USA’s New Cold War Against China

By Yanis Iqbal  –  Oct 8, 2020

USA’s new cold war against China continues to escalate. On 2 October, 2020, the US Citizenship and Immigration Services (USCIS) issued a document to address inadmissibility based on affiliation with the Communist or any other totalitarian party. As per the document, “any immigrant who is or has been a member of or affiliated with the Communist or any other totalitarian party (or subdivision or affiliate), domestic or foreign, is inadmissible to the United States.” The timing of this anti-communist immigration ban neatly reflects the American agenda of brazenly subverting the Chinese Communist Party (CCP) which is one of the largest communist party in the world with more than 90 million members. Recognizing the imperialist tint of the recent immigration ban, Qiao Collective – a diaspora Chinese media outlet – has aptly labeled it as “a thinly-veiled Chinese Exclusion act”. 

The exclusion of Chinese people from the US is not new. America has already constructed an intricate regulatory framework aimed at surgically snipping out supposedly “harmful” Chinese people from the country. To give some examples: all Chinese nationals in the US on a journalist visa must apply for visa renewal every 90 days; in an effort to contain the technological development of China, the US has made it mandatory for Chinese graduate students pursuing degrees in certain science and technology fields like robotics and aviation to renew their visas each year; the State Department has restricted visas for CCP officials who have tried to put an end to the pro-imperialist protests in Hong Kong which have been advancing the geo-strategic agenda of the US; the State Department also announced visa bans for certain employees of Huawei as part of its attack on China’s tech sector. 

Chinese Socialism

Behind the increasingly aggressive American position against China, one can locate a genuine fear stemming from the recognition that socialism with Chinese characteristics will overtake the brutal neoliberalism of the American empire. With the help of this socialist ideology, China has initiated a unique economic experiment wherein it has empirically rooted Marxism in the concrete conditions of the country. This experiment has culminated in the process of reform and opening-up which attempts to create an economy where public ownership plays a dominant role and different economic sectors develop side by side.

The “Decision of the Central Committee of the Communist Party of China on Some Major Issues Concerning Comprehensively Deepening the Reform” precisely describes the basic idea behind China’s new “socialist market economy”: “Both the public and non-public sectors are key components of the socialist market economy, and are important bases for the economic and social development of China. We must unswervingly consolidate and develop the public economy, persist in the dominant position of public ownership, give full play to the leading role of the state-owned sector, and continuously increase its vitality, controlling force and influence.”

The structural dominance of the state in the current Chinese economy is indicated by the fact that there is nearly three times as much stock of public assets to private capitalist sector assets in the country. Moreover, China has public capital stock near 160% of GDP whereas every other major capitalist economy has less than 50% of GDP in public assets. Terming the massive state apparatus in China as a “noncapitalist sector of the Chinese economy”, the Marxist economist John Bellamy Foster says that it “includes not just a large sector of state ownership, but also both state control of finance through state-owned banks and the continuing absence of the private ownership of land.”

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In China, effective state planning geared towards the development, management and distribution of wealth has created an explosive surge in GDP and a requisite increase in global clout both economically and militarily, thus providing it with the resources to construct a socialist economy. The process of socialist capital accumulation in China is distinct from the collectivization of poverty and egalitarian distribution of privation which glorifies a state of penury. Criticizing this idea of “poor” communism, Deng Xiaoping, the paramount leader of the People’s Republic of China from 1978 until 1989, had said: “Unless you are developing the productive forces and raising people’s living standards, you cannot say you are building socialism…there can be no communism with pauperism, or socialism with pauperism. So to get rich is no sin”. In order to accumulate national wealth, China has started a process of opening up and reform which utilizes capitalism as the intermediary link between small production and socialism, as a means of increasing the productive forces.

By vigorously promoting the development of society’s productive forces through active state intervention, China has elevated 800 million people from poverty in the past 40 years and it has plans for uplifting an additional 30 million people from poverty by 2020. With its vast ownership of productive assets, the Chinese state has also managed the inter-industrial input-output relations at social prices that respect the value of direct producers while guaranteeing growth in industrial investment. Besides poverty eradication and the institution of socially designed prices, the results of socialist capital accumulation in China are visible in the country’s people-centered Covid-19 response which is starkly different from the inhumane response of USA. A 2009 document entitled “Opinions on Deepening the Health Care System Reform” has laid the foundations for China’s current unified health system and it is important to analyze the four reform initiatives on which the document focuses – 

(1)  A new public health service system – aimed at providing basic public health service package to all people through government subsidies and supporting programmes to control the primary public health problems – has been constructed. Increased state funding was done to expand the health services from 9 categories in 2009 to 14 categories in 2017; an average of 15 Yuan was allotted per capita in 2009 and was increased to 55 Yuan in 2018; a large government outlay on healthcare increased the availability of the basic public health package to almost everyone. 

(2) A robust health insurance system has been instituted to expand the population coverage of the basic health insurance schemes and develop medical financial assistance for people living in poverty. In 2018, 42.46 billion Yuan was spent from medical assistance funds nationwide to subsidize the participation of 76 million people in basic medical insurance and 53.61 million people received outpatient and inpatient assistance. 

(3) The (CCP) has built a medical service system aimed at increasing investment in the primary healthcare system, expanding human resources for primary care and abolishing the practice of raising medicine prices to make up for the shortfall in hospital funds. From 2009 to 2017, government subsidies as a proportion of total primary healthcare income increased from 12.3% to 32.5%; compared to 2012, the number of primary healthcare workers in 2017 increased by 7.1% to 3.863 million and the number of general practitioners per 10000 people increased from 0.8 to 1.8; lastly, the share of drugs and consumables as a percentage of the total medical revenue of public hospitals declined by more than 4%, highlighting the efforts of CCP to remove drugs as a source of finance for all public hospitals. 

(4) China has improved its drug supply and security system by initiating a zero-markup or zero-profit policy on drug sales, thus discouraging providers from prescribing unnecessary drugs and reducing the price of drugs for patients. 

The process of the development of productive forces is accompanied by the risk of increasing income inequality and privileging the bourgeoisie. In China, major CCP leaders have taken cognizance of this fact. Xi Jinping, for instance, has said that it will be a dead end “if we pursue a “reform and opening-up” against the socialist orientation. When it comes to direction, we must be very clear-headed. Our goal is to constantly promote self-improvement and development of the socialist system, rather than to reform and change the socialist system as a whole.” He has further stated: “Even if development is achieved, there is still the issue of common prosperity. If we are rich in material senses, but have uneven development and a huge gap between rich and poor or an unfair and polarized society, then how can we win the support from the people?…There must not be allowances made for the rich to accumulate huge wealth whilst leaving the poor with the crumbs”. 

In order to guard against the disadvantages of the capitalist market economy, China has politically expropriated the bourgeoisie and prevented its emergence as a coherent class. This has been done through the principle of “democratic dictatorship” enshrined in China’s constitution which states: “the People’s Republic of China is a socialist state under the people’s democratic dictatorship led by the working class and based on the alliance of workers and peasants. The socialist system is the basic system of the People’s Republic of China.” Mao Zedong has defined democratic dictatorship as “democracy for the people and dictatorship over the reactionaries.” Here, “reactionaries” refers to the class enemies of peasants and workers, the bourgeoisie and old aristocracy who had for so long deployed the state to crush the proletariat and now want to restore the capitalist mode of production. 

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On 15 September, 2020, China’s Communist Party Central Committee published a document entitled “Opinion on Strengthening the United Front Work of the Private Economy in the New Era”. This document is the most recent manifestation of democratic dictatorship and attempts to carefully re-calibrate the capitalist sub-economy with the over-arching structure of socialism. According to this document, private Chinese corporations of every size will be expected to recruit Communist Party members in management and other key positions, work towards fulfilling Communist Party objectives, and be held accountable by reporting back on progress under the plan. Reflecting the socialist blend of the private and public sector, the document states that the party must “bring into play the positive functions of private industry for technological innovation and positive transformation”. However, it also asserts that “[we] must from beginning to end persist in and perfect our country’s fundamental economic system, [and] unshakably solidify and develop the public economic sector”. 

Imperialist Belligerence 

Angered by China’s establishment of a stable domestic economy and transformation from a starved, third world nation into a super-power, USA has unleashed a new cold war which seeks to punitively discipline the country into passively accepting capitalism. The ideological foundations for this new cold war have been laid through a variety of ways. Firstly, the US has tried to cultivate mass hysteria against China and has repeatedly portrayed the country as a “threat” to USA’s imperialism. In June 2017, for instance, Joseph Francis Dunford Jr. – at that time Chairman of the Joint Chiefs of Staff – had shrilly said: “The competitive advantage that the United States military has long enjoyed is eroding… In just a few years, if we do not change the trajectory, we will lose our qualitative and our quantitative competitive advantage. The consequences will be profound.” Two years after this statement, USA increased its military expenditure by 5.3% to $732 billion, spending nearly three times as much as China and almost as much as the next 10 highest spenders combined

Since Francis’s alarmist proclamation of shrinking imperial-unipolar dominance, the US has never looked back and rationally examined its scare-mongering, Sinophobic rhetoric.  The ferocity of the anti-China rhetoric has only been increasing. On 23 September, 2020, USA’s “Future of Defense Task Force Report 2020” was released. This is a report which is crammed with frenzied declarations about America’s weakening dominance and is consequently, maniacal about somehow containing China. Frightened by the effectiveness of China’s socialist economic planning, the report states: “the gap between the United States and its competitors is narrowing sharply…China is blurring the lines between the government, academia, and private industry, taking an aggressive, whole-of-government approach to develop and leverage emerging technologies for economic and military advantage.” 

Reiterating an alarmist analysis of China, a September 2020 report by the Committee on the Present Danger: China (CPDC) – a hawkish, neoconservative group –singles out the CCP as a major threat to American dominance: “We require a determined national effort to regain such ground and establish an insuperable lead over our most dangerous enemy: the Chinese Communist Party.” In an acknowledgement of the ideological role played by Marxism, the CPDC document proposes the following as a remedial measure against Chinese socialism: “Address more generally and seek to reverse the cumulative effects in the U.S. academy of the cultural Marxists’ “march through the institutions” that has produced several generations of professors and teachers who espouse socialism and have inculcated in many of their students an enmity towards America and receptivity towards its revolutionary “fundamental transformation.” From this, it is abundantly clear that the new cold war is not just a simple trade war. It is also an important ideological battle. 

Secondly, by blaming China for the spread of the Covid-19 pandemic, the imperialist American empire has facilitated the cultural diffusion of Sinophobia and thus, the consolidation of its position in the new the cold war. In a telling case, Florida sent letters in June 2020 to 100,000 businesses and entities as vendors with the state asking if they were “owned or controlled by the Communist Party of China.” This list-making was a part of Florida Chief Financial Officer Jimmy Patronis’ campaign to assign blame for the COVID-19 pandemic to China. All the letters were signed by him and recipients were asked to confirm whether they represent “U.S. Interests” or not. Patronis’ hypothesis of the “Chinese Coronavirus” has been entirely unfounded and in September 2020 Florida’s administration revealed that it was unable to cite a single company controlled by the Communist Party of China. As a result of these unsubstantiated and orchestrated attempts aimed at scapegoating China for the Covid-19 pandemic, 73% of American adults today say they have an unfavorable view of the country, up 26% since 2018.

Subverting Socialism

On 7 July, 2020, FBI Director Christopher Wray gave a histrionic anti-China speech at a video event organized by the Hudson Institute. Using traditional fear-mongering tactics, Wray declared: “The Chinese government is engaged in a broad, diverse campaign of theft and malign influence, and it can execute that campaign with authoritarian efficiency. They’re calculating. They’re persistent. They’re patient. And they’re not subject to the righteous constraints of an open, democratic society or the rule of law. China, as led by the Chinese Communist Party, is going to continue to try to misappropriate our ideas, influence our policymakers, manipulate our public opinion, and steal our data. They will use an all-tools and all-sectors approach—and that demands our own all-tools and all-sectors approach in response.” 

Wray’s over-dramatic speech and promise of a full-blown response is an indication of the extent to which USA will intensify its new cold war to topple down China’s socialist economy and extend its neoliberal dominance. By specifically vilifying the CCP, the US has shown that it wants to deprive China of its Marxist-Leninist ideological guidance and suffocate it with doses of neoliberalism. The CCP has played an integral role in consolidating Chinese socialism and through its old system of Party directive to enterprises it has provided the country with the advantage of being able to supplement the usual instruments of state intervention available in a capitalist market economy with other revolutionary instruments. Hua Chunying, a Chinese diplomat, the spokesperson of China, and the director of the Foreign Ministry Information Department of China, aptly sums up the enormous role played by the CCP in guiding the country through a socialist path: “The CPC [Communist Party of China] leadership has enabled China to grow into the world’s second biggest economy without resorting to warfare, colonialism or slavery, which is unprecedented in the past decades. The CPC puts people and lives first. In stark contrast, the U.S. parties put selfish political gains and capital first.” In the contemporary period, the US wants to weaken the CCP and ultimately destroy China’s socialist economy so that it can erase alternative imaginations and sink the world in war, austerity and misery.


Featured image: Image courtesy of the Financial Times.

Yanis Iqbal is an independent researcher and freelance writer based in Aligarh, India. His articles have been published by different magazines and websites such as Monthly Review Online, ZNet, Green Social Thought, Weekly Worker, News and Letters Weekly, Economic and Political Weekly, Arena, Eurasia Review, Coventry University Press, Culture Matters, Global Research, Dissident Voice, Countercurrents, Counterview, Hampton Institute, Ecuador Today, People’s Review, Eleventh Column, Karvaan India, Clarion India, OpEd News, The Iraq File, Portside and the Institute of Latin American Studies.


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