional definition to justify and beautify the capitalist restoration that Deng Xiaoping initiated in the late 70s and the central place of the CCP, the party-state of the Mao-Stalinist bureaucracy, at the heart of Chinese capitalism.

1. Jabbour (PCdoB), socialism and semi-slavery to labour

The Communist Party of Brazil (PCdoB), Xi Jinping’s spokesman and apologist for the CCP, and its China specialist, Elias Jabbour, have been flying the banner of socialism with Chinese characteristics. Even Jabbour gives it a bizarre personal academic touch by calling it “nova economia do projetamento.” [3] This new economy would become the “real socialism” of our days, a new type of economic-social formation based on a totalitarian
state technocracy.

For our author, those who, like us, dare to affirm the capitalist character of Chinese social relations, are stuck (forgive the bombast of the quote) to “a positivist hegemony, which does not go beyond the limits of the notion of separation into parts; pure abstraction without dialectical rationality, trapped in abstract representation.” [4]

Let us see, then, what is the “dialectical rationality” of the accumulation of misery equivalent to the accumulation of capital of which Marx spoke and which takes place in China.

Chinese billionaires

In October 2020, China’s super-rich owned a combined fortune of $4 trillion, more than the GDP of Germany, the world’s fourth-largest economy. In the aforementioned edition, Jack Ma’s family leads the macabre list whose fortune is the size of Russian economy. In the same way that the fortune of American and other imperialist billionaires multiplies, “the wealth of Ma’s family grows by 45 percent as the booming stock market and mega technology announcements raise the fortune of China’s billionaires by 1.5 trillion dollars.” [5]

The pandemic has elevated the shares of American, German and English pharmaceutical companies for the simple reason of keeping their patents in a besieged fortress, while countries like South Africa have only 7% of their population vaccinated, at the end of November. Well, the new face at the top of the TOP 10 of Chinese fortunes is Zhong Shanshan, the main shareholder of the Chinese pharmaceutical company in the vaccine business, which with its $ 85 billion is today the richest man in Asia.
Other additional information also helps us to keep up with Jabbour’s “abstractions”[6]:

– Beijing is the capital of the “billion”, for the sixth year, with 145
billionaires. China now has six of the 10 cities with the highest
concentration of billionaires.

–  The Covid19 pandemic has triggered the profits of the new
branches: pharmaceuticals, e-commerce or electric vehicles
(EVD). The Star Market, the Chinese technology exchange
equivalent to the Nasdaq, has “generated” 13 new billionaires.
Among them, Tiktok’s founder and largest shareholder, Zhoang
Yiming, who adds $40 million to his fortune and enters the TOP30
with $60 billion. Also Huang Zheng, founder of the e-commerce
platform Pinduoduo, which totals $51 billion and enters the TOP
20 with $69 billion. [7]

This number of billionaires of the “new projectment economy”
also gives play to their Western friends. Thus, the large imperialist investment funds such as Blackrock, Vanguard or State Street together have stakes in around 10% of the shares of large private corporations and also in many Chinese state-owned enterprises. For his part, tycoons such as Bernard Arnault, owner of the French multinational LVMH (Moët Hennessy Louis Vuitton), which controls large luxury brands and who in May 2021 became the second richest person in the world, behind Jeff Bezos, thanks to his Chinese friends:

Revenues in Europe were still in the red… But Chinese consumer demand has revived, with LVMH sales in Asia, excluding Japan, up 86% in the first quarter compared to a year earlier. Overall, LVMH’s revenue increased 32% over the same period in 2020 and up 8% from 2019. [8]

The concentration of wealth and property in Chinese capitalism has nothing to do with Xi Jinping’s official proclamation of “common prosperity.” According to Thomas Piketty (Capital and Ideology, 2019) the proportion of wealth held by the richest 10% of the population was between 40% and 50% in the early 1990s, twenty years after the capitalist restoration. By 2018 that percentage had grown to nearly 70 per cent. [9] .

The side that “accumulates misery, torments of labor, slavery and moral degradation”

The accumulation of wealth does not exist without its opposite, for capital accumulates by squeezing the workers. The propaganda about the average increase in wages in China hides the real hell to which the workers are subjected:

– On January 3, 2021, a 22-year-old employee of the Chinese portal Pinduoduo died from overwork from overtime, which angered the public by exposing the system known as “9-9-6” [working from 9:00 am to 9:00 pm for six days a week]. On January 9, 2021, another worker from the same company, surnamed Tan, committed suicide in Changsha. [10]

It’s the same path Foxconn workers traveled in 2010, when there were a series of suicides caused by unbearable workdays. Most were migrant workers from the countryside, who are forbidden by the CCP dictatorship to organize to fight for better working conditions. Until 2003 these workers were forbidden even to join the official unions, which are organizations completely tied to the bosses and the CCP bureaucracy.

All of the above refers us to the great “secret” of the impetuous
development of Chinese capitalism after the restoration: the brutal overexploitation of workers, especially migrant rural workers:

– China’s workforce is made up of more than 800 million people, of whom, as Premier Li Keqiang said last year, “there are 600 million living on a monthly income of 1,000 yuan [$156.83[11]] or less. That is, more than 40 per cent of the country’s 1.4 billion people live on less than $5 a day.”

– Wang Xiaolu, deputy director of the ruling National Institute of
Economic Research, said: “Half of China’s 400 million urban
workers are migrant workers. Most of them are excluded from the
urban social security system. They do not receive public services.
Less than 30 percent of them are covered by the public pension
program.” [12]

– That is, these 200 million migrant rural workers – equivalent to
the entire Brazilian population – suffer subhuman conditions: they
do not receive public services; 70 per cent are excluded from the
urban social security system. As soon as a worker leaves his
village, he is tied to the hukou system, a census that is based on
the birthplace of the parents. This means that without official
urban residence, they do not have access to public services, from
pensions to education.

– According to official data, to retire they must continue to
contribute to the rural pension system in the town where they are
registered. If they pay an annual contribution of at least 100
yuan, they can receive a minimum monthly pension of 55 yuan
($8.63) upon reaching the age of 60. By comparison, urban
retirees received an average of 2,362 yuan ($370.43) in monthly
pensions nationwide in 2016.

Chinese social relations are not determined by the role of the remaining state monopolies, but by the exploitation of the working class and the accumulation of capital, both in state-controlled enterprises and in private enterprises.

Some conclusions

Now, before continuing with the specificities of capitalism in China and seeing how state and private capital form an inseparable whole, let us consider some political conclusions of the theses of Jabbour and other admirers of Chinese capitalism.

Jabbour forgets to mention the intensity of the exploitation of Chinese workers and that such super-exploitation is only conceivable with a one-party dictatorial regime, as in China. For him, as well as for the Castro-Chavistas and the bulk of the communist parties and their successors, the old “Soviet Marxism” that they once defended lasted until the collapse of the Stalinist apparatus in the former USSR and Eastern Europe. After the debacle they had to look for “new models”, their new model being “market socialism with Chinese characteristics” like Xi Jinping, a model as legitimate as the Soviet Stalinist dictatorship once was. For all of them not only the project of socialism of Marx and Lenin was surpassed by history but also by its midwife, the socialist revolution.

For Jabbour and his peers, Chinese capitalism is a benefactor power of humanity with which it is necessary to weave an “anti-imperialist alliance” against the US. An alliance where they have their place from the dictatorship of Putin to the Taliban government, the Pakistani military regime, the coup junta of Myanmar, the Cuban dictatorship and that of Ortega in Nicaragua and the Maduro regime. An alliance in which they reserve places for progressive Latin American governments.

Jabbour’s blind trust in Chinese capitalism makes him and his investments the great natural ally of Brazilian (capitalist) development as if Chinese capitalism were not governed by its own interests. In truth, the PCdoB alternative for Brazil’s development only fits into the picture of the country’s new location in the global division of labor, now with its relative
deindustrialization and subordination to the import of industrialized goods from China in exchange for the export of natural resources. It seems that Jabbour has not taken much into account in drawing up his proposals the predatory policy and super-exploitation of Chinese benefactor capitalism in Asia and Africa.

2. A “hybrid” regime between socialism and capitalism?

Beyond the Castro-Chavista current and the surviving CPs, there are left-wing intellectuals who, in more refined ways, agree with Jabbour in some fundamental aspects. For these intellectuals the Chinese regime, if it is not the socialism of our time, it’s quite similar to it. An exponent of this sector of the intelligentsia is the Argentine Claudio Katz.

Claudio Katz flatly denies that capitalist restoration has taken place in China, although he acknowledges that important elements of capitalism have been introduced. This introduction would, however, be ‘partial and reversible’. Unlike Jabbour, Katz considers it excessive to speak of socialism in China and argues that we are facing a “hybrid” regime between socialism and capitalism, a regime that has not yet opted in one direction or another.

However, for Katz this “intermediate” regime can last “decades”, so that we would not be facing a provisional historical impasse but a new social formation that, as he says, “involves the general project of socialism”. For us to understand each other, we would come to be facing a social regime historically necessary in the transition from capitalism to socialism. Of course, seen this way, the differences between Jabbour and Katz are truly blurred.

Katz is forced to recognize that “small and medium-sized private property in agriculture gave way to large industrial enterprises belonging to the new bourgeoisie. Pricing by competitive rules was extended to the bulk of quotations, exploitation modalities were extended, and the accumulation of profits enriched an influential minority. In addition, the old bottlenecks generated by underproduction were replaced by overinvestment tensions.
(…) Of this basket of elements, the most significant thing is the
emergence of a class that owns the means of production that seeks to transmit privileges to its heirs.

But this, according to Katz, does not define the validity of capitalism in China. He goes so far as to state that “the answer would probably be affirmative in other historical circumstances.” But as China joined capitalism in a global scenario of “neoliberalism and financialization” without adopting these two characteristics, this made “the restoration of capitalism very incomplete from the beginning.” That is if Chinese capitalism does not reproduce the characteristics of American, European,
Japanese or, say, Brazilian capitalism, then one cannot speak of
capitalism.

But imperialism developed to the extreme the socialization of labor on a world scale, incorporating countries into the production chains of its oligopolies. However, this in no way implies that all capitalist formations are homogeneous with each other. On the contrary, they take very different expressions, depending on the historical circumstances and their place in the imperialist chain. On the other hand, what we are discussing here are the basic social relations that govern the country. And there is no way to avoid, no matter how you look at it, that we are in the presence of a regime of exploitation (“with Chinese characteristics”) at the service of capitalist accumulation.

But in truth, the main reason that draws out Claudio Katz’s doubts about the social nature of the Chinese regime is the role played by the Mao-Stalinist bureaucracy. The CCP is, for Katz, the great pillar of the socialist part of the Chinese hybrid, the one that prevents the restoration of capitalism. He insists on it again and again. The following quote is demonstrative: “The old political system structured around the Communist Party persisted and strengthened its predominance of economic management. The contrasts with what happened in Eastern Europe are so categorical that the author of the comparison [i.e., himself]
seriously questions the current validity of capitalism in China.” That is, as long as the control of state power remains in the hands of the CCP, there will be no capitalism in China. In view of this, for Katz the enormous social, political and environmental sufferings and costs caused by capitalist restoration become secondary.

Indeed, it is surprising to argue that China is not capitalist because the CCP dominates the state, precisely when the protagonist of the restoration is none other than the CCP, the single party of the Mao-Stalinist bureaucracy. As surprising as this is denying the capitalist nature of the Chinese regime because it “did not adopt neoliberalism and financialization” like the West. Given China’s enormous delay in its jump-start, its barrier-free opening to Western finance capital would have simply meant the suicide of the Mao-Stalinist bureaucracy and the conversion of the country into a mere American semi-colony.

Playing a sleight of hand, Katz treats the Chinese bureaucracy and bourgeoisie as entities alien to each other, “parallel” to each other. Thus, he writes: “Instead of burying the political structure of the Communist Party, they decided to consolidate it and instead of merging the new capitalist class with political power, they only accepted its existence as a force parallel to their own leadership.” Katz forgets that the CCP is not only the one who promoted and directed the restoration of capitalism from the top of the state but is also its main beneficiary and fundamental
piece. State capital and private capital, as we will see later, form an inseparable conglomerate in the configuration of Chinese capitalism.

To those of us who argue that capitalism has been restored in China, Katz accuses us of not clarifying “when the burial took place. The characterization of this shift is key to defining what meaning is assigned to the concept of capitalism or socialism.

In his work “The Revolution Betrayed” (1936) Trotsky wrote that in the event that if neither the revolutionary party nor the counterrevolutionary party seized power in the USSR, it could not be thought that the Stalinist bureaucracy would abdicate in favor of socialist equality and that “in the future, it will be inevitable that it will seek support in property relations.” This is what happened with Deng’s Reformation and Opening in 1978 (as well as Gorbachev’s Perestroika in 1986). [13]

Both were conscious plans to restore capitalism by utilizing the levers of the state. The state, from that moment, as an instrument of the ongoing restoration, came to have a capitalist nature. As Trotsky pointed out in the aforementioned work: “the class character of a state is given by the forms of property and the relations of production that it protects and defends.

Uneven and combined development in the restoration

Among those who deny the capitalist nature of China is also Michael Roberts, the British Marxist economist. Roberts defends his theses in a more sophisticated way than Katz and has a more critical approach to the Chinese bureaucracy.

Roberts’ problem is that, by taking elements of reality (the role of the state and the CCP in the economy or the transfers of value from China to large multinational corporations and imperialist countries), he separates them from the process as a whole, transforms them into a totality and freezes them into a still photo, completely disregarding the historical origin of the restoration and its own movement.

Roberts does not consider the internal logic of the Mao-Stalinist
bureaucracy, its historical course and its restorationist project, which became conscious and explicit with Deng Xiaoping’s “Reform and Opening-up” in 1978: a project based on the integration of the Chinese economy into imperialist globalization, after reconciliation with US imperialism in 1972. [14]

The Chinese Stalinist bureaucracy undertook capitalist restoration through the levers of the totalitarian state; relying on the possibilities offered by the integration into the value chains of the new branches linked to
information and communication technologies (ICTs), fragmented
internationally in the new global division of labor (Globalization) and settled in East Asia. It took advantage of internal inequality, with a country marked by an overwhelming majority of the population in the countryside and by the huge urban explosion, which opened up immense potential for its internal market. The bureaucracy took advantage of the country’s historic economic backwardness and made extensive use of the colonial survivals of Hong Kong, Taiwan and Macau. Everything is on the basis of the most brutal exploitation of the working class.

Illustrative of this process is the trajectory of an emblematic company, the Taiwanese Foxconn (Hon Hai) known worldwide for assembling, among others, iPhone, Kindle and PlayStation devices. Terry Gou’s company was born as part of the new global division of labor (GDL). The son of immigrants after the Kuomintang’s defeat in the civil war in 1949, Gou set up his company in 1974 in a Taipei suburb assembling switches for black
and white televisions; in a few years he assembled the Atari console and in the early 1980s IBM was listed in his portfolio. But to continue expanding, he ran into a limit on the availability of labor and wages, which were rising in Taiwan, as well as in the other three “little Asian tigers” (Hong Kong, Singapore and South Korea). [15]

Gou found his answer in mainland China. In 1988 he opened his first factory in Shenzhen’s Special Economic Zone (SEZ). By vertically integrating the assembly process, he increased the scale by incorporating more than a million workers into the semi-slavery of its barracks-factories. Now Foxconn not only assembles goods for The North American oligopolies but also among its main customers are large Chinese multinational companies such as Huawei, Xiaomi or Lenovo.

In the SEZs, established in 1981, foreign investment enjoyed great privileges in taxes, infrastructure or repatriation of profits, in addition to having an abundant labor force in conditions of semi-slavery. In its first phase, the SEZs mainly hosted investments from Japan, Korea, Hong Kong and Singapore and the mobile was the price of the labor force for the expansion of regional production chains. Later, the privileges of the SEZs
were extended to a large part of the coastal cities. Later, starting in 2000, with the entry into the World Trade Organization (WTO), China experienced an investment boom of the US and the EU.

In parallel to these processes, there is another phenomenon, which is based on the uneven development that characterizes capitalist expansion in China. Let’s look at a notable example. In 1987, a senior Army officer, Ren Zhengfei, created Huawei, not by mere coincidence also in Shenzen. In the space of a few years, the company has become the world’s leading supplier of equipment for the fifth generation of the Internet (5G), the
best-selling smartphone brand in China and the second in the world, on the heels of imperialist oligopolies.

In the late 80s, smartphones and the Internet were a piece of science fiction, most of the country’s inhabitants lived in the countryside and did not even have a landline. Thus, in a country that did not have similar equipment to expand the fixed telephone network, Huawei entered the digital era occupying the field of rural telephony, which was not of interest to large foreign monopolies. The technology of telephone switches [16] was developed by the Armed Forces Engineering Institute and later
became an element for the accumulation of capital in Huawei’s production lines. From the first equipment (HJD-04), a digital telephone switch for fixed lines, to the equipment for mobile phones integrated into the Internet, there is a dizzying speed [17]. Control of the domestic market came with the switch to 3G,[18] developed entirely in China in 2006, to be adopted by the Ministry of Communications and then on a global scale.

Roberts, like Katz, does not see the concrete characteristics of the
Chinese bourgeoisie, and defends a distinction, as sharp as it is artificial, between the state bureaucracy and the private bourgeoisie. But the bond between them is intimate, carnal, a true fusion.

The high bureaucracy not only runs banks and large state-owned
enterprises (SOEs) but profits directly from their businesses through their direct and indirect participation in the network of private subsidiaries that they create in places like Hong Kong. While, in its function in the direction of the state, the bureaucracy participates directly in capitalist profits. It looks after the interests of the bourgeoisie and the capitalist state as a whole. Large private corporations are financed and owned by the state, just as large state-owned enterprises, including banks, are owned by
private capital, while large consortia are formed that include both. “Small and medium-sized” state-owned enterprises (SOEs) were privatized and handed over to the provincial bureaucracy in the ’90s[19]. The Evergrande scandal has also shown that a majority of local (134) and rural (1400) banks (which account for a third of China’s commercial banking sector) are controlled by private tycoons. Add the private businesses, built on structural corruption, shared between the new private bourgeois and the
local and provincial bureaucracies on whose decisions they depend, as well as the network of private businesses, managed by “cronies”, which parasitize the various apparatuses and services of the state. We are facing a single capitalist class, intertwined, formed by different fractions with specific interests, presided over and disciplined by the high state capitalist bureaucracy.

Huawei, emerging from the bowels of the Armed Forces, has become an oligopoly that exploits 194,000 workers and has businesses in 170 countries. [20] Its fulcrum for the conquest of foreign markets has been the economy of scale from state purchases, which has expanded the 5G network to all large Chinese cities during the pandemic. Huawei’s overseas contracts are made with the Chinese government’s help and financed with loans from Chinese state-owned banks. The purchase of Volvo by Geely was financed by Shanghai’s provincial banks…

The Chinese big bourgeoisie is not a homogeneous sector but, by the origin of its monopolies, it is a complex ruling class that, beyond the class interests that unify it as a whole, also houses different factions with conflicting interests.

Thus, oligopolies emerged in the 90s, in the wake of the development of the productive chains of Internet equipment, mostly linked to online commerce, have appropriated a huge mass of profits, transforming themselves into holdings that are directed towards productive investment and the financial market, threatening the monopoly of state banks in the creation of money.

One of these tycoons linked to e-commerce is Ma Huateng, who emigrates from Shantou, a fishing village east of Shenzhen, to create in 1998 the company Tencent, which is currently the largest video game provider in the world. Its flagship product is the “All-in-One” messaging app, WeChat, an application that combines WhatsApp, Facebook, Venmo, Tinder, Spotify, Amazon, as well as an online payment and transfer system, in a unique
combination. It has around a billion users, the vast majority in China. In January 2021, its stock market valuation was close to one billion dollars.

Tencent has stakes in more than 600 companies, and venture capital funds and began focusing on technology start-ups in Asia, with a special interest in artificial intelligence. When it began acquiring companies abroad, such as Riot Games in the United States or Supercell in Finland, it was tackled by the EU and the US government. [21]

Colin Huang, or Huang Zheng, is the founder of the e-commerce company Pinduoduo, which became China’s largest agricultural platform. Founded in 2015, advertising accounted for about 90% of revenue, but its business is financial, equipping farmers and entrepreneurs in rural communities with an unprecedented system of collective purchasing, blurring the boundary between retail and wholesale. In April 2020, Pinduoduo made its first strategic investment by underwriting $200 million in convertible
bonds issued by Gome Retail Holding, a major appliance and electronics retailer in China. [22]

Profits from the unproductive sector (e-commerce) and those of industrial monopolies (Huawei…) are intertwined in the capital market – stock exchange and bonus markets – and are oriented towards branches whose capital accumulation is above average.

This entanglement moves e-commerce giant Alibaba, led by Jack Ma, the main shareholder of fintech Ant Group, into the race for chip production. Likewise, the third-largest smartphone supplier in the world, Xiaomi, announces its foray into the electric vehicle industry in China, joining other technology companies such as Huawei Technologies Co and Baidu [e-commerce operator] in a big bet on the largest automotive market in the world. Even the over-indebted Evergrande, which specialises in real estate speculation, set foot in the electric car business.

Instead of capturing this living process, Michael Roberts traces a one-sided, abstract and lifeless narrative around the law of value, understood as an abstract, supra historical category. Such a law, Roberts writes, appears “distorted, limited, and blocked” by “bureaucratic ‘interference’ of the state and party structure.” Therefore, Roberts concludes that China would not be capitalist.

The Law of Value and the Role of States

Roberts provides as irrefutable arguments to substantiate his conclusion IMF data that compare China with the US, Germany or France, as if all of them had a comparable origin and historical development and as if a simple formal analogy were enough to solve the problem. The most “irrefutable” of his evidence (which he describes as the “murderous figure”) is an IMF calculation according to which the stock of state productive assets in China is three times greater than those of the private sector, while in the US and the UK they are only 50% and in Japan and
India 75%. [23]

But these data, in addition to reflecting a given moment in
the evolution of Chinese capitalism, only demonstrate two things: 1- that its origin lies in the capitalist restoration of a bureaucratized workers’ state and 2- that without a powerful totalitarian state playing a central role, Chinese capitalism would not be able to compete with imperialism in the world capitalist arena.

Roberts “forgets” that the law of value is expressed in a “distorted” way, particularly in the imperialist epoch, marked by the domination of the big monopolies, finance capital and the big imperialist states that represent them. For Roberts, the law of value would only be operational in the distant epoch of free competition capitalism. But to understand the decisive role of the capitalist state in the economy it is not necessary to go back to the first and second World Wars, to the periods that preceded
them and to the subsequent reconstruction, to the gestation of Japanese imperialism or to the emergence of the Asian Tigers. A very current example of this “distortion” is the billion-dollar ($250 billion) Innovation and Competition Act passed by the US Senate in June 2021 to confront Chinese capitalism. A law that, as the New York Times points out, recalls Xi Jinping’s Made in China 2025 program six years ago. Contemporary history shows the decisive role played by the capitalist state in the economy, distorting the “free market”. It shows how the law of value is
imposed in a “distorted” and indirect way. The bankruptcy of The Chinese real estate giant Evergrande is a good demonstration of this.

Financial capital and BigTech regulation

Roberts does not regard the role of the bureaucracy as the engine and center of capitalist restoration; he does not see its entanglement with private capital forming a single conglomerate around the state. Just as we criticized Katz, Roberts does not understand that if the Chinese bureaucracy had opened its hand in the banking system and had not controlled the capital account, putting limits on the entry of imperialist finance capital and certain “free market” mechanisms, it would have been violently displaced, the country’s political independence would have been
directly threatened and China doomed to become a semi-colony again. But the CCP had learned the lessons of what happened in the former USSR and Eastern Europe and was unwilling to repeat it.

However, despite the restrictions on the entry of imperialist banks and the limits imposed on foreign investment funds in the purchase and sale of shares on the stock exchange, the Chinese capital market exists and is vigorous. In this context, the new regulatory framework of Chinese BigTech has been criticized by the British magazine The Economist as an onslaught by Xi Jinping against free enterprise. On the contrary, Xi’s international “altar boys” such as Jabbour or the Castrochavistas defend him as an example of “socialism with Chinese characteristics”.

The rapid growth of the digital economy has concentrated in the hands of Alipay (Ant Group), WeChat Pay (Tencent) and their colleagues $5.4 trillion in business transactions in 2020, up 9.6% from 2019, making China the second largest e-commerce market after the US.

Money that functions as a means of circulation (a measure of value and means of payment) is not distinguished from its function as capital except by its various forms at times in the business cycle. Its digital form appears as a mere sign, a measure of value, and acts as imaginary money in the face of the speed reached by transactions (of goods and capital). Its fetishistic form is the reflection of the fetish of the commodity itself, to continue to hide the social character of private labor. [24]

The increasing centralization of Chinese technological oligopolies of the means of payment in the hands of holdings that control hundreds of other companies – a genuine expression of financial capital – exponentially expands their investment capacity and threatens the control of the state credit system and the foreign exchange market itself, which moves trillions of dollars a day. [25]

The measures of the new regulatory framework of Big Tech established by Xi reduce investment in productive branches marked by overaccumulation (housing, infrastructure and their suppliers such as steel, cement, etc.), expand their presence in the BRI, Belt and Road Initiative, and direct the investments of technology holdings towards the bottlenecks of the ICT production chains, in order to deal with the technological war waged by Biden, with the aim of achieving self-sufficiency in the production of chips. This is the role of the state in any capitalist country and, of course, it does not nullify the law of value, as Roberts points out.

Roberts does not see that the process of Chinese capitalist restoration (whose gradualism has responded to the lessons that the Mao-Stalinist bureaucracy drew from the debacle of the Stalinist parties in the USSR and Eastern Europe) is marked by the bureaucracy’s extreme preoccupation with preserving its power. Capitalist restoration in China has gone hand in hand with the maintenance and strengthening of the one-party dictatorial regime. Without this totalitarian regime, it would have been impossible to ensure overexploitation and arbitrariness over the
Chinese workers and peasants and would not have been able to
preserve the primacy of the upper strata of the CCP or the interests of the restorationist bureaucracy as a whole and the new private bourgeoisie. Without that iron hand, foreign investment would never have arrived or made China its greatest destination.

Roberts, like the other admirers of the Chinese “economic miracle”, identifies “progress” with “purchasing power”[26] and is unable to explain that under capitalist-imperialist domination, every advance in productive capacity, such as that caused by the capitalist restoration in China, releases at the same time enormous destructive forces that translate into very high and irreparable human and environmental costs: 1- massive industrial relocations in the West, together with a brutal decline in the
wages and labour standards of the working class on a global scale, 2- in China, a semi-slave labour regime in the form of factory-barracks for 200 million rural migrant workers, plus a general regression of the working conditions of the urban working class, as well as pitiful conditions of millions of peasants forcibly displaced to urban suburbs by local officials eager to free up agricultural land to sell its right of use to real estate developers; 3- a brutal social inequality, which is among the largest in the world; 4- a very serious rupture of the metabolism with nature, leaving the country affected by the greatest environmental disaster in the world, with its corresponding planetary impact on global warming and the depletion of mineral and energy resources; 5- a suffocating police dictatorship on
the Chinese people and 6- an expansionist policy that depletes natural resources, super-exploiter of local labour and supporter of dictatorial regimes in Asia and Africa.

A beautifying vision of the restorationist bureaucracy

At last, Roberts simplifies and reduces the basic relations between China and the United States to the “transfer of value” between the two countries, without even considering the conflicts between the monopolies of both countries for supremacy and technological superprofits. We will not develop in this text the place that, in our view, China occupies in the current global division of labour and the system of States.

But, in any case, the relationship between China and the dominant imperialism, the US, cannot be reduced to a “transfer of value” and a comparison of the global productivity of labour in both countries, as if nothing has changed or is changing in these 40 years, as if reality were frozen. As if there had not been or was a combined double track of capitalist accumulation in China: that of the great Western oligopolies and the autonomous accumulation of Chinese capitalism, both based on the super-exploitation of the Chinese workers. As if the relationship between
these two paths of capitalist accumulation had not evolved profoundly, with an enormous development of autonomous capitalist accumulation, both private and state. As if Chinese oligopolies had not entered into open competition with American and Western oligopolies for technological dominance and associated superprofits. As if the battle for hegemony in Asia was not in full swing. Beyond its theatricality, the words of the Democratic majority leader in the US Senate, Chuck Schumer, just before voting on the Innovation and Competition Act are enlightening: “If we do nothing, our days as a dominant superpower may be ending.”

Anecdotally, it is interesting to mention how the combination of his unilateral and reductionist method, together with the data he extracts from the IMF, lead Roberts to absurd conclusions. This is the case when he writes that. “Of the 101 ‘middle-income’ countries in 1960, only 13 managed to break away from the group to become advanced economies in 2008.” Only, among these “advanced economies”, apart from Japan, we find Hong Kong, Singapore, Taiwan, Korea, Spain, Portugal, Greece,
Ireland, Israel, Mauritius, Puerto Rico and Equatorial Guinea. It does not seem necessary to add comments. In the same vein, Roberts adds: “It is no accident that only two large developing economies have managed to become part of the rich capitalist club in the last 50 years (Taiwan and Korea), measured in GDP per capita.” But to qualify a US protectorate like Taiwan as an imperialist country by per capita income does not seem very
reasonable, nor does it do so with South Korea, with 28,500 US troops installed on its soil.

The momentum of Chinese conglomerates abroad seems undeniable. However, according to Roberts, investments in the BRI “are not aimed at profit. Everything is to expand China’s economic influence globally and extract natural and technological resources for the domestic economy” (sic). As if Chinese foreign investments, where private capital accompanies and is associated with the state, were not a central part of China’s global plans!

Roberts also argues that China’s foreign investments are not due to the need to absorb excess capital or the fall in the rate of profit inside China. However, the overinvestment and overproduction that followed the gigantic investment wave after the world crisis of 2008-2009 are more than accredited by the overwhelming majority of scholars, and Roberts himself, on the other hand, points out in several of his works the fall in the Chinese domestic rate of profit as a result of the large investment made.

In one of his latest works, from May 2018, “Xi takes full control of China’s future,” Roberts writes that under Xi, the majority of the CCP leadership will continue with the current economic model, dominated by large state corporations and the one-party apparatus, because “even the elite realizes that if the capitalist road is taken and the law of value becomes dominant, this will expose the Chinese people to chronic economic instability, job and income insecurity and greater inequalities.

Although he later claims that this bureaucracy “is united in its opposition to socialist democracy” and wants to “preserve its autocratic power and the privileges that derive from it,” it does not fail to convey a beautifying vision of a restorationist bureaucracy to which it implicitly assigns a progressive role. In one of his most recent writings, “China in the Post-Pandemic Decade” (May 2020), Roberts is more critical of Chinese bureaucracy and introduces qualifications that move away from Katz’s complacency. He tells us about an “autocratic one-party communist government, often inefficient, that imposed draconian measures during the pandemic, repressed dissidents mercilessly and the cultural revolution was a shocking parody, represses minorities, maintains re-education camps in Xinjiang, no one can speak out against the regime without consequences, in Hong Kong, it has imposed a military government…”

However, there is no mention of the central point: the need to overthrow the (capitalist) dictatorship of the CCP in order to establish a workers’ government supported by a socialist democracy that will take steps in the construction of socialism and expand the world revolution.

Some strategic conclusions of Katz and Roberts’ theses

Claudio Katz is adamantly reluctant to make explicit the conclusions of his theses and Michael Roberts, absorbed by “economic reason”, does not develop them. But if their theses were true, they would be tantamount to sentencing for an entire historical epoch the impotence of the proletariat to resume the struggle for power and resume the construction of socialism. It would mean recognizing in this state bureaucracy a new alternative historical subject,[27] neither capitalist nor socialist, all-powerful and dictatorial, which would represent, despite all its defects, a progressive camp with respect to capitalism and imperialism. The role of the working class would be limited to pressuring this bureaucracy for some reforms and, of course, it would be forbidden as a reactionary thing to make a revolution to overthrow it. The dispute between the US and China would be between imperialist capitalism and a new progressive social formation, despite its shortcomings, in whose field we would have
to remain, even if it was “critically”.

In truth, its unilateralism and its formal and abstract conception of Marxism lead Michael Roberts[28] to the extreme of stating that whoever defends that China is capitalist would be denying Marxism because, if with its “phenomenal success in economic growth”, China continued to be capitalist, “it would be the refutation of the Marxist theory of crisis and a justification of capitalism. «. Of course, since he cannot defend that China
is anything like socialism, then he characterizes it as a “weird beast”, neither capitalist nor socialist. It only remains for us to say that introducing a new category like this into the theoretical corpus of Marxism would require a deeper theoretical justification than economic figures frozen and isolated from the general and historical context and an argumentation caught by the hair.

Notes:

[1] https://www.hurun.net/en-US/Info/Detail?
num=LWAS8B997XUPhttps://www.hurun.net/en-US/Info/Detail?
num=LWAS8B997XUP

[2] K.M. Capital t.1, section seven. XXIII. The General Law of Capitalist
Accumulation. p. 547. Economic Culture Fund.

[3] Elias Jabbour, China and the new possibilities of scientific socialism. Left Bank, p.35. Boitempo Magazine. No. 37, 2nd Semester, 2021.

[4] Idem. pg. 33

[5] Data from Hurun Report’s latest list of the rich, issued by a private Chinese company similar to Forbes, dedicated to the ranking of Chinese tycoons.
https://www.scmp.com/business/money/wealth/article/3106202/jack-ma-leads-pack-chinese-billionaires-2020-fortunes-grow

[6] Data from March 2021. https://www.hurun.net/en-US/Info/Detail?num=LWAS8B997XUP.

[7]  https://www.scmp.com/business/money/wealth/article/3106202/jackma-leads-pack-chinese-billionaires-2020-fortunes-grow

[8] https://economia.uol.com.br/noticias/redacao/2021/05/24/bernard-arnault-se-torna-a-pessoa-mais-rico-do-mundo.htm

[9] Comparing Piketty’s numbers with the Gini index (which measures social inequality: 0 is absolute equality in the distribution of income and 1 is the maximum inequality, where one person would appropriate all the income of the country), the latter was 0.16 in 1978, when the capitalist restoration began, but in 2017 it already reached 0.467. Since then it has continued to increase, to the point that the Chinese government does not
make it public. It is estimated to reach 0.470, much higher than the average of 0.300 OECD countries. Likewise, at the end of 2020, the richest 1% of the country owned 30.6% of the national wealth, compared to 20.9% two decades ago. For its part, the 2014 report of the Social Science Research Center of Beijing University calculated that the richest 1% exceeded 30% of the national wealth, while the poorest 25% owned only 1%.

[10] https://www.scmp.com/tech/big-tech/article/3116385/death-22-yearold-pinduoduo-employee-renews-controversy-over-chinas

[11] Revenue in yuan is converted to dollars as of 4/12/2021.

[12] https://www.scmp.com/news/china/article/3153466/chinas-armymigrant-workers-waits-xi-jinpings-common-prosperity-touch?

[13] Martin Hernandez. The Verdict of History, Russia, China, Cuba… From socialist revolution to capitalist restoration. Editions.
Sundermann/Ediciones Marxismo Vivo, 2009.

[14] [Deng] “wanted to convince Washington that there could be no more loyal ally in the Cold War than the People’s Republic of China under his command. Mao had seen his entente with Nixon as another Hitler-Stalin Pact, in the formulation of one of his generals, with Kissinger acting as a Ribbentrop: a tactical deal with one enemy to avoid the dangers of another. Deng, however, was looking for more than that. Their goal was strategic acceptance into the U.S. imperial system, to gain access to the
technology and capital needed for their effort to modernize the Chinese economy. This was the real and hidden reason for his assault on Vietnam. The United States was still suffering its defeat in Indochina. What better way to earn their trust than to offer them revenge for power? The war failed, but it bought Deng something more valuable than the cost of 60,000 lives: a ticket for China to enter the world capitalist order, in which it would flourish.” Deng Xiaoping and the transformation of China. The
Belkap press of Harvad University Press, 2011. Review by Perry
Anderson. Sinomania, London Review of Books.
http://www.lrb.co.uk/v34/n03/perry-anderson/sino-americana.)

[15] https://www.scmp.com/author/karen-chiu

[16] Developed by the CIT (Information Technology Center), linked to the Institute of Engineering of the Armed Forces, and whose inbound production was in charge of LTEF (Luoyang Telephone Equipment) company linked to the MPT (Ministry of Posts and Telecommunications) X. Shen, The Chinese Road to High Technology: Telecommunications Switching Technology in the Economic Transition. p.105. Springer, 1999.

[17] “By opening the domestic market to foreign companies, domestic companies had to focus on the low-end market in the eighties and early nineties. The Chinese government offered support to help domestic companies capture some of the market share after they developed their own digital fixed-line switches. For example, the Ministry organized two coordination meetings to encourage the use of domestically produced switches in 1996 and 1999 and these two meetings were the turning points for Chinese enterprises in replacing multinational enterprises.” Qing Mu and Keun Lee. Knowledge diffusion, market segmentation and technological catch-up: The case of the telecommunication industry in China. Journal Research Policy, 2005. Volume 34/759-783.

[18] Estándar TD-SCDMA Time Division Synchronous Code Division Multiple Access

[19] The state-owned sector had steadily shrunk in the years following China’s accession to the WTO. In 2001, 40 per cent of all jobs in China were in the state sector. That figure had fallen to 20 per cent in 2008, but this decline stopped in the years after 2008 and showed little change until the end of Hu-Wen’s administration in 2012. Between 2008 and 2012, assets managed by state-owned enterprises increased from more than 12 trillion yuan to more than 25 trillion yuan. Yeling Tan. How the WTO Changed China. Foreign Affairs. Tue/Apr2021, Vol. 100 Issue 2, p90-102. 13P

[20] https://www.huawei.com/en/about-huawei/corporate-information (accessed January 2020)

[21] https://www.scmp.com/abacus/who-chat/who/article/3028219/pony-ma-tycoon-behind-chinas-social-media-and-gaming-giant / https://
www.scmp.com/tech/big-tech/article/2182193/tencent-plugs-holes-andboosts-profits-163-new-investments

[22] https://www.caixinglobal.com/2020-04-20/pinduoduo-buys-into-homeappliance-retailer-to-sell-their-branded-goods-101544707.html

[23] «Xi takes full control of China’s future«, mayo 2018

[24] Karl Marx. op.cit. t.1, pags. 103, 53, 55.

[25] Since 2018 Tencent Holdings has been reprimanded by regulatory authorities for “conducting currency exchange operations beyond the scope of its business registration,” culminating in a fine of 2.8 million yuan ($438,000) to Tenpay.

[26] It is worth recalling here, however, the statements of Premier Li Keqiang at the annual sessions of the National People’s Congress in May 2020, according to which 600 million Chinese, 40% of the population, live on just 1,000 yuan a month ($140). Of these people, 75.66% do so in rural areas. On the other hand, around 200 million people (more than a quarter of the working population) are in flexible or precarious employment. It should also be borne in mind that the official criterion of “poor person” is
that of someone with an annual income of less than 4000 yuan ($674), while if it were to fit the international bar of 60% of the average income, it should be 8600 yuan ($1326), more than double the threshold used [which questions Xi Jinping’s triumphalist statements] Xulio Ríos, “Xi Jinping’s ‘Common Prosperity'”, October 2021).

[27] A thesis that is similar to that developed by Bruno Rizzi in 1939. In The Bureaucratization of the World. Ediciones Península, 1980.

[28] «IIPPE 2021: Imperialism, China and finance», Michael Roberts Blog, 30 September 2021.