Upstream - [UNLOCKED] China Pt. 1: A Socialist Introduction w/ Jason Hickel

Starting point is 00:00:00 A quick note before we jump into this Patreon episode. Thank you to all of our Patreon subscribers for making Upstream possible. We genuinely couldn't do this without you. Your support allows us to create bonus content like this and provide most of our content for free so we can continue to offer political education media to the public and help to build our movement. Thank you, comrades. We hope you enjoy this conversation. China does not in fact pose any kind of actual military threat to the people of the United States or Europe. And indeed, the sole reason for Western fear mongering is because China is just achieving economic sovereignty. And this is basically undermining the imperial arrangements that Western capital accumulation depends on.

Starting point is 00:01:08 And for the West, this is just not on. They're not willing to let this happen. And that's why they went to go to war. It's actually wild to consider that they're willing to flirt with the possibility of global nuclear warfare in order to maintain the conditions for capital accumulation. That's effectively what we're facing. I think we have to be clear about that. It's a disaster and none of us should accept it. You're listening to

Starting point is 00:01:29 Upstream. Upstream. Upstream. Upstream. A show about political economy and society that invites you to unlearn everything you thought you knew about the world around you. I'm Della Duncan. And I'm Robert Raymond. The world we all grew up in is no longer a reality, although in many ways those in power are still grasping onto it with the desperation of drowning men. Flailing, lashing out, furious, terrified, and in denial of what is staring them in their faces. Imminent death. The rest of us are watching this process unfold before our very eyes, also terrified but seemingly powerless. It's a weird time to be alive, but when has it ever not been? As we watch,

Starting point is 00:02:19 experience, and feel the collapse of the state that we live within, or for those of us not currently living in the belly of the state that we live within, or for those of us not currently living in the belly of the beast, the imperial world that this state rules over, it feels like it's an important time to explore this collapse. Specifically, it's an important time to understand what's happening in the imperial world order. And in order to do that, we must understand China. In this conversation, we've brought on a regular guest, a guest who you all know and love – Jason Hickel – to talk about China. Jason Hickel is a professor at the Institute

Starting point is 00:02:58 for Environmental Science and Technology at the Autonomous University of Barcelona, and the author of the books, The Divide, A Brief Guide to Global Inequality and Its Solutions, and Less Is More, How Degrowth Will Save the World. In this conversation, we first take a brief dive into modern Chinese history, looking at the pre-revolution period, the 1949 communist revolution itself, the Mao period, the Deng period, and the Xi period.

Starting point is 00:03:30 We analyze what the rise of China means in terms of the current world order and the implications for the United States. We tackle some common questions and dispel some common myths about China. Like is China capitalist? Is it imperialist? We analyze some current events like trade wars and the TikTok ban. And finally, we explain why it's crucial

Starting point is 00:03:55 to not fall into the trap of US propaganda when it comes to how we on the Western left analyze China. And now here's Robert in conversation with Jason Hickel. All right, Jason, it's wonderful to have you back on the show. Hey, Robbie. Thanks. Good to be back with you. Yeah, you are definitely one of our most popular guests and quite a frequent guest, actually, which is really exciting. And our episodes with you are always a lot of fun, extremely

Starting point is 00:04:37 informative. Our listeners always have a lot of great responses. So it's really great to have you back on and especially for such an interesting topic. So before we jump in to China, I love it just in case there are any listeners out there who aren't familiar with you, if you could introduce yourself and just talk a little bit about the work you do. Yeah, sure. So I'm a professor at the Institute for Environmental Science and Technology at the Autonomous University in Barcelona, and a visiting professor at the London School of Economics. And my research focuses mostly kind of on imperialism and ecology in the capitalist world economy, with kind of a particular focus on how we can achieve post-capitalist transformations, and also how global South countries can achieve

Starting point is 00:05:22 sovereign developments kind of delinking from imperialist exploitation, so that we can ensure good lives for everyone within planetary boundaries. And we also have a big research project that's based at ICTO, where I work with a couple dozen researchers that are all working on these issues too, so it's quite an exciting team. I've written a couple of books related to these topics that people can check out if they want to. One is called The Divide, A brief guide to global inequality and its solutions. And more recently, Less is More, How Degros Can Save the World.

Starting point is 00:05:53 Incredible. And I just want to underscore the research that's coming out of your research team is like phenomenal, and you're doing such incredible and important work. So thank you so much for everything that you do and for sharing a little bit about it. Today we're here to talk about China. And I'm wondering if we could start with just a brief history of modern China. So we are planning on getting into the history more

Starting point is 00:06:20 in the next few months or so with, I'm not sure if you're familiar actually with Kenneth Hammond, but he has a couple books out. We're going to be diving a lot deeper into the history. So for now though, I do think it might be helpful for a brief history, just for anybody who really doesn't know much or anything at all about Chinese history. It might be helpful to help orient them and give sense to maybe some of the things that we may reference as we move forward. So like, yeah, maybe you could just guide us through the period prior to the revolution briefly, and then talk about the revolution itself, you know,

Starting point is 00:06:56 the period of marketization of the economy, and just anything else that you think might be helpful to set the stage as we move forward? Okay, yeah, cool. So yeah, I think this is important because in my experience, most people in the West actually have very little knowledge of Chinese history. And to me, this is sad because it's actually this extraordinary story of how oppressed masses

Starting point is 00:07:19 of workers and peasants rose up against capitalist imperialism, fought against not only the national reactionary forces, but also against the US, Britain, and France, like the most powerful states in the world at the time. They managed to win against incredible odds, and they succeeded in establishing a socialist society that is still with us today, which has achieved actually really incredible things. So, it's an amazing story. And so I think that it's useful to kind of start with that. Now, the difficulty of course, is that China's history is thousands of years old. So what I'm going to do is I'm going to skip like most of it.

Starting point is 00:07:53 And just we're going to focus on kind of the more recent modern period right around the turn of the 19th century. This is where I think that the story becomes quite relevant. So this is during the Qing dynasty, which was a long period of political stability, during which China became the major manufacturing powerhouse in the world economy. At this time, China accounted for something like more than 30% of total global manufacturing output, which is huge. You have Britain and Western Europe that were consuming massive quantities of really high quality goods from China at the time, like tea and silk and porcelain, things like that. But China was only accepting

Starting point is 00:08:32 payments in silver, right? They refused to accept European goods in exchange for their exports, partly because they considered European goods to be basically inferior in terms of their technology, but also because they wanted to protect their national industries from being undermined by foreign competition. So it was effectively like, you might say, a kind of protectionist economy. So the Europeans were forced to finance their trade with China using silver, which they plundered from their colonial territories in Latin America. So you get a sense of how the world system is

Starting point is 00:09:05 shaping up here. And of course, they were using the labor of enslaved people in Latin America, both indigenous and also African enslaved people, to obtain the silver. So basically, we have a situation where Europe is plundering silver from Latin America virtually for free, and then using it to buy real goods from China, which they therefore obtained effectively for free. So this was a crazy system that was massively beneficial to Europe. It provided them with an enormous windfall of basically free goods and propped up their material consumption. Now here's what happened. So by around the middle of the 1800s, Europe had lost control of most of its colonies in Latin America. Their silver began to run dry, and they needed some other way of financing their

Starting point is 00:09:52 massive imports from China. So they started to sell opium. Now, opium didn't grow in Europe, of course. The Europeans forced their colonial subjects to grow it in India and the Middle East, and then they sold it in China illegally to finance their purchases of Chinese goods. So in other words, European states and companies basically turned to trafficking drugs, right? The opium was also massively addictive and had a major negative effect on the health of the Chinese population, and actually created a kind of trade deficit actually that sucked silver back out of China and ended up impoverishing the population. So it was a total disaster for China. The Chinese authorities started to crack down on the drug trade as any reasonable state would do that

Starting point is 00:10:35 wants to protect this population. And in response, Britain and France invaded China in the 1830s and 1840s with the explicit goal of forcing open the Chinese market. And owing to their superior naval power, they managed to defeat the Chinese military. So this is where basically imperialism knocks on China's door, right? So these are called the Opium Wars, which is true, but also false, because they weren't really ultimately about opium as such, they were actually ultimately about gaining control over China's economy, which is exactly what they did. After the Europeans won the war, they basically established China as part of the colonial periphery, alongside India and Southeast Asia and later Africa, etc. They divided the country

Starting point is 00:11:17 up into spheres of influence controlled by variously like Britain, France, Germany, and the other imperial powers. And they imposed a series of unequal treaties on China that pushed Chinese tariffs down and therefore let in European manufactured goods, right, which was basically their core objective. This undermined domestic production, it deindustrialized the Chinese economy, and it turned China into a kind of captive market for European capitalists. So there were several other things that happened during this time, like the British basically established a system of indentured servitude, which is wild actually, this is an important history, I think it's totally neglected. They were basically shipping indentured Chinese workers

Starting point is 00:11:58 around the world to work on their colonial plantations, especially after slavery was formally abolished. This is how they took up the slack in the labor force for their labor requirements. And finally, I think it's important to note that the Europeans also, in fact, directly colonized several territories within China, including most famously Hong Kong. And I think this is an important piece of history because Westerners today often assumed that Hong Kong is like a separate country that China wants to seize, but in reality it is a Chinese territory that was colonized by Britain in the 19th century and remained colonized until 1997, if you can believe it. I think this is bizarrely

Starting point is 00:12:36 forgotten in our historical memory. So this is kind of the background to the Chinese Revolution, right? The society was brutally subjugated by the imperialist powers. The people were totally emiserated. Wages collapsed. Workers and peasants struggled to meet even basic subsistence requirements. Famines became much more common. The Qing dynasty basically disintegrated, and China became kind of a patchwork of warring factions. It was an extremely dire situation. And not surprisingly, all of this triggered massive discontent among the Chinese working class, who came to understand correctly that the only solution to this crisis was ultimately to

Starting point is 00:13:14 undertake a revolution, remove the imperialists and their their stooges, and regain worker control over the productive forces of the nation. So the Chinese Communist Party, the CCP, was founded in 1921, inspired by the success of the Russian Revolution, which had just taken place a few years earlier. So you can see a direct relationship there. And they formed the People's Liberation Army in 1927. Now, the other major guerrilla force that emerged during this time was the Kuomintang, or the KMT, which was a right-wing nationalist party that was viciously anti-communist. So the Communist Party ends up in the Civil War with the KMT, and this attracts international attention. So the Soviets

Starting point is 00:13:57 support the communists in China, and the United States supports the KMT because they're desperate to do everything possible to prevent China from swinging to the left. But the communists, who were led by Mao Zedong, who was revolutionary from a peasant family, had the benefit of very strong popular support among China's massive peasantry and working class, and as a result they managed to win the Civil War against the KMT, and in 1949 they established a new government called the People's Republic of China, which is the government that continues to operate in China today. Now just briefly here, the KMT, this is an interesting little side story for the KMT, it was under the command of a guy called Xi'an Kaisheng. The KMT retreats to the island

Starting point is 00:14:39 of Taiwan and claims to be the only legitimate government of China. And this is a crucial part of the story because remember, Taiwan was part of China. The defeated KMT basically seizes control of the island, institutes a military dictatorship that ruled there for nearly 40 years, and during that period brutally repressed socialists and communists and executed tens of thousands of people for the political views. There was basically like a violent fascist regime that had the explicit support of the United States, who saw it as an opportunity to set up a kind of forward base against revolutionary China, right? And I think this is important because a lot of people have this kind of naive view of the US relationship with Taiwan.

Starting point is 00:15:20 The story that we're normally told by our media is that the US is supporting this tiny, fledgling democracy that is threatened by its big bad neighbor, but in reality, Taiwan represents clearly a separatist movement that is supported by the US, which wants to use it to destabilize China. So to grasp the stakes of this, I guess for American listeners, you'd have to imagine after the US Civil War, imagine the Confederates seize, let's say, South Carolina, establish a military dictatorship there with the direct support of Russia, let's say, and then claim to be the only official government in the United States. I mean, obviously, this is a totally absurd scenario and obviously not be tolerated by

Starting point is 00:16:01 the US government. That gives you a sense for what's going on with the history of Taiwan in this whole story. Let's get back to the story of mainland China, which is what we're here to talk about. What happened after the revolution was actually remarkable. Maoist China experienced the most rapid sustained increase in life expectancy of any population in documented global history, which is actually extraordinary to consider. We're talking massive improvements in social indicators. And this occurred because the communists were able to mobilize the productive capacities of the nation, the considerable productive capacities

Starting point is 00:16:34 of the nation, to roll out things like public health care, public education, and to implement universal access to important things like nutritious food and other essential goods at affordable prices, which allowed them to massively accelerate human development. Now, of course, everybody knows about the Great Famine that occurred in the late 1950s. I want to briefly touch on this. This is very clearly a massive disaster. And it happened because the planning system at the time lacked robust democratic mechanisms that would enable people on the ground to kind of feed back on policy implementation. So this was a major error. It was like unintentional effects of the way the planning system was organized. It was an error and the Chinese leadership recognized that fact and they learned

Starting point is 00:17:15 very serious lessons in the wake of it. They learned that basically democratic participation is crucial to good planning and they implemented this in the future which is why similar events did not occur. And I want to emphasize here that despite this catastrophe, China's social outcomes during the Maoist period were incredibly impressive. We have UN data from 1980, right at the end of the Maoist period, which shows that China's social indicators dramatically outperformed capitalist countries with similar levels of income. So China had lower

Starting point is 00:17:46 mortality rates, higher life expectancy, better education, better health outcomes, better electricity access, better nutrition, lower inequality, etc. etc. etc. And in fact, this was famously recognized by the Nobel Prize-winning economist Amartya Sen at the time who wrote in the 1980s, and I quote, it is difficult to escape the conclusion that communism is good for poverty removal. Which is interesting to consider when you realize that Amartya Sen has since been kind of depoliticized and kind of claimed by liberals. I mean, he was clearly in the 1980s very in favor of communist and socialist policy in the global south. And one thing he did in his writing is he illustrated China's success by doing a direct

Starting point is 00:18:30 comparison of India. And this is useful because India achieved independence at roughly the same time as the Chinese Revolution happened. In fact, China was actually poorer than India at that time, so in the late 1940s. But communism enabled China to shoot rapidly ahead in terms of human development, so that by the end of the Maoist period, China's life expectancy was 10 years higher than India's, which is an extraordinary gap. And today, China's life expectancy is one of the highest in the Global South and higher than in the USA. So really impressive achievements on the human development front. I also briefly want to mention what they achieved in terms of gender because I think this is important and also overlooked. So the communist revolution achieved very rapid progress against gender

Starting point is 00:19:15 inequality. They very quickly established the right of women to determine their own marriages, and the right of women to divorce, and the right of women to education, land, and economic independence, they legalized abortion in 1953. So this is just a few years after the revolution. By the way, in many European countries, this did not occur until the 1980s, just to give you a sense for how ahead of the curve they were. They established community cafeterias, they established public childcare facilities, and the idea here was specifically to reduce the burden of domestic labor on women. And they established job guarantees that ensured women had access to paid employment, and they used democratic wage-setting mechanisms to purposely

Starting point is 00:19:54 reduce the gender pay gap. These are impressive reforms, and what's interesting is that by the 1980s, again, this is using UN data, we see that China was outperforming the USA and Europe in terms of gender wage equality. And in fact, China's performance on this indicator in the 1980s, get this, was better than what the USA and Europe achieve today, which I think is a remarkable story that deserves our attention. So basically in sum, I mean, when you think about the achievements of the revolution, these are incredible world historical achievements. In fact, even the US was forced to admit this in the 20th century. There were key figures in the US government who wrote that

Starting point is 00:20:36 communism was working extremely well in China and provided a kind of model that everyone else in Asia wanted to copy. They realized it was wildly popular in Asia at the time. And we know that the US took extreme measures to crush communist aspirations in China, including with the invasion of Vietnam, the invasion of Cambodia, the invasion of Korea, with just spectacular violence, right? Carpet bombing these countries. And China in particular has always been in the sights of the imperialist powers. The US and Western Europeans have fundamentally never forgiven the Chinese people for the revolution. They desperately want to crush it to this day, and they've literally surrounded China with military bases ready to attack at a moment's notice. In fact, before this episode, I was counting US military bases,

Starting point is 00:21:22 and I counted almost 200 active military bases on China's borders. I was counting US military bases, and I counted 200, almost 200, active military bases on China's borders. This is active US military bases on China's borders, which is actually wild when you think about it. I mean, there's few nations in the world that would accept that kind of threat to their integrity and sovereignty. So that's a part of history of China since the Imperial Age and the revolution. But obviously there's much more we can explore. Yeah, thank you so much for that. And just to pick up on that last point, I actually was just reading about the Korean War.

Starting point is 00:21:55 And of course, Chinese soldiers were involved with that at some stage as well. The amount of bombs that were dropped on North Korea, I believe, was the most per capita amount of bombs dropped on any country ever in the history of the world, basically. And it killed over a million civilians in North Korea. So the idea that China is somehow an aggressor towards the United States, right, which is the narrative that's built in order to justify a lot of the, you know, trade wars and sort of warmongering that's taking place right now is just historically and currently just so inaccurate that it does have violence to reality,

Starting point is 00:22:36 really. And then a couple other things I wanted to just sort of like pull on and sort of underscore from what you were sharing with that really helpful history. I think just when we look at the development of socialism as sort of a long-term process, and I'm reading this book right now which looks at sort of all of the different attempts at socialism starting from the 1848 revolutions in Europe all the way up to more into the present and we learn lessons, you know, as a socialist movement through each of these 48 revolutions in Europe all the way up to more into the present. We learn lessons as a socialist movement through each of these experiences. The Chinese revolution was a really fascinating development in socialism in terms of both

Starting point is 00:23:15 the theory and the practice of building socialism. One of the things that Mao did, which was really important, was he really put the priority on, as a revolutionary class, onto peasants, which was something that was not quite as clear. And then also just his incredible ability to conduct guerrilla warfare was really astounding and a huge achievement in terms of learning how to fight against, like you mentioned, the right-wing nationalist, vicious Kuomintang, which had actually massacred many of the communists and was just a really evil force and could have taken the country in a horrible direction. So it's really quite a remarkable history. And thank you so much for sharing so much. I know you're not a historian of China,

Starting point is 00:24:07 but you obviously have a lot of depth in your knowledge of the history there. So thank you so much for sharing that. And you had touched a little bit on the development of China economically, and you had mentioned in our correspondences that one thing that you think would be an interesting point to touch on is that this idea and we've talked about this in previous episodes with you is sort of the drain right from the south to the north from the periphery to the core. So on that note I'm wondering if you could talk a little bit about China's position in the capitalist world economy, bringing it a little bit more into the present and building on and maybe providing any kind of specific examples to bring this idea further down to eye level, this idea of unequal exchange and

Starting point is 00:24:57 how China still does suffer a drain to the core. Yeah, yeah. So actually this brings me to answer a question that you asked earlier, which I didn't actually get to touch on, which is about the liberalization period in China, which is kind of the precursor to understanding its current position in the world economy. So basically during the Maoist period, China was effectively locked out of the world economy, right? Now, the way that we normally hear about this from Western propaganda is that this is because Mao wanted to pursue autarky and basically closed China off. But this is actually a false narrative. In fact, Mao wanted to trade with the rest of the world, but the US prevented it by sanctioning China and effectively imposing a kind of blockade similar to what they're currently

Starting point is 00:25:43 doing in Cuba. And the US objective was basically to what they're currently doing in Cuba, right? And the US objective was basically to crush the Chinese economy, which failed, but it did massively limit China's developments because they couldn't buy the capital goods that are necessary for advanced manufacturing. But this changed in the 1980s. So this is after the death of Mao, when Deng Xiaoping rises to the leadership of the Communist Party. And Deng's view is basically that China needs access to foreign capital if it wants to accelerate its development of the productive forces. So Deng decides to strike a bargain with the devil. He agrees to implement structural adjustment programs in China in direct alignment with the World Bank and the IMF. Now China had a reasonable level of

Starting point is 00:26:23 bargaining power because it was a fairly large economy, etc. It was able to avoid the more extreme shock therapy that completely crushed most of the other countries in the global south that suffered structural adjustments. And China retained public control over finance and industrial policy, which is crucial. But still, the reforms quite severe. So they privatized state companies, they dismantled many of the price controls that China had been using, and they dismantled the public provisioning systems that were established during the socialist era, etc. Now, this had several important effects. One is, of course, that China did in fact gain access to foreign capital, so that's that.

Starting point is 00:27:04 But all of the privatization and the abolition of the price controls led to huge inflation, and it was a massive shock to the working classes who were suddenly basically unable to afford rent and food. And in fact, this ended up triggering huge protests against the capitalist reforms, which culminated in demonstrations at Tiananmen Square in 1989. And this is an interesting part of the story because most Westerners assume that the Tiananmen Square in 1989. And this is an interesting part of the story, because most Westerners assume that the Tiananmen Square protests were against communism, but in fact exactly the opposite is true. They were protesting against the US-backed capitalist

Starting point is 00:27:36 reforms. They thought the reforms were going too far and they wanted to retain the socialist policies of the Maoist era. In the end, the state suppressed the protests and proceeded with reforms as per the IMF and World Bank agreements. And the US basically saw this as a massive victory. So it's important to remember that the West was facing a crisis of capital accumulation in the late 1970s, and they desperately wanted to liberalize China. They saw this as a way basically to gain access to a massive pool of cheap labor and restore their profitability. That's exactly what happened. As soon as China was forcibly open, then American companies were able to relocate industrial production over to China, where they could

Starting point is 00:28:18 produce the same goods they were producing before, but with much lower labor costs, which enabled them to massively increase their rate of profit. And this effectively resolved the crisis of Western capital accumulation at the time. So it's kind of interesting when you think that the liberalization of China was kind of crucial to keeping Western capitalism afloat, like solving its own internal contradictions. But the result is basically that you have this, we're now in a situation where China's productive capacity has suddenly reorganized toward producing for export to the imperial core. Now, the problem here is that the massive price differential between China and the core, like manifesting in both prices of resources and also wages, meant that the trade relationship between China and the core was characterized by very severe unequal exchange. And this happens because remember,

Starting point is 00:29:05 imports have to be paid for with exports. So for every unit of labor and materials that China was importing from the core, they had to export many more units to pay for it, basically shoveling tons of goods and embodied labor over to the imperial core. And this created a massive net flow of value out of China and into the core worth trillions of dollars. So we wrote about this in several recent empirical studies where we found that during the 1990s, during the heights of the liberalization period, this net appropriation from China comprised about one third of the core's total net appropriation from the Global South.

Starting point is 00:29:42 So this is like a massive effect. I mean, the liberalization of China is a massive benefit to the Imperial core. It services Western capital accumulation and massively increased material consumption of the Western working classes, which is important because basically it deals with working class demands for better wages without capitalists having to make any concessions to the working class. Instead, they basically balance these working class demands on the back of Chinese labor. So it benefited Western capitalism by ameliorating domestic class conflict in the West. So yeah, a huge benefit to basically the key conclusion here is that we have to understand that China is still very much until today, but

Starting point is 00:30:23 also especially in the 1990s and the early 2000s, is still very much like a part of the periphery of the world economy and is heavily drained by the core. So the US relationship with China has been, let's say, evolving in the last decade or so from one perhaps that could be marked by like uneasy cooperation to one of what feels like outright antagonism. And I think we can all remember how much, you know, Trump filled his diaper over China during his first administration. And then of course, the Biden administration really escalated things, you know, putting

Starting point is 00:31:00 100% tariff on EVs, that kind of stuff. There are attempts to stifle Chinese tech. I think it was called Biden's Protect Agenda aimed at cutting off Chinese firms' ability to manufacture advanced computer chips and creating a whole new federal authority to regulate US investments in China. The Chips for America Act and the Inflation Reduction Act really aimed at breaking US reliance on Chinese techs. I just mentioned the tariffs on electric vehicles, and the list just really goes on. And then of course, we know about the attempts to ban TikTok. And I'm going to check in with you about that further on, see if there's anything we want

Starting point is 00:31:42 to talk about that specifically more in terms of TikTok. But yeah, things have only really been escalating over time, every single US administration pretty much in the last couple of decades. And now we have this implementation of tariffs like across the board, you know, by the Trump administration. And so yeah, I'm wondering if you can talk a little bit about what's going on there. And, you know, we got these military exercises in the South China Sea as well, which you touched on the issue of Taiwan. Why is the US so threatened by China?

Starting point is 00:32:15 And what's with all of this warmongering? Yeah. Yeah, it's wild actually when you think about it, because there's been kind of a big shifts. The US has kind of gone from this kind of uneasy cooperation, which is kind of what you described to outright antagonism. And now Western media is basically just packed with anti-China rhetoric and warmongering. It's really disorienting because I feel like even just 10 years ago, we weren't seeing this in our newspapers all the time. And then suddenly it's just like, at every opportunity in the New York Times, it's throwing some kind of negative story on China for no good reason. Yeah, so it's a big shift. What happens? I think there are a couple things to note here. The first is that over the past decade or so, wages in China have really increased quite

Starting point is 00:33:01 dramatically, by a factor of eight in a very short period of time. This is staggering. And the reason for this is basically because the massive surplus labor population in China has basically been absorbed. And so it's a tighter labor market, workers have more bargaining power, and so they're able to get better conditions. And at the same time, also, we have the current leadership of Xi Jinping, who's basically a Marxist-Leninist, right? He's kind of moving the country in a more socialist direction. And these are good developments, right? We should celebrate the fact that workers' conditions have improved and wages are skyrocketing like this. But the reality is that it poses a very severe problem for Western capital, which is highly tied into China. So higher wages in China, specifically manufacturing wages, which is where the big increases have happened, higher wages in China, specifically manufacturing wages, which is

Starting point is 00:33:45 where the big increases have happened, higher wages impose a constraint on Western profits. And it's a problem for them because they don't have anywhere else to go, because the key alternative locations they might want to use, like say India, for example, or Bangladesh, there's cheaper labor there, but they basically lacked the key infrastructure that China has, like the technological development, but also the skill levels. China has massive amounts of engineering talents and very high skilled labor. This is actually something that the CEOs of major Western firms repeatedly point out. Every time the government in the US is like, bring Apple jobs back to China, then there's a huge debate. And the CEOs always point out the

Starting point is 00:34:25 same thing, which is that this is not just about we need cheap labor in China. It's about we need high-skilled engineering and scientific labor, which just doesn't exist at the necessary scale in the USA. And so basically, these companies are tied into China, and they don't really have sufficient alternative options. And this puts Western capital in kind of a bind. So that's one thing. The second thing is that the improvement in China's wages and price level basically means that China is now reducing its exposure to unequal exchange.

Starting point is 00:34:56 This is reducing the core's ability to appropriate, to net appropriate material wealth from China, which is posing a constraint on growth and consumption in the core. So the West is basically desperate now to do something to push wages in China back down and restore access to cheap labor. And of course, the one way they know how to do this is through war, right? If you can go to war, if you can do a regime change, overthrow the communist government, then you can create chaos, create a situation where Western capital can move back in, exploit cheap labor again, destroy the unions, etc. etc. And that's

Starting point is 00:35:29 kind of ultimately what they want to do. But of course, the difficulty is that China has nuclear weapons and defense capabilities now, so it's not so easy. So that's kind of the core of it, I think. The key element behind the warmongering is that Western capital wants to regain access to cheap labor and raw material. But the other crucial thing is also technology. And this is important because China was extremely strategic during the liberalization period under Deng. They let Western firms come in, but in return, they required them to share technology. So this accelerated their access to key capital goods, which they needed to do their own advanced manufacturing. But also at the same time, China began using industrial policy to actively invest in accelerating their own national technological developments. So if you put these two things

Starting point is 00:36:15 together, then you have a recipe for rapid technological innovation, and that's exactly what we've been seeing happening in China over the past several years. And it's bewildering to behold because now suddenly China has the world's largest high-speed rail network. They manufacture their own commercial aircraft, which is breaking the monopoly of Boeing and Airbus, which are the main suppliers of airplanes in the world. They're world leaders in renewable energy technology, in electric vehicles, they have advanced medical technology, they have smartphone technology, microchip production, several artificial intelligence companies, aerospace engineering with an incredible space program, et cetera, et cetera, et cetera. And keep in mind, these are things that we only normally expect from high-income countries.

Starting point is 00:36:59 And yet here we have China doing it with like one-fifth of the GDP per capita. It's totally unprecedented. It completely rewrites the development textbooks and it shows the power of industrial policy to achieve national development objectives and technological developments, even at relatively low levels of income, which is very powerful. Now it's good for China,

Starting point is 00:37:19 but it poses a problem for the West because, and this is crucial, one of the main pillars of the imperial arrangement in the world economy is for the West. And this is crucial. One of the main pillars of the Imperial arrangement in the world economy is that the West needs to maintain a monopoly over necessary technologies like capital goods, medicines, computers, aircraft, etc. And this is important to them because it forces global South countries into a position where they're dependent on imports from the West and are therefore forced in turn to export large quantities of their cheapened goods in order to obtain these necessary imports. And this is basically what keeps Global

Starting point is 00:37:51 South countries inside this relationship of unequal exchange, which benefits the core so tremendously. And this is why China is now considered a threat to Western capital, because Chinese technological development is basically breaking Western monopolies, and this is giving other developing countries alternative suppliers for necessary goods at more affordable prices. And this basically poses the fundamental challenge to the core structure of the imperial arrangements and the broader dynamic of net appropriation that the core enjoys. The core states are extremely unhappy about this, and this is why they're going so hard after China right now with all the saber rattling. It's not in fact because China poses a military threat to the people of the United States or Europe. It's because China's development poses a threat to

Starting point is 00:38:37 imperial capital, to profits basically, to monopoly power. And so we get Western media demonizing China as some kind of danger to the West. But this is, I mean, it's pure propaganda, which can be debunked when you look at just the basic material facts of the world, right? So let's look at these. China's military spending per capita is actually less than the global average. It's about 40% less than the global average, and one-twentieth that of the USA. Now China is a big country, but even in absolute terms, the US military bloc spends seven times more on military power than China does. The US alone has 15 times more nuclear weapons, etc., etc., etc. I mean just preponderant excess of military power.

Starting point is 00:39:18 As I mentioned before, the US has almost 200 military bases surrounding China. China has zero military bases on the US borders. In fact, China only has one foreign military bases surrounding China. China has zero military bases on the US borders. In fact, China only has one foreign military base that I'm aware of, and that's in Djibouti. And remember, China's income per capita is only one-fifth out of the court. This is a developing country we're talking about. So the propaganda really has very little basis in reality. In fact, I was just reading some political theory on this. In political science, scholars measure geopolitical power using a metric called net resource availability. And this basically measures the total resources that a country has available for projecting power internationally. As of the most recent year of data looking at this indicator,

Starting point is 00:40:00 the Imperial core controls 90% of global net resource availability, and China controls 5%. So the narrative that China is somehow a threat to the Imperial Corps in any kind of military sense is just massively overblown. In fact, it's clearly that the opposite is the case. China has not fired a single bullet in international warfare in over 40 years, And during that time, the US and Britain and France, etc. etc. have bombed and destroyed countless global South countries. So, I mean, the reality is that the Imperial Corps regularly inflicts violence across the global South, and that's the primary threat to world peace and stability. So this is not to say, of course, that China doesn't have its own problems and internal contradictions that it needs to resolve, but the key point here is just to establish that China does not in fact pose any kind of actual

Starting point is 00:40:48 military threat to the people of the United States or Europe. And indeed, the sole reason for Western fear mongering is because China is just achieving economic sovereignty. And this is basically undermining the imperial arrangements that Western capital accumulation depends on. And for the West, this is just not on. They're not willing to let this happen. And that's why they want to go to war. It's actually wildly considered that they're willing to flirt with the possibility of global nuclear warfare in order to maintain the conditions for capital accumulation. That's effectively what we're facing. I think we have to be clear about that. It's a disaster and none of us should accept it. Ah, yeah. I mean, sometimes I do wish that Xi would just invade the US and, you know, fix our situation here, turn us into the 35th Chinese province, maybe. No, I'm just kidding.

Starting point is 00:41:37 But, you know, one thing I wanted to pull on from that great explanation there was how important it is, I think, to underscore the fact that China was able to avoid the underdevelopment trap that most of the global south countries were really pushed into. And that really is because it was governed by, it is governed and was governed by the Chinese Communist Party. And it was able to develop its own productive forces and not simply serve as like an extraction site, right, or a site of cheap labor for the core, but to actually build out its own productive capacity while it was liberalizing its economy,

Starting point is 00:42:18 like you mentioned, and I think that was key. And that's why China is not just, you know, a semi colony of the West right now, but it's actually a powerful developing country. And underscoring the word developing again, versus being actively underdeveloped. And I'm going to ask you a little bit more about China's development in terms specifically of the ecological impact.

Starting point is 00:42:42 But just real quick before we move on to that, just because it's been so in the news and there's just been so much confusion, less and less so as you kind of like anybody kind of even spends a couple of minutes looking at it. But in terms of the narratives that are coming out of Washington right now, there is a lot of misinformation, disinformation around tariffs and how tariffs actually work. So I'm wondering if you might be able to just briefly describe

Starting point is 00:43:09 maybe a little bit about how they're being deployed in terms of this sort of trade wars and economic warfare by the United States. Yeah, basically, I mean, the US is desperate to kind of do anything it can to kind of halt China's developments. And I think that's their view is that if they can impose tariffs on Chinese goods, they can achieve some of that. Now, of course, the consequence for the US is that it means that there's going to be inflation. This will cause inflationary pressures for ordinary US citizens who buy Chinese goods. The cost that we pass on the US consumers, as far as the US government is concerned, probably what they want to do is they want to create conditions for the reindustrialization of the US this way. It's not totally clear to me how that's going to happen, actually. I don't really see a clear industrial policy

Starting point is 00:43:56 strategy here, because the US does not have a public investment mechanism that is prepared to make the necessary investments. I think the only way it could probably happen is if the US basically finds ways to dramatically cheapen labor domestically in the US, which I suspect they might try to do, right? So I would expect in a right-wing or fascist turn in the US government, I would expect that they start to go after labor unions, they start to push against labor law, they start to cheapen labor and so that the national capitalist class can restore profitability domestically. It'll probably be something like that because again, without an industrial policy to achieve public investments and unnecessary industrial output, then you're going to have to

Starting point is 00:44:37 have capital doing it. They're only going to do it if it's profitable. So this is a major contradiction that I see potentially forming. As far as China, I think what's interesting is that the terms that have been put on China so far have just not worked to achieve the US goals, mostly because basically it's incentivizing China to pursue more of its own sovereignty. It's like, look, if we're going to be cut off from access to US markets and access to some US technologies, we're going to have to develop our own alternatives, which is what they're doing with chip manufacturing and AI, etc. So China's played this really well. I think the moral of the story here is like, in a situation like this, whatever country has more capacity for industrial policy

Starting point is 00:45:18 and planning is going to come out better. And right now, the US has destroyed its own industrial policy planning capacity, and China has been building it. So I think this is why we're seeing these kind of divergent outcomes. But I mean, really, like time will tell, let's see what happens. I think that the Trump administration is going to face some very severe contradictions. I imagine these will not be resolved easily. So I'm going to start a section of the conversation where we begin to try to address some of the most common criticisms of China, some of them valid, some of them may be based a little bit on Western propaganda. But the first one that I would like to ask you about, and this is something we hear all the time, China's process of developing as a country has been incredibly impressive.

Starting point is 00:46:07 It's pulled many people out of poverty, just a whole range of improvements in the society. And there has been a lot of scrutiny on China's climate impact and the environmental costs to this development. And so I would love to ask you specifically as someone who is so dialed into this sort of eco-socialism perspective, right? Like I want to ask you about what China is doing in terms of renewables in a sec, but first, can you talk about some of the critiques that I just mentioned in terms of China's ecological impacts? How should we be viewing this in terms of the broader understanding of China's history and where it's headed and all of that? Just yeah,

Starting point is 00:46:52 maybe if you could address that, talk a little bit about their impact ecologically and then we'll get into sort of what they've been doing in terms of renewables after. Yeah, totally. So yeah, this one's important to me because I think that the environmentalist critique of China is actually one of the ways that the Western left, and particularly kind of the environmentalists left, has attacked China and also basically created the refusal to engage with what China is actually doing, which is bad because it prevents us from learning. And I think that the main claim, of course, is that China is the biggest contributor to climate change and has a massive drain on the world's resources,

Starting point is 00:47:31 etc. Now, let's address these. So it's true, of course, that China's total annual emissions have been high in recent years. Nobody would deny this. You can see this in the data. But China's also a very big country. And so what matters is also per capita emissions, which changes the story. But also furthermore, not only that, when it comes to understanding responsibility for climate change, we know that the only way to measure this is to look at each nation's cumulative historical emissions with respect to their fair shares of the global carbon budget, right? Because climate change is not caused by annual emissions, it's caused by cumulative historical emissions. So in a recent study, which we published in The Lancet, we used the carbon budget that's associated with the safe

Starting point is 00:48:13 planetary boundary of 350 parts per million concentration of CO2 in the atmosphere, which was breached in the late 1980s, right? And the excess emissions since then are what's driving climate breakdown. So what we did is we recently updated this study to the most recent year. And we found that when you look at national responsibility for excess emissions, then China is only responsible for 1% of total global emissions and excess of the climate boundary, whereas the global north is collectively responsible for 86% of excess emissions. So this is wild actually. The disjuncture between the scientific evidence on China's responsibility for climate breakdown and dominant media discourse is just astonishing. Okay, so that's the planetary boundary, but what about the Paris Agreement carbon

Starting point is 00:49:01 budgets for 1.5 and 2 degrees, let's say? So the reality is that the global North countries we found in a more recent study, published in Nature Sustainability, have already overshot their fair share of the Paris Agreement carbon budgets at least twice over on average, while China is actually still within its fair share of the 1.5 degree carbon budget.

Starting point is 00:49:24 In fact, furthermore, China is the only nation in the world that is officially planning, part of its five-year planning, to decarbonize fast enough to stay within its fair share of the 1.5 degree carbon budget. As far as I'm aware, there's not a single Western nation that has pledged to do this and is on a policy trajectory to achieve it. So I think that that's very powerful, actually, to consider. Then there's the question of material use, of resource extraction, right?

Starting point is 00:49:49 So we also did a study on this, and we found that China was within the sustainable levels of resource use up until about the year 2000, meaning that prior to that time, it did not contribute to excess global resource extraction at all. And so therefore therefore was not a major driver at all of the kind of damages that we see from excess resource extraction. But we found that this has changed in the past two decades. So since the early 2000s, China has kind of built up a lot of infrastructure, which we've seen. And recently, China has been overshooting sustainable levels.

Starting point is 00:50:22 But there's a few things to add here. One is that their overshoot is about the same level as, in per capita terms, as say Brazil and Argentina, so other kind of lower middle income or middle income, you know, semi-peripheral countries. In fact, China has substantially lower levels of resource overshoot than literally every single European country that we assessed, and is about one quarter of the level of countries like the US, Canada and Australia. So it's true that China uses resources in excess of sustainable levels, but it's more or less like other countries of the semi-periphery and also much less than the

Starting point is 00:50:58 Imperial Corps. So it's just important to put this in perspective. And of course, from China's perspective, of course, the objective here is like, look, we're going to have to use some resources in order to build up productive capacities to achieve economic sovereignty and avoid impure intervention. And so they have a kind of justification for it in a way that Western countries don't. And furthermore, we also know that China is officially committed to what they call a policy of ecological civilization, with the goal of achieving sustainable levels of resource use in the future. So yeah, let's see what happens.

Starting point is 00:51:30 But that's kind of the situation as it stands. Yeah, and we're about to get into that, right? The renewables and the ecological civilization side of it. Just real quick before I ask you that, I just wanted to say that one of the reasons I really, really love having you on is because you not only have the data to back up your arguments,

Starting point is 00:51:49 but half the time you've actually produced that data. It's so awesome that you can just be like, oh, and we published a study about this in The Lancet. It's quite difficult to argue with that, especially if you're arguing with the sound bites of Western propaganda that many people who argue against China often do. So I just wanted to appreciate that about the work, the work that you do. Thanks.

Starting point is 00:52:14 And this is definitely, by the way, done to my brilliant team of colleagues and PhD students and postdocs who, who work with us on this. And so keep an eye out for them. They're doing excellent work and they're going to be a force in the future. Awesome. Absolutely. Okay. So yeah, let's talk a little bit about that ecological civilization part and China's renewable energy advancements. And maybe we can compare them to what the United States is doing. Yeah. So I think that, yeah, this is interesting to me, the renewable energy side, because the data on this is really striking and has been capturing headlines actually, and even the Western business press in the past couple of years. So in 2023, China,

Starting point is 00:52:50 this is wild. China added more renewable energy capacity than the USA, the European Union, and the rest of the world combined. So just way ahead of anybody else, like not even close to the nearest competitor. They also deployed more electric vehicles and more heat pumps than the rest of the world combined. And remarkably, this share of installation is increasing. So if you look at solar and wind energy capacity that's currently under construction around the world, China is building eight times more than USA

Starting point is 00:53:24 and twice as much as the rest of the world. China is building eight times more than the USA and twice as much as the rest of the world combined. So these are just astonishing figures and I think they really kind of shocked commentators because nobody expected this to be happening. So it's interesting because it's true that China currently has high annual emissions, notwithstanding the fact that they're still within their fair share of Paris Agreement targets, etc. But importantly, at the current rate of renewable energy deployment, then China is on track to reach zero emissions ahead of its 2060 targets. So China has an explicit 2060 target for decarbonization, and it seems to be that it's going to achieve decarbonization before that. And as far as I'm aware, that currently cannot be said for a single country in the global

Starting point is 00:54:05 north. So that's renewable energy installations, which China is leading. But China also leads the world in production of renewable energy technologies. And this is particularly true for solar power. So China currently produces about 80% of the world's solar cells and solar modules, which is astonishing when you consider that the USA produces about 1%. So China is basically enabling not only itself, but the rest of the world to decarbonize. And this is really a massive contribution, I think. And so I think that in conclusion,

Starting point is 00:54:35 we can say that, I mean, it's very strikingly clear that to the extent that global renewable energy transition is happening right now, it is not being driven by capitalist markets, which was the claim that Western policymakers made for themselves years ago. It is a socialist country that's driving it using industrial planning. And I think that this is a lesson to everybody, right? It's very clear that the Western approach to market-driven development of renewable energies is not working. And there's something that we have to learn from Chinese industrial policy on this. And it's just as simple as that. The effects are there for us to see. So spoiler alert, because you just said a socialist country when describing China. My next question for you was, again, I want to go back to some of these points that we hear a lot

Starting point is 00:55:22 and sort of dispelling some myths and getting some ideas that maybe go against the common narratives here in the United States. And one of those that we hear and particularly among Western Marxists and the Western left is that, no, China is actually capitalist. It's like a, you know, state capitalist or something like that. And I just would love to get your opinion on it. Is China capitalist? Is it socialist? Is it some special third thing? Yeah, it's interesting. I think it kind of depends on the period you're talking about. It also depends on some definitions.

Starting point is 00:55:54 But let's see. I think that there's kind of three main periods to talk about here. The first is, of course, the Maoist period, right? So from 1949 to the late 1970s. This is clearly a communist period. Of course, it obviously also had problems. Like I mentioned the planning failures of late 1970s. This is clearly a communist period. Of course, it obviously also had problems, like I mentioned the planning failures of the 1950s, and of course we know about repression during the Cultural Revolution, etc. etc. And by the way, these are problems that

Starting point is 00:56:15 the Communist Party is of course aware of and has learned from. And I think this is actually important for our understanding of the development of communism in China is that it's not like this kind of rigid thing. It's an evolving idea, an evolving process of implementation as they learn from real material facts and ground. Then of course, the second period, the 1980s and 1990s, this is the period of capitalist reforms under Deng, which we talked about earlier. This is where China develops its concept of what it calls the socialist market economy, or socialism with Chinese characteristics. And the idea basically is they have market mechanisms, like there's private capital that controls production, etc. But there's still substantial public control over industrial policy and key industries. So

Starting point is 00:57:01 that's important. Now, Deng is massively debated on the Western left. Some people see him as this neoliberal sellout. Others see him as making a necessary compromise to develop the productive forces. And then others see him as this masterminds doing 3D chess with the USA and playing the long game. So he aligns with US capitalist interests in the 80s and 90s to basically prevent a direct confrontation with the US until China is strong enough to build up its own economic sovereignty and fend off the imperialist threats. So he's a massively debated figure and this period I think is the one that's most debated. I think for me, I'm kind of somewhere in between these. Clearly, I think that Deng had very good

Starting point is 00:57:45 reasons for doing what he did. Clearly, I think that many of China's successes since then have borne out the wisdom of what he did. But at the same time, it's also very clear that some of these reforms were massively damaging to the working classes. Something like half the population was pushed into extreme poverty, pollution was everywhere, workers were housed in prison-like dormitories to service multinational companies, they were jumping off the roofs of Foxconn, etc. I mean, it's hard to see a socialist economy here that anyone would really want to emulate. So I think that it's contradictions. I think that Deng played it well in many respects and made mistakes as well. And I think that China

Starting point is 00:58:22 has also learned from that. And this brings brings us to the third period, which is the period under Xi Jinping since 2012. Here we have a period of what scholars call left realignments and a kind of restoration of the path towards socialism. This is the way they see it now. This period has been characterized by several interesting developments that leftists in the West should pay attention to and learn from. One is that they've started to restore public services that were privatized in the 1980s. And they've also started to restore price controls on basic foodstuffs like grain, meat, eggs, and vegetables, with the idea of ensuring that everyone can afford nutritious food. And this is effectively a restoration of some of the key principles of the iron rice bowl that Mao had. So this is effectively like a restoration of some of the key principles of

Starting point is 00:59:05 the Iron Rice Bowl that Mao had. So this is amazing to see. I mean, this is hugely beneficial to the health of the nation. Another key element is they've rolled out this massive anti-poverty program. The slogan of this program is, is one income, two assurances, and three guarantees. And what they've done, it's actually really impressive's really impressive. Like this is not like passive poverty reduction. This is active poverty reduction, where they mobilized three million cadres to ensure that everyone has access to a sufficient income so that they're out of extreme poverty. Plus they have the two assurances of guaranteed access to food and clothing. And then the three guarantees of access to basic medical services, safe housing and electricity, and then of course, free education. So that's really interesting. This has been massively

Starting point is 00:59:50 effective at removing extreme poverty in the past couple of years. Another key thing they've been doing is they've been cutting the power of billionaires. China is one of the only countries in the world that has not seen it. Instead of seeing an increase in billionaires like the USICs every year, they're seeing a decrease in billionaires. Not because the billionaires are leaving, but because policies have been introduced to ensure people don't become billionaires and don't command too much of the productive forces of the economy. So they see this as crucial to ensuring a proper economic democracy, and I think that's

Starting point is 01:00:19 important. Then there's the principle of ecological civilization, which we brought up earlier. And the objective here, and this is again under Xi Jinping, the objective here is to invest in decarbonization, which we've talked about, but also massive ecological regeneration programs. So during Xi's presidency, China has employed over 1 million people to accelerate ecological regeneration of degraded lands. They've reforested or regenerated a total of five million hectares of degraded lands. And according to recent data I was looking at, China has now reforested more land than any other country in the world over the past several years. You know, so I think this is like, like for any environmentalist that wants to be serious

Starting point is 01:01:01 about regeneration, I think that looking at what China is doing is actually quite impressive. Of course, they have a lot to do, there's no question, but their progress on this has been quite impressive. And then finally, I think there's China's continued use of planning and industrial policy, which I think is increasingly returning to the forum Chinese development. And this is where I think things get kind of interesting, right? So the key thing to understand is that every state things get kind of interesting, right? So the key thing to understand is that every state has the power of money creation, which means they have the power to direct labor and production to do anything that they want. Under capitalism,

Starting point is 01:01:34 the government cedes this power to commercial banks. This is the core principle of capitalism. So commercial banks create money when they issue currency, and they invest this currency creation not into what is most necessary for social progress, but whatever is most profitable to capital. This is capitalism 101. So capitalists determine what we produce. And so the mobilization of our labor and productive capacities is at the whim of capital. And this is why in capitalist societies, of course, we end up with massive investment in things like mansions and SUVs and fast fashion, but chronic underinvestment in obviously socially necessary things like renewable energy and public transit and affordable housing. So in China, the state continues to hold a share, a commanding share, in the main commercial

Starting point is 01:02:20 banks. And it requires them to align their credit creation and investments with national policy objectives. They basically steer capital toward what they want to be achieved in terms of social progress and industrial development. For example, over the past decade or so, they dramatically increased investments in housing and infrastructure, and then suddenly, when they reached sufficient levels of these things, they basically pulled those investments and then pivoted toward their next objective, which was technological development in renewable energy and electric vehicles and

Starting point is 01:02:54 artificial intelligence. So for anyone wondering how China achieves these things, this is how they do it. This is Chinese socialism. They ensure democratic control over the commercial banks and therefore can guide investments in developing the productive forces in the way they think is most necessary. So that's kind of like how industrial policy works in China. I think it's working really well. This is how they've managed to achieve levels of human developments and technological development that we normally associate with high-income countries. But they're doing it with a lot less aggregate production and much less energy and resource use and much less environmental impact than the high-income countries. And so this is interesting, right?

Starting point is 01:03:32 For anyone who cares about the question of ecological efficiency, I think that China is an interesting story here, right? They're much more efficient at converting energy and resources into human well-being and social progress than the capitalist economies are. And that's just clear now from the data. And you can see that the US and EU are now sussing the fact that industrial policy is extremely effective in China, and so they're scrambling to come up with their own. But their major limitation is basically that they cannot bring themselves to guide finance in the same way, because this basically runs against the core tenets of capitalism. And so the most they can do with their industrial policy is basically to use

Starting point is 01:04:11 de-risking strategies where they basically try to attract capital to certain industries like renewable energy. But it's clear this is not working. This is an extremely weak strategy. And this is fundamentally why the US and EU are failing to achieve the renewable energy transitions, because ultimately, capital is in the driver's seat of investments, and they do not consider renewable energy to be profitable enough. Fossil fuels are more profitable than renewables. And so capital keeps investing in fossil fuels, even when we know it's necessary to do the opposite. So I think there's real lessons to be learned here. Like whatever you might want to say about China, industrial policy is working for them and that's a lesson that we need to learn

Starting point is 01:04:48 from. Yeah, absolutely. And that plays out in so many ways when it comes to the minority control of how capital is invested and deployed in this country. It's really just a handful of CEOs and major shareholders that make these decisions, and they're made purely on the basis of short-term individual gain, without even a glancing thought towards something as silly as, say, planetary well-being. And I suppose that's just bourgeois society for you, but it goes even further than, I think, just how capital is deployed. But as we're seeing in perhaps

Starting point is 01:05:25 like a heightened way right now under the Trump administration, just the wholesale selling off of like state infrastructure to a handful of oligarchs, the attempts to take control of like the very mechanisms that the state uses to distribute our money, It's really accelerating beyond just the simple control of capital, but it's like this stripping of the copper from the capitalist state that can't end in any way except for total collapse the way I see it. And then that brings up, I think too, this really interesting question of democracy, right?

Starting point is 01:06:01 And one of the narratives deployed by the State Department that's been picked up by all sorts of people in the US, including many on the left, is that China is not a, quote, real democracy, and that it's authoritarian, et cetera, et cetera. And I think that is a very, very funny narrative when you think about it in terms of the dictatorship

Starting point is 01:06:23 of capital that we live under, which is absolutely not very democratic either. But in fact, that whole narrative is kind of bullshit because China does actually enjoy a very high degree of democracy in so far as like survey after survey shows that people in China view their country as far, far more democratic than people in the US do. And the data on that is very clear. But that's a whole other conversation that, you know, maybe we can get into bits and pieces of it as we move forward, or maybe we just have to do like an entire episode on that at some point. We'll see.

Starting point is 01:07:02 But for now, I do really want to make sure that we get to this next question, which is about imperialism. And again, another critique that is hurled towards China quite often, especially among Western Marxists, is that actually China is also imperialist. And this is an especially interesting question to me because we have been looking at imperialism and how it functions so closely on this show for the past year, year and a half now. And actually just recently had the incredible team from the Red Menace podcast on to dissect Lenin's text on imperialism, imperialism, the highest stage of capitalism, you know, written a century over a century ago. And that text gives us a very

Starting point is 01:07:53 specific definition of imperialism, which incorporates monopoly, and it incorporates finance into this question of how imperialism functions globally. And I'm not sure if you draw from Lenin at all when you think about imperialism or what your framework of analysis is. And maybe we can explore that a little bit together in answering the question, is China imperialist? Yeah. So first of all, on the theoretical front, I'm heavily influenced by the work of Witzel Patnick and Pradeep Patnick, who are these Indian economists who kind of, I think, kind of advanced

Starting point is 01:08:30 on London's ideas. And to me, their book, Capital and Imperialism, is kind of the gold standard right now, as far as I'm concerned, in understanding this dynamic. But also, I think, John Smith's book, Imperialism in the 21st Century, is also really strong. So anyways, the question about whether China is imperialist, I mean, it's interesting. This is a very strong discourse in the West. I was kind of looking into the origins of this, and it's clear also that this is a discourse that's been very heavily peddled by the US State Department, by agencies in the US government, but obviously have broad traction in Western media, etc. But I think that in order to assess this question, I think we have to be

Starting point is 01:09:05 clear about what imperialism actually is. And in the Marxist literature, imperialism is very clearly defined with respect to the functioning of the capitalist world system. So imperialism is basically when core states intervene in the periphery to reorganize national production in the periphery in their own interests, cheapening labor and resources so as to obtain a net appropriation of value from periphery to the core through trade and through monopoly power in global commodity chains that they effectively dominate. So right off the bat, we can see that this definition does not readily apply to China, primarily because China is fundamentally not a core state. And this is very well established in the literature and world system theory, right? China is a peripheral economy that has only recently developed to the point of entering the semi-periphery, which is basically converging

Starting point is 01:10:01 at the level of the Latin American average. So this idea that China is converging with the core, has become a kind of core state and a global power in the way that the US is, is just fundamentally not true. Like it's gained a lot of economic sovereignty, but it is, again, a similar peripheral country that is the level of the Latin American average. Okay. It's got one fifth of the level of the GDP per capita of the core. It does not project military power around the world in anything like the way that the US and its allies do. It has only a tiny fraction, as we established before, a tiny fraction of the core's geopolitical power, right? It has

Starting point is 01:10:36 very little power in the institutions of global economic governments. So for example, we know that the World Bank, for instance, and the IMF are key instruments in the West's toolbox of economic imperialism. The core states control 60% of the voting power in the World Bank, which enables them to basically determine economic policies through structural investments. China controls 3% of voting power in the World Bank. So it's just like, nowhere even close to the kind of hegemony that the West exercises in this way. It just doesn't have the power to impose its will on the rest of the world. It has power to resist the dictates of Western states, but it does not have power to impose its

Starting point is 01:11:17 will on the rest of the world in the way that the Western states do. And then of course, is the fact that, as we discussed before, China still suffers a drain to the core. And so it's in this respect, like, still well within the periphery, right? Now, for a while, a couple of years ago, there was kind of this discourse that China exploits poorer countries, particularly Africa, through debt traps. And there was this whole discourse in the media on Chinese debt trap diplomacy. But what's interesting is this narrative basically fell apart very quickly because empirical evidence emerges to show that China's loans to developing countries in Africa had 50% lower interest rates than Western loans. And furthermore, they did not come with structural government conditions attached in the way that Western loans

Starting point is 01:12:01 typically do. So it became clear there's just no comparison here, right? Now, it is possible that China benefits from some unequal exchange with poorer countries that have lower price levels, because remember, unequal exchange occurs when you have price level differentials, and China has been increasing its price levels recently, as we discussed. And so therefore, we might expect some unequal exchange to occur. In fact, it's fairly common for this to happen between semi-peripheral countries and peripheral countries, but it's important to establish that in world system theory there is a difference between passively benefiting from unequal exchange in the way that semi-peripheral countries may do, and actively intervening to create the conditions for unequal exchange, which is what the core

Starting point is 01:12:44 states do, through military interventions and through structural adjustment programs, et cetera, et cetera. So we have a new study where we examine China's relationships specifically with Africa, looking at exchanges with Africa. And here's what we found. We found that of the total drain that gets appropriated

Starting point is 01:13:03 from the continent of Africa each year, which is massive by the way, the global north is responsible for 83% of it. And China is responsible for 5% of it. The rest of Asia and Latin America are responsible for 12% of it. So you can see the discrepancy here, right? I mean, the massive preponderance of the drain goes to the global north, and then the semi-peripheral regions get a little bit of what is left. So China does benefit from a drain from Africa, we found, due to Africa's much lower prices. So this is almost what we would expect, but only to the same extent that all semi-peripheral countries do from Africa. So China is not qualitatively or quantitatively different from any of the other semi-peripheral regions, like for example, Latin American countries. So over and over again, I think that the evidence does not support the claim that China is imperialist. Now, a lot of people will, as a last resort,

Starting point is 01:13:53 point to China's position with respect to Hong Kong and Taiwan, and of course, its naval presence in the South China Sea, which is on its border, by the way, as evidence of Chinese imperialism. Now, people may not like what China is doing, and perhaps they have reason for that, but the material reality is that these are disputes over local territorial sovereignty and cannot be described as imperialism unless you're willing to say that, you know, for example, Pakistan and India are imperialist toward one another, or Egypt and Sudan, which also have border disputes or territorial disputes, are imperialist toward one another, which you can do if you want, but the word imperialism basically loses all of its meaning as an analytical term. So I think that it's not particularly useful. So the conclusion is like,

Starting point is 01:14:37 if you don't like something that China's doing, like have a more specific term for that thing, because using the word imperialism is just empirically not correct. And I think term for that thing. Because using the word imperialism is just empirically not correct. And I think actually blinds us in terms of our analytical abilities. All right. So on that note, I think many of our listeners have probably at least heard of the Belt and Road Initiative, this big development, international development project by China. And I think many people unfortunately have been subjected to the relentless news stories of, uh, and we touched on this briefly before the Trump administration's trade war and belligerence in terms of pressuring other

Starting point is 01:15:19 countries to divest, to like, de-partner with China. And it's, you know, sort of like shooting themselves in the foot often with the Trump administration. They're trying these like belligerent tactics to coerce other nations and who knows if they're going to backfire or work or what. It seems like they're trying to go against the inevitable tide of history as China continues to grow and the United States continues to recede in terms of economic strength. But yeah, with all of that, I'm just curious if you could

Starting point is 01:15:51 talk a little bit about what the Belt and Road Initiative is, and then also maybe a little bit about these potential global realignments and this sort of decentering of the United States as the only sort of option in town for a lot of peripheral or semi-peripheral countries. Yeah, so this is interesting. So the Belt and Road Initiative, basically China, as everybody knows, has accumulated quite a lot of basically US foreign currency because of its massive trade deficit with the US, right? Like China exports more than it imports in the US and so it accumulates foreign currency. What it's decided to do basically is to use this foreign currency,

Starting point is 01:16:28 in large part to invest in development projects around the global South. Now from China's perspective, one key objective here is to work around a possible US blockade. Because what they realized is that the US has the power to blockade China by sea, because they basically surround China. They have military bases and also some stooges on the ocean border of China, right? And so one key objective is to develop overland routes for trade to overcome this vulnerability. That's one key objective. The second key objective is just look, China wants to build South-South trade arrangements and solidarities, even if it's as far afield as Latin America, because on the one hand, for themselves, they want options for trade outside of the Western block,

Starting point is 01:17:15 in case the US and Western Europe blockade China, but also in order to give global South countries opportunities for their own industrial development and economic sovereignty. So this is precisely where the US finds the Belt and Road Initiative so threatening to them because it creates an alternative, again, an alternative for global South countries to obtain key goods and technologies from China, therefore reducing their dependence on these imports from the USA. And this basically, like, I mean, again, kind of unravels the imperial arrangement that Western capital depends on. So that's kind of in a nutshell, like the US sees this as kind of a threat to

Starting point is 01:17:53 its hegemony in the world. China sees it as crucial to its survival and also crucial to building a kind of robust network of South-South trade. So you recently co-authored a paper which I believe you mentioned earlier and it's titled Capitalist Reforms and Extreme Poverty in China, Unprecedented Progress or Income Deflation. And so this paper examines the conventional wisdom about poverty in China and I'm wondering if you can maybe discuss your findings and then let us know why they're significant. Yeah. Okay. So this is a paper that was led by Dylan Sullivan and then also co-authored by Michalis Mouatzos. And it's interesting because basically you have this dominant narrative

Starting point is 01:18:39 about poverty in China, which relies on the World Bank's method for measuring poverty, right? So people who have more than a dollar ninety a day in purchasing power terms. So when you use this metric, then it becomes clear that it looks like extreme poverty was super high during the socialist period, under Mao, for example, and then massively declined during the capitalist reforms of the 90s. And so the dominant narrative that has emerged from this, which has been picked up by Western media and by reactionary intellectuals in the West, is basically that socialism is bad for poverty, capitalism reduces poverty, yay. The capitalists celebrate China's achievements against poverty as a win for capitalism.

Starting point is 01:19:23 Now this is interesting because scholars who work on poverty have long pointed out that there are major problems with the World Bank method for measuring poverty, and the reason is because it doesn't actually measure poverty. It measures generic income, but does not actually tell us whether people can actually afford essential goods like housing and food that they need to escape extreme poverty. So a couple of years ago, the OECD published a new data set on basic needs poverty, which overcomes these problems. And it's fascinating because what it shows is that extreme poverty was actually extremely low during the Maoist period up until the 1980s, even through much of the 1980s,

Starting point is 01:20:04 precisely because even though China was a low-income country, so people did not have high incomes, there were price controls and public provisioning systems that ensured that even despite low incomes, they were still able to access things like housing and food. And so extreme poverty was prevented through these socialist mechanisms. Then what we see is that during the structural adjustment programs, extreme poverty skyrockets, right? When price controls are abolished and public provisioning systems were dismantled. And so we have a massive spike in extreme poverty during this period, which then, like after this, there's kind of a long, slow recovery to the point where now poverty actually has been abolished, probably under Xi Jinping due to their most recent efforts.

Starting point is 01:20:46 This totally inverts the existing narrative. Instead of socialism is really bad for poverty and capitalism reduces it, we actually see that the Maoist period was actually really good at preventing extreme poverty and is useful for low-income countries in particular as a development method. The process of rapid liberalization was actually quite damaging in terms of extreme poverty. So I think this is a change in narrative that needs to be absorbed to understand the full implications of it. Now, crucially, this is only about extreme poverty. So this is access to housing and food and clothing and fuel and things like that. Obviously, even during the reforms, the total level of production in the economy, the total GDP per capita increased, and people gained

Starting point is 01:21:26 other benefits from this. But in terms of access to these basic goods, the privatization period was very damaging in that respect. So it's kind of this mixed story. But in terms of just the story of extreme poverty, then it's very clear that liberalization is quite harmful for people, and the socialist public provisioning policies were extremely beneficial. And that's something that every developing country can learn from. Even with quite low levels of income, you can abolish extreme poverty more or less today. I mean, think about that. The fact that today, something like 20% of the world population is in extreme poverty according to this basic needs method. I mean, that's wild. And there's absolutely zero reason for it, because we know that China of 1980

Starting point is 01:22:06 was able to virtually abolish extreme poverty, which with very low levels of income per capita. So that's something that any developing country can achieve today. Absolutely. And I think it's interesting too, I think part of why this narrative is so unfortunately powerful for many people who want to paint socialism in a certain light is because many of the socialist countries came out of situations of extreme poverty. And so when we think about, you know, China and Russia and Cuba and many other countries that experimented with and had socialist revolutions, they're starting off at a very low place in terms of the strength of their economies and a very high place in terms of poverty and extreme poverty.

Starting point is 01:22:57 So the very achievement of bringing people out of poverty is that much more remarkable. So I think that's just a really important note to make on that. Yeah, I think this is really important for people to realize is simply that for the periphery of the world economy, capitalism is really not good at delivering developments. And the reason is because it's not profitable

Starting point is 01:23:18 to invest in the kinds of things that you need for developments, right? To invest in public healthcare, to invest in affordable housing, to invest in affordable housing, to invest in nutrition screw for everybody. These are not profitable endeavors. It's much more profitable to set up sweatshops and produce a bunch of t-shirts for Zara or smartphones for Apple or something like that. This is how capital makes profits. And so you really need, in these conditions where it's more profitable to maintain underdevelopments

Starting point is 01:23:45 and exploit cheap labor, then the only real path to development is to have some kind of public finance mechanism where you can directly invest in improving your sovereign industrial capacity and public services to meet people's needs. You've got to be able to invest in things that are not profitable, and that's what a socialist economy can do because investment and production is not overdetermined by whether something is profitable. And this is the core piece of the puzzle that explains why Russia and China, after their revolutions, were able to achieve such rapid developments, because they didn't rely on capital to invest in developing the productive forces. They were able to do that directly. And so I think this is a crucial lesson for every government in the global South to realize how

Starting point is 01:24:29 powerful industrial policy and public provisioning and planning can be when it comes to achieving rapid developments. And China and Russia show what can be done. And then the flip side to that too is when capitalism was reintroduced at the point of a gun back into Russia in the 90s and how devastating that was and how life expectancy dropped and etc etc. So that's also another important thing to keep in mind in terms of the other side of it. So I guess, you know, it's not quite as much in the news as it was when I was sort of, you know, formulating my questions for this conversation, but I do think there's still, it's still worthwhile to explore and sort of maybe find some analysis that could sort

Starting point is 01:25:18 of complement our conversation that we've been having so far. I'm talking about TikTok and DeepSeek, which I think are two news items that have received a lot of attention recently. And of course, the TikTok ban and the unban and the attempts by the US to pressure TikTok's parent company, Bike Dance, to sell the app to the US. I'm really curious just kind of generally

Starting point is 01:25:43 what your take is on that. And then also, and this is a bit more of a bigger question, and I think you've addressed bits and pieces of it, but deep-seek and what this tells us about how the US and Chinese economies function and what the implications are for the United States as it continues to sort of spit the bit in its competition with China

Starting point is 01:26:05 to be the world's leading economic power. So I'm going to throw those both at you. And I know, you know, kind of a lot there. So just feel free to attack that one however you'd like. And yeah, I'd love to know your thoughts. Yeah, so my understanding of these is like not that much more advanced than sort of the ordinary person who reads, who reads analysis that's been published online about this. But my understanding is that basically the TikTok ban was done in large part because the US government worried that people were becoming radicalized against the Gaza genocide on TikTok, where critical content exposing Israeli violence and US complicity in the genocide was very popular and very educating for masses of people. It it was kind of undermining US narratives, and so disrupting their control

Starting point is 01:26:49 over the narrative here, which they'd enjoyed through legacy media for a long time. And so I think that it's clear they really needed to kind of assert some control over editorial policy on TikTok, and I think that was probably the heart of it. So that's TikTok. In terms of Deep Seek, I think that's in some ways a more interesting story because it was just so surprising to people. For ages, we've been told that the US tech sector is just like, Silicon Valley is just like the golden boys and is way ahead of everyone else in the world. And it's really important that we just funnel just billions of dollars to them, give them huge amounts of political control because they're geniuses and they're delivering these extraordinary products, etc.

Starting point is 01:27:26 And then suddenly DeepSeek emerges and offers a product that's as good or better than open AI with much more efficiency, much lower costs, and using inferior chips, right? Because the US basically blockaded China from accessing the most advanced chip capacity that it has. And so DeepSeek just explodes into the scene in this way. As soon as this happened, I was like, man, who are the engineers here? And I kind of assumed, maybe they came from Silicon Valley, maybe they were educated in the US. So I looked at the founder and many of the engineers, and I found that this is totally homegrown talents. They went to Chinese universities, they were

Starting point is 01:28:03 in Chinese companies before. This is completely homegrown talent here. And it's remarkable because they've shown that with a fraction of the budgets, they're able to take on these big Silicon Valley firms who have become totally bloated by monopoly power. And I think that this is just a blind side of the US tech industry because basically, like monopoly power in the tech industry in the US has basically prevented them from being exposed to real competition, right? Whereas in China, there's actually robust competition between lots of different AI companies, not just DeepSeek, but there's dozens, with lots of competition between regions and cities. And there's also a lot of public investments in necessary technological developments and so on, which has really facilitated a vibrant

Starting point is 01:28:43 culture of innovation, right? And so they're able to do much more with a lot less money, a lot less resources. And they basically burst this massive AI bubble in the West. And it was a huge wake-up call, I think, and I think has been kind of a Sputnik moment, I think, for the US. Ordinary people suddenly realizing that the existing discourse on China is partial and has limited their ability to really see what's going on and see the power of industrial policy and public education there, etc. So I think that that's been a wake-up call for people. In some ways, it's like a result of everything we've been talking about. What is China able to achieve that other countries of its level of income just cannot,

Starting point is 01:29:24 right? Because it has power through industrial policy and it's very impressive. And just the final question I have for you as we wrap up is, I'm just curious for all of the Western Marxists and those on the left who are listening, I want to ask you any words that you would like to share, any thoughts that you'd like to share on how we in the West approach actually existing socialism, actually existing communism, and why it's important to support these states and to not ingest and metabolize all of the imperialist Western propaganda that we're being spoon-fed. And yeah, just any thoughts or words on that as we conclude. Yeah, so this is interesting. I think that we have to be aware that there's massive pressure in the US to pump out propaganda against China. This is what

Starting point is 01:30:25 we're going to be exposed to every day. It behooves us, I think, to look beyond that, to investigate the scholarly literature on what is going on. I mean, to me, the saddest part of the discourse on China in the West is simply that we're being convinced to hate our sisters and brothers, in the West is simply that we're being convinced to hate our sisters and brothers, who we have much more in common with in terms of our interests and our position in the world economy than we do with our own ruling classes. These are our sisters and brothers who face extraordinary odds as massively exploited in the imperialist world economy, overcame those odds through tactical struggle, implemented a proletarian government, and are experimenting with socialism in a way that few countries have been able to achieve. And I think

Starting point is 01:31:10 that it behooves us to recognize the achievements of our comrades. Now, that does not necessarily mean you saw everything that the Chinese Communist Party has done. Clearly, there were mistakes. But the process of being a socialist is also to learn from the historical mistakes of people who have tried this already, and so that we can develop our analysis and improve our implementation of socialist policy, with the objective for all socialists being ultimately a truly democratic economy, where we have worker, community, and collective control over the means of production such that we can organize our collective productive capacities over around achieving our ecological goals and meeting

Starting point is 01:31:48 human needs within time-share boundaries. That is the horizon. And of course, existing socialist experiments have succeeded to a certain extent, also failed to a certain extent, facing very real material difficulties and contradictions that they have tried iteratively to overcome. And I think that our job as analysts is to learn from that process, right? So I think the lesson I want people to take home here is it's a process of learning. It doesn't mean that you have to just blindly celebrate everything that the challenge is done or ignore the problems. It's a process of recognizing the lights and the shadows and developing our analysis from there.

Starting point is 01:32:34 You've been listening to an Upstream Patreon episode with Jason Hickel, a professor at the Institute for Environmental Science and Technology at the Autonomous University of Barcelona, and the author of the books The Divide, A Brief Guide to Global Inequality in its Solutions and, Less is More, How Degrowth Will Save the World. Please check the show notes for links to any of the resources mentioned in this episode and to find our past conversations with Jason. Thank you to all of our Patreon subscribers for making Upstream possible. We genuinely

Starting point is 01:33:11 couldn't do this without you. Your support allows us to create bonus content like this and it allows us to provide most of our content for free so we can continue to provide political education media to the public and help to build our movement. For more from us, visit UpstreamPodcast.org and follow us on Twitter, Instagram, Blue Sky, Facebook, and threads at Upstream Podcast. You can also subscribe to us on Apple Podcasts, Spotify, or wherever you get your podcasts. And if you like what you hear, please give us a 5-star rating and review.

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Upstream - [UNLOCKED] China Pt. 1: A Socialist Introduction w/ Jason Hickel

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