What is the blame-China brigade after?

March 6, 2012

David Whitehouse examines the campaign to blame China for deteriorating conditions for U.S. workers--and argues that the real culprit is Corporate America.

AN INTENSIFYING economic rivalry between China and the United States is playing out everywhere you look around the world.

From Afghanistan to Australia to Angola, from Vietnam to Venezuela, U.S. and Chinese corporations are competing for access to energy sources and key raw materials. They've also begun competing to exploit the world's cheapest sources of labor.

Politicians from both countries now travel the globe to back up these corporate interests--courting governments in Latin America, Africa and Asia with offers of trade deals, investment, infrastructure development and, not incidentally, military assistance.

These are all signs of real and growing frictions between the capitalists of China and the United States.

At the same time, politicians and the corporate media present a selective and distorted view of U.S.-China relations--a view calculated to scapegoat China for the problems facing ordinary people in the U.S. The aim of this China-bashing is to promote the idea that "we're all in this together" against a ruthless and unfair competitor.

President Obama presents his State of the Union address to Congress
America's growing rivalry with China was a theme of Barack Obama's State of the Union

In other words, America's rulers want to recruit the 99 percent to a campaign where the real objective is to protect the profits and power of the 1 percent.

Election-year politics has raised the pitch of anti-Chinese rhetoric. In a Republican debate last October, presidential candidate Rick Santorum declared: "I don't want to go to a trade war, I want to beat China. I want to go to war with China and make America the most attractive place in the world to do business."

Not to be outdone, Mitt Romney said last November in South Carolina: "We can't just sit back and let China run all over us. People say, well, you'll start a trade war. There's one going on right now, folks. They're stealing our jobs, and we're going to stand up to China."

The most openly racist instance of China-bashing this election year may be a campaign ad from former Republican Rep. Pete Hoekstra, who is running for the U.S. Senate seat from Michigan.

The ad, which aired in local markets during the Super Bowl, shows an Asian American actress--who has since apologized for appearing in the commercial--bicycling through a rice paddy and talking in broken English about Michigan's incumbent Sen. Debbie Stabenow: "Debbie spends so much American money. You borrow more and more from us. Your economy get very weak. Ours get very good. We take your jobs. Thank you, Debbie Spend-it-now."

But China-bashing doesn't belong to Republicans alone.

The Obama administration presents its positions more suavely, but its stance towards China is just as aggressive. Within a period of just a few weeks last fall, the president and cabinet members announced a series of measures that hark back to the "containment" policies of the Cold War.

Secretary of State Hillary Clinton inserted the U.S. into Chinese disputes with Southeast Asian neighbors over the control of offshore islands, a move calculated to win local allies to maintain the dominance of the U.S. Seventh Fleet over the waters surrounding China. Then, Defense Secretary Leon Panetta laid out a plan to shift military resources from the Middle East to Asia, and referred to China as an emerging military "threat."

In November, Obama announced the deployment of some 2,500 Marines in northern Australia and then told the Australian parliament: "As we end today's wars, I have directed my national security team to make our presence and mission in the Asia Pacific a top priority." Obama's implication was that "tomorrow's wars" will break out in Asia--a way of threatening China without even mentioning the place.

TO WIN support for antagonistic policies toward China, politicians have zeroed in on the alleged connection between the rise of China and the decline in most Americans' living standards--our lost jobs, shrinking paychecks and mounting debts. In other words, the politicians realize that working people's pain and long-term sense of loss--loss of confidence in the future, once embodied in the "American Dream"--can be exploited by turning the Chinese into scapegoats.

In its simplest sound-bite form, the claim is that "they've stolen our jobs and they hold our debt." The most racist version of this ploy--exemplified by Hoekstra--blames all the Chinese, while the more liberal version blames the Chinese ruling class for "not playing by the rules," a charge Obama intones while professing sympathy with the repressed Chinese masses.

The evidence of China's economic rise--and the contrast with hardship in the U.S.--is clear enough, all the more so during the past five years of global economic crisis.

The U.S. economy has registered roughly 0 percent annual growth since 2008, a period that began with a 3 percent fall in gross domestic product and rebounded to just 1.6 percent last year. China's annual growth also dipped in the same period, but it has hovered around 10 percent, plus or minus 2 percent.

China's rapid growth and the relative decline of the U.S. economy is an established fact. But that doesn't mean that China's rise is the reason for the troubles in the U.S.

The problem with blaming China for "stealing the American Dream" is that Corporate America is the real culprit.

The battering of working-class living standards in the U.S. began in the late 1970s, long before the Chinese economy became a global factor. Democratic President Jimmy Carter deregulated the trucking industry, and Republican Ronald Reagan followed up on his example, smashing the air traffic controllers union. These two moves signaled open season on wages and benefits in the 1980s.

Corporate America is also thoroughly complicit in making China into a low-wage haven for investment. The opening of China's previously closed economy has meant that 10 million peasants per year enter the world labor market at the lowest end of the wage scale. The migration within China from the countryside to new industrial cities--mirrored in smaller ways in India, Indonesia and the Philippines--has exerted a decades-long downward pull on wages worldwide.

The global transfer of wealth from working people to the world's mega-corporations was the intended consequence of the free-market, neoliberal revolution envisaged by the U.S. Treasury Department, the International Monetary Fund and the World Bank, starting in the 1980s. Capital was free to nestle anywhere it could find the cheapest labor and resources.

It is not surprising that China turned out to be a perfect place for Western capital to produce sneakers, toys, microwave ovens and electronics. There wasn't just a flood of new workers eager to take even low-paying jobs. The Chinese administration was very "business-friendly"--the very same autocratic repression that Western liberals decry in China has served as a precondition for "labor discipline," and thus for the profitability of Western investments.

Who engineered the long-term assault on workers' living standards in the U.S.? Not the Chinese. They were just partners in a scheme dreamed up by Washington and Wall Street.

The China-bashers want us to take sides with Corporate America against foreign competitors like China, but that means accepting the terms of a global race to the bottom. Workers make the sacrifice, and the corporations make the profit.

This is nowhere more evident than in the recent resurgence of manufacturing in the U.S., which is based on a shrunken workforce and massive cuts in wages and benefits.

ANY EFFECTIVE ideology needs to appeal to the emotions of the target audience. In the case of China-bashing, the emotions are the sense of loss and lowered expectations that come from 30 years of working harder for less. Reason plays a secondary role.

Thus, Barack Obama can begin his State of the Union address by accusing China of giving unfair state support to its businesses--and finish by making a case for federally funded research and development to support industries that are key to the U.S. economy. He can rail against Chinese subsidies to manufacturing and then propose cutting the corporate tax rate in the U.S. from 35 percent to 28 percent.

There is also a bipartisan consensus that China keeps its currency valued "artificially" low to facilitate exports, while the U.S. "plays by the rules" and allows the value of the dollar to be set by the "free market." The truth is different--U.S. policies of loose credit before the economic crisis hit flooded the world with dollars, and the Federal Reserve's policy of "quantitative easing" since the recession has injected $2.1 trillion into the world economy since the crisis began.

It's important to do more than expose the distortions and lies of the China-bashers. As we discover how the global economy really works, the key question becomes clear: Whose side are you on? Do we get sucked into supporting the American 1 percent against the Chinese 1 percent, and take on the sacrifice inherent in this "partnership"--or do we take sides in solidarity with the Chinese 99 percent?

China's workers and peasants can teach us a lot about resistance. If we refuse to be pitted against them, we have a chance of rising together against the global 1 percent.

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