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IW 05

China

THE BUREAUCRACY IS MASSACRING PEASANTS

China: A rebellion is underway

 

Bankruptcies in Italy

Since the massacre of Tiananmen (1989), this is the first time that Chinese police have fired openly and in the light of day against a multitude in a mobilization. The massacre of Shanwei is, up to a certain point, exceptional; the peasant mobilization is not: it has been growing exponentially for a decade. The prime mover of the rebellions is the expulsion of the peasants from their land to give way to “private enterprises”. In the last few years, forty million peasants were disp\ossessed of their land. This is why the degree of violence has also grown in the clashes between the peasants, the police forces and the bands of thugs armed by the ‘businessmen.

The tension in the country is not limited to the peasants dispossessed of their land. Even those who are able to still hold on to it see their situation worsening with each day that passes: the “opening” of China signifies that in the domestic market itself agricultural products cannot compete with the subsidized western production: “the supermarket chain Carrefour, which has a notable presence in China, imports 80% of the food products it offers on its shelves” (Corriere della Sera, 19 July). For this reason, it is not surprising that, apart from the mobilizations for land, “assaults have taken place against McDonald’s outlets, the Kentucky Fried Chicken chain and State properties, such as telecommunications stations, at the hands of desperate peasants” (ídem).

Social Transformation

The peasant revolts bring to the foreground the question of property rights over the land. Although the constitutional reform of 2003 reestablished private property, this was not extended to cultivated land, which continued to be “communal” property. The peasants received land with “usage rights”, general for a period of thirty years.

“The refusal of the party to allow private property over land limited the usage of rural land for industrial use, urban expansion and the construction of infrastructure” (The Economist, 25/9). However, the bureaucracies of the towns and villages —acting as the true 'owners' of the 'communal' lands continued to expel the peasants and to pocket the compensation paid by the companies appropriating the lands. In this way the private appropriation of rural lands continue to increase. But to the degree that this appropriation grew, so didthe demand of the privileged ones for the extension of private property rights over land.

In order to stop the civil war in the countryside, the central bureaucracy ordered a six-month suspension on the transformation of rural lands to other uses; exceptions must be personally approved by the Prime Minister. It fears, moreover, that the sudden transformation of cultivated lands into energy plants, hotels, office buildings and even golf courses threatens “alimentary security” in the cities. But, above all, it fears that the greed of the local bureaucracies will end up unleashing a generalized reaction. The emphasis of the central bureaucracy on 'order' and 'stability' reveals the consciousness it has that it is stepping on a mined field.

The expulsion of the peasants continues, together with the robbery at the hands of the bureaucracy itself of the sums destined to compensate the evictions. The hoarding of those funds “is one of the prime means of the formation of capital in China” (Stratfor, 13 Dec). “One of the ways of becoming a businessman in China is by becoming a government official who can use public funds for personal accumulation and to establish a network (...) of contacts which will allow him to wheel and deal in the future. With the massive expropriations of lands in the last decade, the opportunities (and the compulsion) to steal funds destined to the peasants are very great. In order to keep his post, a government official must keep a series of relationships with superiors, colleagues and subordinates. These relationships are based on money. If a functionary does not collect enough money to maintain himself in his place, in the bureaucracy, he will lose it. So, the stealing of funds has become a system” (ídem).

Pyramid and anarchy

However, it is not only about the enrichment of a bureaucracy seeking to become capitalist. The anarchy of the process of capitalist restoration is, by itself, a powerful factor of the expropriation of the peasants.

The systematic transformation of cultivated land to industrial use and the private 'small businesses' “is a critical process at the heart of Chinese industrialization” (ídem). The rapid Chinese growth is a consequence of a massive investment in factories, productive capacity, office spce, hotels and luxury housing, financed with loans from the official bank. The Chinese official banks accumulate, then, unpayable debts equivalent to half the GDP, which means that a financial catastrophe is underway.

The profitability of most of those investments is very low. “Within what may be termed business bureaucracy —with pyramidal plans, but with little capital and highly 'connected' accumulating on top of each other—, new investment projects are necessary to generate the cash (that is, bank credit) capable of stabilizing the old and failed projects (...) This means that aggressive economic growth is necessary. This also means that a massive social upheaval —including the stealing of land— is inherent to the Chinese system” (ídem).

The stealing of new lands is necessary to avoid the collapse of the 'businesses' set up on the basis of the lands stolen in the past. The “Chines miracle” appears, under this light, like a “pyramid plan”, a scheme in which new funds serve to pay the inexistent profits of the old and failed investments. In the whole history of capitalism there is not a single “pyramid” that has not ended in a spectacular explosion.

World crisis

The mined fields facing the bureaucracy are multiple. For the same reasons —'order' and 'stability'— it prohibited the transfer of the increase in the international price of crude oil to the domestic prices of its derivative products. It fears that a generalized increase in the price of fuel will unleash chaotic inflation sharpening the contradictions in the economic process, liquidating the already living conditions of the workers in the cities and putting 'political stability' in danger.

But neither has the bureaucracy been able to impose itself upon the destructive tendencies of the capitalist restoration. The local refineries (in their majority state-owned) refuse to work at a loss; as a result they have begun to export their production, drying up the supplies on the domestic market. “We are not a social welfare network”, protested one of the managers of the state-owned Sinopec (Financial Times, 27 Aug). The 'normal' supplies will only return with an increase in domestic prices. The lack of fuel is already provoking industrial paralysis and protests among consumers. While China carries out an active international campaign to assure its supply of crude oil, 'market mechanisms' promote the flight of its derivatives abroad. Whether through inflation or through falling supplies, the world market alters the “social peace”.

The main mined field, all things considered, is to be found in its relationship with the United States. It is unanimously considered to be “the most important” relationship, not only for both countries but also for the world economy. The core of the crisis is to be found in the trade imbalance between both countries (China has accumulated a trade surplus of 200 billion dollars with the United States) and in the divergence in the current account balance of both countries: while China has accumulated a surplus of 7%, the United States has accumulated a deficit of the same order.

“These imbalances are unsustainable” (Financial Times, 24 Aug). Together with the growth of the trade deficit, protectionist demands are growing in the United States. Restrictions have already been established on the importation of textiles, television sets, semiconductors and furniture; the Senate is about to pass a law stipulating that, unless China revalues its currency by 25%, customs duties of 27.5% will be imposed on all imports. Alternatively, “it is just a matter of time until the dollar falls another 20%, forcing other countries to adjust...” (ídem).

The revaluing of the yuan (and the fixing of its value on the basis of a basket of currencies) was an incoherent response to this imbalence. Fred Bergesten, of the International Economic Institute, calls for China to offer “substantial concessions” on the access of imported products to its domestic market, particularly for agricultural products (ídem).

The cheapness of Chinese industrial merchandise, however, does not arise from the manipulation of the currency; nor, exclusively, from the cheapness of labor power. It is a more general question. “In some sectors, the utilization of national teams, designs and construction companies allow the Chinese to build factories and to install machinery at a value between 30 and 50% under the amount foreign competitors would pay” (El Cronista, 20 July). Capital has availed itself of this divergence of values to convert China into a platform for export to the world market. China exports half its GDP and invests 40%. It is a potential factor of unheaval in the world market, which in its turn could unleash a catastrophe in China.

A working class and peasant China

China is a mass of peasants dispossessed of their lands and industrial workers forced into unemployment. The social contradictions sharpen with each passing day.

“There are massive social movements at stake which combine the two most powerful forces in China: the workers and the peasants. Their interests have converged. The important thing is to take into account that the quantity and the intensity of these confrontations is growing. The question is how far the discontent will go” (Stratfor, 13 Dec).

This picture of crisis, determined by the contradictions of the world economy and of the restorationist process itself, places the peasant uprisings into their true perspective: the anticipation of enormous social upheavals all over China.

By Luis Oviedo