China and World Capitalism

Abstract

China’s reintegration into the structure and logic of the world capitalist economy after Mao, and the development of trade and investment relations ‘along capitalist lines’ constitute a new and crucially important phase in the structure of the post-war international division of labour. This process is characterised by the integration of China’s manpower reserves into the ‘international reserve pool’ of cheap Third World labour and the subordination of China’s natural resource base of conventional and strategic raw materials to the needs and requirements of world capitalism. With close to one-quarter of the world’s population, unlimited supplies of cheap industrial labour, and a large surplus population in its rural hinterland, China is rapidly becoming the largest world supplier of cheap labour (low technology) industrial exports. Not only is the cost of labour in China more than 30 times lower than in the advanced capitalist countries (for a similar category of skill in the same branch of industry), wages (expressed in US dollars) are several times lower than in many competing cheap labour locations in South-East Asia. Moreover, it should be understood that China’s industrial export economy (for example, in textiles) had already achieved a relatively high level of development, prior to Liberation, in Manchuria and the treaty ports. The semi-colonial foreign trade infrastructure which developed historically during the Republican period and Japanese occupation influences the nature of China’s reinsertion into the structure of the capitalist international division of labour in the post-Mao period.