“Can China survive the economic crisis by relying on consumption by state bureaucrats and the ‘upper’ working class alone? Or will the Han Chinese who are displaced by ethnic minorities from the West eventually be bumped up a tier?”

I imagine that the state wants to “engineer” a middle class consumer base through programs like health care, easing the relocation laws, etc. as folks laid out.

At the same time, wages on the East Coast of China are being driven up by strikes, occupations, folks kidnapping their bosses etc. The state is probably not thrilled about this mass activity but it provides an opportunity for them to kill two birds with one stone. They can buy off a layer of the insurgent workforce through wage increases, dividing them from lower paid migrant workers from the countryside and from ethnic minorities. This can create an aristocracy of labor similar to the white skilled labor base in the US which has historically been coopted into busines unionism and US nationalism. This divides the class and gets the upper layer of the class to help police the lower layers on the basis of race rather than uniting to fight the bosses. At the same time, it also creates an expanded consumer base for domestic industry. All of this is very similar to what the US did with the New Deal and Keynesianism.

If the types of insurgency outlined in your piece continue I do think that the Chinese state might have to incorporate more of the Han workers in mid to lower skill level jobs, including migrants to the cities, into a slightly higher tier in order to keep order. They may not want to – it might not always make pure economic sense to do so, but they’ll at least need to pay them marginally higher wages then ethnic minorities if they wish to really create a caste system that can help prevent a unified workers movement.

I wonder how much the Chinese rulers study the US and white supremacy here as a model. I don’t want to overemphasize this – China is a different country and the state there has developed it’s own unique methods of social control…. but at the same time, I do think it’s a useful analogy. In the US even unskilled white workers were given marginally better wages then workers of color in order to maintain the political coherence of white supremacy.

Incidentally, as Will suggests, it is these kind of co-optation methods that are starting to break down a bit in the US but are more of an option for the Chinese state. In the US a contracting capitalist system can’t dish out the kind of “reforms” and/or reactionary patronage that make people satisfied to go home and keep slaving away. For example, the bosses can no longer afford to buy off white workers in small rustbelt towns who are no longer central to their profits… they can’t invest in a largely political project of maintaining white supremacy for the sake of social control… so many of these white workers are polarizing. Some of them, like the lumpen white kids in my classes, are starting to identity with people of color because they are starting to face similar issues of unemployment, police brutality, etc. and they find that youth of color understand them better than White America does. Other white workers are moving to the far right , buying into an insurgent white supremacist populism that holds out the false promise of restoring their privileges.

Of course, there is no automatic reason why the Chinese working class will go the same route as the US working class…. workers may overcome these emerging ethnic and teir divisions in the workforce, the state might not be able to dish out enough patronage fast enough, the economy as strong as it is might not grow fast enough to incorporate the flood of people displaced by primitive accumulation in the countryside. We’ll see. One thing is for sure though – the Chinese working class is at the center of global class struggle today and all eyes will be on its next moves.

At the same time as a new consuming ‘upper’ tier of a working class is created though, China is redoubling its efforts to get ethnic minorities from the West to work for cheap in Eastern coastal factories. This new ‘lower’ tier of working class is important for China to sustain its global competitive edge, especially considering other more exploitative areas in SE Asia. What will happen to the former Han Chinese workers in these areas though? Are they going to be bumped up to the ‘upper’ tier of working class? Ethnic conflict in the Eastern Coastal regions suggest that this has not been the case. Can China survive the economic crisis by relying on consumption by state bureaucrats and the ‘upper’ working class alone? Or will the Han Chinese who are displaced by ethnic minorities from the West eventually be bumped up a tier?

What are the new industries that will emerge to encompass recently laid off workers if nonproductive sectors are relocated to SE Asia?

How can working class solidarity be achieved in light of these real ethnic divisions?

1. It seems while the United States has been imposing austerity on its own working class, there has been intense lobbying and discussion in magazines like the Economist and in interviews with Charlie Rose over the need to raise the buying power of the average Chinese worker. This translates into increased wages. This is tied to the recognition of the CCP that they cannot live off exporting to the United States forever. They are witnessing first hand, in the last two years, the dangers of this deep recession. They are also seeing the flight of foot of capitalism where sectors of it have relocated to Vietnam and Bangladesh and even interior China where wages are lower. While appearing contradictory, this makes sense. My hunch is that it could give the Chinese capitalists to let commodity productions which don’t make much profit relocate, even out of the country if needed, and to move up the commodity chain into mid and high-tech goods.

Here is an important graphic on p.24 which demonstrates wage increases on the coast of China. http://libcom.org/files/china.pdf

2. We can also see government intervention, its scale, and its effectiveness differ in the two countries. Healthcare is the most clear. In the US, it is pretty clear that there is little political will for a comprehensive health care system. Instead, a sham plan is being cooked up where most working people will be looted to line up the wallets of health insurance companies and providers. In contrast, the last time I read related material on China, there was discussion along the lines providing some type of healthcare to millions of people so it can free up their wallets. In other words, if you know the government is not going to provide a penny when you get sick, you tend to save more, and buy less dvds and other fun items. This is one dimension among others tied to the need to start a real domestic economy of China which can make it more independent of exports.

3. These realities are further sharpened by the growth of Chinese economy (regardless of the inaccuracies of the data the CCP releases) compared to the contractions of Western Europe, Japan, and the United States. I don’t believe the Chinese capitalists or state are any nicer or more progressive than the United States.

Perhaps one way to look at this question is are we seeing the birth of a new powerful capitalist state comparable to what we saw of the United States from the 1900s to the 1960s. This has important implications because it gives space for working people to fight for gains and at the same time–in the most economics sense–room for the rulers/ capitalists to throw a few dollars worth of concessions to workers. This might explain the reality that there have been thousands of strikes in China and yet no revolution. Strikes not being synonymous with revolution is something I have had to learn about. Workers can win strikes on a case by case basis and it looks like that is happening in China because of the political-economic moment. This has reformist and revolutionary implications. The experience of the US, compounded by a Stalinist-left and other tiny revolutionary organizations is the former. At the same time, I still do not believe a boom period in capitalism does not close off chances for revolution.

Meanwhile, is the US a declining capitalism where the capitalists are squeezing their working class worth every penny because their profit rates are so low, they have truly become a vampire. As far as I understand revolutionary politics, this has important implications for reforms, solitary strike actions versus more militant demands and the need to link up and fight on a national basis the way the rulers are attacking working people. The rulers in the US are desperate to keep their number 1 position and are arguably less likely to give scraps to workers unless workers change their posture on a national scale not seen since the 1960/ early 70s. The challenges to revolutionaries are real but I also believe that only revolutionary perspectives can give plausible solutions to the crisis humanity faces today.

Either way these are just preliminary thoughts as I look at these two countries in this economic recession and political crisis.