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Discussion: Are Russia and China imperialist powers?

"Probably the most important Russian monopoly is Gazprom, the world’s largest gas company, which by 2008 had about 400,000 employees. The company is reported to control over 93% of Russia’s natural gas production and about a quarter of the world’s known gas reserves."

By Chris Slee

April 7, 2014 – Links International Journal of Socialist Renewal -- Russia and China both play an important role in world politics. This includes involvement in armed conflicts distant from their borders. Russia for example supplies arms to the Syrian government. Both Russia and China supplied arms to the Sri Lankan government during its war against the Liberation Tigers of Tamil Eelam, who were fighting for an independent Tamil homeland in the north and east of the island of Sri Lanka. (The LTTE was defeated in 2009.)

In some cases, Russia and China intervene on the same side as the Western imperialist powers. This was the case in Sri Lanka, where the US, Britain, Israel and other Western powers also aided the Sri Lankan government in its brutal war against the LTTE, which was in fact a war against the Tamil people.

In other cases, Russia and/or China support forces that are in conflict with those backed by the United States and its allies.

In Ukraine, for example, there was a struggle over whether the country should be economically linked to Russia or to the European Union.

Another example is Syria. Russia openly gives large amounts of military aid to the extremely repressive Assad regime. US intervention in Syria is more indirect. US allies such as Saudi Arabia and Qatar supply money and arms to selected groups among the rebels. (Generally to groups that identify as Sunni Muslim, thereby intensifying the tendency towards religious sectarianism in Syria. Sectarianism is also fostered by the Assad regime, which arms Alawi militias.)

In the case of Sri Lanka, despite the fact that the US and China were on the same side during the war, there is rivalry between these two powers for influence on the politics and economics of the island.

Chinese support to the Sri Lankan government during the war was given in return for the use of the port of Hambantota, which is on China’s trade routes to the Middle East and Africa, as well as other opportunities for investment in Sri Lanka.

Protecting trade routes has historically been one of the motives for imperialist intervention in other countries.

The United States, however, is also trying to strengthen its presence in Sri Lanka, in part to counter Chinese influence. Tamara Kunanayakam, the former Sri Lankan permanent representative at the United Nations, has claimed that the US would like to establish a military base in Sri Lanka, and is using the issue of human rights as a pretext to put pressure on the Sri Lankan government to agree to this.

This rivalry is reflected in the different positions taken by the US and China in debates on Sri Lanka at the United Nations Human Rights Council. China voted against a recent US motion expressing “concern” at human rights violations in Sri Lanka, and calling on the UN Human Rights Commissioner to “investigate” crimes committed during the war.

The disputes over Ukraine, Syria and Sri Lanka look very much like cases of inter-imperialist competition.

Imperialist?

But is it correct to call Russia and/or China imperialist?

Michael Probsting[1] argues that both Russia and China are imperialist.

In his article, “Russia as a Great Imperialist Power” [2], Probsting makes a strong case that Russia today is not just capitalist, but imperialist. He cites the growth of Russian monopoly capitalist corporations, their increasing investments in other countries, Russia’s domination of the now formally independent countries that were previously part of the Soviet Union. On the development of capitalist monopoly corporations in Russia, Probsting says:

Probably the most important Russian monopoly is Gazprom, the world’s largest gas company, which by 2008 had about 400,000 employees. The company is reported to control over 93% of Russia’s natural gas production and about a quarter of the world’s known gas reserves.

Another important monopoly is the Sherbank, which is Europe’s third largest bank by market capitalization. These two companies, Sherbank and Gazprom, account for more than half of the turnover of the Russian stock exchange. Other huge corporations are Rosneft and LUKoil, both oil companies; Transneft, a pipeline company; Sukhoi, an aircraft manufacturer; Unified Energy Systems, an electricity giant; and Aeroflot.

In sum, in less than two decades a number of Russian monopolies have been formed which exert a total grip on the country’s economy. Russia’s capitalism is probably more monopolized than most other imperialist economies.[3]

Probsting reports that Russian companies are increasingly investing overseas:

While Russia received US$43.3 billion in inward FDI [foreign direct investment] in 2010, and US$52.9 billion in 2011, Russian corporations invested outside the country US$52.5 billion in 2010 and US$67.3 billion in 2011.[4]

Russian capitalist corporations have extensive investments in the other countries of the former Soviet Union, which Probsting argues are treated as semi-colonies. As an illustration of their semi-colonial status, he cites the use of debt-for-equity swaps:

In exchange for Russia canceling part of their debt, nearly all countries of the former Soviet Union handed over enterprises and former property of the Soviet Union. Russia forced its semi-colonies to transfer to her part of their means of production – similar to the notorious IMF debt-to-equity agreements with so-called Third World countries.[5]

Probsting views the national minority areas that are officially part of Russia as outright colonies. An example is Chechnya, where “Russia’s regime waged a genocidal war against the Chechen people when they dared to strive for independence”.[6]

In addition to the states of the former Soviet Union, Russian capital has investments in many other countries, including Eastern and Western Europe, Africa and the Middle East.

Russia had military bases in nine other states that were formerly part of the Soviet Union. (This included Ukraine. Russia has bases in Crimea, which used to be considered part of Ukraine. There are differing views on the legitimacy of Russia’s annexation of Crimea, but in practice Crimea is now part of Russia, and is no longer part of Ukraine).

Russia also has a naval base in Syria.

This analysis of Russia as an imperialist power helps explain Russia’s foreign policy. For example, the current conflict over Ukraine has an element of inter-imperialist rivalry (Russia versus the European Union and the United States). Similarly, Russian military aid to the Assad regime is an example of imperialist intervention in Syria, in the context of inter-imperialist rivalry in the Middle East.

China

Probsting also argues that China is imperialist, in an article entitled “China’s Transformation into an Imperialist Power”.[7]

Probsting documents the fact that Chinese transnational corporations are rapidly expanding their presence around the world. The majority of Chinese investment in other countries is devoted to mining and energy, and is aimed at supplying China’s industries with raw materials. (This is particularly the case for Chinese investment in Africa.)

I have reservations about classifying China simply as imperialist. I agree that China has imperialist features. But on the other hand, a large part of the Chinese working class is exploited by transnational corporations based in the United States, Europe and Japan. This gives China a semi-colonial aspect. (The workers are in many cases not directly employed by the TNCs, but are employed by Chinese companies that have contracts with TNCs, sometimes via a chain of intermediate companies. This does not negate the fact that they are exploited by the TNCs. Such contracting chains are also common in places like Bangladesh.)

Thus China combines imperialist and semi-colonial features. I think it is necessary to recognise that there can be states that are intermediate between imperialist and semi-colonial status.

To give an analogy: when analysing the class structure of capitalist society, we recognise that there are social layers that are intermediate between the capitalist class and the working class. Why can’t we recognise that states can also be intermediate between imperialist and semi-colonial status?[8]

Probsting points out that China is now economically stronger than Russia. But China’s rapid economic growth has in part been due to the decision by many Western TNCs to make China their main base for production for the world market.

The TNCs took this decision because of China’s vast supply of low-paid workers, who were subject to a very repressive political regime (especially after the 1989 Beijing massacre, which was a key step in the restoration of capitalism in China – see my pamphlet, Capitalism and Workers’ Struggle in China[9]).

The TNCs were given the opportunity to exploit migrant workers from the countryside who were working in the cities, but without the rights of city residents, and able to be sent back to their home villages if they rebelled or were no longer needed.

In recent years the situation has changed. Chinese workers have increasingly been fighting for better pay and conditions, and have won pay rises and other concessions.[10]

Also, the global financial crisis led to factory closures and sackings in the export-oriented manufacturing sector in China. The Chinese government responded by creating more jobs in building infrastructure (e.g. high speed rail).

But despite these changes, production controlled by foreign TNCs remains a very important part of China’s economy (even while Chinese TNCs are expanding overseas). Thus China still has a semi-colonial aspect, along with an imperialist aspect.

In so far as China acts like an imperialist power, socialists should oppose it. One example is China’s excessive territorial claim in the South China Sea. Another is its support for the Sri Lankan government’s oppression of the Tamil people.

References and notes

1. Probsting is the chief theoretician of a Trotskyist group called the Revolutionary Communist International Tendency.

2. “Russia as a Great Imperialist Power”, by Michael Probsting: http://www.thecommunists.net/theory/imperialist-russia/.

3. “Russia as a Great Imperialist Power”, p. 8.

4. “Russia as a Great Imperialist Power”, p. 10. Both inward and outward figures are inflated by “round-tripping” in which Russian capitalists invest in tax havens, then reinvest in Russia. The extent of this phenomenon is unknown. Russian capitalists also use enterprises located in tax havens as vehicles to invest in third countries, so it is not always obvious that the ultimate source of the investment is Russian.

5. “Russia as a Great Imperialist Power”, p. 14. These debt-for-equity deals do not appear in figures for Russia’s foreign investment.

6. “Russia as a Great Imperialist Power”, p. 16

7. “China’s Transformation into an Imperialist Power”, by Michael Probsting: http://www.thecommunists.net/publications/revcom-number-4/

8. In the following passage discussing Russia’s involvement in the First World War, Trotsky seems to imply that tsarist Russia was intermediate between an imperialist power and a semi-colonial country: “Russia’s participation in the war was self-contradictory both in motives and in aims…The participation of Russia falls somewhere halfway between the participation of France and that of China. Russia paid in this way for her right to be an ally of advanced countries, to import capital and pay interest on it – that is, essentially, for her right to be a privileged colony of her allies – but at the same time for her right to oppress and rob Turkey, Persia, Galicia, and in general the countries weaker and more backward than herself” (History of the Russian Revolution, Sphere Books, London 1967, vol. 1, p. 33).

9. Capitalism and Workers’ Struggle in China, by Chris Slee: http://links.org.au/node/2349.

10. http://links.org.au/node/2349.

 

Comments

are Russia and China imperialist?

Thanks for a very useful article!
One question: I'm glad you pointed out the presence of TNCs in China as another factor to be considered in characterizing it. I'm not sure I'd label it both imperialist and semicolonial. Russian factories, for instance, had before 1917 heavy French investment. In the US there are increasing numbers of Japanese and German-owned plants. But of course the amounts involved -- and their salience -- vary from example to example, so I'm glad you set us thinking about the possible combined development (pun intended).

"Thus China combines

"Thus China combines imperialist and semi-colonial features. I think it is necessary to recognise that there can be states that are intermediate between imperialist and semi-colonial status.

To give an analogy: when analysing the class structure of capitalist society, we recognise that there are social layers that are intermediate between the capitalist class and the working class. Why can’t we recognise that states can also be intermediate between imperialist and semi-colonial status?"[8]

Excellent, agreed. Both Tsarist Russia and the 19th century USA are also examples of this, the result of uneven and combined development. Unfortunately, too many self-described Marxists disdain dialectical reasoning.

Discussion: Are Russia and China imperialist powers?

Chris, You ask, with regard to China, “Why can’t we recognise that states can also be intermediate between imperialist and semi-colonial status?” You defend this idea with a quotation from Trotsky’s History of the Russian Revolution – but in the very next sentence after your quote Trotsky writes, “The twofold imperialism of the Russian bourgeoisie had basically the character of an agency for other mightier world powers.”

That is, Trotsky came down on the side of labeling Tsarist Russia imperialist despite its prominent indicators of a country oppressed by stronger imperialist powers. Like China today, Tsarist Russia in its last decades was a prime example of uneven and combined development. It included both backward economic features plus a major sector of modern industry, much of it foreign-owned, along with a heavy indebtedness to French and other Western European financiers.

Lenin also regarded Russia as imperialist. In his article, “Imperialism and the Split in Socialism” (1916), he wrote “In Japan and Russia the monopoly of military power, vast territories, or special facilities for robbing minority nationalities, China, etc., partly supplements, partly takes the place of, the monopoly of modern, up-to-date finance capital.”

As to China, I would come down on the other side of the line. China has clear imperialist aspects, but it remains a very poor country (per capita) whose workers are super-exploited by both Chinese and imperialist capitalists. On balance, it is far from belonging to the group of countries that share in the rewards of the military and economic domination of the majority of the world’s countries by the strongest and wealthiest powers. Internationally, it is more exploited than exploiter.

Even using the flawed and partial data of foreign direct investment (FDI) as a measure of “capital export” that Michael Proebsting favors, China’s inward flow of FDI greatly exceeds its outward flow – in contrast to the genuinely imperialist powers. See Table 2 of his document “Russia and China as Great Imperialist Powers.”

Reply to Chris Slee on Russia and China

More on Russia and China as Great Imperialist Powers

A Reply to Chris Slee (Socialist Alliance, Australia) and Walter Daum (LRP, USA)

By Michael Pröbsting, Revolutionary Communist International Tendency (RCIT), 13 April 2014, www.thecommunists.net

Chris Slee, a long-time activist from the Socialist Alliance (Australia), has published an article which focuses on whether Russia and China are great imperialist powers. (1) The article is mainly a critical review of the RCIT’s analysis of Russia and China, which I have elaborated in several documents. (2)

Read more at http://www.thecommunists.net/theory/reply-to-slee-on-russia-china/

On Chinese "imperialism"

Just one point for now. Michael Pröbsting’s claim that China has become “the world’s second largest Net Capital Exporter” after Germany seems highly unlikely – especially since Pröbsting himself believes that China is only a recently emerged imperialist power. The claim is footnoted to the IMF’s Global Financial Stability Report (2012), and indeed that report’s Statistical Appendix (p.3) contains a chart headed “Major Net Exporters and Importers of Capital in 2011,” in which China does place second among the exporters.

But a footnote to this chart explains that the IMF measures capital export by “economies’ current account surplus.” That is very different from what Marxists have regarded as capital export, namely capital invested overseas via loans, FDI etc in order to return a rate of profit higher than obtainable at home. Current account surplus refers not to a country’s total foreign investment but rather to the sum of several factors, manly its balance of trade. China’s current account surplus is high because it heavily exports goods, rather than investment capital; and because it lends large amounts of money to the U.S. (at negligible rates of interest) and others. Other countries among the higher “capital exporters” in the IMF diagram cited by Pröbsting include Saudi Arabia and Kuwait, which sell lots of oil but are not major capital exporters or imperialist powers.

Michael Pröbsting’s heading for the IMF’s diagram is misleading, to say the least. China remains a country more exploited than exploiting on the international level.

A brief reply on Walter Daum

A brief reply on Walter Daum
Capital export today is to a large degree export of financial capital. China invests huge sums in buying foreign bonds for which it receives secure interest rates (which is a form of surplus value). That’s why not only China but also many other capitalists buy foreign bonds too. This is without any doubt capital export. As I did show in my book “The Great Robbery of the South”, China had in 2011 more than 3 trillion US-Dollar foreign exchange reserves of which it used most for investment in foreign bonds. Therefore my argument about China being a major capital exporter remains completely valid.
The fact that some Gulf States also hold a number of foreign bonds does not negate the fact that this is capital export. However, as I have shown in various documents, the definition of an imperialist state must be derived from the totality of its economic, political and military position and not an isolated aspect. Therefore, the Gulf States certainly are not imperialist states just because they also hold a lot of US bonds.
In general I would appreciate a fuller discussion of the issue of China and Russia and not debating this or that isolated aspect. Walter Daum has bought “The Great Robbery of the South” one year ago and my study on Russian imperialism is online available since more than one month. It would be excellent if he could deal with the full range of arguments and facts which I have presented.

While Chris Slee is the most

While Chris Slee is the most progressive commentator from the Socialist Alliance he fails to grasp that though Russia & China certainly have imperialist designs and aims, they are overshadowed by Anglo-America which has far more global influence.

Anglo-America has long been trying to set up comprador bourgeoisies in those countries - the Yeltsin gov't too ineffectual and chaotic to become so, while Putin & Medvedev are too smart to be subjugated.

Likewise China, where the USA waited in the wings in 1989 to hijack the democratic rabble should the CCP have acquiesced and been toppled. Note that Deng was hostile to them from the start and wanted Tienanmin cleared as quickly as possible.

Deng's suspicions were entirely correct - I wish I had seen this at the time - since such naïve democrats (with their silly goddess of democracy) coming to power would readily have been seduced by Western interests to become a comprador bourgeoisie, selling out enterprises to foreign owners and becoming fat commissionaires in response. China would have lost its national sovereignty while the wretched Tienanmin democrats would have persecuted and annihilated the CCP.

IOW it is Anglo-America that is the greatest danger today since if it sets up comprador regimes in other countries, those other countries' resources will be fatally drained on behalf of Western capitalism. Australia too is running out of natural gas (already run out of oil) hence our future petrol supply will be coal-based until new technology and massive solar generation comes on line.

Most progressive?

What is the comment about Chris being the "most progressive commentator from Socialist Alliance." I did not know there was a sliding scale of "progressiveness" for commentators from Socialist Alliance. So are we to assume that Holmes,Bolton or Boyle are less "progressive" ?

It would better if poster did not destroy their credibility with such nonsense.

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