U.S. transnationals eyeing China

By Victor Perlo, People's Weekly World, 30 November 1996

President Clinton and Chinese President Jiang Zemin have arranged for an exchange of state visits as the U.S. signals its intention to expand economic relations with the world's largest and fastest growing economy.

China's socioeconomic system is not easy to define. It is under the leadership of the Communist Party; its basic industries are publicly-owned and it has other aspects of a socialist society. At the same time, it has opened significant sections of the economy in specified geographical areas to capitalist relations - including foreign capital. American capitalists were late-comers to this bonanza but are now moving in, trying to catch up with Japan and other early entrants.

The U.S. government and mass media want to discredit China among U.S. workers because of its Communist leadership and socialist features. Most adverse publicity is directed at China's human rights violations that focus on a handful of dissidents - more than likely including a number of CIA contacts.

But American and other transnational corporations (TNCs) are expanding production in - and imports from - East Asia because of the low wages in the region. Thus, the loss of jobs for American workers is blamed on China because of the U.S. trade deficit. (A trade deficit is the excess of U.S. imports from over exports to a given country.) According to official statistics, the U.S. deficit with China is second only to that with Japan - and exceeded the deficit with Japan in the most recent reporting month. To a large extent, these data involve methods of accounting: The U.S. says the deficit with China is about $40 billion annually; Chinese figures put it at $7 billion.

Congressional Republicans would like to impose stringent trade restrictions against Chinese products but any reduction in Chinese imports will only be shifted to others from among its neighbors.

On the other hand, U.S. import policies toward China are cutting off thousands of jobs in the United States. Washington is continuing its cold war policies that ban export of technology high-tech goods to China. So the Chinese get these products from western Europe and Japan, instead. The latest example was a major airplane sale that the U.S. lost to French and Italian firms because of Washington's restrictions.

Defeat of Dole in the recent election improved prospects for U.S.-China relations but right-wing pressure continues and remains dangerous. Consider, for instance, a recent article by James Shinn in Current History, organ of the Council of Foreign Relations and a think tank for U.S. foreign policy.

In Emerging China: Exploiting the Fissures in the Facade, Shinn discusses various fissures in the Chinese economy and how to exploit them in order to weaken - and ultimately destroy - the Communist-led regime. He sees one such fissure as privatization and writes, The collapse of state-owned firms would pose a huge risk to the Beijing government. Millions of cashiered workers would spill into the streets of urban areas, and the banking system would be shattered by massive defaults.

Shinn calls upon U.S. TNCs operating in China to use their corrosive capitalism to attack state-owned enterprises and to split the Chinese working class by setting up company unions. He goes on to say that negotiating with China should be used to selectively advance the very practices that threaten the regime.

Naturally, China will resist these efforts he says, but it is very much in the interest of 'pluralistic' countries (e.g. imperialist countries, VP) of Asia, North America and Europe to persistently counter Beijing's resistance to the threats posed by interdependence to the regime's economic security.

Shinn says it will take forever to destroy socialism if China is permitted to pick and choose which aspects of integration it finds tolerable. But Shinn still worries about the consequences of not moderating anti-Communist pressure:

If the central government were to collapse, he says, there would be terrible costs in human suffering: floods of refugees, famine, disease, crime, drug trafficking, environmental disaster and international terrorism. And save for the terrorism, that's exactly what has happened with the destruction of socialism in the former USSR!

Obviously Chinese leaders read such incitations and will certainly take measures to counter them, a course that could be harmful to improving U.S.-China relations.