Some on the left, are so impressed with China’s rise as an economic power, that they are uncritical as to the distribution of wealth, let alone trade-union and political rights. Au Loong Yu, a labour rights activist in Hong Kong and author of China’s Rise (2012, Resistance Books), looks at the real condition on the working class in the country.
When the old musical Cabaret was made into movie in 1972, the actress Liza Minnelli won the Best Actress Academy Award. In the movie she sang the famous song Money Makes the World Go Around and it was impressive. The musical is based on a novel set against the background of 1932 Germany. Hence the song runs:
A mark, a yen, a buck, or a pound
Is all that makes the world go around
That clinking clanking sound
Can make the world go ‘round.
In 1972, it was the US dollar that made the world go around, just as the pound once did. Since then, the scene is changing rapidly first with the triumph of neo-liberalism in the 1980s, followed by the rise of China in 21st century. Chinese money is now joining the dollar, the euro, the pound and the yen in moving the world round. Although far from being able to challenge the dollar, the RMB or Yuan, is now beginning to make the same clinking clanking sound everywhere. No wonder Xi Jinping and his money were whole-heartedly embraced by Cameron and even some former leftists.
Martin Jacques, for instance, reminds us that despite China’s human rights record the CCP has still managed to take “600 million people out of poverty, arguably the single biggest global contribution to human rights over the last three decades”. John Ross gives an even higher figure: “China has raised 728 million people from poverty,” taking the latest World Bank International definition of poverty ($1.90 daily expenditure). Surely it never occurred to these gentlemen that they should first verify how meaningful this kind of measurement is by taking $1.90 and staying for a day in any city in China to see how far they could go. If that is too troublesome, then at least they could get someone to ask just how much it costs for a very un-impressive lunch in Guangzhou, the capital of Guangdong province, where 30 million rural migrants toil. I did. Although it varies from district to district, $1.90 only allows you to buy one lunch, or at most two meals. Shelter? Forget about that.
I will be the last person on earth to deny there is huge improvement in poverty in China. Only those China bashing US Republicans and their like will miss the Chinese elephant in the room: despite it being a far-right regime, the CCP’s crazy drive for industrialisation has changed China from a largely peasant country into an urban China. In the course of that it has provided urban jobs for rural migrants, which in turn has lifted them from dire poverty. But let us be more precise. There is improvement only in terms of absolute poverty, and this chiefly applies to the rural population. For the 40 million workers in the state owned enterprises who were sacked, they suffered a sharp downward mobility and impoverishment. Relative poverty has been worsening very quickly. Because of inflation (never trust the official figures), even for the so-called middle class, many are called the Moon Tribe, or Yueguang zu, which means they spend all their wages by the end of the month. “My monthly salary is 4,000 yuan (US$622). That’s not bad for many in the post-80s generation like me. But I tell you, I can only save not more than 200 yuan per month. I am a member of the Moon Tribe.”
According to the ILO Global Wage Report 2014-15, China’s wages as a share of national income experienced a major decline from 54% in 1992 to 45% in 2011. This is one of the chief contributors to the sharp rise in unequal distribution of wealth. Last year a study shows that China’s Gini coefficient – a measurement for income inequality, with 1 as absolute inequality – reached 0.55, far higher than the 0.45 of the US.
It is sad to read other leftists like Samir Amin’s defending the CCP by first saying that one does not need to bother with the question “is China capitalist or socialist”, followed by saying that China is state-capitalist, but one that is working-people friendly and that the social safety net and pension covers 50% of the urban population. He does not need to do a social survey (and under current laws he must seek official permission before doing this) to know that the picture is not that rosy. Even the official press admits that there is serious fraud and corruption in social welfare. For instance, according to a report by the Chinese Academy of Social Science in 2012, 60% of those who receive dibao, or “minimum livelihood insurance”, are not poor at all, while 80% of the really poor get no benefits at all.
Jacques’s embracing of the CCP is prompted less by his concern over the Chinese poor but more about the clinking clanking money: China is rising, and “we are fast becoming a minnow by comparison”, and that “Britain’s much-neglected infrastructure requires huge capital investment, money it does not have.” He should be assured that he has my full sympathy.
Today’s China is:
- The world’s second largest economy;
- The world’s largest trader in merchandise;
- The world’s largest manufacturer;
- The second largest recipient of FDI and fifth largest contributor of FDI;
- The owner of the largest foreign exchange reserves;
- The largest foreign holder of US government bonds;
- The largest total energy consumer and more than half of its domestic consumption of oil relies on imports;
- The world’s largest number of millionaires and billionaires.
The British ruling class now begins to feel the gravitational force of the Chinese money pulling them into the latter’s orbit. It happily endorses the CCP’s new motto: Bourgeoisie of the world, unite to make money! But the motto should not be understood as purely something about the economy and profit. It is also highly political. China is still very far from being able to challenge the US hegemony and the British elite knows this all too well. It is another ability of China, which is so attractive to the British elite – that is it being a great engine of the global race to the bottom in terms of labour rights and environmental protection. While using Maoist rhetoric, Xi Jinping is actually moving even further to the right by promoting more Free Trade Agreement all over the world, including with the EU. As is shown by the result of the NAFTA, the WTO, etc., Free Trade Agreements prioritise investment and corporate rights over labour rights and environmental protection, seeing the latter as “trade barriers”. China’s rise gives the Western ruling class the best leverage to promote the downward harmonisation in their home countries and globally. For the past twenty years they told their working people at home: “we must cut your wages and welfare if we are to compete with China, or we will move our investment there.” What is new for now is that today it is Chinese money, which is flooding the West. And what is this money invested in? Nuclear power. Is this not the best answer to the question as to who actually benefits this race to the bottom, jointly promoted by Chinese government and the Western ruling class?
There is, however, one thing the ruling elite may miss out in their formula. The rise of China is not sustainable in its present mode. For the past thirty years it has relied on a set of relationship of forces, domestically and internationally, which today are rapidly changing. Some years ago I argued that it is increasingly entering a bottleneck. China’s integration into global capitalism, although enriching even further the business class in the West and many parts of the world, sharpens all the contradictions of global capitalism in the medium term. We are now exactly arriving at this moment.
30 October 2015
 China is rising as the US declines. Britain can’t ignore this reality, Martin Jacques, 19 October 2015, The Guardian, http://www.theguardian.com/commentisfree/2015/oct/19/china-us-osborne-xi-jinping-visit-economic
 , A Note for Jeremy Corbyn – How China made the world’s largest contribution to human rights, John Ross, 20 October 2015, http://ablog.typepad.com/keytrendsinglobalisation/2015/10/a-note-for-jeremy-corbyn-how-china-made-the-worlds-largest-contribution-to-human-rights.html
 Surging Prices Pulling Middle Class in All Directions, Economic Journal Insight, August 8th, 2011.
 Dibao zhikun weishenme gaichide chibushang (The Dilemma of Dibao: why those should be entitled to benefit are denied), http://politics.people.com.cn/n/2014/0623/c1001-25189231.html