CHINA AND THE "END OF THE END OF HISTORY"

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August 20, 2010

CHINA AND THE "END OF THE END OF HISTORY"

WILL CHINESE WORKERS CHALLENGE GLOBAL CAPITALISM? PT.3 MINQI LI INTERVIEW

looking for, it's probably not yet published)WILL CHINESE WORKERS CHALLENGE GLOBAL CAPITALISM?

Bio-Data; MINQI LI

Minqi Li is an Assistant Professor at the University of Utah specializing in Political Economy, World Systems and the Chinese Economy. He was a political prisoner in China from 1990 to 1992. He is the author of "After Neoliberalism: Empire, Social Democracy, or Socialism?

Transcript

PAUL JAY, SENIOR EDITOR, TRNN: Welcome to The Real News Network. I'm Paul Jay in Washington. Many economists and political analysts think the current recovery, as it's being called, is a rather temporary phenomenon. Many people expect the recession to kick back in, and perhaps within a couple of years get rather serious. What does that mean in terms of the future of the world economy and world politics? Well, Minqi Li, who's a professor teaching at the University of Utah, has written an article called "The End of the 'End of History': The Structural Crisis of Capitalism and the Fate of Humanity." Here's a little excerpt from the article. "The global capitalist economy is now in its deepest crisis since the Great Depression. Even the world's ruling elites no longer have any doubt that a significant historical turning point has arrived. The neoliberal phase of capitalist development is coming to an end. This will prove to be the end of the so-called 'End of History' and the era of global counter-revolution it signifies. The immediate and important question is: what will be next? Where is the world heading as the crisis unravels and evolves?" And now joining us from the University of Utah is Minqi Li. Thanks for joining us, Minqi.

PROF. MINQI LI, UNIVERSITY OF UTAH: Thank you, Paul.

JAY: So answer your question: what comes next?

LI: Well, I guess it's not exaggerating to say that global capitalism right now is in a structural crisis. And, of course, in some previous historical periods, we know that capitalism has similar structural crises and that later managed to survive. So the question is whether we are going to see a similar restructuring of global capitalism, and so that capitalism would be back to some kind of normal expansion in the coming decades. But my own understanding is that this is not likely, because on the one hand, capitalism, unlike in previous historical periods, has exhausted its historical space for social reform. So, for example, after World War II, capitalism was able to restructure itself, undertaking some social reform, introducing welfare state, and then return to social and economic recovery. But now, basically, in all the Western countries [inaudible] we see that it's not possible to combine a redistribution to the favor of the working people with the requirement of capitalist accumulation. On the other hand, in the past, capitalism has been able to rely upon the exploitation of cheap labor force in the non-Western world, especially in places like Asia. But in the future I expect that the Asian working classes are going to have more organization, they will demand more economic and political rights, and that will reduce capitalist profit rate and undermine global capitalism. But probably the most important limit is that after centuries of accumulation, capitalism has exhausted the environmental space, so that the global ecological system now is literally on the verge of collapse.

JAY: So by that you're talking a climate change crisis.

LI: That is just one among many aspects of global environmental crisis.

JAY: What other aspects do you think are so serious that are threatening to the system itself?

LI: Well, you have the water shortage, water pollution that is pervasive. The United Nations predict that by 2025 maybe 70 percent of the population in the world will live in areas of water stress. And we have soil erosion, and we have desertification, we have deforestation, ocean acidification. So all of these aspects are threatening the global ecological system.

JAY: So there's two places or two—from two places change to this scenario could come, one from within the elites themselves. You get to see some sign of trying to restructure, and you hear voices in the American elite, European elite, who are saying, for example, the American empire is going to diminish; it needs to be done rationally, not in a bloody way. From an economic point of view you hear some voices (although they're certainly not in control) calling for far greater financial regulation so the finance sector doesn't run amok as it has. Or something's going to come from the other side of the barricades, and not from the elites, but from workers and ordinary people. But one doesn't see in too many places any real sign of that, really, now.

LI: I agree. Yeah. I agree with you.

JAY: What are you seeing? Because you could have 100 years of decay.

LI: Well, I would rather not see it. I mean, I agree with you as far as the elites are concerned, and we know that basically advanced capitalist country right now is talking about reducing fiscal deficits and trying to abandon the historical commitment to workers' health care and pensions. And on the other hand, with respect to climate change, the US Democrats just gave up hope to pass the climate change law. So, as far as the elites are concerned, I agree with you. About workers, recently we have seen that workers resistant in Western Europe, although there has been no immediate major effect. But in the medium term or long run, I say in five to ten years, I think hope could happen in the non-Western world, in places like Latin America, in places like in China—especially in China. I think the Chinese working class have now reached a turning point in the coming one or two decades, and we are going to see more organization from the Chinese workers. That's going to challenge the Chinese capitalist system. And if the Chinese capitalist system is challenged, because of the central role of the Chinese economy in the global capitalist system, and also with respect to energy and climate change, and so if the Chinese capitalist system is challenged, that could dramatically change the global balance of power.

JAY: That's very interesting. So talk a little bit more about that. And in one of our earlier interviews you said in China this is coming mostly from the urban workers. I mean, how many people are we talking about? And what stage is that movement at?

LI: Well, historically, let's say over the past two or three decades, one of the major problem with the Chinese workers movement is that it's divided between the urban workers that had its origin in the socialist tradition, and the migrant workers who have origin in the countryside and recently moved to the cities. The hope is that in the future the urban workers and the migrant workers will develop the growing solidarity, growing unity. And so, as the migrant workers learn to get organized, demand more rights, and they will realize that it's not possible to realize their rights within the current form of capitalism, within the current Chinese political regime, so they—hopefully in five or ten years they would move beyond just asking for higher wage and also make demand for political rights. So at that stage their demand is going to converge with the demands of the urban workers, which have been asking for more political rights, asking for a return to socialist legacy. And if we have unity between the urban workers and the migrant workers, that's going to make the Chinese working class a powerful political force.

JAY: Is there any reflection of this within the Chinese Communist Party? Are there forces within the party that support this kind of movement?

LI: I would not say "support", but there has been some interesting developments within the party. In the past, over the past two or three decades, the overall direction of the party is to move increasingly towards a neoliberal capitalist direction. But over the past two years there have been some interesting signs. Some party leaders, like the secretary of the major city of Chongqing, Bo Xilai, is making some speculation or making some gesture in the leftist direction by promoting Maoist era songs, by promoting anti-mafia campaign in the local area, although so far his effort has not been cooperated by other parts of the elites.

JAY: Okay. Say that again. Anti what?

LI: Anti-mafia.

JAY: Mafia, anticorruption, anti-crime.

LI: Right. Right.

JAY: Okay. Good. So what he's been doing is going after the organized crime. And has he been going after crime and corruption within the party, within the state apparatus itself?

LI: Well, he, of course, has to use the police. But interesting thing is that the organized crime in that city has grown stronger under the previous secretary, who is now still the provincial secretary of the Guangdong province, the very important export-oriented industry province near Hong Kong. And so that, you can see the split within the elites.

JAY: So what do you think? What do you think over the next five to ten years? What are you going to be looking for to see how this is developing?

LI: Well, one thing we want to look at is how the Chinese economy is going to evolve. And we know that the Chinese economy has relied upon investment and exports. We need to transition towards a more consumption-led economy. We need to see whether that's going to happen. But potentially more importantly, and we are going to see how the energy crisis and the climate-change crisis is going to evolve in the coming decades, and whether that's going to move toward some kind of global ecological catastrophes.

JAY: Well, what are the possibilities of a Chinese-styled New Deal to kind of put off this threat to the Chinese capitalist system?

LI: That I would not—although I cannot rule it out 100 percent, I don't think it's very likely, and for a number of reasons. One is that to have a consumption-led economy, you need to have higher wages. But then, if you want to have higher wages, then capitalists are going to have lower profits, so capitalists are going to resist it.

JAY: But in the United States you had a somewhat similar situation in the 1930s, and they did make the New Deal.

LI: That was true. But then, by the 1960s, because the workers have got too high wages, capitalists have got lower profits. That's why you have got neoliberalism. And then another major factor is that because the wealth of the Chinese capitalist class mostly came from the theft of state and the collective assets from the socialist era, so the whole Chinese ruling class is very corrupt. And because of this corruption, the central government has a smaller ability to impose discipline on the capitalist class. So the Roosevelt New Deal used to be able to impose some discipline on the American capitalists, even though some capitalists would call Roosevelt a socialist, right? But nevertheless you could have a New Deal. But today it's not clear if the Chinese government, despite its talk, whether it's able to force any significant group among the capitalists to make concessions.

JAY: Thanks very much for joining us, Minqi.

LI: Thank you very much.

JAY: Thank you for joining us on The Real News Network.

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US-China tensions over South China Sea

US Secretary of State Hillary Clinton’s provocative stance at the Association of South East Asian Nations (ASEAN) security forum last month, where she voiced opposition to China’s claims in the South China Sea, has inflamed another global flashpoint. Her comments came just after the Obama administration announced it would proceed with a major US-South Korean naval exercise off the Korean Peninsula, despite strong protests from China.

At the ASEAN forum in Vietnam on July 23, Clinton rejected China’s territorial claims. “The United States has a national interest in freedom of navigation, open access to Asia’s maritime commons and respect for international law in the South China Sea,” she said. “We oppose the use or threat of force by any claimant.” She called for a binding “regional code of conduct” in the South China Sea—a move that would undercut China’s attempts to assert its interests in what Beijing regards as a strategically sensitive zone.

Clinton was well aware that she was stirring up a diplomatic hornet’s nest. China has been at loggerheads with Vietnam, as well as the Philippines, Malaysia and Brunei, over the control of the Spratly and Paracel islands in the South China Sea for decades. The Obama administration is exploiting the issue to foster divisions in ASEAN and undermine China’s growing regional influence. Clinton’s proposal was rejected by China, but welcomed by a number of ASEAN states.

The Japanese media reported that Beijing had told senior US officials in March that it regarded the South China Sea as one of its “core interests,” along with Taiwan, Tibet and Xinjiang. The US delegation was in China to enlist its support for tough UN sanctions against Iran over that country’s nuclear programs. Beijing insisted that non-interference by the US in China’s immediate periphery was a key condition for its support for the UN resolution, and also for Chinese President Hu Jintao’s participation in Obama’s Nuclear Security Summit.

Clinton’s move at the ASEAN forum, together with US naval exercises with South Korea, not far from the Chinese mainland, make clear that Washington has no intention of abiding by China’s strategic sensitivities. Clinton told last year’s ASEAN summit that the US was “back in South East Asia”. Having passed the UN resolution on Iran, the US is now demonstrating that it is back with a vengeance—flexing its military muscle in a bid to counter China’s rising economic strength and influence.

Clinton’s statement on the South China Sea is calculated to exacerbate the dilemma facing Asian nations, which are caught between their growing economic dependence on China and, in many cases, longstanding strategic ties with the US. The disputes in the sea have always been a sore point in relations between China and ASEAN, which has ruled out bilateral negotiations with Beijing in favour of a collective response. In 2002, China agreed to ease tensions over the disputed territories as part of free trade talks with ASEAN. By backing the claims of ASEAN countries in the South China Sea, Washington is seeking to drive a wedge between ASEAN and China, undermining Beijing’s efforts to cultivate closer ties in the region.

The US is playing a reckless high stakes game. A third of world’s maritime trade, including vital energy supplies for China and Japan, pass through the South China Sea. Of China’s 39 sea lanes, 21 pass through the region and account for 60 percent of Chinese foreign trade. About 60 percent of ships passing through the neighbouring Strait of Malacca are Chinese, carrying 80 percent of China’s imported oil from the Middle East and Africa. China is well aware of the Pentagon’s longstanding strategy of controlling key naval “choke points” as a means of depriving a potential enemy of vital supplies.

China has begun to build up its own blue water navy to protect its key trade routes. It has a submarine base on Hainan Island, adjacent to the South China Sea, where it houses its ballistic missile submarines—a major component of its nuclear arsenal. China’s first aircraft carrier, which is now under construction, will reportedly be deployed as part of its South China Sea fleet. The sensitivity of the area was highlighted in March last year when a flotilla of small Chinese vessels confronted the US naval spy ship Impeccable, which was stationed near Hainan Island, monitoring Chinese submarines and mapping the sea floor.

The incident reflected the interests at stake in the debate over the law of the sea. China insists that foreign military vessels must obtain its permission to pass through its declared Exclusive Economic Zone (EEZ). The US claims its “right” to “freedom of navigation” through the “Asian commons”—even though the Impeccable was provocatively positioned to monitor a sensitive military base. If China were to take a similar stance—placing a spy ship in “international waters” just off a major US naval base in Hawaii or San Diego for instance—there would be outrage in the US political and media establishment.

The South China Sea also has significant reserves of oil and natural gas, estimated at 35 billion tonnes. Several hundred wells have been developed by Vietnam, Malaysia, the Philippines, Indonesia and Brunei around the Spratly Islands, many within waters claimed by China. The US call for “free access” to the South China Sea is also aimed at backing American corporations, such as Exxon Mobil, that are developing energy projects with Vietnam. At a regional security forum in Singapore in June, US Secretary of State Robert Gates accused China of “intimidating” US corporations. In 2007, China demanded that US firms stop exploration in the South China Sea. “Our policy is clear: it is essential that stability, freedom of navigation and free and unhindered economic development be maintained,” Gates said.

Clinton’s aggressive stance at the ASEAN forum was welcomed by Daniel Blumenthal from the right-wing American Enterprise Institute. Writing in the Wall Street Journal last week, he hailed Obama for standing up to “China’s bullying” and supporting a “collective response” of ASEAN nations that would put an “end to China’s divide-and-conquer strategy in the South China East Asia”. Blumenthal advocated putting “US military might behind diplomatic efforts” and the establishment of an Asian Regional Partnership to unify US allies in Asia against China.

Significantly, in its diplomatic efforts to isolate China, the US is relying heavily on Vietnam. Far from being “socialist” or “communist”, the Stalinist regime that emerged from the US defeat in Vietnam in 1975 has evolved into a mini-version of Chinese capitalism—a cheap labour sweatshop for global corporations. Hanoi has no compunction in siding with the very same imperialist power that the Vietnamese people bitterly resisted for decades.

An important aspect of the US rapprochement with China in 1972 was to seek Beijing’s support to contain the impact of the imminent American military defeat in Vietnam. During the final stages of the Vietnam War, China seized the opportunity in 1974 to occupy the Paracel Islands. Five years later in 1979, China launched a war against Vietnam, with tacit US support, aimed at crippling the fledgling regime in Hanoi, which had toppled Pol Pot, China’s ally in Cambodia. Rivalry over control of the Spratly Islands led to a military clash in 1988 over the Johnson Reef, with China sinking three Vietnamese vessels.

The economic rise of China in the 1990s led to a shift. The US normalised relations with Vietnam in 1995 in a bid to counter China. In recent years, US has sent warships to visit Vietnam, raising fears in Beijing of a US naval presence in ports such as Cam Ranh Bay, which is adjacent to the South China Sea. Major US corporations have increasingly invested in Vietnam. At the same time, Japan, a US ally, and India, a US strategic partner, have boosted their security ties with Vietnam as a means of countering growing Chinese influence.

The potential for conflict over the South China Sea was highlighted by China’s reaction to Clinton’s remarks. Foreign Minister Yang Jiechi, who was caught by surprise, wrote an essay accusing the US of carrying out “virtually an attack on China”, by internationalising the disputes in South China Sea. “It will only make matters worse and the resolution more difficult,” he warned. China conducted its largest-ever naval exercises in the South China Sea shortly after the ASEAN meeting.

An editorial in China’s Global Times on July 26 issued a blunt warning to ASEAN countries: “Few Southeast Asian countries would like to get in the middle of Sino-US tensions, but like many other regions, they are caught in a dilemma: economically close to China yet militarily guarded against China.” It added: “Southeast Asian countries need to understand any attempt to maximise gains by playing a balancing game between China and the US is risky. China’s long-term strategic plan should never be taken as a weak stand. It is clear that military clashes would bring bad results to all countries in the region involved, but China will never waive its right to protect its core interest with military means.”

By openly siding against China at the ASEAN security forum, the Obama administration has added another contentious issue that will further compound the already tense relations between the two powers. (WSWS)

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US naval exercise heightens tensions in Asia

A large-scale US-South Korean naval exercise that begins Sunday in the Sea of Japan near North Korea has inflamed tensions in what has been for more than half a century a dangerous flashpoint in North East Asia. Both North Korea and China have voiced their opposition.

The war games codenamed “Invincible Spirit” are specifically aimed against North Korea over its alleged sinking of the South Korean warship, the Cheonan, in March with the loss of 46 sailors. South Korea and the US have been seeking to penalise North Korea after a South Korean investigation concluded that North Korea was responsible for the attack. Pyongyang has denied any involvement.

The exercise involves around 20 South Korean and US warships, including the nuclear-powered aircraft carrier USS George Washington, 200 aircraft, including advanced F-22 fighters, and 8,000 military personnel. This massive show of force far exceeds what is required to deal with any threat from the North Korean navy and has been denounced by Pyongyang as a “reckless provocation.”

The South Korean media initially reported that the exercise would take place in the Yellow Sea—that is, to the west of the Korean Peninsula and close to the Chinese mainland. Beijing, however, reacted angrily to what it regarded as a direct security threat. A Chinese foreign ministry spokesman last week declared: “We resolutely oppose any activities in the Yellow Sea that may threaten China’s security.”

Japan injected itself into the dispute, announcing that four Japanese observers will participate in Invincible Spirit, on board the USS George Washington. It is the first time that military officers of Japan, which maintained a brutal colonial rule over Korea from 1895 to 1945, have taken part in a US-South Korean military exercise.

In a further provocation, the US-led United Nations Command formally notified North Korea of plans to hold another joint US-South Korean military exercise at unspecified locations from August 16 to August 26.

An editorial in the China Daily on July 13 stated: “The public outcry in China will turn stronger if the US decides that its nuclear-powered aircraft carrier USS George Washington is to participate in the exercise. The vessel’s likely presence, whose combat radius can reach the nation’s eastern coast, is nothing but a provocative action aimed at China’s doorsteps.”

Commenting in the People’s Daily, Chinese general Luo Yuan exclaimed: “If the United States were in China’s shoes, would it allow China to stage military exercises near its western and eastern coasts?” He warned that the two purposes of the US-South Korea joint exercise, “strategic reconnaissance and testing initial combat plans, will pose a threat to China.”

China held a live-fire naval exercise in the East China Sea—to the south of the Korean Peninsula—from June 30 to July 5, involving a large number of fighters. As the US announced the planned exercise with South Korea last Tuesday, Chinese state television broadcast footage from more recent exercises in the Yellow Sea, saying that their purpose was to counter “long-distance attacks”.

Far from backing off, State Department spokesman P.J. Crowley declared last week that other US-South Korean drills planned this year would eventually involve the Yellow Sea, regardless of Chinese opposition. “Obviously [the Chinese] are a regional power and a country…whose opinion we respect and consider,” he said. “But this is a matter of our ability to exercise in open seas, international waters. Those determinations are made by us and us alone.”

US Secretary of Defense Robert Gates and Secretary of State Hillary Clinton were in South Korea last Tuesday to meet with their South Korean counterparts. As well as announcing the joint naval exercise, Gates and Clinton also visited the demilitarised zone between North and South Korea. It was the first time that two top US cabinet officials, responsible for national security policy, had toured the DMZ at the same time.

The top uniformed officer in the US military, Admiral Michael Mullen, chairman of the Joint Chiefs of Staff, was in Seoul for talks with his South Korean counterparts. US commanders will retain operational control of their joint military forces in South Korea until at least December 2015. Previously, the US military was scheduled to hand over operational command in 2012.

Gates declared the visits were intended “to send a strong signal to the North, to the region and to the world that our commitment to South Korea’s security is steadfast.” In an indirect reference to China, he added: “In fact, our military alliance has never been stronger and should deter any potential aggressor.” He also foreshadowed joint exercises in the Yellow Sea.

Clinton announced new sanctions against North Korea. Although providing no details, she said that the sanctions would freeze more North Korean overseas assets, prevent additional individuals from traveling abroad and tighten international bank transactions involving Pyongyang. She also pledged that the US would provide “a stalwart defense” of South Korea.

The tough US stance in South Korea is in part a response to the US failure to obtain a UN Security Council resolution condemning North Korea over the Cheonan sinking and imposing new penalties. Much to Washington’s annoyance, China refused to accept the findings of the South Korean investigation blaming North Korea or to back a UN resolution. In the end, the UN Security Council only issued a presidential statement in early July condemning the sinking but without naming North Korea as the attacker.

In an indication of the underlying tensions between the US and China, President Obama made an unusually blunt criticism of China at the G20 summit in June, accusing Chinese President Hu Jintao of “willful blindness” over North Korea’s alleged provocations. While professing to understand China’s concerns about the Korean peninsula, Obama said: “My hope is that President Hu will recognise that this is an example of Pyongyang going over the line in ways that just have to be spoken about, seriously.”

The differences between the US and China over North Korea are part of their broader rivalry throughout Asia and internationally. The economic rise and continued growth of China threaten to eclipse the US in North East Asia where major US allies—Japan, South Korea and Taiwan—are all heavily dependent on trade with China. The US is responding by flexing its military muscles, reminding the same countries of their military dependence on Washington.

The frictions were also evident at the Association of South East Asian Nations (ASEAN) Regional Forum Thursday and Friday in Vietnam. Clinton, who has championed a more aggressive US stance in Asia, told a meeting with ASEAN leaders: “The American future is intimately tied to that of the Asia-Pacific. The United States is a Pacific nation and we are committed to being an active partner with the ASEAN and with all of you.” Washington achieved a small diplomatic victory, securing entry into the East Asian Summit (ASEAN plus China, Japan and South Korea).

Clinton called for North Korea to be condemned over the Cheonan sinking, declaring that Pyongyang was conducting a “campaign of provocative, dangerous behavior,” a description that would seem to apply as readily to American policy in the region. As in the case of the UN, US pressure was not sufficient to overcome Chinese opposition, and the ASEAN statement was relatively mild.

The North Korean representative at the Hanoi meeting, Ri Tong-il, vehemently denounced the upcoming military exercises. “Such a move presents a grave threat to the peace and security not only to the Korean peninsula, but to the region,” he said, adding that there would be “a physical response.”

“If the US is really interested in the denuclearisation of the Korean peninsula,” he said, “it should halt the military exercises and sanctions that destroy the mood for dialogue.”

Clinton used the forum to press China on several fronts: lashing out at Burma, a close Chinese ally, over human rights, and pressing for free navigation in the South China Sea which Beijing regards as particularly sensitive to its strategic interests. The bulk of China’s oil shipments from the Middle East and Africa pass through the area.

The US intervention in the South China Sea controversy is particularly provocative. China, Vietnam, the Philippines and Malaysia all have claims to all or part of the Spratlys, a chain of small reefs and islets in waters that are both strategically located and believed to hold undersea oil reserves. Clinton called for international resolution of the dispute, effectively siding with Vietnam against China. The New York Times commented, “Though presented as an offer to help ease tensions, the stance amounts to a sharp rebuke to China.”

The Times account continued: “The administration’s decision to get involved appeared to catch China flat-footed and angered its foreign minister, Yang Jiechi, at a time when the country is already on edge over naval exercises the United States and South Korea will hold starting this weekend. Twelve of the 27 countries at the security meeting spoke out in favor of a new approach to the South China Sea, prompting Mr. Yang to observe that the American effort seemed orchestrated.”

On the first day of the ASEAN meeting, the Obama administration announced that it would resume military-to-military relations with Kopassus, the special forces deployed by the Indonesian military junta to suppress both domestic opposition and separatist movements. US officials said the ban was no longer needed because Indonesia had become a democracy.

But the Washington Post adduced another reason, writing: “The Obama administration’s announcement Thursday that it will resume relations with Indonesia’s special forces, despite the unit’s history of alleged atrocities and assassinations, is the most significant move yet by the United States to strengthen ties in East Asia as a hedge against China’s rise. The push comes at the same time that the administration’s tone with China has turned tougher, especially on the nettlesome issue of human rights. In recent speeches and interactions with Chinese authorities, the administration has abandoned an earlier approach of patience and quiet engagement.” (WSWS)

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