China can’t save capitalism from environmental destruction

A year ago at the World Economic Forum, China’s president, Xi Jinping, won plaudits from Davos elites for his commitment to open trade. Of course, because China’s economy is heavily dependent on exports, so-called “free trade” is in its interest, so President Xi’s stand was no surprise.

What has drawn less attention are President Xi’s statements on the environment, something the elites of capitalism find rather less convenient. This past October, at the 19th Chinese Communist Party Congress, for example, he delivered this statement: “Man and nature form a community of life; we, as human beings, must respect nature, follow its ways, and protect it. Only by observing the laws of nature can mankind avoid costly blunders in its exploitation. Any harm we inflict on nature will eventually return to haunt us. This is a reality we have to face.” He set a goal of “restor[ing] the serenity, harmony, and beauty of nature” and elevated the environmental-protection agency to the level of a ministry.

Given China’s huge contribution to global warming and the heavy pollution it suffers from, such statements are welcome. But does this truly mean that China will now become a country that puts the environment first and, perhaps, save capitalism from its excesses? That is very unlikely, given Beijing’s integration into the world capitalist system and the dynamics of capitalism, in which all incentives are for more growth — a system that requires growth.

Air Pollution in Hong Kong (photo by Yym1997)

In addition to the basic laws of capitalism, an interesting paper by Richard Smith, an economic historian who frequently writes on the impossibility of “green capitalism,” argues that the nature of China’s system is a further barrier to any turn toward environmental primacy. In his paper, “China’s drivers and planetary ecological collapse,” Dr. Smith argues that despite the power that President Xi has seemingly gathered into his hands, changing the country’s economic incentives are far beyond his capability. Dr. Smith writes:

“Xi Jinping cannot lead the fight against global warming because he runs a political-economic system characterised by systemic growth drivers — the need to maximise growth beyond any market rationality, the need to maximise employment, and the need to maximise consumerism — which are, if anything, even more powerful and even more eco-suicidal than those of ‘normal’ capitalism in the West, but which Xi is powerless to alter. These drivers are responsible for China’s irrational ‘blind growth,’ ‘blind production’ and out-of-control pollution, what Xi himself describes as ‘meaningless development at the cost of the environment.’ ” [pages 4-5]

Three factors drive Chinese growth, Dr. Smith writes: import-substitution industrialization (the need to compete successfully as a national economy against the U.S. and other leading capitalist countries); employment generation (the main reason for Chinese authorities to not allow companies to go out of business); and consumerism. In his paper, he argues that, for all the market reforms introduced in recent decades, China’s state-owned enterprises don’t operate by the rules of the market. He writes:

“For all the market reforms since 1978, the government has not allowed a single major SOE to fail and go bankrupt, no matter how inefficient, no matter how indebted, because those industries serve a different purpose. They do not exist just to make money. They exist to fulfil the wishes of China’s Communist Party rulers, especially as they contribute to import substitution and national industrialisation.” [page 6]

Tens of millions laid off from state enterprises

Ensuring social stability is unarguably a goal of Chinese leaders, but Dr. Smith appears to under-estimate the extent of ordinary capitalist behavior of Chinese state-owned enterprises (SOEs). A 2006 paper published by the China Labour Bulletin, “Swimming Against the Tide,” notes not only the continuing consolidation of SOEs, but the resulting mass loss of jobs resulting from those restructurings. The report says:

“In the late 1990s, however, the government massively intensified the restructuring of SOEs. This process disenfranchised and marginalized tens of millions of workers, while at the same time creating a new class of powerful capitalists with close and highly influential links to local government. Crucially, at this time, the central government seemed to abandon any thoughts of additional remedial measures and basically gave local government officials and SOE managers free rein to carve up the state’s assets between them.

From 1995 to 2002, SOEs cumulatively laid off as many as 30 million workers. … Meanwhile, SOE managers used their power and connections with local governments to work behind the scenes to secure enterprise assets at ridiculously low prices, elevating themselves from being mere managers to actual owners of the enterprise. According to one survey, over 20 percent of the private enterprises created in the first half of 2006 emerged from the restructuring of state-owned and collective enterprises.”

Beijing (photo by ahenobarbus)

Minqi Li, in his book, The Rise of China and the Demise of the Capitalist World Economy, in examining the development of the Chinese economy, pulled no punches in describing the lack of concern for working people:

“Throughout the 1990s, most of the state and collective-owned enterprises were privatized. Tens of millions of workers were laid off. The urban working class was deprived of their remaining socialist rights. Moreover, the dismantling of the rural collective economy and basic public services had forced hundreds of millions of peasants into the cities where they became ‘migrant workers,’ that is, an enormous, cheap labor force that would work for transnational corporations and Chinese capitalists for the lowest possible wages under the most demanding conditions. The massive influx of foreign capital contributed to a huge export boom.” [pages 64-65]

By July 2017, SOEs accounted for just 16 per cent of China’s jobs and less than a third of industrial output, according to an HSBC report.

Capitalist dynamics are firmly in place in China’s economy, a development that will only intensify, given the Communist Party leadership switching the role of the market from “basic” to “decisive” in 2013 at a key Central Committee plenum, and the continuity with this course that was laid down by the party at the October 2017 party congress, again stressing the “decisive role” of the market.

Waste, planned obsolescence add to consumerism

Nonetheless, Dr. Smith is correct is noting that there is more state guidance of the economy than in ordinary capitalist economies. China is by far the biggest consumer of industrial raw materials, a function of the country’s frenzied pace of investment. Wastefulness extends to consumer items as well, he writes. Planned obsolescence is out of control. Because of the incentives to produce beyond any rational demand, unnecessary infrastructure, to the point of “ghost cities,” is built; buildings are demolished after a couple of decades; and large appliances, such as refrigerators, are designed to break down within only a few years to spur more consumption.

He argues that the introduction of market reforms has amplified, instead of reducing, tendencies in the old bureaucratic economy toward redundant investment. Provincial and local officials seek to build their own industrial bases, which discourages cooperation and efficiency. Although the Communist Party can remove millions of people to clear the path for construction projects, it can’t enforce dictates on the environment or excess development. There are too many interests, according to Dr. Smith:

“[M]inisterial officials, provincial governors, local officials, and SOE bosses mostly need not worry. Why is that? How is it that a highly centralised neo-totalitarian police state cannot force its own subordinate officials to obey its own orders, laws, rules, and regulations? This is a most interesting question. The answer, I suggest, is to be found in the collective nature of China’s ruling class. Beijing can’t systematically enforce its writ against resistance from below because it can’t systematically fire subordinates for insubordination: they’re not just employees, as in capitalism. They’re Communist Party members, members of the same ruling class as the leaders in Beijing.

If you’re head of a ministry or an SOE, especially a big ‘national champion’ SOE that Beijing wants to forge into a world-beating industrial competitor, then Beijing is willing to overlook your pollution. … China’s coal and oil ministries and its giant SOEs are very powerful and profitable, with millions of party bureaucrats and employees. Heads of large SOEs have ministerial rank. Of the 120 SOEs directly managed by the central government, fully fifty-four heads of those firms enjoy ministerial rank. They like things the way they are and they intend to keep them that way.” [page 16]

China’s de-centralized administration leaves each province striving to achieve as high a measure of self-sufficiency as possible. This includes energy, meaning that energy is produced for local consumption, and not necessarily in an economically rational manner:

“In 2015, China spent a record $102 billion on wind, solar, geothermal, and other low- or no-carbon renewable energy. Yet in 2016 wind turbines produced just 4 percent of China’s electricity generation, and solar barely reached 1 percent. By comparison, the US invested just $44 billion in 2015 but in 2016 wind produced 6.9 percent of its electric generation — nearly double China’s production with less than half the investment. The reason China produces so little renewable energy despite all the investment is that so much of its renewable energy is ‘curtailed’ (wasted). Nationally, the government concedes that about 21 percent of wind energy is curtailed, as much as 40 percent in some provinces and even more than 60 percent in Xinjiang (ironically, the province with the most installed wind power).” [page 22]

Enough housing for half the world’s population

That investment will continue at a breakneck pace is exemplified by news that when all the plans for new housing are added up, there will be enough housing in China for 3.4 billion people by 2030, which an article reporting this in Shanghaist dryly notes “seems a tad excessive.” The source of this overdevelopment, Shanghaist reports, is “more than 3,500 county-level new urban areas planned by local governments.”

Just one project, the Xiongan New Area, will cover an area three times the size of New York City, The Guardian reports. This planned city, near Beijing, set off a real estate frenzy so intense that it was said to create gridlock on roads leading to the area, and land prices were reported to have doubled in hours after the government announced its plans. And of course Chinese investment is not limited to within its borders. People’s Daily Online estimates that as of 2016, approximately 30,000 Chinese companies had invested $1.2 trillion in China’s “One Belt, One Road” infrastructure initiative.

People’s Grand Hall in Chongqing (photo by Chen Hualin)

Private profit, and all the problems that revolve around that, has become the driving force of the Chinese economy. Timothy Kerswell and Jake Lin, in their recent Socialism and Democracy article, “Capitalism Denied with Chinese Characteristics,” noted that SOEs operate like like private firms and are controlled by “a handful of wealthy businessmen and executives, who mostly are the [party] princelings and their families.” By the early 21st century, they wrote:

“Urban China had gone from a highly protected ‘iron rice bowl’ system that guaranteed state workers’ permanent jobs, cradle-to-grave benefits — and a relatively high degree of equality — to a market-determined contract-based employment system at its core, and massive informal and unprotected sectors at its periphery.” [page 45]

Land speculation on the part of local governments is rapidly paving over farmlands, another contributor to global warming. Land sold to commercial interests can be 40 times higher than what is paid to farmers, Dr. Kerswell and Dr. Lin write:

“In many respects, urbanization in China can be understood as the process of local government driving farmers into buildings while grabbing their land. The pseudo-collective-ownership of rural land has also increasingly become a front for rural cadres’ rampant corruption and cronyism in pursuit of personal interest in the process of transferring use rights. From 2005, surveys have indicated a steady increase in the number of forced land requisitions, and about 4 million farmers were losing their land annually.” [page 39]

Incentives for more investment, more global warming

This is not a system that is going to give priority to the environment. And because so much of China’s sweatshop-based economy is built on assembling parts made elsewhere into final products — first the parts are shipped from around the world and then the final product is sent elsewhere as well — the transport inherent in these global production chains hugely contributes to pollution and global warming. So however much we might quibble with Dr. Smith’s characterization of SOEs, he is quite correct that all incentives are for China’s contribution to global warming to continue to increase and thus Beijing can not contribute to reversing global warming and future environmental collapse.

There is no substitute to consuming less. Dr. Smith concludes his paper with these lines:

“[T]he only way to effectively meet the climate emergency we face is with an emergency shutdown of useless, superfluous, unnecessary and harmful industrial production around the world, but most particularly in China and the United States, the biggest polluters. … If the Chinese don’t organise a rationally managed retrenchment and shutdown of unsustainable industries, Mother Nature is going to shut those industries down for them and in a much less pleasant manner. There’s no way around this very inconvenient truth: Making too much staff has to stop.” [page 27]

Not that Beijing should be asked to shoulder all blame. Western multi-national corporations willingly moved their production to China, greatly adding to global warming. Nor should Western capital’s role in facilitating Chinese projects be soft-pedaled. The World Bank provided loans for the Three Gorges Dam project that displaced 1.3 million people, and Canadian, French, German, Swiss, Swedish and Brazilian capital were also necessary to build the dam.

It’s hard to avoid the argument that the Western peoples were allowed to enjoy highly consumptive lifestyles, and it would be unfair to force lower living standards on those in the global East or South. That is a reasonable argument. But we only have one Earth, and humanity is consuming resources far beyond sustainability — at the rate of 1.6 Earths. If the entire world consumed at the rate that the U.S. does, we’d need four Earths. (Kuwait is tops in this category, with a ratio of 5.1 Earths, followed by Australia at 4.8.)

Such consumption is quite impossible in the long run. Those living in the advanced capitalist countries are going to have to consume much less. Yet that is impossible in a global economic system that requires growth, and will not provide jobs for those dependent on polluting industries. Industrializing the solar system, even if that proves possible, would only delay the inevitable. We can have a sustainable future with production geared toward human need, or we can continue to produce for private profit until we find out the hard way that you can’t eat money.

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15 comments on “China can’t save capitalism from environmental destruction

  1. xraymike79 says:

    Humans are so good at double-talk and self-serving sophistry that they actually come to believe it their own bullshit. Who needs the crutch of ‘fake news’ when we are all living one big lie? I often wonder how bad things have to get before there is a tipping point in public consciousness, but then I remember that the time to change this global system was decades ago as warned by the authors of Limits to Growth. Disaster management will be all that’s left to do in attempt to stem the tide of refugees, rising oceans, swings of crushing floods–droughts–heat waves, and collapsing ecosystems. Oh and don’t forget that we in ‘Merica need more guns in the classroom to protect the next generation.

    • Good to hear from you, Mike. Forty-five years on, the forecasts made by the authors of the book The Limits to Growth have proven accurate, as I wrote a couple of years ago at this blog post.

      I’d like to believe that enough of us will wake up in time to avert catastrophe, and that belief is one reason for my writing this blog, but it may be that humanity will have to learn the hard way, when it will be too late for mitigation. I often have cause to remember Fredric Jameson’s famous statement that it is easier to imagine the end of the world than the end of capitalism.

  2. louisproyect says:

    Terrific article, Pete. Really timely as well.

  3. Victor says:

    Very good piece. What exactly do you mean though when you say ‘those living in the advanced capitalist countries are going to have to consume much less’ – I’m sure by that you’re not arguing in favour of austerity, or, as one well off Australian Greens politician put it, Western workers are ‘privileged’ and who need to change their ‘lifestyle choices’, etc.

    Obviously tackling planned obsolescence is key, as if fundamentally reshaping the whole system of production, distribution and exchange – which to my mind can only be done by abolishing capitalism. If that is done, and in whatever new system where the kind of products that are produced are done so in a dramatically more sustainable and recyclable way, people do not need to necessarily consume much less in that context.

    One can have an aesthetic, moral, philosophical or political objection to consumerism (which to some extent I share as a socialist, but I’ve always been skeptical of the moralism and elitism so many people bring to their anti-consumerist views) but I would always say the main problem is capitalism, not just singling out one particular feature of the system.

    In a socialist society, certainly in the one I envisage, luxury for all is a real aspiration. Not just luxury in a narrow sense of gold encrusted plates, obviously, but still – I think working class people have a right to enjoy luxury cruises for example, at least sometimes, if that is a real desire on their part.

    • Greetings, Victor. You asked a good question and so to clarify, indeed I am not suggesting austerity. But as humanity is consuming resources at a rate much greater than replacement, mathematics dictates that can’t go on.

      As you correctly said, tackling planned obsolescence is an indispensable component of reducing consumption. If consumer products are designed to last three times longer than they currently do (easily achievable), then we’ve reduced by a huge amount right there. If we re-use products or recycle them more effectively, we’ve cut down consumption more.

      But we in the global North can certainly buy less useless gadgets that we don’t need, and having an effective mass-transit system (woefully lacking in the U.S.) means less people need to buy automobiles, reducing the pollution they cause. We can, and should, choose to make personal choices less destructive to the environment. Nonetheless, the main problem lies with the functioning of the capitalist system.

      Planned obsolescence is obviously not a choice of individual consumers (and is quite against our interests) but an intentional insertion by manufacturers to require their products to be bought more frequently. If we had an economic system designed to meet human need, rather than satiate the greed of a handful of capitalists, we’d have products that lasted vastly longer periods before breaking down, and made in more environmentally conscious ways. And, yes, with such a drastic reduction in consumption, all of us would get to indulge in a bit of luxury, not to mention no longer having to live life exhausted from working so damn much so a boss or a speculator can become even richer.

  4. Joel Meyers says:

    The Soviet Union and the People’s Republic of China were the two giant products of working-class-led revolution, which offered hope that a better world is possible and is actually being built. The very existence of these historic structures, both established and experimental, also led to the spread of post-capitalist development through revolution in other areas, from Northern Korea to Vietnam to Cuba, and an expansion of the system through annexation in Eastern Europe, also transforming their property forms away from private capitalist control. Together they came to constitute the socialist bloc of resistance to world imperialist domination.

    However, as Lenin foresaw, these transformations, as a first step towards a socialist society, took place in the “weak links” of the imperialist system.

    These countries were unable to compete triumphantly with the advanced capitalist countries, which had already built up the most powerful industries in the world.

    Unmatchable power had grown from centuries of advanced capitalist exploitation of a labor market at home, enclosing the peasantry off their land to create a working class in the hundreds of millions.\

    Land was stolen by genocide from the Native Peoples in the Americas and turned into capitalist wealth. Racial slavery and indentured servtude extracted an enormous rate of surplus that was the basis for the monstrous growth of the young capitalist system worldwide.

    This capitalism entailed an imperialist dimension, spreading colonial slavery around the world and plundering the natural resources of whole continents.

    This both accelerated and added to capitalist accumulation at home, and the imperialist superprofits even provided a fund for social bribery and the creation of a pro-imperialist labor aristocracy, which to a certain extent swallowed up the revolutionary spirit and even much of the reformist drives of the privileged layers, relative to world-scale standards of living, particularly Africa, Asia and Latin America.

    The emergen socialist bloc was no match for its encircling class enemy, which was subject to massive military attacks, such as at the end of World War I, World War II (resulting in 27 million Soviet deaths), and the Korean and Vietnam wars, taking unknown millions of lives of the local populations, and heroic Soviet and Chinese fighters alongside.

    Through the Obama and Trump years, military confrontations such as that ongoing in Syria have continued, while World War III threats and actual preparations, such as the U.S.-E.U. instigated takeover of the Ukraine through an internal neo-Nazi/Zionist/Oligarch Mafia alliance, with Ukrainian Americans staffing Ukrainian ministries there, and one of Joe Biden’s sons heading up Ukraine’s energy production at Gazprom.

    With the world increasingly integrated integrated into one ultra-imperialism, prematurely proclaimed by renegade Kautsky, the transitional societies have been forced, for their growth, nay their survival, into a partial re-absorption into the imperialist-dominated global economy and even to make certain concessions to economic warfare and have developed revisionist ideologies reflecting the same.

    It is easy to blame this or that leader in the partially recolonized and still threatened areas.

    It is more difficult to look in the mirror, at the role of the working populations arguably benefiting from imperialst robbery of others, at gunpoint, those who even risk their own lives, not to mention take those of others, to wield those guns.

    With the exception of a handful, especially what you call Unitedstatesians, have sided with “our own” imperialists, chosen to accept the brainwash of their media big-lie system, rather than respond to the spark that Lenin predicted the Russian revolution would inspire revolutions in the more powerful capitalist countries, powerful, that is, only because of our complicity.

    By “our” here, I hope it is obvious I am not talking about those exceptional people who have held high the banner and waged revolutionary class struggle against the tide, but of the Unitedstatesians as a nation with its fellow gangsters.

  5. troutsky says:

    To Victor’s question, I think the false choice of “austerity” or “freedom” (as unlimited accumulation) needs to be rejected altogether. Limits to Growth means less stuff and more freedom. Smith calls for economic retrenchment, “to enforce limits on consumption and pollution, to fairly ration and distribute goods and services” and it is incumbent on ecosocialists to explain how making do with less needn’t be “austere”; to quote Smith again, “to connote a way of life that is richer while consuming less”. Certainly, luxury cruises would be rationed while there are people without enough to eat. This isn’t “elitist moralizing”, it is rational.

    As for “privileged” Western workers, I would argue there is most definitely a labor aristocracy that has benefited from the immiseration of workers in the periphery. Let’s not kid ourselves.

    • All of us in the global North have clearly benefited from the super-exploitation of the global South. Corporate globalization obviously favored multi-national capital vastly more than working people, but I agree we should not kid ourselves that there were not some benefits. The dialectic is now turning, and corporate globalization means jobs are being moved overseas, but as they are moved precisely due to low wages and poor regulation of working conditions and the environment, the working people of the South will continue to be horribly exploited.

    • Roskva says:

      i think one of the best things about socialism/communism/anarcho communism is that it will ideally provide both stability and freedom to try new things, and this results in important psychological benefits. once we are in a society where the people who do the work are planning what they want to do (and why) (and have control over the productive infrastructure), everyone will know they have total material security, that there is always going to be meaningful work for them to do (and when they re old that they ll be taken care of), that they have a place with other people. this should really not be under estimated! and once society is running as a network of interlinked collectives, there should also be a lot of freedom to experiment and a huge improvement in social inter relationships which should make everyone a lot happier!!! and- well, i think that on a spiritual level craft goods have a whole different energy, things carry the energies of their creation inside them, maybe we won t have so much shit (to rephrase: if we re voting on it, i m voting to reduce the manufacture of industrially produced consumer goods) but the shit that we have will be treasure and everyone will have access to a bit of this treasure in a fair way!! and equality and cooperation and being able to care about the work and actually live that care in a real and meaningful way(because we would all have a say in what we re doing and why and how), i think this will make people pretty happy! oh and also then we can have art and theatre and spiritual development and community etc etc instead of objects!

  6. Ol' Hippy says:

    Late to the party but consumption along with the planed obsolescent nature of mass produced goods has literally depleted Earth’s bountiful resources. We could all live much simpler lives without the desiring machines of capitalist ideology. The guiding forces of endless profit seeking has, in my opinion, doomed human existence. I’ve lived a fairly spartan life but know I’ve left my mark on global poisoning, it’s the system we’re born into and have to navigate to survive. I learned about Earth’s plight in the early 70’s and the first Earth Day Teach In,1970. Every thing they talked about has happened and as best as I can tell at a faster pace. I believe a collapse is imminent. No leader takes things near as serious as they should, which should have started in the early 70’s at the latest. Now the youth of today will be left with a plundered Garden of Eden, it’s here if one looks. I’ve followed some of XRay Mike’s work and he seems to see the same collapse of impending doom. At least I have no children to live in this toxic soup industrial capitalism has left in its wake. Thanx for your work, I do appreciate your effort. Peace, The Ol’ Hippy

    • Peace to you, Ol’ Hippy. Are we past the tipping point? I fear we are. And if I am wrong, we are very close to the tipping point. Either way, I fear for the world our descendants, including young people already born, will inherent.

      That a few capitalists became fabulously wealthy and talked others into believing this was fair or sustainable will be of absolutely no consolation to those who will live in the environmental disasters of the future. As a regular commenter on this blog, Alcuin, frequently reminds us: Nature bats last.

      • Ol' Hippy says:

        I wrote a piece today on Earth’s plight. https://medium.com/@jrallen1200 . I fear it’s probably too late but I hate to be a gloomy Gus with most of my writings. I also follow Robertscribbler as his posts are accurate and well presented. I think the title of my piece is The Arctic. Thanx for responding. Peace, The Ol’ Hippy

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