China and the World

, privatization and the auctioning off of state-owned enterprises became the order of the day during China’s economic reform. Tens of millions of Chinese workers were laid off, and those remaining on the job were deprived of the customary life-time employment security and the social safety net. At the same time, privatization and the dissolution of cooperative farming also eliminated basic health care and educational opportunities for the vast majority of the rural population. Hundreds of millions of peasants had to migrate to the coastal cities and work in ‘sweatshop’ factories to earn a meager wage. In 2001, China embraced globalization fully integrating herself into the global capitalist economy by joining the World Trade Organization (WTO). Unfortunately for China, the conditions imposed upon China’s WTO entry were so onerous that they provided easy access for the multinationals to penetrate the Chinese market. In the face of the intense competition, many Chinese domestic industries experienced bankruptcy resulting in more layoffs, while Chinese farmers suffered equally from the dumping of American subsidized agricultural products on the Chinese domestic market. The impoverishment of the Chinese working people resulted in insufficient domestic demand and led China to depend on exports for economic growth. At the same time, as a result of the neoliberal economic policy of cheap labor, China became a popular destination for outsourcing by Western multinational firms. Having been thoroughly indoctrinated in the positive role of multinational corporations, China’s neoliberal economic advisors naturally welcomed foreign investment with open arms. Consequently, Western multinationals increasingly dominate key sectors of the Chinese economy. It is not surprising then that after 30 years of reform and opening up, China still possesses only a few global enterprises. China’s neighbors Japan and Korea, having protected their own industries by restricting foreign investment, all have world class corporations with global brands. This is a pity, as Chinese are traditionally one of the most creative and ingenious people in the world and have a long history of inventive tradition; they should play a bigger role in the development of national brands. However, this cannot be done with the neoliberal economic policy of embracing free trade, globalization and the WTO with its intellectual property rights regime. Trying their utmost to integrate into the capitalist world-economy, the Chinese policymakers have not hesitated to adopt the American economic model of consumer capitalism for fostering development in China. One of the key features of this economic model is the powerful presence of the auto industry, and it has been promoted as a pillar of the Chinese economy.3. Accordingly, China has experienced phenomenal growth in auto production and sales. “If this growth continues apace, 150 million cars could jam China’s streets by 2015—18 million more than were driven on U.S. streets and highways in 1999.” This could have huge implications for China in terms of fuel supplies and environmental problems. What is even more ominous for China’s agriculture is the conversion of fertile farm lands to industrial and residential uses in the process of urbanization. According to American management consultant McKinsey & Co., by 2025, China will build the equivalent of two Chicagos every year. Unfortunately, development on such a scale will have heavy social and environmental costs.