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China joins the World Trade Organisation

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China's accession to WTO on November 11 is a symbolic recognition that capitalism holds sway in the country and the beginning of a new stage in the consolidation of business power.

Beijing no doubt sees membership of WTO as a step towards becoming not only the principal power in the Asian region but also a fully fledged global imperialist state.

Certainly, accession will stimulate the concentration and centralisation of capital within China, creating the economic base for a powerful capitalist class which mainland China still lacks.

Within days of the Dohar agreement, the Beijing-based Datang Power Generation company, one of the first state corporations to be fully privatised, announced an alliance with the Aluminium Corporation of China to develop a new power plant in Shanxi province.

The next day China's biggest privately owned glass maker, Zhejiang Glass, declared that it planned to expand production on the basis of an Initial Public Offering on the global market, expected to raise up to £40 million.

However, the reality of China's status today, despite the feverish growth in some sectors and regions over the last twenty years, is that of a semi-colony and this will be reinforced by the WTO's inbuilt bias towards the imperialist powers.

Even before WTO membership has been formally confirmed by China's rubber stamp parliament (the National People's Congress) the immediate trends are becoming clear.

China Merchant Holdings (International) became the first foreign owned company to gain ownership of a mainland port and immediately announced plans to invest some £30 million to make Shekou, on the Pearl River the main logistics hub for south eastern China.

In the same week, a key Chinese asset management company, Huarong, set up by Beijing to liquidate bankrupt state enterprises, began offering a range of industrial sites, fixed assets and non-performing loans for auction on the world market.

Insiders reported to the Financial Times on November 20 that firms like Goldman Sachs were expected to pick up the assets for no more than 30% of their face value.

Multinational corporations are also lining up for a new round of investment in production in China. Ericsson has announced plans to invest US$5 billion. Nor is production the only sector to see increased foreign interest. Wal-Mart, the giant US distribution firm announced plans for five new stores in the Greater Beijing region.

A less visible but, in the long term, at least as important development was signalled by a Beijing court which on November 14 ruled against two mainland firms who had been sued by 11 international corporations for infringement of internet domain name regulations.

On the same day, government regulators announced that they would revoke the licences of accountants who failed to meet standards ultimately laid down by the WTO.

The multinationals are also moving fast into the still undeveloped insurance and banking sectors in China. The Coface Group, one of the world's largest export credit insurance companies, has announced plans for a Shanghai office and the Hong Kong Shanghai and Standard Chartered banks both announced their intentions to buy into mainland banks.

In banking, however, the first actual move has been made by the International Finance Corporation, the private sector arm of the World Bank, which has taken a 15% stake in China's most successful city commercial bank, Nanjing City Commercial which specialises in financing new industry start ups.

All of these moves point not only to a future draining of profits out of China but also to the creation of a significant layer of Chinese capitalists tied to their imperialist paymasters a key social force for exercising imperialist leverage within the country.

China's entry into the WTO will also encourage steps towards integrating Taiwan into the mainland economically and, eventually, politically if necessary against the wishes of the Taiwanese people themselves.

Taiwan's own accession to the WTO was carefully choreographed, approval in principle was given one hour before China's application was finally agreed and then formal agreement to Taiwan's application was given one hour later.

As part of the WTO accession agreement, the island state has to dismantle barriers to investment in the mainland and analysts are already predicting a significant impact on jobs and wages as investment is redirected.

On the mainland, too, this is the other side of the coin. Consolidation and centralisation mean closures, redundancies and continual pressure to lower wages and shift production to even cheaper parts of the country.

But this is not taking place without opposition and resistance as the Chinese working class itself enters a new period in which it will consolidate its enormous numerical growth in the last two decades.

The scale of working class resistance to the closures of heavy industry in the north-east in particular is now well known. Literally millions have taken part in strikes, demonstrations, occupations and even armed confrontations with state forces.

China is joining the WTO at a time of downturn in world trade, her export growth this year alone has fallen from 30% to nearly zero and the economy as a whole is now expected to grow by only 7% this year. Historically, a growth rate of less than 8% has been seen as a danger signal because of the high rate of population growth.

These figures are sure to lead to attempts to increase exploitation in the new industries as China's bosses strive to make their profits in the markets of the imperialist powers. At the same time, the imperialist backed corporations will accelerate their attempts to shift production into China and to grab an ever bigger slice of the mainland's economy.

The enforcement of the WTO's rules within China and the greater integration of the mainland economy into the global economy will undoubtedly stimulate political and economic conflict.

This must be taken as an opportunity for the development of a politically independent working class movement in China and its integration into a new International of working class and anti-capitalist organisations.