World Capitalist Crisis Hits China!


THE world crisis of capitalism has now erupted once again and has the deformed workers’ state of China in its sights, and no doubt in its gunsights.

The Stalinist bureaucracy, since the death of Mao in 1976, has swung far to the right. It embraced the policy that China under the rule of the Communist Party could and should encourage the formation of openly capitalist regions in China itself, since it could supply no end of cheap labour to the bourgeoisie of the planet, and at the same time export cheap commodities to the capitalist world.

Huge US and UK monopolies have opened up in China and made billions paying low wages, and fighting the development of trade unionised workers. The Communist Party is now split between those who look back to Mao, and capitalist roaders whose sons and daughters have become bankers and want China to be 100% capitalist. The working class however remains wedded to the gains made by the deformed workers state.

The capitalist trend began with the argument in the late 1970s that it does not matter whether a cat is red or white as long as it catches mice. Under this banner, the world’s bourgeoisie has made billions in China in specially established economic zones and converted a major section of the bureaucracy and its children into its open allies.

Ever since the banking collapse of 2007, the relations between the Chinese working class and the bureaucracy has become fraught. Now the collapse of the Chinese stock markets, as part of the world crisis, is going to bring matters to a head.

The bureaucracy has just had what it called its ‘Black Monday’ as shares in Asia were hit overnight, after the Shanghai Composite in China closed down 8.5%, its worst close since 2007. That plunge wiped out this year’s gains.

Now the stock markets in London, Paris and Frankfurt have followed suit and fallen sharply as the economic slowdown of the Chinese private sector continues, as part of the world crisis, to haunt investors who were told that shortly there would be a huge middle class in China purchasing endless quantities of Western luxury goods, fomenting a new worldwide economic activity and growth.

This spectre has collapsed like a pack of cards. Instead the opposite has happened. London’s FTSE 100 index was down by 2.6% in morning trade, with stock markets in France and Germany also falling by a similar amount. The bureaucracy is now rushing to try to bale out the world crisis using China’s national wealth. Beijing’s latest intervention, after devaluing the yuan to try and boost its exports, has been to instruct its main state pension fund to invest in the stock market, and to instruct the Chinese regions to use their resources for the same purpose.

The situation where foreign concessions provided the Chinese state with the resources to expand its operations has now been transformed into its opposite. Now the state is putting its resources into the bottomless pit of the capitalist crisis to try to bail it out.

Over the past week, the Shanghai index fell 12%, adding up to a 30% drop since the middle of June.

The sharp fall sparked a global sell-off, with the Dow Jones in the US losing 6%, while the FTSE 100 posted its biggest weekly loss this year, of 5%.

The deepening of the world capitalist crisis is rapidly threatening to undermine all of the gains of both the Russian and Chinese revolutions. In Russia, Putin balances with his left foot on the working class, who want to return to the USSR, and his right foot on the oligarchs who want to take over the whole of the economy.

In China, the working class will not permit the corrupted bureaucracy to destroy the gains of the Chinese revolution to assist the world’s capitalists. The working class will launch its own political revolution to impose its power and its socialist agenda onto the whole of society. Meanwhile in the West, the working class looks at Greece and sees its future if world capitalism is not overthrown and replaced by a world socialist republic.

The struggles of these three main sections of the working class of the world are united in the struggle for the victory of the world socialist revolution. It is vital to build sections of the Fourth International worldwide to organise the victory of the world socialist revolution to put an end to capitalism and imperialism.