China: The Largest Cheap Labor Factory In The World (VIDEO)

China’s system is one of despotic capitalism, under a “Communist” label.

Wages are exceedingly low, productivity is high. These are the social realities of commodities “Made in China”, marketed Worldwide.

China is an advanced capitalist economy integrated into the World market. Wages for non-skilled labor in Chinese factories are as low as 100$ a month, a small fraction of the minimum wage in Western countries.   

The factory price of a commodity produced in China is of the order of 10% of the retail price in Western countries. Consequently, the largest share of the earnings of China’s cheap labor economy accrue to distributors and retailers in Western countries. 

Capitalist Restoration

In 1981-82, based at the University of Hong Kong, Centre for Asian Studies (CAS), I started my research on the process of capitalist restoration in China. I took a crash course in Mandarin at the HKU Language School as well as in Taiwan.  This research –which extended over a period of 3 years–  included fieldwork conducted in several regions of China (1981-83) focussing on economic and social reforms, analysis of the defunct people’s commune and the development of privately owned capitalist industry including the cheap labor export economy.

I started reviewing Chinese economic history including structures of the factory system prior to 1949, the development of the treaty ports established in the wake of the Opium wars (1842) and came to the realization that what was being reinstated in terms of extraterritorial economic zones was influenced by the history of the treaty ports, which granted extraterritorial rights to Britain, France, Germany, the US, Russia and Japan.

In the 1980s, the consensus among Leftists was that China was a socialist country. Debating the restoration of capitalism in China in Leftist circles was a taboo.

Most “Left wing”  economists and social scientists dispelled my analysis: “What you are saying Michel is an impossibility, it goes against the laws of history” said Brazil’s political economist Theotonio dos Santos (in response to my presentation, Second Congress of Third World Economists, Economistas del Tercer Mundo, Havana, 26-31 April 1981).

A dogmatic perspective prevailed: Chinese socialism could not be reversed. The Socialist Mainstream refused to even acknowledge the facts pertaining to land concentration, owership, the collapse of social programs and the rise of social inequality.

I completed the manuscript of my book entitled “Towards Capitalist Restoration? Chinese Socialism after Mao” in 1984. It was  casually turned down by Monthly Review Press: “We unfortunately have no market for a book on this subject”.

While this  was a slap in the face from what I considered to be an important and powerful socialist voice, I came to realize that MR (Harry Magdoff in particular) throughout the 1980s remained  firmly supportive of the post-Mao regime under the helm of Deng Xiaoping.

I had previously met and was in contact with both Paul Sweezy and Harry Magdoff for whom I had high regard. The book was subsequently published by Macmillan in 1986.

Eighteen years later, Monthly Review came out with a book by Martin Hart-Landsberg and Paul Burkett entitled “China and Socialism: Market Reforms and Class Struggle” (Monthly Review, 2004) which concludes that

“market reforms” have fundamentally subverted Chinese socialism…. Although it is a disputed question whether the Chinese economy can be still described as socialist, there is no doubting the importance for the global project of socialism of accurately interpreting and soberly assessing its real prospects.

Income inequality has been rising rapidly in China and now surpasses that of the U.S. by a large margin, say University of Michigan researchers.

That is the key finding of their study based on newly available survey data collected by several Chinese universities.

“Income inequality in today’s China is among the highest in the world, especially in comparison to countries with comparable or higher standards of living,” said University of Michigan sociologist Yu Xie. University of Michigan study. 

While China plays an important balancing role on the geopolitical chessboard, it does not constitute a viable alternative to Western capitalism. Moreover, in contrast to the US, China has no imperial ambitions.