By Chris Fry
When the Chinese giant privately-owned Evergrande property developer company failed to pay its bondholders on Sept. 23 some $83 billion that was due, financial analysts around the capitalist world called this China’s “Lehman Brothers” moment. Lehman Brothers was the U.S. investment banking firm whose collapse in 2008 triggered the Great Recession, when millions lost their homes and jobs. But it is apparent there is a stark difference between the two events.
After Lehman Brothers failed, Wall Street and its political minions in Congress and the Bush White House immediately looted the public treasury to prop up the rest of the investment banks, declaring that they were just “too big to fail”. People who were left homeless and jobless were largely left to fend for themselves. This sparked the popular “Occupy Wall Street” movement, with young activists militantly confronting these capitalist giants, often facing off against police.
In China, protestors there too have demonstrated in front of the conglomerate Evergrande’s headquarters in Shenzhen in southern China. But instead of attacking the protestors like cops across the U.S. did, the Guardian newspaper on Sept. 24 describes a much different government response:
Economists said that if Beijing were to become involved, it would most likely focus on making sure families get apartments they have already paid for, rather than trying to bail out banks or other creditors.
China’s housing regulator is stepping in to protect funds earmarked for housing projects from being diverted to creditors, Bloomberg reported. The Evergrande funds must first be used for construction to ensure project delivery, it said, citing people familiar with the plan.
This difference explains the ever-increasing attacks on the Chinese government and its people by Big Business, the Pentagon, all of Congress and the Biden White House, to the point of the U.S. and its allies parading fleets of warships off China’s coast, imposing more and more extreme sanctions and tariffs, and coercing more and more countries into new military alliances.
Capitalist “democracy” versus socialist “autocracy”
Biden has somewhat shifted from Trump’s crudely racist “China virus” monologue (although Biden did launch a failed “investigation” of the Wuhan research lab) to his own diatribe about China’s “autocratic” rule. This has won nearly universal support among the corporate elite. But as we can see from the Evergrande example above, the Chinese government’s response to the company’s financial crisis is to not bail out the company or its investors, foreign and domestic, like was done under Bush and Obama, but to instead ensure that its worker customers get what they paid for, a roof over their heads.
Biden himself as Vice President was knee deep in the rescue of the auto companies during the Great Recession, where workers’ pay and benefits were cut, and thousands of younger workers were and are suffering under the “tier” arrangement, while the auto giants amassed huge profits.
Biden has proclaimed his massive infrastructure proposal, which would provide billions in profits to corporate contractors, as being necessary to counter China’s progress in developing speedy mass transit, its effective Covid response, and its many other technical and scientific achievements for the workers. Biden has also spurred new weapons programs, including the development of massively expensive hypersonic missiles. This is music to the ears of the entire capitalist class, even as they scheme how to drop progressive proposals to provide childcare, lower drug prices and particularly voting rights of the oppressed communities into the wastebasket. As Karl Marx noted long ago, capitalist “democracy” is in fact a democracy only for the capitalist class. But for the workers and oppressed, it is a thinly disguised dictatorship of the banks and corporations.
China, on the other hand, while it does have a capitalist class, and while it does still invite foreign capital into the country, has, as a workers state, tightened its leash on private companies, particularly giant tech firms. As the NY Times reported on Sept. 24:
The government has cracked down on the most successful private enterprises, including Alibaba Group, the e-commerce giant, and Didi, the ride-hailing company. It has sentenced business leaders who dared to criticize the government to lengthy prison terms.
China’s paramount leader, Xi Jinping, has urged tycoons to share their wealth with the rest of the country in an effort to pursue “common prosperity,” leading to concerns that the state could choke out the private sector and give the Communist Party even more sway in everyday life.
Not only does this directly threaten U.S. and Western profits from their Chinese investments, the contrast between the two different social and economic systems, a declining capitalist state versus a successful workers state, has created a growing panic on Wall Street. CNBC published an article with the mind-bending title: “U.S Needs to Work with Europe to slow China’s Innovation Rate, [Commerce Secretary] Raimondo said”
“We don’t want autocratic governments like China, writing the rules of the road. We together with our allies, who care about privacy, freedom, individual rights, individual protection, we need to write the rules of the road,” Raimondo said.
“We have to work with our European allies to deny China the most advanced technology so that they can’t catch up in critical areas like semiconductors,” Raimondo said, adding that the Biden administration plans to deepen cooperation with Europe on export controls.
“We want to work with Europe, to write the rules of the road for technology, whether it’s TikTok or artificial intelligence or cyber,” she said.
Speaking of “rules of the road”, the U.S. is blocking sales of aircraft parts to China to prevent it from developing and producing its C919 jetliner, while at the same time Secretary Raimondo is demanding that China go ahead and immediately purchase Boeing’s 737 MAX aircraft, whose two crashes caused China to suspend its purchase until its safety is tested.
So technical innovation that conceivably benefits the workers and oppressed not only in China but around the world must take a backseat to U.S. imperialist hegemony. Yes, that’s capitalist democracy!
A falling out among thieves and China’s countermove
To threaten China, Biden formed an Anglo-Saxon military alliance called AUKUS (Australia – United Kingdom – U.S.) To sweeten the deal for Australia, whose largest trading partner is China, and particularly for U.S. weapons contractors, Biden enticed Australia to drop its $66 billion contract with France to build diesel submarines, to instead purchase U.S. made nuclear powered submarines that can sail undetected off the Chinese coast for indefinite periods.
France’s Foreign Minister Jean-Yves Le Drian called this a “stab in the back”. France’s Prime Minister Macron took the unprecedented step of calling home its ambassadors from both the U.S. and Australia.
The day after the AUKUS was announced, China applied to join the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP), currently composed of 11 nations around the Pacific Rim. Originally formed by Obama, when it was called the Trans-Pacific Partnership, to counter China’s growing economic influence, Boss Trump withdrew the U.S. from this alliance. Even the U.S. corporate media says this China application is a “smart move”. If CPTPP rejects China’s application, member states will have to explain why they oppose membership of the most powerful economic nation in the region, even though it would benefit the living standard of all the workers there.
Anti-Chinese racism in U.S. and Australia: Byproduct of U.S. conflict with China
A Sept. 14th article in the Guardian newspaper reports that a letter signed by 177 members of the Stanford University faculty demanded that the government stop using the Trump-spawned “China Initiative”, continued by Biden, which “harms academic freedom by racially profiling and unfairly targeting Chinese academics.” The letter cited the case of Doctor Anming Hu, who was recently acquitted in Tennessee, who was accused of “concealing his ties to Beijing.” The judge said:
“Given the lack of evidence that defendant was aware of such an expansive interpretation of NASA’s China funding restriction, the court concludes that, even viewing all the evidence in the light most favourable to the government, no rational jury could conclude that defendant acted with a scheme to defraud NASA,” US district judge Thomas Varlan wrote in a 52-page ruling.
The article goes on to note the rise of hate crimes against Asian people:
The recent round of calls came in the wake of growing violence against Asians in the US. According to an FBI annual report last month, the number of reported crimes against people of Asian descent grew by 70% last year, totaling 274 cases.
Ethnic Chinese in Australia are also facing increasing racist attacks, including from high government officials:
When three Chinese Australians appeared before an Australian Senate committee hearing last October, Senator Eric Abetz, of the Liberal Party, asked them whether they were willing “to unconditionally condemn the Chinese Communist Party dictatorship.”
After one of the witnesses asked why Chinese Australians would be singled out to declare their condemnation, Mr. Abetz bristled. “But can you not pick a side to condemn the oppressive ugliness of the communist regime in China?” he said.
Progressives in general and the anti-war movement in particular must mobilize to counter this growing threat to world peace and defend the right of Socialist China to navigate its own destiny and to demand an end to racist attacks on all ethnic Asian people. The workers and oppressed have no stake in U.S. imperialist hegemony and every reason to support the growing prosperity of the working people of the People’s Republic of China, as a fact and as an example.