China after the defeat of Covid Zero... Did the capitalist locomotive become Titanic?

By Damian Quevedo

The end of Xi Xin Ping's confinement policy implies for many analysts the possibility that China once again plays the role of locomotive that drags the world economy. This characterization has the defect of contemplating only one aspect of reality, which is the productive potential of the Asian giant.

However, there is another aspect that boycotts the possibility of the Asian power repositioning itself as the productive vanguard, which is the shrinking of the markets where it can place its merchandise. In this capitalist society, not only is it necessary for industries to manufacture a lot, but it is also essential that there are buyers.

In that framework, China's recovery may have an unintended consequence for its competitors: In much of the world it could manifest itself not in higher growth, but in higher inflation or interest rates. Central banks are already raising rates at a frenzy to fight inflation. If China's reopening increases price pressure to an uncomfortable degree, they will have to keep monetary policy tighter for longer. Commodity-importing countries, including much of the West, are most at risk of these shocks [1].

The other factor that will hinder the Chinese recovery is the defeat of the restrictions imposed by the dictatorship. A policy designed to regiment the labor movement, preparing it for war and for it to increase, in a qualitative way, its productivity, through the implementation of guidelines even harsher than the current ones of labor flexibility.

The worker and popular rebellion that overthrew the confinements of the Communist Party hit one of the pillars of Chinese growth in recent decades, its cheap wages and extremely exploitative conditions. While these guidelines will continue to exist, they are not what local capitalists need to sustain the competitiveness of their products.

This reality is pushing several multinationals to set up camp in China, in order to relocate their factories to countries with a less conflictive labor movement. The great failure of Xi Xin Ping is not guaranteeing the continuity and deepening of the conditions that big companies had for a long time, to build fortunes by filling the world with their products!

The main dynamic, for the revolutionaries, is the one that the Chinese workers opened when they rebelled against the confinement. This rebellion in one of the main centers of world capitalism will push the working class of Asia and the rest of the world to fight like in China. We socialists must encourage this dynamic, putting ourselves at the forefront of these combats, which will be decisive in terms of the possibility of ending Capitalism and beginning to build a new society, of a Socialist nature. 

[1] Infobae 01/07/2023

Home