More on Russia and China as Great Imperialist Powers

A Reply to Chris Slee (Socialist Alliance, Australia) and Walter Daum (LRP, USA)

By Michael Pröbsting, Revolutionary Communist International Tendency (RCIT), 11 April 2014, www.thecommunists.net

 

Chris Slee, a long-time activist from the Socialist Alliance (Australia), has published an article which focuses on whether Russia and China are great imperialist powers. (1) The article is mainly a critical review of the RCIT’s analysis of Russia and China, which I have elaborated in several documents. (2)

The author begins his article by presenting a number of my arguments and statistics on Russia which I cited to demonstrate its character as a great imperialist power. At the conclusion of this section of his article, Chris Slee expresses agreement with our position. However, in his section on China, Slee is more critical of the RCIT’s position, which is that China is also emerging as an imperialist power. He writes: “I have reservations about classifying China simply as imperialist. I agree that China has imperialist features. But on the other hand, a large part of the Chinese working class is exploited by transnational corporations based in the United States, Europe and Japan. This gives China a semi-colonial aspect.”

We believe that Chris Slee is mistaken. Yes, China is an emerging imperialist power which entered this status only a few years ago (in the late part of the first decade of the 2000s). Consequently, it still also contains a number of backward, semi-colonial elements. We are fully aware of this, and have even pointed this out ourselves. But we are convinced that the imperialist aspect in China’s class character is the dominant one and the semi-colonial feature is the subordinated aspect. In the following, we will deal with comrade Slee’s arguments one by one and elaborate our counter-arguments.

 

Western and Chinese Monopolies

 

Chris Slee first invokes the following argument for his position. He argues that the Western trans-national corporations (TNC) play a very significant role in the Chinese economy and super-exploit – directly or indirectly – Chinese workers.

“The workers are in many cases not directly employed by the TNCs, but are employed by Chinese companies that have contracts with TNCs, sometimes via a chain of intermediate companies. This does not negate the fact that they are exploited by the TNCs. Such contracting chains are also common in places like Bangladesh.”

Later he adds: “Probsting points out that China is now economically stronger than Russia. But China’s rapid economic growth has in part been due to the decision by many Western TNCs to make China their main base for production for the world market. (…) But despite these changes, production controlled by foreign TNCs remains a very important part of China’s economy (even while Chinese TNCs are expanding overseas). Thus China still has a semi-colonial aspect, along with an imperialist aspect.”

We certainly agree with Chris Slee that Western monopolies have invested huge amounts of foreign capital in China and derive significant extra profits from this. However, it would be both incorrect and an exaggeration to maintain that China’s economic growth during recent years has been driven by foreign investment and exports. We have already drawn attention to this issue in the chapter dealing with China in our book The Great Robbery of the South. A leading magazine of the Western monopoly bourgeoisie – Britain’s The Economist – has repeatedly emphasized: “It is investment, not exports, that leads China's economy. Spending on plant, machinery, buildings and infrastructure accounted for about 48% of China's GDP in 2011.” (3) In another article, The Economist citied studies which show that the share of production, in relation to exports, is relatively small. “Arthur Kroeber at Dragonomics, a Beijing-based research firm, argues that investment is not as closely tied to exports as is often assumed: over half of all investment is in infrastructure and property. Mr Kroeber estimates that only 7% of total investment is directly linked to export production. Adding in the capital spending of local firms that produce inputs sold to exporters, he reckons that a still-modest 14% of investment is dependent on exports.” (4) This is a clear indicator that the Western TNC and their export-orientated production do not fulfill a dominant position in China’s economy. Therefore, it is certainly untrue that the Western TNCs play such a major role in China’s economic growth that this is decisive in determining its semi-colonial character.

Another important aspect is the financial sector. Again, we see that the Chinese economy is not dominated by foreign capital. Look, for example, at China’s financial sector in which foreign capital hardly plays any role (less than 3% of the banking sector were in foreign hands in 2005). (5) Its external debt stock as a share of the Gross National Income stands at only 9.3%. (6)

Furthermore, in assessing the nature of China’s financial sector we need to examine an overall balance sheet of the development of the relationship between China and the US or, more specifically, Chinese and US monopoly capital. If the Western TNCs were playing as dominant a role in China’s economy as comrade Slee suggests, their own development during the past decade should have been better than that of their Chinese counterparts. However, in fact, quite the opposite is true.

As we have shown in The Great Robbery, there were only twelve Chinese corporations among the Fortune Global 500 in 2001. At that time, there were 197 US corporations on this list. However, by 2012 there were only 132 corporations from the US among the Fortune Global 500, but 73 from China. (7)

Similarly, while in 1991 China produced 4.1% of world output, this figure rose to 14.3% in 2011, making it the world’s second-largest economy. At the same time, the US share of global output during this same period declined from 24.1% to 19.1%. (8)

We maintain that these figures convincingly demonstrate that, while US TNCs certainly gain extra profits from their investments in China, Chinese monopolies have profited much more, and it is precisely for this reason that they have grown much more relative to their Western rivals in the past two decades.

 

LRP: China as a Semi-Colony

 

In debating Slee’s and the RCIT’s position, Walter Daum – the leading theoretician of the US group LRP – expresses the view that China is a semi-colonial country:

“China has clear imperialist aspects, but it remains a very poor country (per capita) whose workers are super-exploited by both Chinese and imperialist capitalists. On balance, it is far from belonging to the group of countries that share in the rewards of the military and economic domination of the majority of the world’s countries by the strongest and wealthiest powers. Internationally, it is more exploited than exploiter. Even using the flawed and partial data of foreign direct investment (FDI) as a measure of “capital export” that Michael Proebsting favors, China’s inward flow of FDI greatly exceeds its outward flow – in contrast to the genuinely imperialist powers.” (9)

Let us deal with this argument issue by issue. Yes, there is still more Foreign Direct Investment (FDI) flowing inward to China than flowing outward from China to the world market. But the gap is constantly narrowing. Also, let us not forget that China is a very recently emerged imperialist power.

Furthermore, FDI is just one of several forms of capital export. China, for example, exports a lot of capital as bonds and loans. As we have shown in The Great Robbery, for a number of years, China has been a net capital exporter. It has even become the world’s second largest Net Capital Exporter, only slightly behind Germany. (10)

It is certainly true that China is a poor country (per capita) compared with the rich Western countries. However, as we have elaborated in The Great Robbery and other documents, this is not the decisive issue for Marxists in characterizing a given state, and never was the criterion for Lenin and Trotsky. The task is rather to analyze the totality of a given state’s economic, political, and military position in the global hierarchy of states. Thus, a given state must be viewed not only as a separate unit, but first and foremost in its relation to other states and nations. Hence we concluded: “In short, we define an imperialist state as follows: An imperialist state is a capitalist state whose monopolies and state apparatus have a position in the world order where they first and foremost dominate other states and nations. As a result they gain extra-profits and other economic, political and/or military advantages from such a relationship based on super-exploitation and oppression.” (11)

Here, it is not necessary for us to repeat the numerous facts which we have elaborated in our documents which, in sum, demonstrate that China has become a major power in the world economy and global politics. If this were not the case, we ask our critics, why are Western politicians and strategists so worried about the economic and political decisions of China’s ruling class?! Why do they fear the rival in Beijing?!

Furthermore, we draw comrade Daum’s attention to the numerous historic references we made in our study on Russian imperialism. (12) There, we demonstrated that the laws of uneven and combined development also applied (and apply) to imperialist states. Hence, these states often have different statuses regarding some criterion: some imperialist states are much weaker and poorer than others; some are net capital exporters while others are net capital importers; some are economically strong but militarily weak, while others are just the opposite. Here, we reproduce just two of the tables from our document on Russia, which show that comrade Daum’s approach is one-sided and un-dialectical.

In Table 1 we show that, during the time of Lenin and Trotsky, there were also huge gaps in per capita income between imperialist states. US imperialism was – measured in per capita income – seven to ten times wealthier than Japan, Russia, and Austria-Hungary. Nonetheless, Lenin, Trotsky, and the Bolsheviks had no doubt whatsoever that these countries were imperialist and not a semi-colonial.

 

Table 1             National Income, Population and Per Capita Income of the Great Power in 1914 (13)

Country	National Income ($US billions)	Population (millions)	Per Capita Income ($US)
United States	37	98	377
United Kingdom	11	45	244
France	6	39	153
Japan	2	55	36
Germany	12	65	184
Italy	4	37	108
Russia	7	171	41
Austria-Hungary	3	52	57

 

In Table 2 we demonstrate that while several imperialist states were net creditors, others were net debtors. As such, there were huge differences between the old imperialist powers – in particular Britain, France, and Germany – and the newer or weaker powers like the US, Russia, or Austria-Hungary. The older powers were creditors while the newer or weaker ones were debtors.

 

Table 2          Creditors and Debtors, July 1, 1914 ($US billions) (14)

Principal sources of capital		Principal recipients of capital
Home country	Amount	Host country	Amount
United Kingdom	18.0	United States	7.1
France	9.0	Russia	3.8
Germany	7.3	Canada	3.7
United States	3.5	Argentina	3.0
Netherlands	2.0	Austria-Hungary	2.5
Belgium	1.5	Spain	2.5
Switzerland	1.5	Brazil	2.2

 

China as an Intermediate State – between Imperialist and Semi-colonial Status?

 

Chris Slee puts forward the following argument to support his thesis that China “has a semi-colonial aspect, along with an imperialist aspect”. He writes: “To give an analogy: when analysing the class structure of capitalist society, we recognise that there are social layers that are intermediate between the capitalist class and the working class. Why can’t we recognise that states can also be intermediate between imperialist and semi-colonial status?”

For us, this position seems close to the invalid theory of sub-imperialism with which we have already dealt in The Great Robbery. (15) It is no accident that the classic Marxist theoreticians wrote a great deal about the different classes under capitalism which indeed, as comrade Slee has suggested, recognized not only the bourgeoisie and the proletariat but also intermediate classes and layers. (16) However, contrary to this diversity of classes, Lenin and Trotsky did not invent similar categories for states, but rather defined only two categories of states: imperialist vs. colonial (or semi-colonial), as the case may be. They did so because, in the context of the world order during the imperialist epoch, conditions are created whereby states are – in their totality, taking into account the uneven character of their development – either on the side of the profiteers or on the side of the losers in the imperialist order.

This does not mean that we should not differentiate or concretize different capitalist countries. As we have shown, one can distinguish between stronger and weaker imperialist states, more or less advanced semi-colonial countries, etc. Lenin did so, too, as we have demonstrated. (17) But such differentiation does not create a separate, new, third category of an intermediate state, in addition to imperialist and (semi-)colonial states.

 

Tsarist Russia before 1917: An Example of a Partly Imperialist and Partly Semi-colonial State?

 

Chris Slee quotes Trotsky about Russia before 1917 in order to support his introduction of the concept of China as an “intermediate state”. He writes:

“In the following passage discussing Russia’s involvement in the First World War, Trotsky seems to imply that tsarist Russia was intermediate between an imperialist power and a semi-colonial country: “Russia’s participation in the war was self-contradictory both in motives and in aims…The participation of Russia falls somewhere halfway between the participation of France and that of China. Russia paid in this way for her right to be an ally of advanced countries, to import capital and pay interest on it – that is, essentially, for her right to be a privileged colony of her allies – but at the same time for her right to oppress and rob Turkey, Persia, Galicia, and in general the countries weaker and more backward than herself” (History of the Russian Revolution, Sphere Books, London 1967, vol. 1, p. 33).”

Comrade Slee is however wrong in his interpretation. First, in the sentence immediately after this quote, Trotsky writes: “The twofold imperialism of the Russian bourgeoisie had basically the character of an agency for other mightier world powers.”

It is certainly true that Trotsky did emphasize the contradictory, uneven character of Russia before 1917 which contained an important semi-colonial aspect. However, as we showed in our study on Russia, he was unambiguous about the decisive difference between a semi-colonial country (like China) and an imperialist state (like Russia). In his book The Third International after Lenin he wrote: “The Russian bourgeoisie was the bourgeoisie of an imperialist oppressor state; the Chinese bourgeoisie, a bourgeoisie of an oppressed colonial country.” (18)

This is not surprising since this was the classic and undisputed position of Lenin and the Bolsheviks. They certainly recognized the specific character of Russian imperialism (its backwardness, its financial dependency on French imperialism, etc.). Nevertheless, they were clear about the fact that the dominant feature of Russia was its imperialist class character.

Such, Lenin wrote in 1916: “The last third of the nineteenth century saw the transition to the new, imperialist era. Finance capital not of one, but of several, though very few, Great Powers enjoys a monopoly. (In Japan and Russia the monopoly of military power, vast territories, or special facilities for robbing minority nationalities, China, etc., partly supplements, partly takes the place of, the monopoly of modern, up-to-date finance capital.)” (19)

In their famous pamphlet explaining the Bolshevik program against the imperialist world war, Lenin and Zinoviev stated in 1915: “In Russia, capitalist imperialism of the latest type has fully revealed itself in the policy of Tsarism towards Persia, Manchuria and Mongolia, but, in general, military and feudal imperialism is predominant in Russia. In no country in the world are the majority of the population oppressed so much as in Russia.” (20)

And in another theoretical article, the Bolshevik leader Gregory Zinoviev explained that “the Russian imperialism differs from Western European imperialism in many aspects. It is not an imperialism of the latest stage of capitalist development. Russia is a country which imports capital, which is an object of capital exporting countries. The Russian imperialism is a feudal, militaristic imperialism. (...) There is no imperialism which is cruder, more barbaric, and bloodier than Russian imperialism.” (21)

The same position was repeated by Nikolai Bukharin and Evgenii Preobrazhensky,the authors of the major popular outline of the Bolshevik’s program – The ABC of Communism.

 

Conclusion

 

In conclusion, we think that comrade Slee’s and Daum’s critiques of our position on China as an emerging imperialist state are wrong. At the same time, we welcome their criticism, because we consider an international debate about Russian and Chinese imperialism to be of greatest importance. It is the emergence of these two Eastern imperialist powers which is one of the most important aspects in the developing world situation in recent years. Without recognizing and analyzing them, it is impossible to understand the present dynamics of increasing inter-imperialist rivalry and to draw the necessary conclusion for the revolutionary program in the period ahead.

 

Footnotes

(1) Chris Slee: Discussion: Are Russia and China imperialist powers? April 7, 2014, Links International Journal of Socialist Renewal, http://links.org.au/node/3795. Chris Slee is a long-time socialist activist and a member of the Australian organization Socialist Alliance. He has published numerous articles and pamphlets on different subjects including China and Cuba. His article was published in LINKS, an international English-language socialist journal. LINKS has been initiated by the Socialist Alliance. On its "Editorial Advisory Board" are well-known representatives of the left from the Philippines (e.g. Sonny Melencio), Indonesia (e.g. Dita Sari), Pakistan (e.g. Farooq Tariq), Canada (John Riddell), Scotland (e.g., Alan McCombes and Murray Smith), the USA (Malik Miah), and Germany (Andre Brie).

(2) These documents are mainly:

On China: See Michael Pröbsting: The Great Robbery of the South. Continuity and Changes in the Super-Exploitation of the Semi-Colonial World by Monopoly Capital Consequences for the Marxist Theory of Imperialism, 2013, Chapter 10, http://www.great-robbery-of-the-south.net/; Chapter 10 is an enlarged and updated version of the following document: Michael Pröbsting: China‘s transformation into an imperialist power. A study of the economic, political and military aspects of China as a Great Power, in: Revolutionary Communism No. 4 (2012), http://www.thecommunists.net/publications/revcom-number-4; in March 2014 the publishing house PROMEDIA published a shortened German-language translation of The Great Robbery of the South. (The title is: Der Grosse Raub im Süden. Ausbeutung im Zeitalter der Globalisierung). This version contains an updated version of the China chapter.

On Russia: Michael Pröbsting: Russia as a Great Imperialist Power. The formation of Russian Monopoly Capital and its Empire – A Reply to our Critics, 18 March 2014, in: Revolutionary Communism No. 21, http://www.thecommunists.net/theory/imperialist-russia/

We have also published a summary of these documents in: Russia and China as Great Imperialist Powers

Michael Pröbsting: A Summary of the RCIT’s Analysis, 28 March 2014, http://www.thecommunists.net/theory/imperialist-china-and-russia/

(3) The Economist: China’s economy: Pedalling prosperity. China’s economy is not as precarious as it looks, says Simon Cox. But it still needs to change, May 26th 2012, http://www.economist.com/node/21555762

(4) The Economist: An old Chinese myth. Contrary to popular wisdom, China's rapid growth is not hugely dependent on exports, Jan 3rd 2008, http://www.economist.com/node/10429271;

(5) See World Bank and the Development Research Center of the State Council, the People’s Republic of China: China 2030. Building a Modern, Harmonious, and Creative High-Income Society (2012), Washington DC, 2012, p. 124

(6) World Bank: Global Development Finance 2012, p. 110 and Asian Development Bank: Asian Development Outlook 2012. Confronting Rising Inequality in Asia, p. 272

(7) See David Shambaugh: Are China’s multinational Corporations really multinational?; in: EAST ASIA FORUM QUARTERLY, Vol.4 No.2 April–June 2012, p. 7; Chinese companies push out Japan on Fortune Global 500 list, By Agence France-Presse, July 9, 2012, http://www.rawstory.com/rs/2012/07/09/chinese-companies-push-out-japan-onfortune-global-500-list/

(8) David W. Stelsel: U.S. Share of Global Economic Output Shrinking, June 28, 2012, http://www.valeofinancial.com/2012/06/u-s-share-of-global-economic-output-shrinking/

(9) See the discussion section below Chris Slee’s article at http://links.org.au/node/3795

(10) See also IMF: Global Financial Stability Report, April 2012, Statistical Appendix, p. 3

(11) Michael Pröbsting: The Great Robbery of the South. Continuity and Changes in the Super-Exploitation of the Semi-Colonial World by Monopoly Capital Consequences for the Marxist Theory of Imperialism, p. 243

(12) See the chapter “V. The Arguments of Our Critics” in Michael Pröbsting: Russia as a Great Imperialist Power. The formation of Russian Monopoly Capital and its Empire – A Reply to our Critics, 18 March 2014

(13) Paul Kennedy: Rise and Fall of Great Powers. Economic Change and Military Conflict from 1500 to 2000, London 1988, p. 243

(14) Mira Wilkins: The History of Foreign Investment in the United States, 1914–1945, London 2004, p. 5

(15) Michael Pröbsting: The Great Robbery of the South. Continuity and Changes in the Super-Exploitation of the Semi-Colonial World by Monopoly Capital Consequences for the Marxist Theory of Imperialism, pp. 220-228

(16) This is by the way also a result of the emergence of capitalism out of feudalism respectively the Asiatic mode of production; hence the important role of the peasantry and the small traders.

(17) See e.g., the quote from Lenin’s Notebooks on Imperialism; Michael Pröbsting: Russia as a Great Imperialist Power, p. 31 (footnote 124)

(18) Leon Trotsky: The Third International After Lenin, New York 1970, p. 174

(19) V. I. Lenin: Imperialism and the Split in Socialism (1916); in: CW Vol. 23, p. 116

(20) V.I. Lenin/G. Zinoviev: Socialism and War. The Attitude of the R.S.D.L.P. toward the War (1915), in: LCW 21, p. 306

(21) Grigori Sinowjew: Die russische Sozialdemokratie und der russische Sozialchauvinismus (1915); in: W. I. Lenin/G. Sinowjew: Gegen den Strom. Aufsätze aus den Jahren 1914-1916, Hamburg 1921, pp. 174-175 (our translation)