Conservatives fear the rise of China for all the wrong reasons

The 70th anniversary of the founding of modern China passed with an impressive (i.e. terrifying) old-school military parade before the balcony on which Mao appeared in 1949. The spectacle was no doubt intended for the world. But it was also tilted more than a little at Donald Trump, the would-be strongman who had insisted on a July 4 parade, and is now facing impeachment — or, to put it in Mandarin, a purging.

This was the moment that China announced to the world that it could no longer be taken merely as an economic powerhouse under the thumb of US unipolar dominance, but as an emerging global military power in its own right; switching to a faster track of arms production and eventual parity.

In the Anglosphere right, the anniversary produced the usual response to any Chinese achievement: they went into conniptions and ran around in circles. Six months ago, Xi Jinping affirmed his own cult of personality and restated Marxism-Leninism as the basis for Chinese development, at which point everyone started brushing off their aged copies of various collected works to see what China would do next.

This anniversary produced the equal and opposite reaction. According to many — Greg Sheridan and Henry Ergas were the local representatives — China was a totalitarian state controlling every aspect of its citizens’ lives. But, they said, the rule of the Chinese Communist Party had nothing to do with the country’s galloping success over several decades, which was due either to the generic East Asian model, or just dumb luck.

It’s a pretty funny totalitarianism which has nothing to do with the economic life of its citizens. The conclusion is, of course, bunkum. Some on the naive right, the chino-pearls-Hayek-fanboy squad, are angered by the stubborn refusal of China to correspond to the idea that demands for political freedom shadow economic freedom. China has shown the opposite: give people a chance to improve their lives within a fairly stable framework, and such rewards will actively defer demands for political pluralism for decades upon decades.

For them, China essentially refutes a philosophy they have based their life on.

For those who cherished the idea that the West had all the answers, China’s surge has been particularly upsetting. Its post-1978 rise was achieved without injection of foreign capital. The “East Asian miracle” that benefited other nations was based on billions in US capital given as a political tool to offer a post-colonial alternative to socialism. When that tap was turned off, some small states — Singapore, South Korea — fared well, others less so. Thailand and Indonesia have been relatively stagnant for decades, remaining rural and semi-underdeveloped, while China has entirely reconstructed itself.

The reason for that has been Marxism. Mao was unquestionably a Marxist revolutionary, though his regime, to 1976, was mostly un-Marxist in its ideal of a collective will to “leap forward” followed by the cultural revolution’s commitment to the nation-as-commune. When Marxism really arrived in China with Deng Xiaoping’s leadership it did so in the form it had taken in the USSR’s 1921 New Economic Policy  — a sector of the private market was retained, special economic areas were introduced, but one-party rule was maintained.

The importance of having a mixed economy, with 60% in state hands, was that funds could be steered towards infrastructure, and the country could bootstrap itself and build an urban working and middle class. Compare India, which has lurched from village socialism to neoliberalism, resulting in a “missing middle” between a rich elite, a residual working/rural poverty, and absolute poverty. Or compare Nigeria, which never managed to free itself from the capitalist world-system, with whole regions being as poor as they were at decolonisation. Or for that matter compare the Anglosphere West, which has talked its way into stagnation by allowing capital to starve demand by crushing wages and evading taxes.

For the Chinese, the goal of socialism remains. But it is not the slightly hippy, weave in the morning, seminars in the afternoon type thing of the 19th century. The CCP is clearly preparing for an era of nationalist post-capitalism, one in which automation and cybernation reduce capitalist accumulation in key sectors to a level that makes private reinvestment impossible. At that point the nation acts like a unit, with a retained but limited private sector, surrounded by a system of universal basic income and universal basic services.

The economy is not centrally planned, but steered by real-time qualitative feedback between production units. As far as one can see, the purpose of the country’s new universal social credit system is to lay the basis for a post-wages form of social control and reward.

The great difference in Chinese transitional capitalism/proto-socialism is that it is conceived in national terms and anticipates future war — with India, Russia or the US. Hence patriotism and military expansion accompany the steady revolutionisation of production — robots, 3D printing manufacture — applied with a focused rapidity that the West cannot, at the moment, match.

If the right is scared for what this does to its pathetic fairytales of history and the West, they should be. And as the cannons and hypersonic missiles parade by, they shouldn’t be the only ones.