The U.S. Economy And China

I get many questions about the Chinese economy and the consequences of its export-led growth strategy for the U.S. economy.   Therefore, I thought I would share a recently published article of mine that takes up this topic.    It is a bit long but hopefully clear and useful.

The U.S. Economy and China: Capitalism, Class, and Crisis

by Martin Hart-Landsberg

The U.S. economy is in bad shape and people are understandably seeking solutions.

Many, encouraged by mainstream media and politicians, believe that China’s trade policies bear primary responsibility for the structural decay of our economy and that recovery will require, above all, pressuring the Chinese government to implement “market-freeing” policy changes that will bring the U.S.-China trade relationship into balance.

Despite its popularity, this nation-state approach to understanding the dynamics of the U.S.-China relationship is seriously flawed.

It encourages people to see U.S. industrial problems, falsely, as the outcome of a contest between China and the United States, in which the Chinese government has boosted the well-being of its citizens at U.S. expense, through “unfair” practices. As a consequence, it leads to counterproductive policy recommendations.

In this paper, I offer an alternative approach to understanding the U.S.-China trade relationship; one that relies on a class-based analysis of (global) capitalist dynamics.

It leads, not surprisingly, to very different economic insights and political challenges.

For example, it reveals that the threat to U.S.-based manufacturing activity comes not from China, but from the operation of a transnational, corporate-shaped, regional production system, in which China serves as the region’s final assembly platform.

It also reveals that, while both transnational capital and elites in China have greatly benefited from the operation of this system, Chinese workers have paid a high cost; in fact, Chinese workers experience many of the same negative consequences from its operation as do workers in the United States.

It also explains why both the Chinese and the U.S. governments have responded to the current world crisis with strategies designed to maintain the status quo, despite the negative effects of this decision on working people.

In short, my analysis reveals that it is capitalism—not competition between China and the United States—that is the source of our economic problems.

Our challenge, then, which I briefly address in the conclusion, is to draw on the above insights to develop a strategy capable of both illuminating and contesting capitalism’s destructive logic—a task that puts U.S. workers in solidarity, rather than competition, with workers in China. . . .

Continue reading the entire article (which was published by Monthly Review in February 2010) HERE.

As with all posts, the comments section is open!


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