A Success Story

The transformation of the Chinese economy into the world’s factory spans just a few decades. It was during this recent period that China became an economic power, maintaining public control over the financial system and rules for foreign investment, whilst implementing a high rate of investment effort, planned technological capacity building and capital accumulation in some large private companies. Its GDP is higher than that of the United States in purchasing power parity and may soon be larger in absolute terms (although, as the Chinese population is five times larger, GDP per capita is much lower), its trade surpluses are larger and its capacity to hoard reserves is, therefore, superior to that of its competitors.

In 2013, the Chinese government launched an economic and diplomatic initiative, the “New Silk Road”, drawing an analogy with trade circuits since the times of Marco Polo, only now under Chinese direction. In 2023, 152 countries joined to celebrate this movement of capital and interests. The September meeting with African countries corresponds to a parallel process which, as shown in the graph, has grown since 2000 until China became Africa’s main trading partner and, by far, the main investing economy. In announcing the 50 billion, the Chinese president added that they would create a million jobs, but also heard African leaders contest the weight of previous debts and ask that the unequal relationship not be accentuated. Moreover, as noted in the graph, between 2016 and today Chinese loans have reduced to about half in terms of weight in African GDP, and the announced amount is less than in the peak years of this relationship. Furthermore, investments are concentrated in some countries (in order: South Africa, Angola, Nigeria, Congo, Egypt).

There was no sign of debt relief. This economic relationship therefore subordinates African countries. And, if the created infrastructure is especially geared towards mineral extraction (trade between China and Africa grew in 2023 to 282 billion dollars), the commitment of these African economies to extractive rentierism is the counterpart to the profitability of large Chinese technology companies. Thus, this form of subordination is neocolonial exploitation.

Empire

The transformation of China into a capitalist economy has no parallel with what is known in other countries. With the fall of the USSR regime, its political structure collapsed and, while it is true that many of the beneficiaries of the privatisation piracy raid, the new magnates, had been communist party chiefs and regional or national bureaucrats, this transit took place in a new political framework, at the time headed by Yeltsin. In the Angolan case, it was the anti-colonial resistance party that, upon reaching power, gave its president and generals the power to steal resources and build their personal fortunes. Thus, capital accumulation proceeded through political rupture.

In the Chinese case, however, there is political continuity guaranteed by the hegemony of the communist party. It is precisely its bureaucracy that responds to the two main forms of creating a capitalist class, one to fight it and another to promote it: corruption, which is whipped by the authorities as it prevents their control over the mechanisms of fortune formation; and the ownership and direction of companies that benefit from exports and, increasingly, the domestic market. Thus, it is capitalism tutored by the state in a historically unprecedented form, given the particularity of being directed by a communist party. But it is a capitalist economy and 60% of GDP is generated by these sectors of private accumulation, probably corresponding to three-quarters of employment. The relationship with Africa, which aims to obtain imports of fossil energy and especially minerals fundamental for communications equipment production, is an important component of this map.

At the same time, Jinping ensures the loyalty of allies and, being by far Africa’s main economic partner, directs a network of alliances that subordinates Washington’s role on this continent. Chinese imperialism does not expand by creating military bases or occupying territory, but disputes with the imperial centre dominion over a part of the world – and there it has been winning.

Francisco Louçã

Click here to subscribe to ESSF newsletters in English and or French.