China’s economic development and role in international politics in the face of U.S. hostility

This interview with Rémy Herrera, a research analyst at the National Center for Scientific Research (CNRS) at the Sorbonne in Paris, the largest such research institution in France, was carried out by Tang Xiaofu for the Observers’ Network, Beijing, where it was published in May 2024. Some of the following text, especially at the beginning, overlaps with an interview with Herrera Workers World published June 21.

I. How the West interprets China

Tang Xiaofu: 1) You have visited China multiple times, but now many scholars are trying to distort Socialism with Chinese Characteristics into State Capitalism. What’s your view towards State Capitalism? And what’s the difference between State Capitalism and Socialism with Chinese Characteristics?

Rémy Herrera: The speeches of many current leaders of the Chinese Communist Party (CCP) suggest that China would still be in the “first phase of socialism,” that is to say, in a stage considered essential for developing the productive forces and which would take a long time to reach its goal. According to them, the historical goal sought would indeed remain that of developed socialism — even if, it is true, the contours of the latter are far from being clearly and precisely defined. However, in Western countries, many researchers claim that these official political declarations claiming the persistence of socialism in China are only a facade, or the cover-up of a hidden form of capitalism, and that socialism is really dead and buried in China. I do not share the opinion of these Western researchers. On the contrary, I think that these statements by Chinese leaders deserve to be taken seriously.

Moreover, even within the debates among Western Marxists, a clear majority of them affirm that the Chinese economy would henceforth be purely and simply capitalist. This is the case of certain well-known Marxists, such as David Harvey, who believes he has seen, since the 1978 reforms, “a neoliberalism with Chinese characteristics” where a particular type of capitalist market economy has incorporated more and more neoliberal devices operated in the framework of very authoritarian centralized control. This is also the case of Leo Panitch, for example, who analyzes the contemporary integration of China into the circuits of the world economy as the duplication by China of the role of “capitalist complement” formerly held by Japan, as a support that China would provide to the United States through capital flows allowing the latter to maintain its global hegemony, and as the trend towards the liberalization of financial markets in China leading to the dismantling of instruments of control of capital movements and undermining at the same time the bases of the power of the CCP. I do not agree with these researchers either. I defend the idea that today, the Chinese system still contains key elements of socialism, and the interpretation I give of its nature is compatible with socialism.

Thus, I read the Chinese political-economic system as a market socialism, or socialism with a market, based on some pillars which still distinguish it quite clearly from capitalism. I will cite, among these foundations: 1) the persistence of powerful and modernized planning; 2) a form of political democracy, obviously perfectible, but making collective choices possible; 3) extensive public services, conditioning political, social and economic citizenship; 4) ownership of land and natural resources that remains in the public domain; 5) diversified forms of ownership, adequate to the socialization of productive forces and boosting economic activity; 6) a general policy which consists of increasing labor remuneration more quickly compared to other types of income; 7) a desire for social justice displayed by public authorities in the face of rising social inequalities since 1978; 8) the priority given to the preservation of the environment, the protection of nature being now considered inseparable from social progress; 9) a conception of economic relations between States based on a win-win principle; and 10) political relations between States based on the search for peace and more balanced exchanges between peoples. Socialism “with Chinese characteristics” is not very far from this reading grid.

Is this state capitalism? Through the contradictions it conveys, this expression allows us to narrow down a little the range of possibilities between the poles of capitalism and socialism, but it leaves too much vagueness in the definition of a mixture of institutions unique in the world. I therefore prefer to discard the term “state capitalism” to account for the Chinese situation — while admitting that this expression could be relatively close to its reality. Rather than a state capitalism, which refers to the form of a “capitalism without capitalists” — the logical tendency of which will be to evolve towards a “capitalism with capitalists,” as was the case of the Soviet Union — the system experienced by current China is rather similar, in my opinion, to that of an economy “with capitalists, but which is not capitalist.” It is not a question of playing with words, but of remembering that the presence of capitalists in a given social formation does not mean, by this very fact, that such social formation is capitalist. Ultimately, the Chinese experience shows that the objective of the CCP was not to appropriate everything economically, but rather to keep political control over everything — which is not the same thing.

TX: 2) Recently, [U.S. Treasury Secretary Janet] Yellen has visited China and brought up the issue of China’s overcapacity in the new energy sector. As the previous world’s largest industrial country, the United States also had overproduced. As a Marxist economist, what role do you think the government and the market should play in this issue?

RH: It is indeed highly probable that, over recent decades, China has encountered, in a certain number of economic sectors, a so-called “overproduction” problem. My point here is not to claim that “socialism with Chinese characteristics” represents the completed ideal of the communist project. Some imbalances exist, numerous insufficiencies persist, and the challenges that this society will face are colossal. My approach is also not to ask whether the Chinese “counter-model” (i.e., socialist, not capitalist) could be reproduced elsewhere. For me, it is just a matter of modestly, and as objectively as possible, trying to understand the original nature of the Chinese political-economic system, without discrediting, transfiguring or schematizing — as is unfortunately frequently the case in the West — the path in which CCP leaders have engaged their country.

As a matter of fact, to the extent that the owners and holders of national private capital are effectively limited in their ambitions by very powerful public ownership of the most strategic means of production, and to the extent that these same owners and holders of national private capital have not been able so far to conquer and exercise power over the apparatuses of both the state and the Communist Party, I therefore think that this system is not capitalism — even if the risks of its restoration of capitalism are obviously real — but a form of market socialism, or socialism with a market, in which the role of central planning remains decisive; a form inserted, as a “first phase,” of course perfectible, in a process of socialist transition operating in the long term, and not without contradictions.

I will put forward several arguments to justify the importance of the role played by large public companies in the case of China: they can first distribute more to their employees; then, the state is free to define the most appropriate management method; and finally, public authorities can more easily put them at the service of its collective projects. Added to this, through various tools available to the participation management institution, the state allocates the profits received to a special fund in order to support public entities that require it. Besides, state-owned enterprises also enjoy certain advantages, particularly in terms of credit lines and interest rates granted by state-owned banks. All this is rather, as we can see, part of a path of socialist development.

One explanation for the strength of Chinese state-owned enterprises is that they are not managed like Western transnational firms. The latter are entirely oriented towards the logic of shareholder value, requiring the maximization of the distribution of dividends to their private owners, the valuation of shares and rapid returns on investments, and operate by squeezing a chain of subcontractors, domestic or relocated. 

If Chinese public groups behaved in this way, in such a rapacious manner, they would act to the detriment of local small and medium-sized businesses and, more broadly, of the entire national industrial fabric, which is clearly not the case. We would then be dealing with a wild form of “state capitalism” — as is so often claimed in the West — and we no longer see how this could lead to such dynamic economic growth. Most of the large Chinese public companies are (or have become) profitable again because the compass that guides them is not the enrichment of private shareholders, but the priorities given to productive investment and the service provided to their customers. It ultimately does not matter that their profits turn out to be lower than those of their Western competitors as long as they serve, at least in part, to stimulate the rest of the domestic economy and go beyond a vision of immediate profitability, since superior strategic interests, whether long term or national, dictate it.

In my opinion, Chinese state-owned enterprises, including those operating in industrial sectors, should not be managed as private groups. “Market socialism with Chinese characteristics” is in fact based in part on the maintenance of a powerful public sector whose role is fundamental to the whole economy. Everything suggests that this is one of the essential explanations for the good performance of the Chinese economy — no offense to the neoliberal ideologues who advocate the generalization of private property and the maximization of individual profit.

TX: 3) Since Trump’s presidency, the United States has been waging a trade war against China in an attempt to reduce its trade deficit with China. However, in recent years, instead of decreasing significantly, the U.S. trade deficit with China reached $419.4 billion in 2018 and $382.9 billion in 2022, which are the top two deficits in history. Why is this happening? Is there unequal trade between China and the U.S., as the U.S. claims?

RH: The (almost) continuous widening of the trade balance between the two countries for several decades, largely unfavorable to the United States, constituted the pretext used by Washington to launch a trade war against Beijing. According to the U.S. administration, the deficit recorded by the United States in its trade of goods and services with China would provide “proof” that President Trump was right in declaring that the Chinese are extracting from the United States “hundreds of billions of dollars every year” and injecting them into China. It is undeniable that wealth is transferred from the deficit country (the United States) to the surplus country (China). But is it that simple? Is this logic solidly founded? What “wealth” are we talking about exactly in this debate?

I mean that it is not so much a question of contesting the idea that China benefits from its trade relations with the United States, but rather of questioning the “fair” nature of these exchanges. This is a question that Marxist and other heterodox theorists have been asking for a long time. Unequal exchange, which is measurable using a variety of methods, reveals that, for a given volume exchanged, the total labor time provided by workers in one economy may turn out to be higher than that of workers in the partner country, thus causing a transfer of value from the first country to the second, which thereby appropriates the value produced by the other country. Only taking into account the transfer of international value — which corresponds to the socially necessary work time required to produce a commodity — will reflect the true redistribution of wealth carried out between the two trading countries.

In a scientific study that I had the honor of carrying out with fellow Chinese professors, we were able to seriously calculate the unequal exchange between the United States and China. These calculations are carried out using several different methods but lead to very similar results. These results confirm the existence, observable over the last four decades, of an unequal exchange between the United States and China; an unequal exchange which operates in favor of the United States and at the expense of China. 

The labor contents integrated into the products exchanged are different in the two countries: there are many more hours of labor incorporated in the goods and services that are exported by China to the United States than there are hours of labor embodied in goods and services that are exported from the United States to China. But, over this period of four decades, we can observe a very clear reduction in unequal exchange, without the latter disappearing completely, since we calculated that, just before the appearance of the Covid-19 pandemic, in goods moving between the two countries, approximately 6.5 hours of labor of Chinese workers are in fact exchanged for one single hour of labor of workers from the United States. And, on average, over the entire 40-year period, workers in China had to work more than 121 hours to obtain, in bilateral trade with the United States, one single hour of work from U.S. workers.

Unequal exchange concerns most sectors of activity, which record transfers of value directed from China to the United States. This is especially the case for the textile, clothing and leather goods sector, for furniture and other supplies, but also for the sectors of electrical equipment and machinery, air transport, wooden items, rubber and/or plastic items, chemicals, and even accounting and management consulting activities.

As a consequence, there is an unequal exchange to the detriment of China which persists, but there is also an erosion of the advantage of the United States in the exchange. And it is precisely, in our opinion, because there is a deterioration of the United States advantage that the U.S. administration, under the mandate of President Donald Trump, launched this trade war. In fact, a trade war is nothing other than the organization by the State of a commercial crisis. But the cure can be worse than the disease, and this is what has happened since the United States trade deficit, after having stabilized a little, began to increase again. Clearly, this trade war was an attempt by the administration led by President Trump to curb the slow, continuous erosion of the advantage of the United States, observed for decades in trade with its emerging rival, China.

II. The current predicament of the Western development path (criticism of capitalism) 

TX: 4+5) Since the last century, financial capitalism has dominated the economic growth of Europe and America, creating a huge debt. Do you think this debt-driven growth is sustainable? How will debt-driven growth and financial capitalism affect the future economic growth of Europe and America? During the pandemic, most countries, especially the United States, stimulated their economy through measures such as expanding the central bank balance sheet rapidly, which has also contributed to a rapid rise in inflation rates in most countries outside of China, and asset prices have skyrocketed. As a Marxist economist, what’s your opinion of the impact of this round of inflation on the future economic growth and social inequality in the West and third world countries?

RH: The capitalist world system has been going through a deep crisis for almost half a century, of which the debt crisis — or rather many debt crises — are only one of the multiple manifestations. It is, in fact, the aggravation of a single structural crisis of the expansion of capital — and one of the visible and publicized manifestations of which has revealed itself in the “financial sphere,” due to extreme financialization of contemporary capitalism. So we are dealing with a systemic, multidimensional crisis, now affecting the center of power of high finance which has controlled accumulation for more than 40 years of neoliberalism. This results in an excess of salable production, not due to an insufficient number of people wanting to consume, but rather due to an excessive polarization of wealth which excludes growing proportions of populations from the possibility of purchasing goods which they need.

Nonetheless, instead of observing an overproduction of commodities, what we see is above all a boom in credit and financial markets which now allows capital to accumulate itself in ever more abstract and “fictitious” forms of money. It is therefore important not to confuse money with financial operations on debt securities which are no longer really money, but which are already “money capital.” The concept of “fictitious capital” — the principle of which is a capitalization of income derived from future surplus-value — can help us to better understand the current crisis of capital. The place of formation of this fictitious capital can be found, among others, in the credits granted by banks to private agents as well as in public debts — through which capitalists completely take control of capitalist states — but also, of course, in securities on the stock market or in pension funds or speculative funds. This is the current capitalist logic of accumulating money for money’s sake.

But in this context, economic growth in the West, already weak, has only been maintained by piling up debt, drawing on credit lines and boosting private consumption. This expansion of credit ended up revealing the crisis of overaccumulation in its modern version. Nevertheless, this cannot last forever. Sooner or later there will be an inevitable, brutal “return to reality.” After the 2008 crisis, the exhausted U.S. Federal Reserve (or FED) had to be recapitalized and the most decisive measure that this institution took to plug a monetary system that threatened to collapse was, in October 2008, the “unlimited” extension of swap lines for the benefit of the Central Banks of other Northern countries and certain strategic allies of the South (including South Korea), to ensure them access to the U.S. dollar, and therefore guarantee relative stability.

At the domestic level, monetary policy became “unconventional” with the implementation of Quantitative Easing through which the Central Bank massively purchased private or public debt securities from commercial banks and transnational firms in order to provide them with cash and guarantee their liquidity and solvency. Then, in 2020-2021, with the Covid-19 pandemic, there was a very large-scale return to measures combining asset buybacks, interest rate cuts, special credit lines and business aid. We therefore see that current devices give central banks the possibility of creating money without limits, apparently — just as private banks can also push credits to the maximum. In reality, however, there are limits to the creation of money: those posed by the problems of convertibility of these credits into Central Bank currency (for the private banks) and of the national currency itself into foreign currencies (for the State); but also those linked to the credibility of monetary authorities and the confidence of agents in these institutions. However, as the economic recession deepens, these constraints become stronger, with the risk of falling into a “debt trap” — especially when interest rates rise.

Today, Quantitative Easing has stopped, because inflation has become a very serious problem, which especially affects the poorest social categories of the population. It must be understood that inflation is one of the manifestations of the class struggle within a society: inflation reflects the degree of intensity of the conflict between all the owners of the means of production and the workers for the distribution of added value. Currently, in the West, the balance of power between capitalists and workers is very clearly in favor of the former and to the disadvantage of the latter — especially since the leadership of most workers’ unions and left-wing parties (including communists) have become pro-systemic, that is, pro-capitalist and pro-imperialist. 

But in times of acute crisis, the level of inflation also reflects some of the contradictions between capitalists for sharing the profit rate, which is then oriented downward when the crisis worsens. Thus, the combination of these two phenomena leads to the fact that inflation today finds its root causes more in decisions to increase the prices of goods and services in an arbitrary and unjustified way on the part of capitalists, as well as in their speculative behavior on the markets. Of course, other phenomena, real this time (such as shortages due to epidemics or even wars) can aggravate this inflation rate — the cause of which remains currently mainly speculative, and the fault of capitalists who gorge themselves on profits which do not correspond to any production activity.

III. China’s global contribution to development 

TX: 6) As China achieves the fastest industrialization in human history, global scholars and politicians have increasingly focused on China’s economic development model and values in recent years. How do you view the similarities and differences between the industrialization processes of China and Western countries?

RH: China has implemented a coherent and self-centered, effective development strategy. One of the features often highlighted to describe the success of the Chinese economy is the very rapid growth of its export of goods and services since the 1990s, and even more so since the 2000s — a growth that the impacts of the global financial crisis of 2008, then the Covid-19 pandemic in 2020, have certainly diminished. In the Western countries, many commentators conclude too hastily that these exports would constitute the fundamental engine of growth of the country. Nevertheless, this forgets the essential, that is to say, that the development strategy, designed and implemented with determination and regularity by the Chinese leaders, is based on a self-centered “model.”

This “model” (even if China does not seek to export it) is based — and this is one of the “secrets” of its performance on world markets — on the maintenance of a vast and very powerful state sector, with a dynamic role for the entire national economic fabric, especially the industrial sectors, including small and medium-sized businesses. Although more limited than in the past, the public sector still represents a large part of industrial assets (in construction, steelmaking, basic materials, semi-finished products, etc.) and almost all of them in strategic areas for the country’s, like infrastructure in energy, transport, telecommunications, and of course armaments — in addition to the banking and financial sectors.

The expansion of Chinese exports was therefore carried out on the basis of successful, deep industrialization — a process which was very long, difficult and costly — and on the affirmation of rigorous control of openness to the global system by integrating it into the framework of a development strategy which has been mastered. Thus, the content of these exports could be modified to concern increasingly more sophisticated production, high-tech goods and services which now represent more than half of the total value of goods exported by China.

Today, a majority of Chinese entrepreneurs in industrial sectors — whose patriotic feeling and attachment to the image and success of their country must not be neglected — are interested in domestic markets for their production. It is then above all the growth in domestic demand which guides their investment programs towards optimism. And this domestic demand is stimulated by increasing household consumption and by very active state spending, in particular thanks to public infrastructure work throughout the country (including and especially in its least developed regions), the promotion of new intermediate-sized urban areas towards the interior of the country, but also the adoption of measures favorable to the agricultural world.

Thanks to the stimulating progress of technological innovation in all fields (such as robotics, nuclear power, space, etc.) and increasingly dominated nationally, the country’s productive structures have been able to evolve from “made in China” to “made by China.” As a result, the accelerated rate of increase in labor productivity gains has made it possible to support increases in industrial wages, without the increase in Chinese labor costs relative to other competing countries in the South deteriorating the competitiveness of national companies in China.

In addition, social services (education, health, etc.) are entirely or largely in the hands of the Chinese state — either the central government or, more often, local governments. These services do not provide commodified goods, but social goods, giving individuals the capacity to be fully political, social and economic subjects, well trained, in good health, with access to good jobs, with transport facilities, well informed. … The scope of public services is broad and extended to “strategic” goods which provide essential inputs to the entire economy. Compared to the private sector, the public sector is voluntarily favored by the state. This expanded concept of public services constitutes one of the main forces of the current economy. What is at stake here, fundamentally, is the defense of national sovereignty.

A remarkable feature of the Chinese political-economic system is its powerful planning which, although it has changed greatly in its objectives and instruments in recent decades, continues to be used. And very powerfully. This planning, which projects itself towards the future in a world full of uncertainties, is the place where collective choices are developed and decided, as expressions of a general will. It is the authentic space where a nation chooses a common destiny and the means for a sovereign people to become its own master, in all areas of its existence: way of life, ways of consuming, housing and occupying or developing the national territory, precise definition of the relationships maintained by human beings with their environment and nature. … 

TX: 7) China has long adhered to the Five Principles of Peaceful Co-Existence. In recent years, China proposed the Community of Common Destiny and three major initiatives, including the Global Development Initiative, the Global Security Initiative and the Global Civilization Initiative. How do you view these principles and initiatives? Do you believe there are some differences between the views of China and the West on global governance?

RH: There are very big differences between the conceptions of “global governance” according to China and the United States. Since the beginning of the 1990s, the main international institutions, first and foremost the IMF and the World Bank, have regularly made recommendations on “good governance” to their member states. Nevertheless, the definitions of this notion, and with them the scope of its content, vary considerably from one organization to another, which makes it impossible to establish precise legal contours — all the more so since governance can also, as we know, refer to “global governance,” or “corporate governance,” or even “environmental governance,” etc.

In the context of its lending and “surveillance” operations, the IMF has sought to promote good governance covering “all aspects of the conduct of public affairs.” Applicable by countries receiving its technical assistance, and closely associated with the fight against corruption, its code of good governance aims, among other things, to try to make economic policy decisions more transparent, to gain access to the maximum amount of information on public finances, to standardize control practices and, more recently, to “combat the financing of terrorism.” 

As to the World Bank, it intends to broaden the scope of this good governance of countries to “go beyond public sector dysfunction to help them integrate reforms” aimed at improving mechanisms for allocating public resources and “institutional arrangements of the State, processes of policy formulation, decision-making and implementation, and relations between citizens and government.” While the Asian Development Bank most often emphasizes private sector participation, the OECD focuses on accountability, transparency, both efficiency and effectiveness, foresight as well as the rule of law. … 

Despite the indeterminacy of the concept of governance, and the most varied criteria of normative judgment that are attached to it, the objectives formulated by these international institutions are quite clear and convergent: what is aimed at, ultimately, is the inflection of the policies followed by national states — or “client countries,” as their experts say — in the direction of the establishment of institutional environments that are the most favorable to the opening up of the economies of the South to the globalized financial markets.

However, this strategy, which has been uniformly imposed on these countries since the early 1980s through structural adjustment programs (SAPs), deregulation and privatization programs, and the free movement of capital, among other measures, has proven to be a failure in all areas and on all continents. Reflecting the now hegemonic power of high finance, neoliberalism is not a model of development, but a model of domination and exploitation. Its economic destructions, its social disasters, its human dramas are too well known to be recalled here.

Faced with the impossible “management of the crisis” of the world system by neoliberalism and the refusal of international institutions to recognize the urgency of an alternative that would add to the dynamics of capital’s expansion some limits external to its profit maximization logic, this good governance could only harden the criticism of “state failures.” However, the coincidence of moralistic discourses on the responsibility of states that would be solely to blame for all the problems encountered, and on the irresponsibility of civil servants, is nothing other than a legitimization of the ultraliberal option of abandoning the major functions of the state, going in some cases as far as the delegation to a foreign power of national defense, the substitution of the national currency by a strong foreign currency or the privatization of the collection of taxes graciously entrusted to a few private companies. … 

Indissociable from the pursuit of neoliberalism and the societal project that is the objective of its deployment, the new anti-state ideological dogma of good governance can only be seen as the inverted symmetry of good government. The aim is not the development of democratic participation of individuals and peoples in the processes of discussion and decision concerning them, nor the respect of their fundamental right to development, but to push states to deregulate markets, that is to say, to re-regulate them by the sole forces of globally dominant capital.

Managing the state apparatuses of the South (and of the East) directly from the center of the capitalist world system (that is, from the North), while neutralizing their state power, divesting them of all real prerogatives, constraining their margins of maneuver to the extreme, and recolonizing them with a smile — this is, seen from the United States, the secret of “ideal” global governance. Nothing to do, therefore, with the vision of peaceful and cooperative governance desired and implemented by the Chinese government.

TX: 8) With the increase in the intensity of regional conflicts such as Russia-Ukraine and Palestine-Israel, the lack of global security and global governance capabilities is significantly affecting economic growth around the world. What role do you think China will play in global governance in the future? If there is a struggle for “world dominance,” how will the West respond to its declining influence?

RH: The current global situation is very serious and worrying, but we must be aware of its causes. In my opinion, due to the very fact that the United States continues to exercise (for a while yet) its hegemony over the world and that in the United States itself, the high-finance oligopolies, which control the military-industrial complex, push for military interventions in an attempt to continue to impose their domination, we can observe that the world system finds itself trapped in a destructive and extremely dangerous spiral of capitalist crisis and imperialist war. Overaccumulation is a chronic disease of capitalism, which marks its structural tendency to enter into crisis — and into decadence. A terribly dramatic “solution” exists for the capitalists: the devalorization of capital through its massive destruction by war.

Today, within finance itself, there is a systemic crisis: capital will not find internal solutions to the contradictory dynamics it deploys. This is the reason why the extreme form of devaluation of capital —that is to say, war — is more and more often used by the dominant factions of capital, those of high finance. In the United States, instead of having economic growth driven by a strategy oriented towards production, these fractions of the dominant classes, at least those with “globalist” interests, have chosen to promote an accumulation of fictitious capital of both a financial and military nature. 

The imperialist war is there to reproduce the conditions for maintaining the command of finance over the global capitalist system. These factions only maintain their power through their interests in the military-industrial complex which offer new outlets, as well as new opportunities for speculation. Under their domination, the world system functions through the armed force of the United States and NATO, which it commands — the basis of this visible violence being the invisible one of capitalist relations of production. Today, total militarization has become the mode of existence of the capital of financial oligopolies.

Today, and in reality since the fall of the USSR, U.S. military spending is mainly carried out through debt in dollars, which is achieved through the issue of Treasury bonds — therefore, by resorting to fictitious capital, whose financing burden is transferred to third countries. This type of expenditure thus becomes a source of profitability for financial capital, because it can transform unproductive capital, financed by public debt, into fictitious capital. Then, faced with the downward trend in the rate of profit in civilian production, the war economy can constitute the “alternative” for capitalists.

In times of crisis, war is integrated into the cycle of capital as destruction of capital. However, the U.S. government will not be able to revitalize capitalist accumulation through war, because the destruction of capital caused by these armed conflicts, considerable for the societies which suffer them, is insufficient to stimulate a new long cycle of economic expansion. Insufficient, unless these imperialist wars expand and become permanent within the systemic crisis, through an aggravation of the North-South confrontation. Nevertheless, this strategy of total war led by high finance is at a dead end.

U.S. hegemony is in crisis and its difficulties are insurmountable. Its capacity to support its armies is exhausted. And it would be even worse for it if the anchor of the petrodollar escaped. The destabilization of the dollar, the pillar of this hegemony, could unbalance the other one, i.e., the military pillar, which depends on the country’s debt capacity. As soon as U.S. Treasury bonds are no longer in demand, the source of financing for the military-industrial complex will dry up, revealing its unproductive nature. 

And if the United States could no longer maintain its network of [more than 1,150] military bases abroad, the current unipolar world would be called into question. Among the options for ending the crisis considered by the dominant factions of globalist financial capital, there is unfortunately that of the generalization of a project of warlike destruction — even if, ultimately, imperialist wars further aggravate the capitalist imbalances. The contradictions of capitalism are so serious today that the present situation resembles less the beginning of the end of the systemic crisis than the beginning of a process of slow, gradual collapse of the current stage of oligopolistic financialized capitalism.

However, the “peaceful coexistence” between the two superpowers of yesterday [United States and USSR] had led to a substitution of military war — with the exception of localized conflicts — by economic war. Today, the new “Cold War” between the United States and China has recently taken the form of a trade war launched by Washington against Beijing — adding to a currency war launched by the U.S. dollar against the whole world. But the seriousness of the situation is such that the risk is re-emerging today that we will move from monetary-commercial war to military war, which would take on a global scale. 

The urgency at present is therefore to stop the “regulation” of the world by war under U.S. hegemony. We must dismantle the logic of crisis and war driven by high finance by imposing democratic control on it, and therefore think about alternatives to capitalism. The defense of peace and the reactivation of the socialist project are today’s priorities. In this context, China has a fundamental role to play in these transformations. If it is helped by state support and popular solidarity at the global level, it has the capabilities because, unlike the United States, it deploys a non-financial and non-war strategic project.

Some recent books by Rémy Herrera related to China:

– (2023) “Dynamics of China’s Economy” (co-written with Long Z.), Brill & Haymarket, Leiden & Chicago

– (2023) (ed.) “La Chine est-elle impérialiste?” (with Wen T., Lau K.C., Sit T….), Éditions Critiques, Paris

– (2022) “Money – From the Power of Finance to the Sovereignty of the Peoples,” Palgrave Macmillan, New York

– (2022) “Confronting Mainstream Economics for Overcoming Capitalism,” Palgrave Macmillan, New York