Imperialism with Chinese Characteristics


In 2013, China announced its ambitious initiative called One Belt, One Road (OBOR). This OBOR later became famous as the 'Belt & Road" strategy, and it denotes a series of initiatives that China envisages to re-establish, strategy encompasses both the overland Silk Route Economic Belt and a 2lst Century Maritime Silk Route. This avowed policy as per the Chinese Government is intended to increase connectivity and economic interaction between Asia, Europe and Africa. Once complete, the two trade routes will pass through an area which is home to almost two thirds of the world's population and which generates almost one third of the world's Gross Domestic Product. The OBOR represents Chinese way of generating new marker for its increasingly excess industrial production, as well as emerging financial capital interests.

As Monthly Review, notes : "The Chinese government has publicly stressed the lessons of the 1930s overcapacity crisis in the West that precipitated the Second World War, and promoted these new initiatives in the name of "peaceful development". Nevertheless, the turn to OBOR suggests a regional scenario broadly similar to that in Europe between the end of the nineteenth century and the years before the First World War, when strong nations jostled one another for industrial and military dominance. The OBOR strategy combines land power and maritime power, bolstering China's existing oceanic hegemony in East Asia". (Monthly Review, One Belt, One Road, China's Strategy for a New Global Financial Order)

The foundation of the OBOR programmes is rooted in two historical trade routes. The ancient Silk Road which was the ancient network of trade routes which traversed through the Central Asian region culminating into Mediterranean Sea. The route was at its zenith during the period of China's Tang Dynasty (618 CE-906 CE). The silk road that was for centuries central to cultural interaction through regions of the Asian continent connecting the East and West and stretching from the Korean peninsula and Japan to the Mediterranean Sea. The second being the Maritime Silk Route, that bases itself roughly on historical Chinese maritime trade routes through the South China Sea and beyond, touching as far as East Africa and Mediterranean Europe via ports such as Kolkata, Colombo and Karachi in South Asia.

Since, the announcement of the Belt & Road strategy by Chinese President Xi Jinping in 2013, Beijing has been maintaining that the initiative is designed solely to achieve economic and diplomatic objectives, and does not have any other motive behind it. It has contended that OBOR will establish direct road and rail corridors between East Asia and Europe, in addition to a string of sea ports linking China with Southeast Asia; South Asia, Africa, the Middle East and Europe. It is stated that once complete, this comprehensive network of trade routes will stimulate trade and exports amongst Eurasian states, driving economic development in the region.

In addition to the economic benefits of the strategy, Beijing argues that OBOR will also have significant diplomatic windfalls. As Premier Li Keqiang commented, the OBOR policy was developed not only to boost economic growth, but also to "deepen international cooperation and promote world peace" through sustained bilateral investment and the economic interdependence it produces. Something, that any observer of international polity would take with a pinch of salt, considering the recent Chinese experience that several countries particularly in Asia and Africa have witnessed.

This initiative of China is also in consonance with its "Go Global" policy wherein private capital allied with the national bourgeois of the Communist Party of China aims at undertaking massive capital investments abroad in financially weaker countries and turn them into their captive markets as well as a constanct supplier of raw material. The tenth Five year plan (2001-05) of China had made overseas investment by the Chinese enterprises a priority that would help then in the future to carve their "sphere of influence" against US hegemony.

Confirming similar developments, an exclusive Reuters report has claimed that China is expected to take controlling stakes, as high as 85 percent, in Myanmar's China funded projects, even if the initial agreement for some of them was on a 50/50 basis. According to the report, China has asked for a 70-85 per cent stake in a strategic deep sea project on the Bay of Bengal, KyaukPyu, and is expected to get it due to the financial constraints of Myamnar. The $7.3 billion project is China funded.

Apart from the stated international significance, the OBOR initiative also has a substantial focus on the Chinese domestic scenario. As Arse, a visiting Senior Fellow at Institute of South East Asian Studies, in his article China's "Two Silk Roads : Implications for Southeast Asia" observes, "the comprehensive network of trade routes developed as part of the initiative will link China to many established and developing markets, creating significant opportunities for Chinese industries". The Government also believes that by opening up of trade to new markets in the areas that would be connected by this initiative would help to sustain the country's economic growth long into the future and also it would raise the economic standard of the people of those region that hitherto have been untouched by the Chinese economic development, particularly in the middle and Western region of the country.

He further wrote. "This vision is inspired by China's rise to great power status and the transition back to structural bipolarity in the international system. China's neighbours are becoming ever more dependent on it for money, finance, and trade, while the rest of the world looks to Beijing to drive global economic growth. Judging from his speeches at Chinese Communist Party central leadership meetings and at international summits, Chinese President Xi Jinping is implementing an ambitious geo-strategic vision of a China-centric order in Asia and the long term integration of Eurasia to serve China's growth and development needs. The two Silk Roads should be seen as a serious bid to realize a 21st Century "great rejuvenation of the Chinese nation" that will match the ancient glory of the Han and Tang Dynasties".

The aim of Chinese government is to have a wider economic integration on trans-regional scale, Arse writes, "The West's approach to regional integration (e.g., NAFTA and the EU) is economic liberalization. It uses multilateral treaties to remove legal and institutional barriers to trade and investment, and to create legally binding rules, standards, and dispute resolution mechanisms to create a flat open space for private sector actors. In contrast, China's approach to regional integration centres on economic facilitation. This means boosting trade and investment by improving connectivity between markets by, for example, building more efficient transportation linkages, providing more trade and investment finance, and multiplying human exchange opportunities. China's aim is to create transcontinental economic corridors that radiate across the Eurasian landmass (the Silk Route Economic Belt) and along the maritime rim of Eurasia (the 21st Century Maritime Silk Road). The result will be to channel economic flows to or from China".

In last few decades China has become a major aid donor to several weaker economies both in its immediate neighbour and in Africa, though it has been alleged by many China watchers that the Chinese loan comes with a much higher interest rates and its investments, terming it to be the new "neo-colonial" power. The Chinese have known to lend charges above 6 percent on their credits and loans that they provide to countries, whereas the international line of credit by different organizations or countries for soft loans ranges from 0.1 percent to 3 percent. Between 2000 and 2011, China offered about €75 billion in aid to Africa for a total of 1,673 projects, this was almost same as that of United States in the same period. But all these loans are not given in the Communist spirit as was the norm during the times when Chinese Party had not capitulated to crass market-economy and state capitalism.

China has in other words reintroduced what Marx had termed the capitalist 'law of value', i.e. when the economy is based on sale of labour power on the market which results in the exploitation of workers and the accumulation of capital along with all its side-effects and results. This becomes clear from a number of developments that resulted from the pro-capitalist switch in policy of the regime. A major step in implementing the law of value in China's state-owned enterprises was a ruthless wave of layoffs. According to official figures published in the Chinese Communist Party's mouthpiece People's Daily (October 27, 2002), more than 26 million workers were laid off from state-owned enterprises between 1998 and 2002. Today, there has been a systematic dissolution and disappearance of these public enterprises, with private enterprises and companies increasing their share of economic activity.

According to the World Bank and the Chinese Development Research Centre of the State Council, non-state sector accounts for approximately 70 percent of the country's GDP and employment. Between 1998 and 2010, the share of State Owned Enterprises in total industrial assets fell from 68.8 percent to 42.4 percent, while their share of employment declined from 60.5 percent to 19.4 percent. The SOEs' share of China's exports also fell from 57 percent in 1997 to 15 percent in 2010. By 2005 over 85 percent of all small and medium-sized SOEs had been restructured and privatized. According to World Bank report: "Many SOEs were corporatized, radically restructured (including labor shedding), and expected to operate at a profit.... As a result, the profitability of China's SOEs increased". (China 2030, Building a Modem, Harmonious, and Creative High-Income Society)

The emergence of industrial sector on capitalist production method, requires the government to seek new markets and hence the perceptible increase in global economic activity of China is discernable. In return for infrastructure, the Chinese firms mostly privately owned receive licenses to exploit natural resources and fossil fuels, two of the commodity that is desperately sought by Beijing to fuel its economic momentum. For instance Angola, has become one of China's key oil suppliers, competing with Saudi Arabia for the top position, the Chinese investment in this war ravaged country has started bearing fruit, while the standard of living of the masses have continued to deteriorate.

Senegalese intellectual Adama Gaye in his book "China-Africa : The Dragon and the Ostrich" warns of a second wave of conquest of Africa, comparing China to the voracious dragon, and Africa, the naive ostrich, who face off as an extremely unevenly matched duo. "They take what they can get", says Gaye, referring to the Chinese. He even accuses them of creating "an apartheid-like culture" through social segregation. He further said, "Africa has buried its head in the sand, while the dragon preys on the continent's resources and ordinary Africans are largely left out".

In case of Myanmar, the Myitsone dam project is a classic example of understanding China's hegemonic designs in grab of economic and financial aid. The $3.6 billion dam project was financed by China and was built at the confluence of the Mali and N'mai rivers and the source of the Irrawaddy River. After being in construction for years, the project was suspended in September 2011 amid democratic reforms. Earlier the Burmese Junta government had taken a unilateral decision to allow the controversial project that was expected to bring cultural, environmental and sociological disaster for Myanmar and its people. Since the initiation of this project it ran into controversy due to its enormous flooding area, environmental impacts, being in close proximity from the Sagaing fault line, and uneven share of electricity sharing between the two countries.

The project when ready was to produce electricity of which, 90 percent of it would be sold to China while 10 percent was to be given free to Myanmar. However the government economic calculations have been criticized for not considering potential environmental and societal impacts. Being a power starved country, protests were held against it in Myanmar. Under pressure, China later said Myanmar was the primary market and rest was to be exported. That was when Myanmar is among the countries with lowest electrification rate and no grid structure to connect its cities and town. A World Bank report says only 33 percent of the country's population has an electricity connection.

Now China is using this junked project that has displaced thousands of people to leverage its position in Myanmar or one can say, to blackmail the Myanmar's government. If Myanmar finally cancels this project, it would have to return China $800 million that would hit it badly, further putting the depleted resource of the country at risk. The Chinese have come up with another proposition, it has proposed to have, "concessions on other strategic opportunities in Myanmar—including the deep sea port in Bay of Bengal Kyauk Pyu", as the Reuters report says. The deep sea port fits in the Chinese narrative of its 'One Belt One Road' initiative under which it is pumping huge sums of money in financially weaker countries like Sri Lanka, Pakistan, Bangladesh, Nepal, or Myanmar. Myanmar is part of OBOR project and has also been actively participating in it.

With OBOR China also wants to widen its reach in the region and secondly also to counter the growing strategic and diplomatic alliance emerging between India and Japan with active support of US, which the Government of China terms as an alliance to counter it. It is worth remembering that China had actively opposed the Japanese strategic concept of Asian Security Diamond, that envisaged forming a form of diamond to safeguard maritime commons stretching from Indian Ocean to the Western Pacific, apart from Japan the other key players of this arrangement are Australia, India, the US state of Hawaii. The primary ambition of this idea is to forge a security network aimed at securing the global commons.

China has expressed a deep apprehension to this and termed it as a provocative gesture aimed to contain and specifically to contain China's maritime strategy. In response to this Chinese have come with a grander concept of OBOR. Then the long issue of China's dependence on Strait of Malacca and Singapore also needed to be ameliorated. With the new maritime route "Twenty-First-Century Maritime Silk Road", China aims to open up another transportation channel from southwest China to the Indian Ocean, bypassing the Strait of Malacca. Another potential southbound route would pass through Pakistan the CPEC, and terminating at the port of Gwadar  in Arabian Sea work on which has already started and also is in full swing. Sri Lanka and Bangladesh two another strategic partners of China in OBOR projects would be providing the much needed entry point to the Indian Ocean for China.

Though ASEAN continues to be the starting point of the maritime Silk Road, but it is also the region fraught with contradictions and complexities, and where US influence is still deeply rooted. Though the US influence is on wane, still it remains the world hegemon of imperialist powers, something that China seems to be desperate to replace it with its own grander strategy and winning new alliances via trade and commerce. Something that Chinese experts are spelling out, "With the rise of the United States, Europe entered into a decline which recent attempts at integration have been unable to reverse. Europe is now faced with a historic opportunity to return to the centre of the world through the revival of Eurasia".

The benefits that the unification of the Eurasian landmass as well as Africa with Asia through the most state-of-the-art transportation systems both overland and maritime has a massive potential to provide significant economic development for the region. But in the current geo-political socio-economic order dominated by imperialistic hegemony and bourgeoisie drive for profit, together with the competing and contradictory aims of capitalist states the project has already become a hub of conflicting interests.

The vision of a One Belt, One Road scheme peacefully integrating Eurasia does not seeing to be viable than a united capitalist Europe.

Fuelled by the deepening global crisis that capitalism finds itself in current situation, the divisions and rivalries among the major imperialist powers within Europe and with the United States and Japan, will only intensify as each scrambles to secure its interests, the world is witnessing another redivision of the world with economics this time playing dominant role.

Even though with dwindling hegemony the chief destabilising factor remains US imperialism, which has repeatedly demonstrated its determination to offset its historic economic decline through the use of military force, at any cost.

Vol. 50, No.10, Sep 10 - 16, 2017