By Peter Moreau
The US has levied an accusation against the Chinese government which has gained some traction over the past few months and years. It accuses the People’s Republic of China of maliciously and imperialistically putting Africa into a debt trap. Let us take a deeper look into this question to see if it is valid. Is an imperialist China putting Africa into a debt trap?
It is important for us to define our terms before we begin. Imperialism, as Lenin so elegantly laid out for us, can be summed up in five principles explaining its character as a development of the capitalist system. These principles are concentration of production into monopolies, the emergence of finance capital, capital becoming the primary export over commodities, division of the world among the monopolies, and the division of the world among the imperial nation-states. Let us dive into each of these separately and in some detail.
The concentration of production into monopolies is a built-in feature of capitalism. Prior to the monopoly-age of capitalism, when firms would compete with one another there would always be a winner and a loser. Whoever could develop a more efficient mode of creating a given commodity would reap the benefits of the reduced cost of labor-power and develop a higher profit margin over their competitor while also providing a lower-cost to the consumers of this commodity. Eventually, the more profitable firms drive or absorb their competitors, consolidating the marketplace. This process repeats itself ad nauseam until there are only a few very powerful firms left to compete with one another.
The emergence of finance capital is another feature of capitalism and an identifiable characteristic of imperialism. The merging of financial capital and industrial capital produced a new beast entirely. Finance capital allows the industrial capitalist to have access to more funds for development and competition while allowing the financial capitalist to control more capital and reap more benefits for themselves. The banks begin to serve a new role in this regard. Instead of providing loans and interest on money, they now control and finance huge industrial operations by equipping industrial capitalists with the funds needed to grow their firm exponentially.
Capital becoming the primary export of a nation-state over commodities is another important characteristic to take note of. When the monopolies of a particular nation-state begin to bump up against the limits of their domestic market, they notice their superabundance of capital and search for places to put it to earn a return. They begin to export the capital around the globe, especially to poorer nations. They do this because, in these nations, capital is scarce. Wages, raw materials, land, and other necessities for capital are, comparatively speaking, lower in price. This export of capital leads to increased profits due to the lower costs of the means of production found elsewhere in the world.
This export of capital by the monopolies has a limit however, as the different monopolies are bound to bump against one another in their quest to devour the entire world. This leads to the next characteristic of imperialism, which is the division of the world among the monopolistic concerns. The monopolists find that cooperation rather than direct competition is more profitable to their endeavors. The division of the world, every last section of it, demonstrates the self-aware nature of imperialism. Monopolies begin dividing nations and taking control over the lives and bodies of workers in faraway lands for the sake of the dollar.
Of course, this does not mean that the monopolies are a monolithic group that always cooperate with one another. The complete division of the world among the monopoly capitalists creates a disagreement between capitalists as they continue trying to ever grow their fortune. These disagreements, in turn, lead to redivision of the world. Sometimes this redivision occurs in an economic or diplomatic fashion. Other times, it leads to war. It is important to note that the content of the struggle between the monopolists does not change. The struggle remains an economic struggle. The form of the struggle however, changes quite frequently.
The different imperialist powers are powerful because of the monopolies which they hold (or rather, which hold them). The great powers of the world divide up the world with boots and guns and have already completed this process. Their military apparatuses enforces the compliance of the periphery nations into the already-decided division of the world. Every change from here on is a redivision of the world as markets pass from one owner to another.
Now that we have covered the actual characteristics of imperialism, we must consider the actual history and development of monopoly capital. The turn of the 20th Century was the turning point from the age of competition capitalism to the age of monopoly capitalism. The development of syndicates, cartels, and trusts displayed both a horizontal and vertical integration of the supply chain and means of production. The death of the age of competition and the birth of a more decrepit era of capitalism was only the beginning, however. World War I was the first inter-imperialist conflict. Capitalist powers from around the world competed for control over the Global South. Controlling Africa and South America became an important (and seldom spoken about) aspect of the war. As the years progressed, the U.S. became more and more influential in the imperial core and eventually surpassed its predecessors the U.K., Germany, and France. Finally, following World War II American monopoly capitalism emerged as the dominant hegemon for the rest of the 20th Century to the present time.
Even before the ascendancy of the U.S., imperialism had not remained stagnant, of course. The dialectical understanding of imperialism and political economy allows us to see the ever changing nature of these historical processes.
Imperialism has developed two interesting characteristics in the 21st century that we must touch on before we can finally answer the question posed at the beginning of this article. First, the neoliberal emphasis on “free trade” is the hallmark of the new changes in the world order. What is “free trade”? It is the freedom for transnational monopolies to plunder the wealth of the Global South. Second, the nominal independence of these imperial periphery nations is another factor of 21st Century imperialism. These nations are allowed some level of independence, but only to that level convenient to the ruling class.
We can finally turn our attention to the People’s Republic of China. The People’s Republic of China has, in the past few decades, risen head and shoulders above all other nations at similar levels of development at the time (e.g., India). The international policy of the P.R.C. is one of non-interference. A policy of non-interference however, does not mean that the P.R.C. is isolationist.
Unlike the extraction-focused imperialism used by the West, China’s foreign relations are focused on win-win cooperation between all involved countries. Mutual benefit and development are important characteristics. The One Belt One Road initiative is probably the most brilliant example of this principle put into action. Through this initiative, 149 nations are joined together in the struggle for mutual development and equal exchange. Developing infrastructure and trade relations with partner countries not only helps with the industrial development and improvement of the quality of life for everyday people of a given nation, but it also helps develop the productive forces in the P.R.C. Furthermore, the connections built between China and other member nations and also between those member nations themselves serve the purpose of building an infrastructure which eliminates the need for predatory Western alternatives.
To people unfamiliar with the definition and characteristics of imperialism however, the charge of imperialism against the P.R.C. may seem valid. Even a cursory examination of the facts, however, shows that the accusation is meritless and the question of whether the People’s Republic of China is an imperialist nation must be answered with a resounding no.
Critics allege that the P.R.C. has allowed monopolies to form. While it is true that there are private enterprises in China, they are closely monitored by the state to ensure that strict regulations are followed which serve the interests of the Chinese and international working class. Another charge is that finance capital also exists in the P.R.C. This charge, however, ignores the very important fact that any finance capital and the power behind it in the P.R.C. is wielded by the Chinese working class to aid in the development of industries. This, in turn, leads to further modernization and equal levels of development nationwide. The collectivization of finance capital that exists in the P.R.C. allows the Chinese working class, under the leadership of the Communist Party of China, to be in the driver’s seat and in full command of the economy.
Critics further insist that the P.R.C. exports capital. This allegation ignores that the export of capital from China is, again, qualitatively different from the export of capital from imperial core nations. Of course, it is inarguable that the P.R.C. does export a vast amount of capital through investment plans like One Belt One Road. But, this is not due to a superabundance of capital as it is in monopoly capitalist states. Rather than seeking to divide and dominate global markets, China exports capital to allow for the mutual development of Global South countries. The People’s Republic of China is not dividing up the world. Rather, it is handing the Global South back to the people who live there and empowering them to develop in a self-chosen way, free from the interference and manipulation of the International Monetary Fund and World Bank. Rather than aiming to ensnare the Global South in a debt-trap, the P.R.C. is using partnerships and strategic investments to give the Global South the keys to their imperialist prison.
When discussing debt-traps, it is the IMF and the World Bank that offer predatory loans to the poor and developing countries around the world. While dressing up their loans as humanitarian, they are exploitative. Loans offered by the IMF and World Bank have stipulations and clauses that only allow their recipients to spend money on certain industries. Of course, these industries are usually those that are most beneficial to the imperial core nations. In another example of exploitation, if loans are not paid back in a timely manner then, in most cases, there are structural adjustment clauses. These structural adjustment clauses are a particularly insidious aspect of imperialism and, when activated, allow lenders to send in their “experts” to determine and eliminate any excesses in spending. Usually, the first things to be slashed are those that are most important to the quality of life of the citizens of the country: education and infrastructure (that is, as long as it is not the road from the factory to the port). The Western accusation of China putting Africa into a debt trap is the projection of the millennium. The slightest bit of research and a basic understanding of global capitalist interests allows one to see the ridiculous nature of this argument.
Understanding the imperialistic nature of the current capitalist system goes hand-in-hand with being able to counter the argument that the P.R.C. is acting in the same way through so-called debt traps. Yet, it is only the first step in dismantling imperialism in the 21st Century. As Communists and peace-loving people, we must engage in discussion with people to spread anti-imperialist sentiment to debunk imperialist myths about China and other Global South countries. We must demystify the organs of finance capital. We must lay out how the system works to our detriment.
Additionally, the press can be used to debunk imperialist myths and work toward dismantling imperialism in the 21st Century. The presence of a progressive working-class press is essential. Resources like People’s World and Red World Review are fantastic resources that can be used by the working class to overcome the lies spread by the ruling class media. People’s World and Red World Review are the greatest tools for education that the American militant working class has at its disposal.
Ultimately, international working class solidarity is what is needed to end the imperial hegemony led by the U.S. The Solidarity Network (SOLIDNET) and the International Meeting of Communist and Workers Parties (IMCWP) is how the international working class communicates and helps one another through the various struggles that they engage in. International working class solidarity is the cure to the imperialist disease and building it is not only possible, but necessary to the survival of our people and planet. One of two things can follow the global capitalist system: socialism or extinction.